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West Coast cargo will “keep moving”

Wednesday, July 2nd, 2014

Although their  labor contract expired yesterday, the International Longshore & Warehouse Union has agreed to continue negotiating with the Pacific Maritime Association, averting a West Coast port strike for the time being.  See the parties’ joint press release for more information.

Nevertheless, in case there is a trade disruption, CBP is prepared with a contingency plan covering the following scenarios:

  • Vessel Diverted to Foreign Port and Discharged
  • Vessel Diverted to Foreign Port and Not Discharged
  • Vessel Diverted to Another West Coast Port and Discharged
  • Vessel Diverted to Another West Coast Port and Not Discharged
  • Vessel Diverted from Intended West Coast Port to Gulf or East Coast for Discharge
  • Vessel Rests at Anchor and Not Diverted

See CSMS 14-000393 for details.



“Horrible” conditions at NY/NJ seaport

Thursday, February 13th, 2014

trafficContainer terminals at the New York – New Jersey seaport complex are suffering the wrath of drayage company owners who claim conditions are “horrible” and “broken” and adversely affecting their businesses.  One of the major underlying causes appears to be the terminals’ limited truck gate hours, causing mile-long truck backups at the gates.  Additional factors include slow turn times due to ILA labor shortages and severe winter weather.

Although a Port Authority of New York and New Jersey task force promises to issue a report in June recommending improvements, it may be too late for the transport companies, whose customers are threatening to divert shipment to other East Coast ports.  See the full story in the Journal of Commerce (site registration required).

Tax law changes hit maquiladora industry

Friday, January 24th, 2014

mexico-flagOn January 1, 2014, a series of tax reform measures took effect in Mexico that have widespread impact on the country’s maquiladora operations along the US border, which account for 85% of Mexico’s manufacturing exports.

As reported in CGMA Magazine, among the changes are:

  • Tightening the definition what constitutes a “maquiladora”
  • Eliminating the maquiladoras’ exemption from VAT on imported materials and replacing it with a tax credit
  • Increasing the VAT in Mexico’s border states from 11% to 16%, in line with the rest of the country

After outcry from the maquiladora industry, Mexico’s President Enrique Peña Nieto issued a decree that addressed some of these concerns, including:

  • Imposing a two-year period that permits foreign owners to meet the criteria of the new definition of “maquiladora”
  • Allowing maquiladoras to claim the VAT credit in the month the VAT is paid (rather than the following month)

However,  in his decree, Peña Nieto also abolished income tax exemptions for maquiladoras, so their tax rate will increase from 17.5% to the standard 30% Mexican tax rate.



More details on federal shutdown’s impact on CBP

Wednesday, October 2nd, 2013

Screen Shot 2013-10-02 at 1.29.19 PMSo how does the current federal government shutdown specifically impact US Customs’ operations?  It’s difficult to expect complete and timely information from CBP since — naturally — that agency’s communications are hampered by the shutdown, although CBP was able to report yesterday, via CSMS, that all Client Representatives offices would be closed.

Luckily, Global Trade Academy has posted a fairly comprehensive list of what CBP functions/offices continue to remain open for business despite the shutdown, such as the CEEs, revenue collection, and FDA and APHIS.  The full listing was obtained from the CEO of AAEI.

Since only about 10% of US Customs’ employees will be furloughed during the shutdown, the impact is not as severe as in other federal departments.

It is too early to speculate whether the shutdown will affect CBP’s East Coast Trade Symposium, slated for October 24 and 25.


Government shutdown affects CBP’s client reps

Tuesday, October 1st, 2013

From CBP’s CSMS 13-000492:

  • Due to the lapse of appropriations and the emergency furlough, all Client Representative offices are closed.
  • To report urgent production technical issues with any automated system during this closure, please contact the Technology Service Desk at 1-866-530-4172. All other issues will be handled once the Client Representative offices re-open.

Port of NY and NJ suffers crushing delays

Tuesday, August 20th, 2013
© Port Authority of NY & NJ

© Port Authority of NY & NJ

Importers shipping to the New York – New Jersey port complex have been subject to extensive delays this summer, an immediate result of technical glitches with the terminal operator’s new operating platform.  However, according to the Journal of Commerce, the software issues “set off a chain reaction that exposed the port’s vulnerabilities in labor, facilities and operating practices.”

