Trade Groups Oppose CBP Proposal to Stop Paper Courtesy Liq Notices for ABI Summaries

On March 16, 2010, U.S. Customs and Border Protection published a proposed rule to amend 19 CFR Part 159 to discontinue mailing paper courtesy notices of liquidation to filers whose entry summaries are filed in the Automated Broker Interface.

In its proposed rule, CBP argued that the ABI filer, who is either the importer of record or a customs broker, already receives an electronic courtesy notice thereby rendering the paper courtesy notice duplicative. If CBP’s proposal is adopted, ABI filers would only receive electronic courtesy notices. Written comments on CBP’s proposed rule were due May 17, 2010.

(Courtesy notices of liquidation provide informal, advanced notice of the liquidation date and are not required by statute¹.)

All Importers Should Receive Courtesy Liquidation Notices

Highlights of the comments submitted by the Customs and International Trade Bar Association (CITBA) and the U.S. Association of Importers of Textiles and Apparel (USA-ITA) include:

CBP should wait for ACE. CITBA urged CBP to postpone the change in practice until the Automated Commercial Environment (ACE) is fully implemented and electronic courtesy notices can be sent to all importers of record. CITBA warns that without a paper copy by mail, those importers who are not self-filers would be reliant upon their broker to provide them with notification of the liquidation dates for their entries.

Non-ABI importers should be notified too. USA-ITA states that while it does not object to CBP’s proposal in principal, if it is adopted, some adjustment must be made to ensure that importers who are not the ABI filers continue to have access to liquidation information, without having to rely upon a broker or surety for the information.

While USA-ITA does not object to an electronic alternative to the paper courtesy notice, it does state that limiting the information to ABI filers is not acceptable. One possibility mentioned by USA-ITA is to modify the ACE reports to include complete liquidation information -- the same information provided in the courtesy notice. According to USA-ITA, providing liquidation information in ACE would likely create an additional incentive for importers to join the program.

Paper Courtesy Notices Should be Maintained for Now

Highlights of the comments submitted by the American Association of Exporters and Importers (AAEI), CITBA, and the International Freight Forwarders & Customs Brokers Association of New Orleans, Inc. (IFFCBANO) include:

Importers should receive liquidation notices directly. AAEI opposes CBP’s proposal to eliminate the paper courtesy notices of liquidation sent to importers whose entry summaries are filed in ABI. AAEI warns that since so many importer rights flow from the date of liquidation, it is critical that importers receive notices of liquidation directly, rather than having to rely on brokers to provide this information to them.

Among AAEI’s practical reasons for urging CBP to retain its practice of issuing paper courtesy notices of liquidation, are (i) ABI transmissions of liquidation notices are not uniformly provided to importers by all brokers, and (ii) while importers can impose additional contractual responsibilities on their brokers to provide them with timely notices of liquidation, most broker power of attorneys limit the broker’s liability to $50 per entry. Thus, while the failure of a broker to provide timely notice of liquidation to an importer can result in an importer completely losing its rights to challenge CBP decisions worth millions of dollars to the importer.

CBP could allow entities to opt out of hard copy mail service. In its comments, CITBA recommends that CBP have in place the systems to ensure all importers of record can themselves readily ascertain or confirm the liquidation dates for their entries before discontinuing the mailing of courtesy notices.

One option mentioned by CITBA, is that CBP could conduct a one-time survey of all current importers of record whose entry summaries are filed in ABI to identify those entities that elect to opt out of hard copy mail service, something that is likely to result in a substantial reduction of paper courtesy notices.

Importers, especially small importers, could be adversely affected. IFFCBANO comments that CBP’s proposal would complicate the efforts an importer must make in order to learn the liquidation status of its entries, expressing concern for smaller companies in particular.

¹19 USC 1500(e) requires CBP to provide notice of liquidation to the importer or his agent and authorizes CBP to determine the form and manner by which to issue the notice. CBP has the discretion to provide advance notice of the liquidation date to the importer or his agent by issuing informal courtesy notices. The courtesy notice is not required by 19 USC 1500(e) and does not trigger the date upon which an importer may file a protest under 19 USC 1514 challenging certain aspects of the liquidation.

(See ITT’s Online Archives or 03/16/10 news, 10031620, for BP summary detailing CBP’s proposed rule. See ITT’s Online Archives or 03/15/10 news, 10031505, for BP summary on CBP’s issuance of the proposed rule.)

(D/N USCBP-2010-0008)