Jen Diaz Honored as Rising Star by DBR

On July 18, 2013, the Daily Business Review (DBR) announced the 40 young Florida lawyers chosen as 2013 Rising Stars by a panel of DBR judges. I'm proud to announce I have been selected as one of the 40 Rising Stars!
The article stated:

Our panel carefully reviewed more than 125 nominations of attorneys 40 years old and under who have established themselves as top contributors to the practice of law and their communities, and are in a position to become tomorrow's top lawyers and leaders.

See the list of the 40 Rising Star honorees.

Profiles of all the Rising Stars will appear in a DBR special section on Wednesday, Sept. 18, and an event honoring their accomplishments will be held that night from 6 p.m. to 9 p.m., at the Bankers Club in downtown Miami, One Biscayne Tower, Biscayne Room, 14th Floor.
For those who wish to attend the event to honor the Rising Stars, please contact Andre Sutton at asutton@alm.com or (757) 721-9020. The event's main sponsor is Ice Legal.

Congratulations to the 2013 Rising Stars.

-David Lyons, Editor in Chief
-Chris Mobley, Publisher

I'm honored to have been selected and invite you to join me as we celebrate on September 18th at the Bankers Club.

BEWARE - Liquidated Damages WILL be Imposed for 10+2 Violations

For those who thoughts CBP's “measured and commonsense” approach for those that weren’t fully complying with the Importer Security Filing (ISF or 10+2) rules would last forever, think again!

Effective, July 9, 2013, CBP advised it would start the liquidated damages phase of the Importer Security Filing (ISF) enforcement process. CBP will now make use of the newly activated cargo holds in the Automated Cargo Environment (ACE) system to address non-compliance with the ISF rule. CBP may also withhold the release or transfer of non-compliant ISF shipments at the terminal until the required ISF is filed. For carrier violations of the vessel stow plan requirement, CBP may refuse to grant a permit to unlade the merchandise. Once the ISF data is received and a security assessment is made, additional enforcement actions including a Non-Intrusive Inspection (NII) and/or intrusive exams may be initiated.

Liquidated Damages

CBP may also assess liquidated damages of up to $5,000 per violation for the submission of an inaccurate, incomplete or untimely filing. CBP Dec. 09-26 discusses "Guidelines for the Assessment and Cancellation of Claims for Liquidated Damages for Failure to Comply with the Vessel Stow Plan, Container Status Message, and Importer Security Filing Requirements."  First violations may be mitigated to $1,000-$2,000 - depending on the presence of aggravating or mitigating factors.  Some mitigating factors for the failure to file a complete, accurate and timely ISF include evidence of progress in the implementation of ISF during the "flexible enforcement period," small number of violations compared to number of shipments, Tier 2 and 3 C-TPAT status, remedial action....  CBP has advised that "no relief will be granted if CBP determines that law enforcement goals were compromised by the violation."  Aggravating factors include multiple errors on your ISF!  If you do receive a Liquidated Damages claim, it is important you consult with an expert to file a timely, persuasive Petition to CBP and address all relevant mitigating factors to assure you receive the maximum reduction possible.

What's ISF Again?

The ISF rules require importers and vessel-operating carriers to provide additional advance trade data on cargo shipments to CBP 24 hours prior to vessel lading, pursuant to Section 203 of the Security and Accountability for Every Port (SAFE Port Act) of 2006.

Importers must report the following 10 data elements on each ISF:

1. Manufacturer (or supplier) name and address
2. Seller (or owner) name and address
3. Buyer (or owner) name and address
4. Ship-to name and address
5. Container stuffing location
6. Consolidator (stuffer) name and address
7. Importer of record number/foreign trade zone applicant identification number
8. Consignee number(s)
9. Country of origin
10. Commodity Harmonized Tariff Schedule (HTS) number

From the carrier, 2 data elements are required:

1. Vessel stow plan – required for arriving vessels with containers.
2. Container status messages – required for containers arriving via vessel.

Hence, 10+2!