As a result, ships were diverted to other ports, truckers encountered hours-long waits, and drayage companies accumulated significant losses.  Meanwhile, retailers are worried about the upcoming peak season for holiday imports.

Plans are in place to reduce delays, including hiring more longshore workers and extending hours for truckers to access terminal gates (nearly 90% of the port’s traffic moves via truck).

The full article is available here.

Kerlikowske to be nominated to top CBP post

Thursday, August 8th, 2013

US Customs and Border Protection logoPresident Obama recently announced his intention to nominate R. Gil Kerlikowske for Commissioner of Customs, Department of Homeland Security.  From the official White House news release:

R. Gil Kerlikowske is Director of National Drug Control in the Office of National Drug Control Policy at the White House, a position he has held since 2009.  From 2000 to 2009, he served as Chief of Police in Seattle, Washington.  From 1998 to 2000, he was Deputy Director of the Office of Community Oriented Policing Services at the U.S. Department of Justice.  From 1994 to 1999, he was Police Commissioner of Buffalo, New York.  He began his law enforcement career serving in the St. Petersburg, Florida Police Department from 1972 to 1987.  Mr. Kerlikowske served on active duty in the U.S. Army from 1970 to 1972, and in the Army Reserve from 1972 to 1976.  He received a B.A. and an M.A. as well as an D.H.L. from the University of South Florida.


Corporate Officer Not Personally Liable for Company’s Gross Negligence in Import Case

Monday, August 5th, 2013

SAfter the Mod Act was passed in 1993, staff at US importers were instructed that executives within the importing company could be held personally liable for gross negligence for violation of US Customs law.  Last week, however, the US Court of Appeals for the Federal Circuit held that a corporate officer of an “importer of record” is not directly liable for gross negligence penalties under 19 USC 1592(c)(2), even though the company would be.

In the case, US v. Trek Leather Inc., Trek’s president, Harish Shadadpuri, admitted that he did not declare the cost of assists on 72 entries of men’s suits, and failed to pay the correct amount of duties owed.  The court ruled that, despite Shadadpuri’s pattern of failing to include assists in this case and in the past, it could not “pierce the corporate veil” because Shadadpuri acted in his scope as a corporate officer, not personally, and would therefore not be personally liable as the “importer of record.”

See an analysis of the court’s decision by Sandler, Travis & Rosenberg, PA.

FDA: Importers must vouch for safety of food brought to US

Tuesday, July 30th, 2013

fdalogoUnder the US Food and Drug Administration’s newly proposed regulations, US food importers for the first time must ensure that imported food for humans and animal is as safe as domestically produced food.

Promulgated under the Food Safety Modernization Act (FSMA), the rules, if adopted, would set parameters for foreign supplier verification programs (FSVPs) that importers must create and follow to safeguard the nation’s food supply.  The proposed rules also call for an accreditation program for third-party auditors of imported food.

According to last week’s FDA press release,

[t]he new measures respond to the challenges of food safety in today’s global food system.  Imported food comes into the United States from about 150 different countries and accounts for about 15 percent of the U.S. food supply, including about 50 percent of the fresh fruits and 20 percent of the fresh vegetables consumed by Americans.

If food importers fail to comply with the new rules, they are subject to entry and/or eligibility denials to participate in FDA’s voluntary qualified importer program (VQIP) for expedited review and entry of food, which is currently in development.  The public comment period on the proposed rules closes on November 26.





Sound off: How effective are CBP’s trade facilitation efforts?

Monday, July 1st, 2013

surveyCOAC, the Advisory Committee on the Commercial Operations of Customs and Border Protection, wants to know how successful US Customs’ trade facilitation efforts are at lowering the trade’s cost and burden of doing business.  To that end, COAC has posted the next installment of its annual survey, seeking responses from both importers and import service providers on current, planned and future CBP facilitation efforts.

As a result of the highly successful 2012 survey, CBP was able to proceed with the following achievements:

  • Establish a working group to analyze CBP’s current partnership programs based on survey feedback.
  • Begin work on establishing Centers for Excellence and Expertise (CEE) metrics – including a customer satisfaction survey and the pursuit of academic studies on the CEEs.

COAC will tally the trade efficiency survey results by respondent type and industry type, and make recommendations to US Customs for future efforts.

The survey can be found here.  All responses will be kept anonymous.  Last day to respond is Tuesday, July 23.