CBP Brings Seizure & Forfeiture Notices to the 21st Century

Co Authored by Michael DeBiase

U.S. Customs and Border Protection (“CBP”) has published a final rule (the “Rule”) providing CBP with the ability to publish seizure and forfeiture notices on the Department of Justice (“DOJ”) forfeiture website. CBP believes that such notices will reach a broader range of the public, at less cost, than the current local print publications or customhouse postings.

You know what? CBP is right, and kudos to them for this added efficiency that goes into effect on February 28 of this year.

Pursuant to the Rule, CBP will post all seizure and forfeiture notices for thirty (30) consecutive days on the DOJ’s site. Thereafter, CBP may still publish notice in print form when it deems such additional outreach appropriate.

The beauty of the Rule is that it provides a vehicle by which both the government and the party interested in the seized goods to share in the greater efficiency, streamlined procedures, and reduction in costs offered by giving electronic notice. This will also make it easier for the interested parties to assert claims for the seized property.

This is a change that needed to happen, and although the process and site will surely experience “growing pains”, the efficiency and cost savings should prove well worth it.

If you do receive a seizure notice, remember, you must file a Petition within 30 days of the seizure notice or, if seeking judicial review of the seizure, file a claim and cost bond equal to 10% of the value of the seized merchandise, up to a maximum of $5,000.

For a summary of the seizure process, review our blog "U.S. Customs Seized My Merchandise, Now What?"

We leave you with our top 3 tips:

1. Perform Pre-Compliance PRIOR to importing merchandise into the U.S. Assure the merchandise you will import is compliant with applicable laws/regulations.
2. If CBP detains your products, contact a knowledgeable customs attorney or customs broker to actively demonstrate that there is no violation. Getting the case resolved in the detention phase is essential. Otherwise, the seizure case will be much more costly and timely.
3. If CBP seizes your products, make sure your customs attorney knows the policies, procedures, and practices of CBP to effectively pursue the release of the merchandise.

Significant New Food Safety Rules are Coming

The FDA has proposed two new rules issued under the Food Safety Modernization Act (FSMA) that is part of a broader effort to prevent food borne illness and ensure the safety of imported and domestically produced foods. If you want your voice heard, you have until May 16, 2013 to submit your comments to the FDA on the proposed rule. The FDA does take comments seriously, we're here to help if you want assistance in drafting your comments. This rule is expected to be published shortly following the conclusion of the comment period on May 16, 2013.

 The proposed rules would apply to facilities that manufacture, process, pack or hold human food. The rules focus on commonly identified routes of microbial contamination of produce, including:

(1) agricultural water

(2) farm worker hygiene

(3) manure and other additions to the soil

(4) animals in growing areas, and

(5) equipment, tools and buildings.

In general the facilities that are required to register include manufacturers, processors, warehouses, storage tanks, and grain elevators. However, there are a number of exemptions and modified requirements. We would be pleased to assist you in determining whether or not your facility may be exempt from these requirements.

Below is a recap of the proposed rules.

Rule #1 - Preventative Controls for Human Food. The rule proposes firms have written plans in place to identify potential hazards, put in place steps to address them, verify that the steps are working, and outline how to correct any problems that arise. The rule proposes each covered facility to prepare and implement a written food safety plan, which would include the following:

• hazard analysis;
• risk based preventive controls;
• monitoring procedures;
• corrective actions;
• verification; and
• recordkeeping

Do you have your written plan in place yet?

Rule #2 - Produce Safety. The second rule proposes enforceable science- and risk-based safety standards for growing, harvesting, packing and holding fruits and vegetables on foreign and domestic farms. These standards include requirements addressing major areas specific to agriculture that can be the conduit for contaminants:

• Irrigation and other agricultural water
• Farm worker hygiene
• Manure and other additions to the soil
• Intrusion of animals in the growing fields.
• Sanitation conditions affecting buildings, equipment and tools

The proposed rule also includes additional provisions applicable to the growing, harvesting and packing of sprouts, which are more vulnerable in their growing environment to harmful bacteria.