For shipments consisting entirely of freight remaining on board (FROB) cargo or goods intended to be transported in-bond as an immediate entry or transportation and exportation entry, the following 5 data elements are required:

1. Booking party name and address
2. Ship-to name and address
3. Commodity Harmonized Tariff Schedule (HTS) number
4. Foreign Port of Unlading
5. Place of delivery

In order to avoid liquidated damages and untimely delays with your cargo, full ISF compliance is now required.  Since we're talking compliance, do you have your pre-compliance plan established?  If not... Let's talk!


If you have any questions on the listed requirements or need assistance with cargo detained as a result of this new enforcement phase, please feel free to contact me, and I'm happy to assist you with any ISF or CBP related question!  

Say Goodbye to GSP, ATPA and ATPDEA

The question of the day... Will GSP be extended?  Yes, no, maybe??

July 31, 2013 is the date when the expiration of the Generalized System of Preferences (GSP), Andean Trade Preference and Act  (ATPA) and the Andean Trade Promotion and Drug Eradication Act (ATPDEA) will take place.

Read on to ensure that you get your refunds expeditiously when/if GSP is renewed, likely after July 31, 2013.

CBP's notice today states:

Barring Congressional action, the Generalized System of Preferences (GSP), special program indicator (SPI) “A” and “A+,” the Andean Trade Preference Act (ATPA), SPI “J,” and the associated Andean Trade Promotion and Drug Eradication Act (ATPDEA), SPI “J+,” are due to expire for goods entered or withdrawn from warehouse after midnight, July 31, 2013.

Special Procedures for GSP-Eligible Goods:

• Importers should pay the normal trade relations (column 1) duty rate but continue to flag GSP-eligible importations with the applicable SPI (“A” or “A+” until further notice. If the program is renewed with a retroactive clause, use of the SPI will allow CBP to process automatic duty refunds. No corresponding procedure is available for the ATPA or ATPDEA programs. [MAKE SURE YOU DISCUSS THIS WITH YOUR BROKER AND DO SO!]

Clarification for African Growth and Opportunity Act (AGOA) Eligible Goods:

• Goods eligible for preference under African Growth and Opportunity Act (AGOA) may continue to receive preference on tariff items displaying SPI “A,” “A+” or “D” in the “Special” column of the Harmonized Tariff Schedule of the United States (HTSUS).

To receive AGOA preference on a good with SPI “D” in the “Special” column of the HTSUS, the importer will continue to file the entry summary with SPI “D” and without duty. To receive AGOA preference on a tariff item with the SPI “A” or “A+” in the “Special” column of the HTSUS (and thus no “D”), the importer will file the entry summary with the SPI “A” but without duty.

Impact on the Merchandise Processing Fee (MPF): 

• The expiration of GSP has no impact on the payment/non-payment of the merchandise processing fee (MPF).

OTI's - July 31 is Deadline to Voice Opinion on FMC's Proposed Changes

Now's the time to apply to become a non vessel operating common carrier (NVOCC) and/or ocean freight forwarder (OFF).  FMC has proposed major changes to its regulations and application requirements for Ocean Transportation Intermediaries (OTIs).   Get your application in now to avoid those changes, and/or, learn the changes and spend the time to comment on them while you can.  Detailed summaries of those changes are below.  July 31, 2013 is the cutoff to have your voice heard!

FMC issued an Advanced Notice of Proposed Rulemaking (ANPRM) that would significantly amend the regulations governing the licensing, bonding and duties of NVOCCs and ocean freight forwarders. The ANPRM is 117 pages long!! You can review the ANPRM in FMC’s Docket No. 13-05, Amendments to Regulations Governing Ocean Transportation Intermediary Licensing and Financial Responsibility Requirements, and General Duties. 

