Customs Modernization Tackles de Minimis, Advance Data, Counterfeits, Public Manifests

The Customs Modernization bill introduced in the Senate allows CBP to access data from parties in the supply chain other than importers, allows those parties to update and amend their advance data, and authorizes a customs broker or importer of record to convert the pre-entry information into a certified entry filing.

This is at the heart of what CBP was seeking in a 21st Century Customs Framework (see 2304260028). The bill, introduced last week by Sen. Bill Cassidy, R-La., and Sen. Sheldon Whitehouse, D-R.I., will allow CBP to use mandatory advance data for trade law enforcement. Currently, the statute limits it to ensuring cargo security. It gives CBP the opportunity to promulgate regulations about what information it's seeking, and who can provide it.

As the agency decides what to ask for, the senators instruct it to consider if the information will:

• facilitate priority processing
• expedite customs release
• reduce redundancies in trade data parties are required to provide
• help CBP to request additional information prior to departure or arrival of the merchandise.

If importers don't submit the mandatory advance data, they can be fined $5,000 on first violation, and $10,000 for subsequent violations. It also authorizes CBP to apply adverse inferences to importers and other parties that don't make "reasonable efforts" to comply with record demands. The penalty could be imposed for each item on a bill of lading.

The Commercial Customs Operations Advisory Committee argued against this level of fine as it discussed CBP's design for a 21st Century Customs Framework, saying it was excessive to the value of shipments. CBP agreed to recommend a lower penalty, of $1,000 for first violation, and $2,000 for multiple violations, but the senators stuck with the higher fines.

The standard for submitting advance data is that it is true and correct to the "best of the knowledge and belief of the party," the same language that was in the discussion draft Cassidy released. At that time, the National Customs Brokers & Forwarders Association of America said that was "a new standard of care potentially more rigorous than the responsible supervision and control standard currently applicable to customs broker,"

However, Express Association of America Executive Director Mike Mullen said in a phone interview Dec. 11 that his understanding "is that that is actually a lower standard than responsible supervision and care. It's a less stringent standard and one we can live with."

The bill loosens the standard for inspecting counterfeit goods, changing the language from "suspect" to "reasonable suspicion," and

In a one-page summary released by Whitehouse's office, the senators said the current process for seizing and forfeiting counterfeit goods "is cumbersome and the costs of the process often exceed the value of the seized goods." The bill allows summary forfeiture for goods that would have entered under de minimis -- valued at less than $800 -- that are either counterfeit or violate Food and Drug Administration or Public Health Service Act bans.

Companies who battle counterfeiting have asked for more information sharing from CBP on counterfeits for years, and this bill offers that, saying that non-public information shared by an online marketplace, an express consignment operator or a freight forwarder can be shared with any party if it "would promote compliance with the customs and trade laws ... ."

The bill allows CBP to seize goods that don't pose a safety risk, obliterate the mark that makes it a counterfeit, and distribute the goods to federal, state or local agencies or charities that could make use of them. If none are interested, CBP can auction the goods after 90 days.

The bill expands liability for aiding unlawful importation or exportation of goods to cover anyone involved in any way in "importation, introduction, bringing in, unlading, landing, removal, concealing, harboring, or subsequent transportation of the article," and the good doesn't have to be seized in order to enforce the law. It also grants CBP authority to levy penalties on those who intentionally destroy, alter, conceal, cover up and falsify evidence with the intent of avoiding duties, taxes, fees or penalties.

The bill gives CBP the opportunity to promulgate regulations that would describe what information related to an offer for sale, purchase, transportation, importation or warehousing of an article is needed for CBP to determine if the product or shipment can enter under de minimis rules. The bill also says that, when CBP detains a good that entered under de minimis, if the importer does not respond to the notice of detention within 15 days, it can toss the package.

When CBP is investigating antidumping or countervailing duty evasion, if the agency has a "reasonable suspicion" that the goods entered through evasion, "the identity of the importer of the covered merchandise shall not be considered confidential information that is protected from public disclosure." Moreover, the agency can add additional importers to an Enforce and Protection Act (EAPA) investigation at any time, if "there is reasonable suspicion that the additional importer is engaged in the same or similar conduct as an importer previously subject to the investigation."

The bill proposes making truck, rail and air cargo manifests public, as ocean manifests are now, a request of firms and nonprofits who use public data to uncover sanctions violations or forced labor in supply chains (see 2305250033). That manifest data would need to disclose the country the cargo was produced in, as well as the last country the cargo was transported from. It would also say if the shipment was to a private individual, or a firm.