CBP Now Issuing Penalties for Wood Packaging Material Violations

Due to the increase in penalties for wood packaging material (WPM) violations – we thought it important to remind the importing community that CBP is issuing WPM penalties and the background as to why.

On September 25, 2017, CBP issued Cargo Systems Messaging Service (CSMS) #17-000609 informing importers of CBP’s intent to issue penalties for wood packaging material violations. In the message, CBP states all wood packaging material (WPM) imported into the United States must have been treated at the place of origin, and contain the appropriate marking upon importation.  CBP is trying to “prevent the introduction of exotic timber pests,” and is encouraging the importing community to look towards alternatives to WPM and to educate your supply chains about ISPM 15 requirements.
What is a WPM?

WPM is defined as:

• Hardwood or Softwood packaging
• Created using glue, heat, pressure, or a combination of the three
• Used to support, protect, or carry an item
• Examples Include: Pallets, Skids, Containers, and Crates,

What are the WPM Requirements? The CBP regulations (7 C.F.R. 319.40.3 (B)(2)) contain the WPM requirements which require:

• “…a visible, legible, and permanent mark certifying treatment, preferably on at least 2 sides of the article”.
• A unique graphic symbol
• The ISO two-letter country code for the country that produced the WPM
• A unique number assigned by the national plant protection agency of that country to the producer of the WPM
• An abbreviation disclosing the type of treatment (g., HT for heat treatment or MB for methyl bromide fumigation).
• A sample of a compliant mark is below, where XX would be replaced by the country code, 000 by the producer number, and YY is the treatment type (HT or MB):

CPB further states that the marking must be approved by the International Plant Protection Convention (IPPC), certifying that the marking is to their International Standards of Phytosanitary Measures (ISPM 15). According to CBP, the IPPC standard mandates most WPM to be either heat treated or fumigated with methyl bromide.

What are WPM Violations? If the markings are not approved by the IPPC, or stamped in accordance with the ISPM 15 standard, or if the WPM is infested, the importer has officially violated 7 C.F.R. 319.40.3 (B)(2)) and will be liable for all costs associated with the violation (including inspection and exporting the WPM).  CBP states that there will be no fumigation of the wood at their facilities. CBP would previously allow a yearly threshold of 5 violations, but is no longer providing the leniency. Each violation of the WPM rule will result in an additional penalty.

Are There Any Exclusions?

While this rule is mandatory, CBP has outlined certain exceptions including:

1. WPM made entirely from Canadian origin wood, which is exempt from the treatment and marking requirements;
2. Manufactured wood materials such as fiber board, plywood, whisky and wine barrels, and veneer;
3. Pieces of wood that are less than 6 mm (0.24 in.) in all dimensions;
4. Sawdust, wood wool, wood shavings, produced as a result of sawing or shaving wood into small slender and curved pieces less than 6mm in all dimensions;
5. WPM used for most Department of Defense (DOD) shipments imported by either the Department or DOD contractors; and
6. Firewood, mesquite wood for cooking and small, noncommercial packages of non-manufactured wood for personal cooking or personal medicinal purposes coming directly from Mexican Border States.

Potential Penalties

Importers in violation of the WPM requirements will be issued a penalty under Title 19 U.S.C. § 1595a(b). Under §1595a(B) “every person who directs, assists financially or otherwise, or is in any way concerned in any unlawful activity mentioned in the preceding subsection shall be liable to a penalty equal to the value of the article or articles introduced or attempted to be introduced”. In addition the article can be seized or forfeited.

Importers in violation can also receive a penalty under 19 U.S.C. § 1592. Penalties under 19 U.S.C.§1592 are calculated based upon whether there was Fraud, Gross Negligence, or Negligence. Penalty amounts for each are listed below.

• Fraud
  • Penalty will not exceed the domestic value of the merchandise.
• Gross Negligence
  • The penalty will not exceed the lessor of
    • Domestic value of the merchandise or
    • four times the lawful duties, taxes, and fees of which the United States is or may be deprived
  • Negligence
    • The penalty will not exceed the lessor of
      • Domestic value of the merchandise
      • TWO times the lawful duties, taxes, and fees of which the United States is or may be deprived

Should you receive a penalty, or want to ensure you provide your supply chain proper notification of ISPM 15 requirements, contact Diaz Trade Law at info@diaztradelaw.com to assist.