The major changes are:

• Qualifying Individual (QI) Changes – Included in the proposed changes are changes to many definitions - this one impacts what it will take to become a QI.  The standards will be tougher.  For one, the QI’s 3 years of relevant experience will only qualify if one has worked for a licensed, bonded, registered OTI. Experience obtained while the individual was employed by a licensed domestic OTI, a vessel operator, or a registered foreign-based NVOCC would be acceptable.
• All Owners will now be Vetted – Background checks will now not be limited to the QI, all owners will go through background checks (and my two cents, your application will take that much longer to be processed with every additional owner)..
• All Licenses will now be Online – FMC proposes to go green in its application process.  Application fees are much cheaper online, $250 vs. the paper application fee of $850.   
• License Renewal Every 2 Years! – All licenses, both forwarder and NVOCC, be renewed every two years, regardless of how long a company has held a license. As part of that renewal process, the licensee would be required to pay a filing fee in an amount yet to be determined. As proposed, the information to be provided would include the name of the current Qualifying Individual, all shareholders, officers and directors (and, their social security numbers), and require the production of corporate good standing certificates. Each company would be required to submit an application for renewal at least 60 days prior to the scheduled expiration dateof its current license. 
• Suspension/Revocation of Licenses – Under the current regulations, a license can be suspended or revoked for failing to respond to a lawful order, making materially false or misleading statements, or failing to have a current tariff or bond. The ANPRM now proposes to also subject licenses to revocation if the OTI “knowingly and willfully accepts cargo from, processes, books, or transports cargo” for, an NVOCC that is either unlicensed or fails to have the required bond. The Commission also proposes to“streamline” the appeals process for any revocation of licenses by eliminating an OTI’s right for a full evidentiary hearing. Indicating that such proceedings are “often lengthy and expensive,” the ANPRM proposes to establish a procedure by which appeals could be handled by a hearing officer on a written record, without any apparent right of discovery concerning matters that may be in the Commission’s files.
• Foreign Registered NVOCCs – The ANPRM would require foreign registered NVOCCs to submit a detailed registration form and a filing fee, with those registrations only valid for a period of two years. Under current regulations, and as is the case with existing OTI licenses, registrations are valid for an indefinite period. The foreign NVOs would be required, in their registration forms, to provide their legal name, any trade names, their principal business address with contact information, a contact person with an email address, and their U.S. resident legal agent.
• Increase Bond Requirements - Citing incidents in which two NVOCCs went out of business owing significantly more than the $75,000 bond, which meant that claimants were unable to recover all monies owed, the ANPRM proposes to increase all OTI bonds as follows: Ocean Forwarder $50,000 $75,000, Licensed NVOCC $75,000 $100,000, Registered NVOCC $150,000 $200,000, Group Bond $3 Million $4 Million
• Tiers for Claims on Bonds - The ANPRM would establish three tiers of payment priorities for claims against the bond.
• FMC Website Publication of Claims - The Commission would publish these notices and claims on its website, which would be available to the general public as well as the various sureties. 
• Prohibit Surety From Payment of 20%+ of Bond - Another proposal would prohibit the surety from paying any claims that amount to more than 20 percent of the face amount of the bond for a period of at least five months after the date the claim is received.
• License Revocation when Bond Termination Occurs – In this proposed rule, FMC licenses and registrations could be revoked “without hearing or other proceeding” in the event the required bond is terminated.
• New Class of NVOCCs for Household Goods – The commission seeks comments on such a change, not an actual proposal at this time.

How do you feel about these changes?  Think they are fair?  Want to comment to the FMC?  Make sure you speak up before July 31! Ready to submit your application? Contact me today at jdiaz@becker-poliakoff.com.  

Do You Know the Top 10 Tips When Importing?

Do you know the top 10 tips when importing to ensure compliance? If not, here's why you should listen to my Compliance Online webinar that took place on June 27, 2013 at 10:00 a.m., EST.

If you import merchandise into the U.S., you are the responsible party and must be aware your requirements and potential liability. In this presentation, we will discuss how to comply with U.S. Customs and Border Protection’s (CBP's) vast laws and regulations. By the end of the webinar you will know and understand the importance of:

• Tariff classification;
• Customs valuation;
• Country of origin marking;
• Intellectual Property Rights (IPR) Protection and CBP Enforcement; and
• Free Trade Agreements (FTA) you should be taking advantage of.

You will also learn basic customs concepts and terms like:

• CBP Form 3461 & CBP 7501;
• Protests;
• Seizure cases;
• Liquidated damage claims, Penalties/Fines;
• Prior disclosure; and
• FP&F Petition Process.