The rules still to come are:

• Foreign Supplier Verification for Importers: This program will require importers to verify that foreign suppliers are following procedures that provide the same level of health protection as that required of domestic food producers. About 15 percent of the food consumed in the U.S. is imported, including about 49 percent of fresh fruit and 21 percent of vegetables.
• Accredited Third Party Certification: The accreditation of third-party auditors would help ensure that food producers in other countries comply with U.S. food safety laws.
• Preventive Controls for Animal Food: This is the implementation of preventive controls at animal food facilities that are similar to those proposed for human food.

As FDA implements more of FSMA, we will keep you informed.

Do you need assistance in submitting a comment to FDA? Does your company need training on FSMA? If so, contact me anytime.

Careers for Women in Transportation

"Be Bold! Women in Transportation" will feature prominent women in the transportation, logistics and supply chain management industry. The purpose of the event is to inform about career opportunities and attract women and minorities to the transportation industry.

I'm thrilled to moderate this event where you'll hear from top notch keynote speakers, Michelle Livingstone, VP of Supply Chain/Transportation at The Home Depot and Natalie Putnam, VP of Marketing at Ryder.

Join us to learn answers to the following questions (and MUCH more): 

1. Why aren't more women choosing Supply Chain/Transportation as a career?
2. How will jobs in Supply Chain/Transportation evolve over the next few years?
3. What does the logistics function look like within a manufacturing/distribution business?
4. How have energy prices affected the Transportation Industry?
5. What impact does the changing demographics of the US have on opportunities for women in the supply chain field?
6. What is the role of sales and marketing in supply chain, logistics and transportation?
7. What is changing in business culture and what do companies need to do to acquire talent?
8. What are the skills needed to be successful in the field of logistics today?
9. Why is a career in supply chain a good choice?

  The cost of luncheon is $30 in advance and $40 at the door. Click HERE to register.

For more information contact Jorge Guerra.

On February 1, 2013 Many Food Facilities Face Suspension

The U.S. Food and Drug Administration (FDA) extended the deadline for the biennial registration renewal for food facilities until January 31, 2013. Your time is almost up to re-register! If your not re-registered, enforcement will begin on February 1, 2013. FDA will cancel your Bioterrorism Act registration and your importations will be significantly delayed. Your facility will NOT be able to import, distribute or sell food products in the U.S.

Here's what you need to know about FDA's new FSMA requirement on Bioterrorism Act registrations. Owners, operators, or agents in charge of domestic or foreign facilities that manufacture/process, pack, or hold food, alcoholic beverages, and/or dietary supplements for consumption in the U.S. are required to register the facility with the FDA.

The Food Safety Modernization Act of 2011 (FSMA) has for the first time, specifically put the onus on importers to have a program to verify that the food products they are bringing into this country are safe. The idea behind FSMA is to change FDA regulatory enforcement and focus to more of a preventative approach, instead of reactionary. These new requirements include risk-based controls, foreign supplier verification program, certification, and audits. A brief overview of the requirements may be found here.

I've summarized the requirements relevant to your Bioterrorism Act Registration below, so you can be sure your registration doesn't lapse.

New Biennial Registration Requirements

FSMA amended the Food, Drug & Cosmetic Act (FD&C Act) Section 415 to provide for biennial registration updates. Facilities which are required to register will have to re-register every 2 years, during the period beginning on October 1 (in this case, October 22) and ending on December 31 in even numbered years. This will first occur in October-December 2012 (which FDA extended until January 31, 2013, as renewals did not start until October 22).

Note that even facilities which are already registered with the FDA are still required to renew their registrations during the October 22– January 31, 2013 extended registration renewal period.

U.S. Agent

FDA requires that foreign facilities have a U.S. agent. The U.S. agent must:

1. Live or maintain a place of business in the U.S. and
2. Be physically present in the U.S. 

The U.S. Agent is also responsible for the payment of "reinspection fees" of foreign facilities and failure to comply with recall orders. Reinspections are follow-up inspections conducted by the FDA after a previous inspection by the FDA where the FDA identified non-compliance issues materially related to food safety. The purpose of the reinspection is to assure the issue has been remedied and food is now safely produced. Fees are adjusted each fiscal year. For FY 2013 (October 1, 2012-September 30, 2013), the fees are steep, at $221 an hour if no foreign travel is required, and $289 an hour if foreign travel is required.

Need a U.S. Agent?

