Import Compliance
U.S. Customs and Border Protection (CBP) is a critical player in the global supply chain. Traditionally, CBP has been the collector and protector of the revenue derived from duties imposed on imported products, and the agency responsible for interdicting at the border illicit drugs and other contraband. Since 9/11, however, CBP has taken the lead in developing, implementing, and administering supply-chain security programs designed to identify and interdict weapons of mass destruction, bio-hazards, and other goods that would threaten the health and safety of Americans.
These changes affect all companies that import goods into the United States. In this heightened security environment, importers are expected to cooperate with CPB’s efforts to tighten controls of all aspects of the importing process. For example, they are now required to provide manifest information about what they are importing up to 24 hours before their containers are loaded on carriers; soon they will be required to provide additional details about each shipment. They are asked to participate voluntarily in the Customs-Trade Partnership Against Terrorism (C-TPAT) and work with suppliers, 3PLs, carriers, and customs brokers to enhance the security of their supply chain. In addition, in response to recent discoveries of importations of tainted food and toys with lead paint, importers are faced with the specter of even tighter controls over general product safety. At the same time, CBP has continued to emphasize customs regulatory compliance, has developed new audit programs, and has increased the number of civil and criminal enforcement actions against importers. Consequently, today importers work in an environment of ever increasing government requirements and scrutiny.
Global Customs
While understanding and navigating CBP’s import regime is a core focus of our customs practice, we also recognize that a majority of the consumers of U.S. goods and services lie outside of our borders. Because of this, we understand and have experience in foreign customs import regimes and help clients navigate these different import regimes. In particular, we advise our clients on how to access existing and new export markets, as well as how to utilize various U.S. and non-U.S. preferential trade agreements.
Miller & Chevalier’s Global Customs and Import Trade Practice helps importers negotiate the maze of CBP requirements, and helps U.S. exporters navigate the patchwork of foreign customs import regimes, procedural requirements and preferential arrangements. Led by Dick Abbey, former Chief Counsel of the U.S. Customs Service, and Jay Eizenstat, former Director for Customs Affairs in the Office of U.S. Trade Representative, our Customs Team provides the full range of import-related advice, from basic compliance counseling and audits, to enforcement and litigation.
Compliance Programs and Audits
CBP’s latest forms of regulatory audit, the Focused Assessment and the Quick Response Audit, are in full swing. Most major importers can expect to be targeted for a Focused Assessment within the next several years, and can prepare for it by conducting a self-assessment to ensure that internal controls over customs operations are satisfactory and to identify and correct any deficiencies. Alternatively, an importer may avoid an audit by choosing to participate in a compliance management program known as an Importer Self-Assessment (ISA). Many importers are also choosing to participate in the Customs-Trade Partnership Against Terrorism (C-TPAT), a voluntary security initiative through which companies commit to enhancing supply chain security in a cooperative effort with CBP to reduce the risk of terrorist attacks in the commercial cargo environment.
CBP is also at the forefront of implementing U.S. obligations under the Kimberley Process Certificate Scheme, the international public-private partnership to eliminate so-called “conflict diamonds” from the international diamond market. Central to compliance with Kimberley Process requirements are supply chain security, robust internal controls and customs operations, and compliance with applicable CBP regulations.
We assist importers with all of these programs. Our extensive experience with customs audits has included both the old Compliance Assessment audits and the new Focused Assessment audits. We have worked with more than 13 companies undergoing Focused Assessments or applying for the ISA program. We also help companies determine whether to participate in C-TPAT and have assisted many clients with the application and approval process for this program. We help importers perform internal customs self-assessments, and establish and maintain effective internal customs compliance programs and security measures. Without rigorous monitoring and evaluation, the chances of inadvertently violating the customs laws increase greatly.
Enforcement and Litigation
We defend companies in customs enforcement proceedings and court cases, including import/export seizures and penalty actions, and provide representation before CBP, the Court of International Trade and the Court of Appeals for the Federal Circuit. Where appropriate, we can call upon the resources of our top-notch criminal defense team. When a client independently discovers an error in its import transactions, we advise and assist in evaluating the matter and in preparing voluntary (prior) disclosures to CBP and the Department of Commerce, where appropriate. This can eliminate, or greatly reduce, monetary penalties for violations.
General Customs Counseling
We provide clients with expert counseling on all types of customs matters, no matter how complex the problem or transaction. We regularly counsel clients on tariff classification, valuation and marking of imported merchandise, as well as country-of-origin determinations. We also specialize in advising clients on border enforcement of intellectual property rights issues, such as patents, trademarks, and copyrights. We are one of very few law firms that prosecute and defend claims of patent infringement before the International Trade Commission. As CBP is responsible for enforcing the import-related requirements of other federal government agencies (such as the Environmental Protection Agency, the Food and Drug Administration, and the Fish and Wildlife Service), we assist clients in complying with substantive and documentary requirements in those areas as well. To help our clients develop and enhance their own internal customs compliance procedures, we offer on-site training seminars, tailored to each company’s specific industry and focused on issues of particular importance to the company’s business. For many years, we have taught a customs broker exam preparatory course.
