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“What Would Carl Do?” – In Memoriam

by Paul Vandevert
Principal, Vandevert Trade Law 

I have been a Customs and international trade lawyer since I graduated from law school in 1987 and have lived and practiced in Michigan since I went to work for General Motors as a Customs attorney in 1994.  I recently learned that Carl Soller, also a Customs lawyer and frequent contributor to this column, died at the end of January.  At the same time, I read further reporting about an ongoing controversial and economically damaging policy imposed by U.S. Customs and Border Protection (CBP) in the Port of Detroit, which hampers trade through all Michigan water ports.  Without offering any explanation or rationale, CBP Detroit has continued this policy despite appeals from some of the state’s largest traders (and employers), shipping companies, port authorities and even members of Congress from both political parties. This issue particularly incenses me, because at its core, it is a persistent problem with Customs that I have encountered ever since I began practicing as a lawyer, with Carl Soller, my first boss at a New York City Customs law boutique.

While the other partners and attorneys at the firm taught me the fundamentals of Customs regulation:  tariff classification, marking, valuation, drawback, etc., Carl taught me a profound skill –  how to use and wield the law to hold Customs and the other government agencies that regulate our clients accountable for their actions, as well as and perhaps more important – their inaction.  In so doing, he validated and encouraged my nascent sense that our laws and regulations are not just a series of barriers and obstacles; the law is a toolkit for lawyers to use to advance the interests of their clients and at the same time to uphold and defend the rule of law for society.  In zealously representing his clients, a pillar ethical obligation for all lawyers, Carl exemplified the principle that rule of law applies equally to those who govern and regulate as well as the governed and regulated.

For those that might not be aware of the issue, for some time now, CBP in Detroit, which has jurisdiction over all border entry points in Michigan on land and water, has effectively prohibited the import and export of containerized and other ocean cargoes by imposing impossible to meet screening standards for containers and refusing to provide inspection services for non-containerized goods.  At the same time, CBP in the ports of Toledo and Cleveland, which also do not have this screening equipment, are under the jurisdiction of the Chicago CBP district, and apply far more lenient and accommodating policies for the same type of cargo.  In fact, CBP in Toledo and Cleveland have received and processed most, if not all, of the cargo rejected by Detroit CBP, from where it has then been trucked overland to their destinations in Michigan.   A study by the University of Michigan found that Detroit CBP’s singular screening and inspections policies have cost the Port of Monroe in Michigan alone around $50 million in lost revenue and hundreds of jobs. 

Officials with the Port of Monroe, as well as the Detroit/Wayne County Port Authority, shipping companies, and major exporters like Ford and GM have done everything “right” in trying to persuade CBP in Detroit to change direction.  They have met with the CBP Detroit port director and his senior staff and they have met with top officials at CBP headquarters in Washington.  Democrat Senator Gary Peters and Republican Representative Tim Walberg have been involved arguing for CBP to pull up this dragging anchor on Michigan’s economy.  Peters and Walberg have even called for an investigation of CBP by the federal Government Accountability Office.  At those meetings, CBP has said that it is listening and that it will review the issue internally and respond “soon.”  To date, however, CBP remains unmoved; Michigan’s water ports remain all but closed to international trade. 

Carl Soller would be the first to say that he wasn’t surprised; neither am I.  We learned long ago that when a port digs in on an issue, the culture and organization of Customs is such that it is highly unlikely any level of intervention will get that port to change.  More simply put, after a point, continued talking with CBP is just wasted breath.  This kind of problem is not about substantive issues, it is not about politics; it is about how an agency runs without concern for the business that relies on it. 

For me, the question has become: “What would Carl have done?”  I’m pretty sure that Carl would have opened up the legal toolkit for a solution.  One idea that Carl used himself:  Obtain a writ of mandamus from a federal court that would force CBP Detroit to lift its restrictions or else provide a reasonable explanation why CBP can treat Michigan differently from every other port in the country.  There are other tools in this legal toolkit.  To honor a fighter like Carl and to serve Michigan’s trade community, we need to find a solution that will open our ports to trade.

Paul Vandevert founded Vandevert Trade Law in 2018, after serving for more than 23 years as in-house trade counsel at Ford and GM.  Paul’s mission is to serve as Advocate and Counsel to Importers and Exporters in the automotive and manufacturing industries. He can be reached at 313-737-3675 or 

Navigating the U.S/Canada border gets harder (sometimes), easier (sometimes) but ALWAYS requires your due diligence

By Debbie Dent
Director, Program Services
Border Connect, Inc.


