Importer Security Filing
On January 26, 2010 You MUST File a 10+2 or Face Penalties!
U.S. Customs and Border Protection is serious. On January 26, 2010 they will start issuing penalties for failure to comply with the Importer Security Filing (ISF), also known as the 10+2. We can file for you or your shipper overseas can do it, but someone must. Failure to file will result in a $5,000 per violation penalty. You can also be fined for filing incomplete or wrong information. Therefore, the total penalty per shipment could be as much as $10,000.00.
Customs' regulations require that this information be filed 24 hours prior to the loading of the vessel. In order for us to accomplish this, we need to receive the documents 4 days before departure of the vessel. This will give us ample time to file and save you from facing a penalty. If there are any corrections we will need that information immediately so we can update the information with Customs. I cannot state enough that this is YOUR responsibility and YOUR penalty.
U.S. Customs is also requiring an additional bond for the ISF. This can be done with a single ISF bond, which will carry an additional charge. The shipment and ISF can also be bonded with a continuous transaction bond.
Arizona Customs Brokers is here to assist you with this filing and the bond. On our website, arizonacustomsbrokers.com, you can download "The Importer Security Filing Data Sheet", found under forms. We have setup a special email address for you or your overseas partner to send the form and documents. This address is firstname.lastname@example.org. If you have any questions regarding the ISF or bonding requirements please give Robert Hornyan a call at 602-273-0912. We are here to assist you and keep you penalty free.
2019 Federal Holidays
For your information, below is a listing of Federal Holidays for Calendar Year 2019. These dates can also be found at:
Date - Holiday
Tuesday, January - 1 New Year's Day
Monday, January 21 - Birthday of Martin Luther King, Jr.
Monday, February 18 - Washington's Birthday
Monday, May 27 - Memorial Day
Thursday, July 4 - Independence Day
Monday, September 2 - Labor Day
Monday, October 14 - Columbus Day
Monday, November 11 - Veterans Day
Thursday, November 28 - Thanksgiving Day
Wednesday, December 25 - Christmas Day
Determining Origin for Section 301 Tariffs Poses Challenges
Thursday, September 05, 2019
Sandler, Travis and Rosenberg Trade Report
There continue to be conflicting reports in the press about the correct test to apply to determine country of origin for purposes of the Section 301 tariffs the U.S. is currently imposing on imports from China. Importers should be aware that while the COO claims made by their vendors may be correct under the source country's rules, they may be incorrect under U.S. rules. With an ever-increasing tariff burden at stake, as well as potential penalties for getting it wrong, it is important for importers to understand the applicable rules and verify COO claims made by their suppliers.
Unlike rules for value and classification, COO rules are not harmonized internationally. Countries often develop their own COO tests or adopt one from a particular free trade agreement. Even within a country the tests can vary depending on the specific issue involved. For example, different origin rules can exist for FTAs, product marking, or preference program qualification, to name a few.
The U.S. uses various COO tests in various circumstances, and there are essentially two tests used for determining COO for purposes of Section 301 duties: (1) substantial transformation or (2) the special origin rules found under 19 CFR Part 102. Which one to use depends on the product at issue.
As a result, COO tests used by the country of manufacture (e.g., a specified percentage of local content) may not be applicable to determining origin for U.S. import purposes. Similarly, the last country of processing and export may not be the country of origin for U.S. purposes.
Act Now to Request Exclusions from Tariff Increase on China List 3 Goods
Wednesday, September 04, 2019
Sandler, Travis and Rosenberg Trade Report
Requests for exclusions from the additional tariff imposed on some $200 billion worth of imports from China (List 3 goods) may be submitted through Sept. 30. Any exclusions granted will be retroactive to Sept. 24, 2018, and remain in effect for one year from the date of publication of the exclusion determination in the Federal Register.
The additional tariff on List 3 goods is currently 25 percent and is set to increase to 30 percent as of Oct. 1 (comments on this increase are due by Sept. 20). Any interested person, including trade associations, may request exclusions from this tariff by submitting the following information.
- contact information, including full legal name of the organization making the request, whether the requester is a third party (law firm, trade association, or customs broker) submitting on behalf of an organization or industry, and primary point of contact (information on whether the requester's business satisfies the Small Business Administration's size standard for a small business may also be provided)
- applicable ten-digit HTSUS number (different models classified under different eight-digit or ten-digit subheadings are considered different products and require separate exclusion requests)
- name and detailed description of the product, including its physical characteristics such as dimensions, weight, material composition, etc. (requesters may submit a range of comparable goods within the product definition set out in an exclusion request)
- product function, application, principal use, and any unique physical features that distinguish it from other products within the covered eight-digit subheading
- requester's relationship to the product (importer, U.S. producer, purchaser, industry association, other)
- annual quantity and value of Chinese-origin product, domestic product, and third-country product purchased by the requester in 2017, 2018, and the first quarter of 2019
- information on the requester's gross revenues for 2018 and the first quarters of 2018 and 2019
- for imports sold as final products, the percentage of the requester's total gross sales in 2018 accounted for by sales of the Chinese-origin product
- for imports used in the production of final products, the percentage of the total cost of producing the final product(s) accounted for by the Chinese-origin input and the percentage of the requester's total gross sales in 2018 accounted for by sales of the final product(s)
In addition, each request should address the following factors.