The law firm Becker & Poliakoff, P.A. provides registration services and will act as a U.S. agent with the FDA for a nominal fee, but, the foreign facilities are always responsible for the payment of any reinspection fee or fee for a failure to comply with a recall order. Please visit www.FDA-USA.com for more information about how to make Becker & Poliakoff, P.A. your U.S. agent with the FDA. 

Contact Jennifer Diaz with any questions and ensure your importation are not delayed come February 1, 2013.

What You Missed at the C-TPAT Conference

The Customs-Trade Partnership Against Terrorism is a voluntary government-business initiative that builds cooperative relationships that strengthen and improve overall international supply chain and U.S. border security. C-TPAT is widely recognized as one of the most effective means of providing the highest level of cargo security through close cooperation with international supply chain businesses such as importers, carriers, consolidators, licensed customs brokers, and manufacturers. At CBP's C-TPAT Conference held on January 8-9, 2013, CBP announced major updates to C-TPAT – lucky for you, I’ve recapped the highlights for you below.


Trusted Trader Program

• CBP proposes to combine CBP’s ISA program with C-TPAT. Additionally, if importers choose to be part of the Trusted Trader Program, they can take advantage of “joint validations” with other government agencies (OGA’s). CBP and TSA have already been performing joint validations for 9 months. Trade is concerned that OGA’s will go on fishing expeditions while validating and no guarantees have been made from CBP that OGA’s won’t. This is a major concern for some (rightfully so!).

• CBP is seeking comments regarding its new Trusted Trader Program. Please email any comments here.

Internal Conspiracies

Top conspiracy indicators to look for are:

• Anyone taking photos of entrances, fencing, hours of operation, etc..

• Anyone interested in stow plans, employee schedules, transit routes, and GPS

• Anyone in financial distress

• Anyone attempting to access a system that they have no authorization to access

• Anyone showing up to work on a day off or with large bags

• Anyone entering restricted zones without access

Container Inspection

Use the VVTT process:

• View seal and container locking hardware

• Verify seal #

• Tug on seal to make sure it is on right

• Twist and turn seal to make sure it doesn’t unscrew.

Most Common Areas of Failed Criteria:

• Conveyance Security – tracking an monitoring 51%

• Container Security – sealing/ container inspection 49%

• Business Partners – screening and subcontracting 46%

• Personnel Security – background checks 31%

SW Border Strategies

• 86% of the time the drivers are responsible and have some involvement in conspiracies

• There were 41 seizures representing C-TPAT companies in 2012

• There are 160 underground tunnels from Mexico the U.S. or Canada to the U.S.

Evidence of Implementation

Suspensions and removals from January 2002-November 2012:

• 403 importers suspended due to validation issues

• 339 were removed from C-TPAT

CBP expects:

• C-TPAT Manuals including all minimum security procedures

• Documentation of audits, checklists, appropriate training

• Assurance that all documentation is uploaded into the portal

• Checklists to be uploaded that are filled out (blank forms will no longer be acceptable)

• Photo and video evidence of implementation may be requested

• If you DON’T contact your CBP Supply Chain Security Specialist (SCSS) when illegal activity is detected, it is a STRIKE against you

Visitor logs

• Only for unknown visitors

• Don’t let visitors sign themselves in!

C-TPAT Portal 2.0

• Expect changes to the portal in the summer, it’s in early prototype stages now

• You will not have to be a C-TPAT member to create a user account

• SVI numbers will go away, tracking will be done using a business name and type

• Members will have the ability to share documents

• The new structure will give you the ability to combine common security practices, this is beneficial if you have more than one user account

Thomas Winkowski, Acting COO of CBP

• Over 55% of goods entering the U.S. are from C-TPAT certified partners

• CBP is pushing for more Mutual Recognition Agreements (MRA’s)

• CBP currently has 7 MRA’s in place

• MRA’s on the horizon with Taiwan, China, Israel and Mexico

Kevin McAleenan, Acting Assistant Commissioner, Office of Field Operations (OFO)

• CBP is working on advancing benefits to C-TPAT members

• New CBP Director Lauren Koffer was announced!