First, let me welcome everyone into 2020.  By the events of the last few weeks of December it’s going to be a year full of border updates and an interesting year for sure!

CTPAT Updates

CTPAT members security profile will be unavailable for updates including submission of your annual review starting March 1, 2020 and remain unavailable for updates until June 1, 2020.  CTPAT will be updating the security profile with the new Minimum-Security Criteria (MSC).

New CTPAT applicants are restricted from making application between Jan. 1, 2020 through June 1, 2020. CTPAT is updating the eligibility requirements and the security profile with the new MSC requirements.  New application notice indicates only to check back in June 2020.

On Dec. 18, 2019 four key highlights were provided in a notice to CTPAT members with the main point of that notice being in paragraph 2 – All CTPAT members will need to comply with the new requirements by January 2020. Since members are on a four-year validation cycle, most members will not undergo a revalidation in 2020 – but all members need to comply with the new requirements by January 2020.

Excel-based files were made available to all members on Dec. 20, 2019. Members will need to become familiar with the new security profile in the portal and use these Excel files as a means to meet compliance in January based on your category of membership.  A separate style Excel is available for each category.

CTPAT Expectation Document along with Instructions and CTPAT Security Profile Questions in Excel format are now available in Public Document Library. These can be downloaded for guidance and use but you can also reach out to your SCSS if you have any questions.

Keep in mind a number of new areas and expanded categories are now included in the proposed new MSC. What should be taken as good news, I guess, is that once you have completed this Excel format and answered all the questions it contains you will simply need to cut and paste to the new MSC when it is finally released on or about June 1, 2020. Where have we heard that before?

CBSA FAST Notice for Trusted Traders

On Dec. 9, 2019 the Canada Border Services Agency (CBSA) amended the eligibility criteria for Free and Secure Trade (FAST) Membership. Under the expansion of the FAST membership criteria, CBSA will now extend FAST lane eligibility to highway carriers and importers who are solely members of Partners in Protection (PIP) program, rather than requiring them to also be members of Customs Self Assessment (CSA).

Eligible FAST lanes are located in Fort Erie and Sarnia, Ontario and in Manitoba at the Emerson border crossing as well as Pacific Highway, British Columbia. Windsor, Ontario at this time is not accepting PIP-only in the FAST lane. Expansion to Windsor is under consideration in light of the success of the Secure Corridor Concept pilot that is being tested by a select few carriers.

I am certain we will have more news to report in February!

Debbie Dent can be reached at 1-800-596-5176 or by e-mail

Import delays by CBP sometimes don’t reflect rhyme or reason

By Carl Soller
Soller Law Intl

As an attorney who has practiced in the Customs and international transportation arena for more than 35 years, one issue that continuously arises is the definition of reasonable care, where it is found, and how is it implemented by Customs and Border Protection (CBP) or others enforcing the import rules of the United States. The requirements for importers, customs brokers, and others involved with the submission of information and documents using reasonable care is accepted by all and mandated by various rules and regulations.

Recently, CBP has issued a proposed rule relating to requirements for submission of documentation and information prior to entry of imported merchandise. Unfortunately, the power of attorney format which is being proposed conflicts with powers of attorney implemented by individual states. No statutory format mandated by CBP or other authority has been adopted by Congress. As a result there are no enforceable “informed compliance” requirements in a power of attorney which importers or their customs brokers are mandated to use. The current powers of attorney include many provisions which are not required by the Customs regulations; provisions relating to limitation of liability and other nonstandard power of attorney terms are often included in the current powers of attorney executed by the “importer of record.” The failure to require standard information in a power of attorney or requirements for customs brokers, as well as importers, confuses the entry process. Often times CBP relies upon its interpretation of what is required in the power of attorney currently, but fails to ensure that its requirements are supported by the provisions in the statutory language in Title 19 USC.