- whether the product is available only from China and whether the product and/or a comparable product is available from sources in the U.S. and/or third countries
- whether the requester has attempted to source the product from the U.S. or third countries
- whether the imposition of additional duties (since September 2018) on the product has or will cause severe economic harm to the requester or other U.S. interests
- whether the product is strategically important or related to "Made in China 2025" or other Chinese industrial programs
Requesters may also provide information about the possible cumulative effects of the Section 301 tariff actions, particularly information about any previously submitted exclusion requests as well as the value of the requester's imports covered by the previous tariff actions. Additionally, requesters may provide any other information or data that they consider relevant to the evaluation of an exclusion request.
Shipments from Third Countries Seeing More Scrutiny Amid Efforts to Avoid China Tariffs
Tuesday, July 02, 2019
Sandler, Travis and Rosenberg Trade Report
Shifting manufacturing operations to change a product's country of origin is a longstanding and legitimate way to mitigate tariffs on goods imported into the U.S. While many U.S. companies are properly using this method to reduce their exposure to the 25 percent additional tariff the U.S. has imposed on hundreds of billions of dollars' worth of goods from China, others are taking shortcuts by simply transshipping goods from China and labeling them as products of a third country. Importers should pay closer attention to their supply chains to avoid such illegal activity.
According to press reports, Vietnam has been a particular target of scrutiny by U.S. officials on the hunt for Chinese goods seeking to avoid the Section 301 tariffs. Trade data show that U.S. imports from Vietnam have surged as those from China have declined in the wake of the tariffs. Some of that increase is legitimate, an article in The Loadstar notes, as "there is a significant number of Chinese businesses setting up factories in Vietnam to legally produce and assemble goods" and foreign direct investment from China into Vietnam has hit "record levels." This trend was already underway due to increasing labor and other costs in China but appears to have accelerated in light of the U.S. tariffs.
However, observers say at least some of the increase is also due to transshipment, or goods made in China being re-routed through Vietnam where they are labeled as products of that country and then sent on to the U.S. to avoid the tariffs on China. A Bloomberg article said Vietnamese officials recently found "dozens of fake product-origin certificates and illegal transfers by companies trying to sidestep U.S. tariffs on everything from agriculture to textiles and steel" from China. In response, officials have reportedly pledged to strengthen factory inspections, tighten the supply of certificates of origin, and increase penalties on trade-related fraud.
Other countries in Southeast Asia could get caught up in this scheme as well. A Reuters article states that the U.S. has fined several companies for transshipping goods through a Chinese-owned special economic zone in Cambodia, and other sources say U.S. Customs and Border Protection has vowed to impose civil or criminal penalties or take other enforcement actions if the problem turns up elsewhere. The Wall Street Journal cited a CBP spokeswoman as stating that transshipment has been "flagged in Malaysia and the Philippines in recent months."
President Trump, who has demonstrated a proclivity for imposing tariffs to address any number of issues, could be considering such measures in response to the transshipment issue. According to press sources, Trump said in a recent TV interview that "a lot of companies are moving to Vietnam," which "takes advantage of us even worse than China" and is "almost the single worst abuser of everybody," an apparent reference to trade practices. Trump added that the two countries are "in discussions" but gave no further details.
These developments highlight that while shifting production remains a legitimate means of reducing tariff liability, those utilizing it should take steps to ensure that their supply chain partners are following applicable rules and that those efforts are sufficiently documented. It is also important to have a plan in place in case transshipment or other violations are discovered.
TSCA Title VI Import Certification Begins March 22
On March 22, the TSCA Title VI import certification requirement that applies to composite wood products (panels of hardwood plywood, particleboard, medium density fiberboard, thin-medium density fiberboard, etc.,) component parts containing such composite wood products, and finished goods containing such composite wood products that are imported into the U.S. goes into effect.
The EPA has updated its "Tips for Trade when filing an EPA TSCA Certification in ACE" as guidance for the Trade when filing certifications. In addition to certification, under the TSCA Title VI regulation, importers must also:
•Keep Records. Take reasonable precautions by retaining, for three years, bills of lading, invoices, or comparable documents that include a written statement from the supplier that the composite wood products (or component parts/finished goods) are TSCA Title VI compliant.
•Provide Records on Request. When EPA requests, make available within 30 days records identifying 1) the panel producer and the date the composite wood products were produced- and 2) records identifying the supplier, if different, and the date the composite wood products (or component parts/finished goods) were purchased.
Imported Plywood Products Could be Hit With Significant AD/CV Duties
Thursday, January 24, 2019
Sandler, Travis and Rosenberg Trade Report
Goods made with hardwood plywood and imported from China may be hit with antidumping and countervailing duties as a result of increased scrutiny by U.S. Customs and Border Protection.
