CBP Says Past Export Filing Penalties, Redelivery Notices Were ‘Legitimate’

CBP recently completed a review of export-related penalties and found they were “all legitimate” despite some shippers claiming they were unfairly imposed, said Peter Russell, a program manager with CBP’s outbound enforcement policy branch. Russell said CBP began the review after exporters, forwarders and others complained they were receiving years-old penalties for filing violations or unfair redelivery notices for used vehicle shipments.

Some forwarders in recent years have reported a rise in penalties for violations surrounding ocean shipments that occurred more than a year prior (see 2105040040). Russell said CBP was right to issue all of the penalties he reviewed, saying the exporter had either omitted filing information or submitted a late filing in the Automated Export System.

As part of the review, Russell also said he was given 75 previously issued redelivery notices, which required shippers to pay to return their vehicle export to the U.S. after it had already been exported. “I only looked at about the first 25 or so,” Russell said, “and every one of them was a stolen vehicle.”

“All those scenarios and different things that I looked at, they were all legitimate” penalties, he said Oct. 28 during the Pacific Coast Council's Western Cargo Conference, known as Wesccon. “Yes, it's a hindrance to the trade. But our number one goal at CBP and your number one goal in the trade community should be to prevent a stolen vehicle from going out.”

Russell said AES users risk a penalty if they don’t update their Electronic Export Information when something about the shipment changes. “You have to go in and change it, regardless of the time frame,” Russell said.

He also stressed the importance of CBP’s 72-hour rule, which requires the documentation for vehicles shipped by vessel or air to be submitted to CBP at least 72 hours prior to export. It generally takes local police departments about that long to report a stolen vehicle, Russell said, “so we need that 72 hours.”

Russell said meeting that 72-hour requirement has become more challenging because most carriers recently ended their practice of verifying whether a vehicle shipment has met that threshold. He said he spoke to a shipping line earlier this month that was “one of the last lines” still verifying the 72-hour requirement. “They're no longer doing that. And at this point,” he said, he believes “all the lines” have stopped verifying the 72 hours.

He added that carriers aren’t required under U.S. regulations to verify the 72-hour rule -- only that the EEI was filed. “Today, they're just putting it on a ship. It's not their responsibility,” Russell said. “So what's happening is, as these vehicles are getting on the ship, the ship gets sailed, and we want it back now. And now there's a redelivery process.”

He added: “Everything is up to the actual exporter themselves. They're the ones who are responsible.” CBP is working with carriers to find a potential way they can still verify the 72-hour rule, Russell said.

He also said the agency is continuing to try to reduce its “parking ticket” violations -- penalties for minor errors made in AES -- despite recent efforts by CBP and the Census Bureau to rein in those fines (see 2210110012). “We're trying to change the way we issue penalties in the export environment,” Russell said, which could also include changes to the way CBP mitigates filing penalties. “So hopefully within the next couple of years, we can have some changes with that.”

CBP also is still working to convince some ports to recognize a pilot program launched in January that allows filers to submit EEI for their used vehicle exports (see 2304270026 and 2212160021). Although Russell said he hasn’t “heard” about any port directors refusing to participate in the pilot, he noted the decision is “at the port director’s discretion.”

He said Port Everglades in Fort Lauderdale, Florida, has been accepting electronic filings for “years,” adding that it’s the “busiest port of export” for vehicles. “They've been 100% for years and they have no problems with it at all,” Russell said. “They’re catching stolen vehicles left and right.”

But other ports, including some ports in New York, are still processing thousands of car titles by hand each day, he said. “It's just a matter of me working with the port director and their people and giving them some training, helping them understand, helping them change and get through it,” Russell said, asking shippers to give the ports “a little bit of wiggle room to work their way in so they can be comfortable with it.”