As an example of CBP’s failure to properly notify the importing public, many imports are substantially delayed release or even seized because of CBP’s inability to specify import requirements of certain ambiguous rules. Two examples of these ambiguities should suffice to demonstrate the consequence. Number one: In January 2016 CBP detained a shipment of plastic containers destined for distribution at major supermarket chains. The detention lasted for more than six months claiming that the merchandise was drug paraphernalia. Thereafter, CBP chose to make a seizure of that import but did not disclose why it believed that these “containers” were drug paraphernalia. In its submission, the importer disclosed the names of the customers to whom the merchandise is being delivered and its use. It is now December 2019 and CBP has yet to respond to the importer’s petition for release of the merchandise or denial of release. These circumstances demonstrates that CBP takes advantage of it’s unfettered ability to detain merchandise at the border without justifying reason for the detention or acting in a timely fashion to resolve the problem. The above description illustrates an abuse of discretion by CBP. This abuse is further exacerbated by reviewing prior imports of the same merchandise of the same company previously detained and seized but ultimately released with no explanation as to what constituted the initial violation and also with a determination that all storage charges are waived.

Unfortunately, there does not seem to be any potential repercussions to CBP personnel who fail to timely review the status and facts behind these types of seizures. Similarly, in December 2016, a seizure of ancient Chinese origin statues was made by CBP at its express consignment hub in Memphis. Because of the lack of expertise by Customs officials, the artifacts were held and not released. Supplemental arguments were presented to CBP but to no avail. It has become quite clear that CBP seized the merchandise merely because it was thought to be restricted and not allowed import into the United States. That is not the case. It is unfortunate that CBP fails to employ experts in the area of antiquities and related commodities which results in seizures that are illegally made and not legally justified. Unless the government is required to use judicial power in order to justify procedure there is no economic device or argument that forces CBP to release the goods being held without any cause. It is quite clear that CBP in these instances is using its broad seizure and detention powers for reasons not originally contemplated or approved. Under non Customs circumstances, the government requires probable cause to implement such a seizure. In the course of establishing these search and seizure rules, US Customs was exempted from the probable cause requirement. At that time it was decided that CBP not be forced to make a decision on the admissibility of merchandise at the time of import. It was determined that delaying release would result in an inappropriate delay in commerce. It was determined CBP could make these detentions or seizures after making an initial determination as to the admissibility of the imported item. Unfortunately, CBP currently has broadened its authority saying that it has the right and obligation to seize any item at the time of import for an amount of time that has since become unreasonable. This is once again a very difficult issue for importers to reverse, since our government fails to acknowledge its constant noncompliance with rules requiring the release of merchandise or a decision to seize based upon reason and legal support.

The above circumstances described are but two of the many determinations not made by CBP in a timely fashion. The rules relating to detention and seizures run afoul of CBP’s practical application on a daily basis. The regulations are clear that if a detention is improper CBP must release the merchandise to the importer within a 60-day period after detention. I would venture to say that the vast majority of detentions are not resolved within the 60-day period and in many instances the decision as to whether to seize the imports is not made until the importer demands release of these goods. CBP often decides to seize based upon the same faulty information that it has had since the initial detention and has gathered no further support.

Importers are often left with a Hobson’s choice that is often really no choice at all. A seizure of a shipment of wearing apparel worth a minimal amount of dollars is often not worth fighting because of the cost of the legal costs in resisting a seizure determination made by the government. To engage an attorney to oppose a case in the US courts is costly. The cases are also time-consuming as a result of the complexity of the law relating to CBP’s seizures and the relatively small number of cases to which the Court has been exposed. This results in additional time being spent on legal analysis.

Currently the lack of certainty of the many government-imposed import tariffs claim to be effectuated as security measures and result in similar economic hardships for many of the US importers and manufacturers who are subject to the additional tariffs. Clients and potential clients often call to discuss whether additional tariffs will be implemented for their goods. Since there are no guidelines as to whether additional tariffs will be implemented and if implemented will continue, or whether sometime in the future refunds of the additional tariffs will be made, the economic analysis is always impossible to arrive at accurately. In order to avoid any of these pitfalls in terms of detention, seizure, or penalty duties imposed for security reasons, you are forced to go to court in an attempt to overturn what appears to be improper and often unsupported by law.

Many/most businesses avoid the high court costs, which is made worse by the inability to recover legal fees.

Carl R. Soller, Customs, International Cargo and Regulatory Compliance Attorney is counsel to companies engaged in all elements of the import/export supply chain and a recognized expert in his practice areas.  He and his firm concentrate their International, Regulatory and Cargo Practice in all business and regulatory matters on a nationwide basis.  He offers advice on supply chain security and its related Government Regulations to the Cargo Community as well as advice and a vast range of assistance to importers and exporters of all kinds of consumer goods.  He can be reached at (516) 812-6650 or (212) 643-6650 or


U.S. Customs Programs – what’s in the pipeline for cross-border truckers

By Debbie Dent
Director, Program Services
Border Connect, Inc.