Learn key best practices and hear real life case studies. Learn what to do, and more importantly, what NOT to do, and what the consequences are for non compliance.

To hear the recorded version of this webinar, that took place on June 27, 2013, click here.

Florida Companies Convicted and Sentenced

Co Authored by Robert Becerra

In another example of the government’s continuing use of the criminal justice system to enforce international trade laws, three Florida companies and their management were recently convicted and sentenced for importing smuggled toys from China containing lead and containing counterfeit trademarks.

LM Import-Export, Inc., Lam’s Investment Corp., and LK Toys Corp., Hung Lam and Isabella Kit Yeung plead guilty to charges of conspiracy to traffic and smuggle toys containing hazardous substances such as lead, and one count of trafficking in counterfeit goods, in violation of 18 U.S.C. Secs. 371 and 2320, respectively. Co-defendant Yeung plead guilty to one misdemeanor count of submitting a false country of origin label, in violation of 19 U.S.C. Sec. 1304(a). The information, or charging document filed in court, against all defendants, as well as the plea agreements for each defendant can be found on the website of the District Court for the Southern District of Florida. (If you have trouble getting these documents, email me and I'd be happy to share them with you).
The facts underlying the charges, as stated in court documents, are that from April, 2000, until May 2011, a span of 11 years, the corporate defendants conspired to sell children’s products imported from China in violation of the Consumer Product Safety Act 15 U.S.C. Sec. 2068, and the Federal Hazardous Substances Act, 15 U.S.C. Sec. 1263. Some of the toys contained lead, while others presented various hazards such as choking, aspiration or ingestion. The products were imported using false statements on Customs declaration forms and with false country of origin labeling.

Hung Lam was sentenced to 22 months incarceration, 3 years of supervised release and a $10,000 fine. The corporations were sentenced to 5 years of probation. Yeung was sentenced to 1 year probation and a $1,000 fine. An order was entered mandating the forfeiture to the government of $862,500 and all products imported by the defendants that were seized by the government. The press release from the Consumer Products Safety Commission and Department of Justice discussing the case can be found here and here respectively.

This case is extremely important for importers to be familiar with and understand that:

1. It is vital for importers to retain counsel to assist with pre-compliance before you import.
2. When you receive any violation notice from the federal government, retain counsel immediately and be sure to address all violations with remedial action and enhanced compliance procedures in an attempt to keep administrative penalties or forfeiture cases from turning into potential criminal matters.
3. Resolving a civil action through a consent decree with the government does not absolve you of criminal liability.
4. Once contacted by government officials, retain counsel immediately. Any evidence you provide or any statements you make will be used against you in court.
5. Repeated misconduct and federal regulatory law violations over a period of years will often result in criminal prosecution of both companies and their individual employees, resulting in federal prison sentences and substantial fines and forfeitures.

Export Regulations and Cloud Computing...Beware!

Co Authored by Perry Sofferman

Forrester Research predicts that the global market for cloud computing services will have increased from $40.7 billion dollars in 2011 to approximately $241 billion dollars by 2020. You can see the ZDNet article here. This figure includes the Platforms as a Service, Infrastructure as a Service and Business Process as a Service delivery models. What this information reveals is that while cloud computing is already a significant part of operational strategy for many businesses (as well as governmental agencies), we should expect it to not only grow as a market but to become even more intertwined with the way we conduct business and store data on a daily basis. Consequently, businesses in general and export compliance officers in particular need to be vigilant and make sure that their use of this important technology is consistent with US export regulations. 

When using cloud services, the user is uploading data to available servers in the cloud provider’s server facility(ies). The type of data uploaded and the location of the server where that data is stored can potentially trigger export compliance issues for the user. In fact, the ultimate location of the particular server used to hold the user’s data may be unknown to either the user or the cloud provider. Data can be redirected to various servers in different countries in order to properly allocate server space based on fluctuations of usage in different time zones. It should be noted that this is only one example of several possible scenarios where the actual export of restricted data could occur inadvertently by the user.