Dan Baldwin, Executive Director

Currently CBP has:

• 10,452 certified partners

• 158 – CBP staffing level

• 328 – Tier 3 IOR’s

• 22,223 – Total Validations Completed since inception

Concern regarding budget and number of validations CBP will be able to complete for FY13

• In 2012 there were 822 new companies that applied for C-TPAT & 693 of those were certified

Barry Brandman, President, Danbee Investigations

Top 5 best practices:

1. Must enlist senior management support

2. Culture and security excellence (Don’t meet standards, exceed them)

3. Apply checks and balances throughout (Anticipate that your first line of defense will fail)

4. Strategically utilize security technology

5. Diligently audit safeguards to expose weaknesses

If you have questions regarding submitting a C-TPAT application, C-TPAT validations, advancing in tier status, or any pending C-TPAT program changes, feel free to contact me.

FDA Extends Until January 31 for Food Facilities to Re-Register

Below are the latest and greatest updates regarding compliance with the FDA's Food Safety Modernization Act (FSMA).  It includes background on FSMA, an update from FDA with 2 new guidance documents, FDA's extension to file biennial registrations, and an update on FDA using its enforcement power to suspend a facilities registration - meaning they can NOT import into the U.S.  FSMA Background

FSMA, enacted on January 4, 2011, amended section 415 of the Federal Food, Drug, and Cosmetic Act (FD&C Act) [21 U.S.C. § 350d]. The registration requirements in section 415 of the FD&C Act apples to domestic and foreign food facilities that manufacture, process, pack, or hold food for human or animal consumption in the United States. Section 102 of FSMA amended section 415 of the FD&C Act in relevant part to provide that food facilities required to register with FDA must renew their registrations with FDA every other year, during the period beginning on October 1 and ending on December 31 of each even-numbered year, otherwise, their registration will be cancelled by the FDA.

Re-Inspection Fees

Importantly, please note that facilities will be charged reinspection fees by the FDA. Reinspections are follow-up inspections conducted by the FDA after a previous inspection by the FDA where the FDA identified non-compliance issues materially related to food safety. The purpose of the reinspection is to assure the issue has been remedied and food is now safely produced. Fees are adjusted each fiscal year. For FY 2013 (October 1, 2012-September 30, 2013), the fees are $221 an hour if no foreign travel is required, and $289 an hour if foreign travel is required. U.S. Agents will be responsible to assure these fees are collected.  

FDA EXTENSION

Because there was a delay in FDA’s implementation of biennial registration renewal for the 2012 cycle, and registration renewal did not become available until October 22, 2012, FDA's guidance document advised that FDA intends to exercise enforcement discretion with respect to registration renewals submitted to FDA after December 31, 2012 for a period of 31 days, until January 31, 2013.

FDA published 2 guidance documents:

1. Guidance for Industry: Questions and Answers Regarding Food Facility Registration (Fifth Edition).  This guidance document contains helpful questions and answers regarding food facility registration.
2. Guidance for Industry: What You Need To Know About Registration of Food Facilities; Small Entity Compliance Guide.  Thus guide was updated to reflect FSMA amendments to the FD&C Act, and discusses: who is required to register pursuant to the Bioterrorism

Suspension of Registration

FSMA also amended section 415 of the FD&C Act to provide FDA with the authority to suspend a food facility’s registration in certain circumstances involving food that has a reasonable probability of causing serious adverse health consequences or death to humans or animals. FDA already used this power and suspended the registration of Sunland, a producer of nuts. The full story may be read here.

New Center of Excellence & Expertise to Arrive in Miami 2013!

DHS Secretary Janet Napolitano addresses a crowded audience at the 2012 East Coast Trade Symposium while CBP Deputy Commissioner David V. Aguilar listens.
Photo Credit: James Tourtellotte

U.S. Customs and Border Protection (CBP) Deputy Commissioner David V. Aguilar announced at the East Coast Trade Symposium the expansion of the Centers of Excellence and Expertise (Centers), which will create six new Centers in 2013 for the Agriculture & Prepared Products; Apparel, Footwear & Textiles; Base Metals; Consumer Products & Mass Merchandising; Industrial & Manufacturing Materials; and Machinery industries. CEE's are "virtual "one-stop shops" that provide centralized processing for importers that volunteer to participate. TheCenters are also already a source of information for the entire trading community. Centers are virtual organizations, managed from a strategic location, that link CBP trade personnel by industry to authoritatively facilitate trade."