Coming in January 2020- CTPAT MSC Workbook
As many of you know the expected rollout of the new CTPAT Minimum Security Criteria (MSC) Workbook is announced to be finally coming in January. Compliance to the new format will be based on your anniversary date or when completing your next annual review. For those companies that may have a first quarter annual review due, it is recommended that you become familiar with the proposed changes and quickly.

As recently as Nov. 27, 2019 MSC by role has been uploaded in each participating company’s public document library.  First focus area is corporate security.  In order for a CTPAT Member’s supply chain security program to remain effective or when completing a new application, it must have the support of the company’s upper management. The new approach will reinforce the need for every person within a company to become familiar with the minimum-security criteria, as well as understand new categories being introduced.

Keep in mind, if you are validated in 2020 you will need to show these new categories have been included in your security plan and processes.

New categories will include Agriculture Contamination and Cyber Security. A number of training aids have been added to the public document library for use.

New applicants will be subject to meeting the new criteria in order to be approved.

We are working hard to ensure our clients are provided the most current information but a number of questions remain unanswered or saddled with conflicting information, with the proposed timeline looming. 

Changes to DTOPS for Commercial Truck Customers

Starting October 2019, some significant changes are coming to Customs and Border Protection’s Decal and Transponder Online Procurement System (DTOPS) program.  These changes include new Generation-2 (Gen-2) transponders being issued to replace all Gen-1 transponders held by most of our commercial trucking customers.  All customers, when renewing your 2020 transponders, will be provided a new Gen-2 transponder, unless they have already been provided one.  This will occur for both annual payments and single-crossing payments, and with both new purchases and renewals. Beginning in January/ February 2020, commercial truck single-crossing fees paid through DTOPS will also initiate the fulfillment of a Gen-2 transponder. We expect this may cause delays in the fulfillment of transponders similar to what was experienced as a result of government shutdown in early 2019.  This notice can be found on the main page of your DTOPS portal.

In closing, we would like to wish you Happy Holidays and our warm wishes for 2020!

Debbie Dent can be reached at 1-800-596-5176 or by e-mail

SuperPort: The Interconnection of International Commerce

The global inventory of Airports, Seaports and Dryports in total constitute tens of thousands of acres of sea and land dedicated to serve as the capillaries of commerce for the life’s blood of the modern economy.  Year by year, the growing wants and needs of millions more people now gaining significant purchasing power press upon the global supply chain with instant access to global markets to buy and sell on-line and on-demand.  But those products bought with the tap of a fingertip have a rough and rugged journey ahead with giant containerships stuck at sea for days waiting to be unloaded, rail yards and highways at capacity, and the air cargo market looking at traffic jams in the sky.

To meet the growing demand Ports around the world are now being rebuilt and expanded into multimodal SuperPorts handling bulk wet, dry and containerized cargo in greater volumes than ever before.  With this demand for infrastructure investment at an all-time high the Interstate Traveler Company’s Hydrogen Super Highway (HSH) offers a practical solution to increased capacity and security while providing a fit instrument to enable Ports secure access for expansion into new inland customs processing facilities.  Not only does the HSH provide secure cargo movement, it also provides secure pipeline services with greater volume than older pipelines already in need of replacement.

The inception of the Interstate Traveler has been the functional upgrade to the Interstate Highway as a public transportation and utility infrastructure network with our focus on the interconnection of our airports, seaports and rail yards to provide fully secured point to point transportation services for people, products and ideas, along with multiple secure pipelines for conducting the hydrocarbon of your choice and direct access to bulk Hydrogen and raw electrical power.  With the integrated system of systems approach the HSH provides a valuable service for all entities co-dependent on port efficiency, safety, reliability and resilience against the hard hits that come from the sea in cyclones and tidal surges.

 Here in America our infrastructure is fantastic, yet the World Bank has developed and maintained an overall performance model to rank the countries of the world published in the bi-annual report called the “Logistics Performance Index.”  The United States ranks 14th overall, yet holds a respectable 7th place in infrastructure.  When the benefits of the HSH are factored in the USA will race to the top of the charts in just a few years after fabrication and installation begins.