Based on Advisory Opinions issued by the Bureau of Information and Security (“BIS”), there is guidance indicating that in scenarios where exports take place through means of cloud computing:

• (i) the cloud computing provider is not the exporter (the user is) and
• (ii) if foreign nationals employed by the provider access restricted data there may well be a deemed export of such data to such foreign national on the part of the user.

If, however, a cloud computing service provider is aware that the service will be used to support certain proscribed activities, then the provider will be obligated to properly acquire the necessary license. Neither the Directorate of Defense Trade Controls (DDTC) nor the Office of Foreign Asset Controls (OFAC) have yet provided substantive guidance on the subject of export regulations in relation to cloud computing, although OFAC has provided some limited guidance related to exports to Iran involving software and services incidental to personal communications. “Cloud Computing” remains an undefined term in the EAR, ITAR and OFAC regulations.

Top 5 Tips for Export Compliance Professionals in Regard to Cloud Computing  

1. It is critical for compliance officers and others involved in export control management, including providers of cloud computing services, to take steps to better familiarize themselves with the many complex issues at play in this area. A good start would be a detailed review of the BIS advisory opinions, which can be found here.
2. In addition, users of cloud services should think about how to approach this issue with their providers. Users might consider gaining a good understanding of where their provider’s servers are located and whether the providers have instituted any safeguards to address export compliance issues. Likewise, providers may want to delve more deeply into the ITAR regulations with particular emphasis placed on the relation between cloud computing services and “brokering” activities.
3. Compliance officers should make sure that members of their organizations are aware that export regulations are applicable to cloud services and that while the storage of data in the cloud might feel virtual, the penalties for export regulation violations remain brick and mortar.
4. While exporters remain liable for violations of export regulations, compliance officers should work with their IT departments when negotiating terms to agreements with cloud services providers. For example, require the service provider to notify you in the event servers are added in geographic locations that might be problematic for you. See if it is possible to obtain a right to terminate in such instance. In addition, try to get the provider to indemnify you in the event there is an export violation as a result of a provider’s action or inaction.
5. Make sure a review of how your organization uses cloud services is part of your standard compliance self-audit so as to identify any possible problems or lapses before they become significant.

In a speech in 2012, Under Secretary of Industry and Security, Eric Hirschorn, noted that a future project for the Bureau might be a review of “for clarification’s sake – the rules regulating cloud computing.” For both users and providers, such a review should be anxiously awaited.

June 10 - FSMA Rules Will be Released!

The U.S. Food and Drug Administration (FDA) has been court ordered to set firm dates for FSMA's implementation.  Details of the court case forcing FDA to set these dates, and the organization that sued the FDA to make this happen follow.
Background
The Center for Food Safety (CFS), a national non-profit public interest and environmental advocacy organization, filed a lawsuit against the FDA on August 29, 2012.  The complaint alleged FDA failed to promulgate 7 food safety regulations required by the Food Safety Modernization Act (FSMA).  Congress enacted the FSMA – which was signed into law on January 4, 2011 – to modernize food safety laws and regulations by mandating science-based standards and controls; by providing the FDA with greater authority to prevent and address food safety hazards by taking steps to prevent them from occurring; by strengthening the FDA’s inspection and enforcement powers; and by improving coordination among federal, state, and foreign food safety agencies. CFS documented the foodborne illness outbreaks since FSMA was signed into law, January 4, 2011.

Court Order
The court case is being heard by Judge Phyllis Hamilton, in the U.S. District Court for the Northern District of California.  Yesterday, May 21, 2013, Judge Hamilton ordered that the FDA and CFS have an extended deadline of June 10, 2013 to file a joint statement with a mutually agreeable proposed schedule for the outstanding food safety rules.

Rationale for Suit and Missed Deadlines
The ongoing battle between the CFS and FDA to complete this process has lasted for several months. On August 2012, the CFS filed a suit against the FDA Commissioner after the FDA missed a series of deadlines for publishing the regulations mandated by the Food Safety Modernization Act. After numerous deadlines went by without the release of the mandated rules, CFS went to court to try to force FDA to adhere to these time constraints. Following the court appearance, Judge Hamilton ruled that the FDA must come up with a new schedule for issuing the proposed rules by May 20.  This extension came about as a result of the inadequacy in time provided for the FDA and CFS to resolve their differences regarding the schedule FDA suggested to issue the proposed rules.