Duty Savings Programs and Opportunities
The proliferation of Free Trade Agreements (FTAs) and Special Trade programs has created a complicated legal and regulatory patchwork which multinational corporations and service providers must navigate in order to fully realize the market access gains from these preferential arrangements. We frequently counsel clients on how to structure their transactions, production, and sourcing to gain maximum benefit from FTAs and preference programs.
We have considerable expertise in the benefits and customs requirements in U.S. FTAs, including NAFTA, CAFTA-DR, and bilateral U.S. FTAs with Australia, Bahrain, Chile, Colombia (pending), Israel, Jordan, Morocco, Panama (pending), Peru, Singapore, and South Korea (pending).
U.S. preference programs also offer significant opportunities for manufacturers to gain preferential access to the U.S. market. We understand these preference programs and have experience in helping manufacturers benefit from them, including the Generalized System of Preferences (GSP), the Caribbean Basin Economic Recovery Act (CBERA), Caribbean Basin Trade Partnership Act (CBTPA), Andean Trade Preferences Act (ATPA), and the African Growth and Opportunity Act (AGOA). We also provide guidance regarding duty-reduction programs for U.S. goods returned and goods assembled abroad with U.S. components, and help companies take advantage of the often complex duty drawback, foreign trade zone (FTZ), temporary importation, and prototypes rules to reduce or eliminate their overall duty obligation on imported goods and materials.
Recent Representative Engagements
We have represented clients from nearly all trade sectors, including many Fortune 100 companies, in a broad range of customs matters. Recent engagements on customs matters include the following:
- Counseling clients on customs matters in a broad array of industries, including the appliance, automotive, camera, machine tools, high technology and electronics, HVAC, petroleum and petroleum products, chemicals, jewelry, biotechnology, food, and hand tools sectors, as well as counseling customs brokers, freight forwarders and air couriers.
- Assisting clients in completing compliance self-assessments or audits and in designing and implementing internal control enhancements, security measures, and compliance improvement programs.
- Obtaining a favorable ruling on behalf of a Canadian client on the NAFTA eligibility of imported fruit juices.
- Assisting U.S. petroleum refining, HVAC, camera, and auto parts companies with their applications for C-TPAT and the Importer Self-Assessment program.
- Investigating potential customs violations and preparing significant prior disclosures for clients in the petroleum, high-technology and manufacturing sectors.
- Preparing a prior disclosure on behalf of a major U.S. manufacturer to limit the company’s liability for several years of undeclared “assets” payments to foreign suppliers.
- Evaluating NAFTA eligibility issues, preparing and filing NAFTA prior disclosures as necessary, and in some cases challenging the denial of NAFTA benefits in the United States, Canada, and Mexico.
- Assisting a U.S. exporter of petroleum products in responding to a NAFTA audit conducted by the Mexican customs authorities.
- Obtaining a favorable ruling on behalf of a major U.S. cosmetics manufacturer establishing that duties were not owed on millions of dollars of past royalty payments to foreign suppliers.
- Advising clients with valuable patents, trademarks and copyrights regarding effective intellectual property rights enforcement strategies at CBP, and representing clients in large-scale intellectual property enforcement matters.
- Successfully litigating before the Court of International Trade on the tariff classification of marble products.
- Defending clients in the consumer electronics, footwear, and textile industries in criminal and civil enforcement proceedings before CBP and the Court of International Trade.
- Representing clients in meetings with CBP officials in ports throughout the country to avoid penalties regarding tariff classification, valuation, country-of-origin marking and entry procedures.
- Successfully protesting the tariff classification of various types of hand tools, resulting in refunds of tens of thousands of dollars for past duty overpayments.
- Serving as customs counsel to major trade associations.
- Filing an amicus curiae brief before the U.S. Court of Appeals for the Federal Circuit on behalf of a major U.S. automobile trade association regarding eligibility for preferential treatment under Chapter 98 of the Harmonized Tariff Schedule of the United States, advocating a position that was successful before the court.
- Filing amicus curiae briefs before two separate Federal District Courts on behalf of the same U.S. automobile trade association regarding record keeping requirements under NAFTA.
- Teaching a four-day preparation course for CBP’s customs broker licensing exam.
We have developed a network of relations with counsel around the globe to better advise clients on foreign customs matters, if the need arises. We also frequently work with systems solutions providers and non-lawyer consultants to provide efficient, cost-effective service to our clients.
Related Publications
International Alert - Implementation of the Lacey Act’s New Declaration Requirement for Wood ProductsAuthor(s): Richard Abbey,
Jay Eizenstat,
P. Welles Orr,
Daniel WendtInternational Alert - Recent Customs Developments/ U.S. Customs and Border Protection Proposes Landmark Changes to Country of Origin RulesAuthor(s): Richard Abbey,
Jay EizenstatInternational Alert - Recent Customs DevelopmentsAuthor(s): Richard Abbey,
Jay Eizenstat,
J. Matteson Ellis
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