Hate Unfair Demurrage Charges? Want to Do Something About it?

Now's the time to make your voice heard. Below details what demurrage charges are and a trade initiative that FMC is currently requesting comments on.

What is Demurrage?

• Demurrage is "a penalty charge against shippers for delaying a shipment/container at a port of loading or destination beyond the allowed free".

How Much Time is Provided for Free?

• "Free time is the grace period for which neither of these charges will be incurred." There is no standard amount of free time. Free time can change from carrier to carrier, from port to port and sometimes from container type to container type. Normally it is anywhere between 3-5 calendar days.
• Free time is supposed to include a realistic time period to assemble cargo for loading, and provide consignees a realistic time period to retrieve cargo at a terminal after unloading.
• The fee charged after the expiration of the "free time" varies. For example, for one carrier, the per diem fee can range anywhere between: $200 to $800 per day!

 What is Being Done to Change this Demurrage Fee?

• Back in December, "the Coalition for Fair Port Practices, a group of 25 members that represent shippers, receivers, motor carriers, port draymen, freight forwarders, third-party logistics companies and customs brokers", petitioned the Federal Maritime Commission (FMC) in hopes that the FMC would issue a ruling on extending the free time for container storage and equipment use that is disrupted by events outside of their control. Such events could be poor infrastructure, weather events, a carrier bankruptcy, port labor issues, etc.

New Executive Order...Will Small Businesses Benefit?

On January 30th, the Office of the Press Secretary released the Executive Order (EO) on reducing federal regulations and controlling regulatory costs. This latest EO requires that all federal agencies "cut two existing regulations for every new regulation they implement". According to President Trump, this EO is meant to help small businesses by easing "the opening and expansion of small businesses" and the "incremental costs for the new regulations in 2017 will be zero dollars". The EO requires “for every one new regulation issued, at least two prior regulations be identified for elimination, and that the cost of planned regulations be prudently managed and controlled through a budgeting process.” There will also be "certain categories of regulations that will be exempt from this new policy, including those dealing with the military and national security".

Keep Your Eyes Peeled For The Single Export Licensing System!

Currently the U.S. government has three different agencies that have been given the authority to issue export licenses. Those three agencies are: the Departments of Commerce, State, and the Treasury. In 2009, President Obama ordered an interagency review of the current export control system. The review found that the current system was “overly complicated, contained too many redundancies, and, in trying to protect too much, diminished the ability to focus their efforts on the most critical national security priorities”. The review also found that many companies had to apply for multiple export licenses with each of the departments. Due to the findings of the review, the Administration created the Export Control Reform initiative to help establish a single export licensing system.

“The goal of the (ECR) initiative is to create a Single Licensing Agency (SLA), which would act as a ‘one stop shop’ for businesses seeking export license and for the US government to coordinate review of license applications.” The ultimate goal of this new licensing process would be to make the process predictable, timely, and transparent.

Medical Device Registration Made Easy!

This article is a continuation of: "What Do Dental Floss, Bedpans, and Pacemakers Have in Common?", and discusses the three types of medical device classifications and how to register and list those devices with the FDA. 

 FDA’s classes of medical devices:

"The Food and Drug Administration (FDA) has established classifications for approximately 1,700 different generic types of medical devices." The device classification is broken up into three regulatory classes (Class I-III), which is "based on the level of control necessary to assure the safety and effectiveness of the device". To determine the device classification, the FDA looks at "the intended use of the device and also the indications for use". According to the FDA's Guidance on Device Regulation, the intended use of a device "means the general purpose of the device or its function, and encompasses the indications for use". Indications for use is "a general description of the disease or condition the device will diagnose, treat, prevent, cure, or mitigate, including a description of the patient population for which the device is intended". (21 C.F.R. §814.20(b)(3)(i)). The class for which your medical device would belong to, determines the type of pre-market submission or application that is required for FDA clearance to sell the medical device in the United States.

Catch up on DTL's TOP Blogs from 2016!

We want to make sure you stay up to date with the hottest trade topics from 2016. Below is a summary of what you missed by category. Enjoy!