The FDA sent its updated schedule to CFS on May 15; however, CFS was not satisfied with the proposed timeline. Due to the fact that there were only five days left until the deadline expired, the parties filed a Joint Stipulation for Extension of Time. This extension was granted by Judge Hamilton.

New Rules Released by FDA & What's to Come
Since CFS filed its complaint last year, FDA has released some of the key FSMA mandated rules it failed to publish on time, including preventive controls for human food and standards for produce safety, both released in early January. However, there are some rules that are yet to be released. Among them is the foreign supplier verification program (section 301).  This program is set to overhaul import safety, an establishment of regulations to ensure the safe transport of food products and a rule ensuring neutrality of third-party audits.  I think of it akin to C-TPAT (Customs-Trade Partnership Against Terrorism).  It's a self-policing and auditing type program that includes functions like  monitoring records for shipments, lot-by-lot certification of compliance, annual on-site inspections, checking the hazard analysis and risk-based preventive control plan of the foreign supplier, and periodically testing and sampling shipments.

I look forward to seeing and reporting on FDA's implementation of FSMA.

Do You Keep Your Manifest Information CONFIDENTIAL?

Did you know importers and consignees can request that U.S. Customs and Border Protection (CBP) keep your manifest information confidential?

If you are currently letting your competitors know your source, read on, and learn how to keep your private data private!
Pursuant to the privacy statute, 19 C.F.R. § 103.31 (d) the public is allowed to collect manifest data (e.g., bills of lading) at every port of entry. This information is limited to vessel manifests. Air, rail, and truck manifests are not available to the general public in any form.

Websites such as panjiva.com, datamyne.com and importgenius.com (to name a few) collect and publish the names of importers, suppliers, and manufacturers from vessel manifest data. This can be troubling for some, as your competitors are able to access information related to the sourcing and/ or manufacturing of your products. However, an importer/shipper may make a request to CBP for confidentiality. The confidential protection is valid for 2 years, thereafter, you have to renew your request.

The public may obtain manifest data at every port of entry. However, Section 103.31 states that

Only the name and address of the shipper, general characteristics of the cargo, number of packages, gross weight, name of the vessel, port of exit, port of destination, and country of destination may be copied and published.

The regulation also states that

An importer or consignee may request confidential treatment of its name and address contained in inward manifests, to include identifying marks and numbers. In addition, an importer or consignee may request confidential treatment of the name and address of the shipper or shippers to such importer or consignee.

It is essential that you send in renewal requests 60 days prior to the expiration of the 2 year confidentiality period. The importer will receive a response when the confidentiality request has been granted and it will state the effective time period.

CBP sent a message to trade on Feburary 7, 2013 (CSMS #13-000064), titled "improperly formatted ACE ocean manifest data resulting in release of confidential data." CBP made it clear that after an importer requests confidentiality, and its granted by CBP, the importer must be sure the commercial party names submitted to CBP always match - CBP will not grant confidentiality if you use any variation of the name originally requested. One incorrect keystroke by an individual who is processing the information can result in a new variation of company information that is not covered by the grant of confidentiality. CBP has stated that the release of confidential data is strictly the result of improper data entry by users and not by CBP programming or system errors.

To assure you send an effective request for confidentiality and so your competitors don't have access to your private data, contact me today!

File Your Petitions Timely, Or Else...

As of January 9, 2013, Customs and Border Protection (CBP) is making procrastinators pay the price for filing untimely petitions that seek relief from liquidated damages. CBP amended it’s guidelines for the cancellation and mitigation of claims for liquidated damages in cases where petitioners are late in filing claims for relief. Additionally, CBP also changed the formula for calculating late petition mitigation.