The AD and CV duty orders on hardwood plywood products from China went into effect Jan. 4, 2018. The goods subject to these orders are hardwood and decorative plywood and certain veneered panels. All hardwood plywood is included within the scope of these orders regardless of (1) whether or not the face and/or back veneers are surface coated or covered, (2) whether or not such surface coatings or covers obscure the grain, textures, or markings of the wood, (3) whether the plywood is trimmed, cut-to-size, notched, punched, or drilled or has undergone other forms of minor processing, (4) dimension, and (5) further processing in a third country.
According to Kristen Smith, who heads Sandler, Travis and Rosenberg's Trade Remedies Practices, the International Trade Administration is now holding that some cabinet and furniture products made of hardwood plywood that were previously considered excluded from the scope of these orders are in fact covered if they are not imported in a single box. As a result, importers of such goods face significant duty liability, with current AD duty rates at 171.55 percent to 183.36 percent and CV duty rates at 22.98 percent to 194.90 percent.
Affected companies have until Feb. 28 to request administrative reviews of these orders in an effort to lower these duty rates. It is unlikely this deadline will be extended despite the ongoing federal government shutdown, Smith says.
Imported Composite Wood Products Must be TSCA Compliant as of March 2019
Thursday, December 13, 2018
Sandler, Travis and Rosenberg Trade Report
A December 2016 final rule from the Environmental Protection Agency established national formaldehyde emission standards and a third-party certification system for regulated composite wood products (i.e., panels), including hardwood plywood, particleboard, and medium-density fiberboard, to ensure those panels are compliant before being sold to end users or fabricated into component parts or finished goods (furniture, cabinets, picture frames, toys, etc.). Between June 1, 2018, and March 22, 2019, such goods that are imported into or manufactured in the U.S. must be (a) certified as compliant with either Title VI of the Toxic Substances Control Act or the California Air Resources Board's Airborne Toxic Control Measures Phase II emission standards by a third-party certifier approved by CARB and recognized by EPA and (b) labeled as compliant with the relevant standard.
U.S. Customs and Border Protection is now advising interested parties that after March 22, 2019, such goods may only be certified and labeled as compliant with TSCA Title VI- labeling them as compliant with the CARB ATCM Phase II standards will not be sufficient.
Also beginning on that date importers will be responsible for providing a TSCA Section 13 import certification for articles containing regulated composite wood products, component parts, or finished goods imported into the U.S. customs territory. This import certification will be in the form of a positive certification for applicable shipments through the Automated Commercial Environment. CBP adds that upon request from the EPA importers must make available within 30 calendar days certain records that document compliance.
Additionally, the EPA recently published a proposed rule that would, among other things, clarify that regulated composite wood products and finished goods containing such must be labeled at the point of manufacture or fabrication. If the product is imported, the label would have to be affixed to the product by the date of importation.
Attention Ocean Importers
Beginning January 26, 2009 all shipments destined for the United States must comply with the submission of "Importer Security Filing 10+2(ISF)". The importer is ultimately responsible for the data to be entered in the Import Security Filing even if entered by an agent of theirs. This data must be received by U.S. Customs 24 hours prior to the loading of a vessel. That data has to be reviewed, classified, processed and accepted in order for your shipment to be loaded on a vessel that is destined for the USA. This data has to be sent to U.S. Customs and Border Protection via an approved electronic data interchange systems.
Arizona Customs Brokers can do this for you.
Simply stated, the ISF requires the importer or their agents to provide ten data elements 24 hours before the departure of the vessel and the two remaining elements 24 hours before the vessel's arrival.
The original ten elements required are:
1. Manufacturer(Supplier)- Name and Address
2. Seller(Shipper)- Name and Address
3. Buyer(Purchaser)- Name and Address
4. Ship to Consignee or Ultimate Consignee - Name and Address
5. Container stuffing location - Name and Address
6. Consolidator(Stuffer)(Forwarder) - Name and Address
7. Importer of Record - ID Number
8. Consignee - ID Number
9. Country of Origin
10. Harmonized Tariff Schedule Number
Plus the last two elements:
1. Master Bill of Lading - House Bill of Lading(NVOCC)
2. Ocean Bill of Lading (if straight B/L).
Arizona Customs Brokers will be prepared to submit this information to U.S. Customs on your behalf. In order for us to comply with this regulation we will require that this information be sent to us 4 days prior to the delivery of the container to the port. We would also like the commercial invoice and packing list at this time. This will require additional work on our behalf and we will have to charge for this service. At this time we are not sure what the charge will be as things are still being worked out and subject to change.
Between January 26, 2009 and January 26, 2010 U.S. Customs will be evaluating any compliance difficulties. Customs reserves the right to take enforcement action when an importer is not achieving "satisfactory progress" or making a "good faith effort to comply" during this time. Customs penalties for non-compliance are $5,000.00 per violation.
Please call us with any questions you may have at 602-273-0912. As we get more information we will pass that along to you or you can check our website at www.arizonacustomsbrokers.com.