CBP's goal is to eventually cover the full range of imported goods. For now, the Centers to be established in FY 2013 are:

1. Agriculture & Prepared Products: Miami
2. Apparel, Footwear & Textiles: San Francisco
3. Base Metals: Chicago
4. Consumer Products & Mass Merchandising: Atlanta
5. Industrial & Manufacturing Materials: Buffalo
6. Machinery: Laredo

These virtual centers will provide one-stop processing to lower the Trade’s cost of business, provide greater consistency and predictability and enhance CBP enforcement efforts. The Centers represent CBP’s expanded focus on "Trade in the 21st Century," transforming customs procedures to align with modern business. The Centers will also serve as resources to the broader trade community and to CBP’s U.S. government partners. The current Centers are Electronics in Long Beach; Pharmaceuticals, Health & Chemicals in New York City; Automotive & Aerospace in Detroit; and Petroleum, Natural Gas & Minerals in Houston.

Resources to learn more about the CEE's:

• Customs created a new 8 minute video advising on additional benefits the CEE's provide, including being a "common sense trade processing system," and discussing the assistance with administrative detentions of merchandise the CEE's can provide.
• PowerPoint Presentation on CEE's.
• CEE's FACT SHEET.

C-TPAT and ISA members are given priority to apply for admission into CEE's.  CEE's are supposed to provide the uniform decision making the importing community craves. Import Specialists will eventually all belong to a specific CEE and utilize their specialized knowledge to provide consistent admissibility decisions around the country. I very much look forward to seeing and reporting on how the Miami CEE progresses.

Jennifer Diaz Joins Governor Rick Scott in Addressing Businesses in Bogota

On December 4, 2012, I will address companies in Bogota, Colombia to discuss the "Top 10 Tips When Importing into the U.S. to Ensure Compliance." My particular topic will go into depth on the top costly mistakes I've seen importers make, and most importantly, how to avoid them. I will go into compliance with the newly enacted Free Trade Agreement and compliance with other federal government agencies (like U.S. Food and Drug Administration (FDA), Consumer Product Safety Commission (CPSC), and more. Importantly, I will address how to effectively deal with the U.S. government, should you have trouble while importing.

The conference is in conjunction with Enterprise Florida's Trade Mission to Colombia led by Florida's Governor Rock Scott. The purpose of the half day conference is to address the current environment of big business opportunities in Florida, especially in light of the new U.S.-Colombia Free Trade Agreement (FTA).

Other panels include: The U.S. Economy and Investment Opportunities; Rules of Origin & Trade Facilitation (Compliance with the new FTA); Business Opportunities in Infrastructure and Utilities. All panelists will be available for question and answer sessions as well.

Colombia is the fifth largest economy in Latin America, with a population of approximately 45 million. During the last decade, improvements in security and political stability have fostered economic growth and a secure business climate. With 4 percent GDP growth in 2010 and an estimated 4.6 percent growth in 2011, the Colombian market presents unbounded opportunities for Florida companies.

You may register and view the agenda here.

See you in Bogota!

Don't Let Your Currency be Seized When Traveling Internationally - TOP TIPS

The holidays are approaching... Do you intend to carry "monetary instruments" when traveling internationally? Read on, these TOP 5 Tips when carrying "monetary instruments" above $10,000 can save you a U.S. Customs Seizure Case.

Here are your top tips to assure you get it right, and you're not screaming U.S. Customs Seized my Money, Oh No!

CBP Symposium Postponed Due to Weather

Hurricane Sandy is busy disrupting the sunshine state as well as D.C. Breaking news from CBP, the CBP Symposium, due to start this coming Monday, is now postponed. CBP's message is below. This is a great opportunity for CBP to join the C-TPAT conference with the symposium. I hope they do. I'll keep you advised when the CBP symposium is back on.

Dear Registrants,

Due to concerns over participant safety and potential travel disruptions related to Hurricane Sandy, U.S. Customs and Border Protection has decided to postpone the East Coast Trade Symposium that had been scheduled for Monday and Tuesday.

We apologize for this inconvenience, but due to the strength and breadth of this storm we believe this postponement is the appropriate decision. We do not want to risk the safety of our participants, many of whom would be traveling to Washington D.C. to attend.

The nature of the storm is such that the agency’s emergency response protocols have been activated and must take precedence.

CBP will provide additional information regarding the registration for this event at a later date. The new date and location within the Washington DC Metropolitan Area for the symposium will be announced as soon as possible. CBP officials apologize for this inconvenience and will reschedule this important event in the near future.