Current Rule for Timely Petitions

Under the existing regulatory authority, in order to be considered timely, petitions for relief in response to claims for liquidated damages must be filed:

•A. By bond principals within 60 days from the date of mailing of the notice of liquidated damages (see 19 C.F.R. 172.3(b)) or any lawful extension thereof; or

•B. By sureties within 60 days of the demand for payment by CBP (see 19 C.F.R. 172.4) or any lawful extension thereof.

When circumstances so warrant, extensions of the time period to file a petition may be granted by the FP&F Officer (FPFO) if such an extension of time is requested during the 60-day period available for timely filing a petition (see 19 C.F.R. 172.3(c)). The amendment to the current rule does not allow a petition for relief to be considered if it is filed after (a) the commencement of sanctioning action against the bond principal or (b) the issuance of a notice to show cause against the surety.

A party responsible for a liquidated damages claim may submit an offer in compromise to CBP pursuant to 19 U.S.C. § 1617 and 19 C.F.R. 161.5. These new guidelines, which will be applicable to all liquidated damages claims for which a late petition is filed on or after Jan. 9, are applicable only to petitions for relief and do not apply to offers in compromise submitted pursuant to 19 U.S.C. 1617 and 19 C.F.R. 161.53.

Consequently, the new mitigation guidelines concerning untimely petitions will impose a more stringent standard. Untimely petitions will be accepted or considered only if the petitioner is able to demonstrate the existence of extraordinary circumstances that prevented the petitioner from filing a timely petition or timely seeking a lawful extension of time in which to file a petition. What does that mean? The FPFO will exercise his or her discretion in determining whether circumstances existed so as to warrant CBP’s consideration or acceptance of a late petition.

Untimely Petitions will NO longer be Accepted

Subject to the permitted exceptions, no untimely petition will be accepted in any circumstance if it is filed:

a. More than 180 days after the date of mailing of the notice of claim to the bond principal, or in the case of a surety, the date of mailing of the first demand on surety;

b. After the petitioner has previously submitted a petition in the same case and/or been offered mitigation in the same case, and such mitigation amount was not paid within the prescribed period;

c After the claim has been referred to Office of Chief Counsel for collection action;

d. After the commencement of sanctioning action against the bond principal; or

e. After the issuance of a notice to show cause against a surety.

CBP notes that (a) an untimely petition is not a supplemental petition described in 19 C.F.R. 172.41, (b) a supplemental petition must be timely filed following a decision on an original petition filed in accordance with the established regulatory time frames, (c) the rejection of an untimely petition does not constitute a “decision” for purposes of 19 C.F.R. 172.41, and (d) petitions that are filed untimely and not accepted for consideration will be rejected. A party responsible for a liquidated damages claim may submit an offer in compromise to CBP pursuant to 19 U.S.C. § 1617 and 19 C.F.R. 161.5.

The Exceptions…

However, untimely petitions for relief of liquidated damages claims issued for the late filing of an entry summary, the late payment of estimated duties (including under the periodic monthly statement test), the late payment of passenger processing fees or the late filing or late payment of reconciliation entries may be accepted without regard to the limitations expressed in paragraphs a and b above at any time prior to the circumstances described in paragraphs c through e.

New Mitigation Calculation for Late Petitions

CBP has also implemented a new calculation for mitigating liquidated damages for untimely petitions. In calculating the mitigated amount on a late petition, CBP will first determine the base amount (i.e., the amount of mitigation that would have been afforded on a timely petition). CBP will then determine the “additional mitigation amount” by multiplying the full assessed amount of the claim by 0.1 percent (.001) and then multiply by the number of days the petition is late (i.e., .001 times the number of days late times the full assessed claim amount.) The product will be the additional amount which will be added to the base amount to produce the mitigated amount applied to the untimely filed petition. In no case will the additional mitigated amount to be added to the base amount be less than $400. For example, a $100,000 liquidated damages claim for which a petition is filed 30 days late will be mitigated to the amount provided by the guidelines plus an additional amount calculated by the new formula (30 days late x .001 = .03 x 100,000 = $3,000 added charge.)

Bottom line, assure you have an expert Customs attorney assisting you to fight for mitigation of Liquidated Damages claims, and file your Petitions TIMELY!