CBP

1. Why Pre-Compliance is a Must
2. Ongoing Hoverboard Concerns
3. Yet Another Reason to Record your Trademark or Copyright with U.S. Customs and Border Protection (CBP)
4. U.S. Customs - Your Personal Policeman at the Border
5. Learn About "The ABC's of Customs Seizures - Plus Top 10 Tips to Ensure Import Compliance" From the Expert!
6. ISF Penalties Have Officially Arrived: Self File and Self Police

On January 11, 2017, the U.S. Customs and Border Protection (CBP) and the Attorney General announced the largest criminal and civil settlement ever against Volkswagen (VW) that totaled $4.3 billion. The breakdown of the settlement was $2.8 billion for the criminal penalty and $1.45 billion for a combined civil penalty for both the CBP and the Environmental Protection Agency (EPA). Volkswagen agreed to plead guilty to three felony criminal counts and pay the $2.8 billion dollar penalty. The $1.45 billion combined settlement was for EPA's "claim for civil penalties against VW in connection with VW's importation and sale of these cars" as well as CBP's claim for customs fraud.

CBP’s part of the $1.45 billion settlement dealt with a violation of 19 U.S.C. §1952, which "prohibits persons, by fraud, gross negligence or negligence, from entering or introducing, attempting to introduce, or aiding and abetting the entry or introduction of merchandise into the commerce of the United States, by means of statements or acts that are material and false, or by means of omissions which are material".

FSMA: Stay Compliant with DTL’s ‘PICTURE’!

Each year, according to the findings of a Center for Disease Control and Prevention study, 48 million people (1 in 6 Americans) get sick, 128,000 people are hospitalized, and 3,000 people die as the result of food-related diseases. Instead of reacting to this news on a yearly basis, the U.S. Food and Drug Administration (FDA) decided to do something about it (although not fast enough, some would say) by enacting the Food Safety Modernization Act (“FSMA”). This law, which went into effect on January 4, 2011, aims to protect public health and ensure food safety by placing a greater emphasis on prevention, compliance, and enforcement.

We’ve summarized the seven foundational rules of FSMA for you below. The compliance elements which food facility owner/operators, growers, suppliers, importers, consignees, carriers, and/or accreditation/certification bodies should, at a minimum, incorporate into their 2017 actions plans are highlighted in red (information regarding compliance deadlines for different size-based categories of business can be viewed here). Diaz Trade Law has extensive advising clients on FDA matters and welcomes the opportunity to help your company get FSMA compliant.

Don't Gamble with Compliance

Are you interested in e-Commerce? Have a desire to go to Vegas?

Diaz Trade Law founder Jennifer Diaz will be speaking at the upcoming Massconversions Live e-Commerce conference in Las Vegas, Nevada. Jennifer’s presentation will focus on the TOP 10 Tips to Comply with Customs When Buying Online. Attendees will, by the end of her presentation, know and understand the importance of:

• Tariff classification
• Customs valuation
• Country of origin marking
• Intellectual Property Rights (IPR) Protection and CBP Enforcement
• Free Trade Agreements (FTAs)

Attendees will also learn basic customs concepts and terms like:

Now, More than Ever, Be Wary of and Responsive to a CBP Form 28!

U.S. Customs and Border Protection (“CBP”), having previously identified AD/CVD evasion as priority trade issue, is ramping up its efforts to further combat AD/CVD evasion. Effective August 22, 2016, interested parties can, in addition to pursuing either a civil False Claims Act/Qui Tam Action or a criminal trade violation, now report Enforce and Protect Act (“EAPA”) violations using CBP’s e-Allegation mechanism. 

Who is an Interested Party?

Interested parties qualified to use this violation reporting mechanism include:

• Foreign manufacturers, producers, exporters, or importers of covered merchandise or a trade or business association a majority of the members of which are producers, exporters, or importers of such merchandise
• Manufacturers, producers, exporters, or importers in the U.S. of a domestic like product 
• A certified union or recognized union group of workers that is representative of an industry engaged in the manufacture, production or wholesale of a domestic like product in the U.S. 
• A trade or business association a majority of the members of which manufacture, produce, or wholesale a domestic like product in the U.S. 
• If covered merchandise is a processed agricultural product, a coalition or trade union that is representative of processors, processors and producers, or processors and growers

CBP Launches New E-Commerce and Small Business Branch … Just in Time for the Holiday Shopping Season

With Thanksgiving in the rear view mirror and the Christmas holiday season kicking into high gear, now is the time to think of Pre-Compliance especially with the grave risks associated with shopping online and not knowing your supplier. As Small Business Saturday and Cyber Monday commercial activity spikes, CBP is, in specific connection with online sales, warns consumers and merchants alike to be on the lookout for holiday shopping scams and/or criminal trade practices. Red flags to watch for in this regard include offers designed to induce the purchase of counterfeit and/or unsafe goods, prices that are too good to be true, e-commerce sites that lack legitimate phone numbers and/or addresses, and sellers who lack good customer feedback.