In the last 20 years the global infrastructure market has seen a revolution in transportation systems in both the reconstruction of old systems and the rapid fabrication of the new.  The thousands of miles of new high speed rail installed in China and the reconstruction of the Panama Canal are just two highlights.  The Port of Montreal is another; handling their one millionth container in 1977 with a port history dating back to the 1600s, it is now after three expansions handling nearly 1.5 million TEUs per year. Now looking at the several hundred FTZs serving America linked by our highways and railroads; could America be ready to leap ahead of the world with a newer, better, faster, safer and more secure multimodal infrastructure system?  For the investors of the Interstate Traveler Company, the answer to that question is always yes. 

With the HSH, America has the opportunity to take local, regional and international logistics to an entirely new level giving greater access to greater markets at greater distances increasing business for all the existing logistics companies to enjoy greater growth in the years to come.   For more information on how the HSH could help increase your revenues and lower your costs visit our website and send us a letter via U.S. Mail.

 Interstate Traveler Co. LLC

Wixom – Michigan – USA


Significant Changes to the 61st Edition IATA Dangerous Goods Regulations

By Sonia Irusta
Bureau of Dangerous Goods

It is that time of the year again. IATA has released a list of significant changes and amendments to the Dangerous Goods Regulations (DGR), which will now see its 61st edition. Hazmat employees involved in the transport of dangerous goods by air must review these changes and incorporate them into their routines if applicable. Time is of the essence, as the updated regulations will take effect on January 1, 2020.

What’s Gone

Updates to the dangerous goods regulations do not always impose tighter restrictions. Sometimes, new research shows that current regulations are harsher than they need to be.

The IATA “pointing hand” symbol appears next to DGR regulations when they are more restrictive than their counterparts in the ICAO Technical Instructions (TI). IATA removed this symbol from entries on the Dangerous Goods List for UN 3449 (Bromobenzyl cyanides, solid) and UN 2389 (Furan). The latter is no longer forbidden from transport by air, while the former is now allowed on passenger aircraft, up to a certain quantity. On that note, UN 2216 (Fish meal, stabilized) did not have this symbol, but its status has similarly been changed from forbidden to permitted on all aircraft.

What’s New

Of course, a few regulations are completely new. The DGR’s list of dangerous goods now has four additional UN numbers: UN 0511, 0512, 0513 (all types of explosives) and UN 3549 (Category A Medical Waste). The glossary now contains a new entry for “aggregate lithium content” and a new definition for “lithium batteries installed in cargo transport unit.” (For good measure, we should note as well that there was a “revision to the definition of fissile material to become ‘fissile nuclides.’”) Finally, the regulations also contain new special provisions as part of Appendix I – more on this later.

What’s Different

When people see the term “significant changes,” they may assume wholesale deletions or brand-new additions. However, quite a few of this year’s changes serve simply to clarify existing rules. For example, tear gas candles have now been assigned special provision A802 “to reinforce that packagings must meet PG II performance standards.” In Section, subparagraphs (c) and (h) were both edited to clarify packing protocols.

Major revisions have been made to the single packagings tables, found under the section called “Packing Instructions.” Previously, the catch-all phrase “Composites – Plastic – All” would appear anytime hazmat employees could use composite packagings. IATA must have determined this designation too vague to be effective, so these parts of the table now specify the permitted packagings. Clarity is vital in cases like this because if the wrong packaging is used due to misinterpretation, the dangerous goods contained could be compromised.

Appendix I

A new appendix has been added to this edition of the DGR to provide the detail of the changes that will come into effect as of 1 January 2021 based on the adoption of the changes arising from the 21st revised edition of the UN Model Regulations as well as the changes that have been agreed to date by the ICAO Dangerous Goods Panel for inclusion into the 2021–2022 edition of the Technical Instructions.

Learn the Latest Dangerous Goods Regulations Today

The DGR may require hazmat employees to undergo training at least once every 24 months, but the DGR still updates more frequently than that. If you would like to stay current with the latest changes in dangerous goods regulations, training will help by educating interested parties in the intricacies of how to navigate such regulations. Training is not an option if your role meets the definition of a hazmat employee.

Sonia Irusta is a highly accomplished business and technical professional instrumental in domestic and international transportation solutions for shippers, freight forwarders and carriers. She can be reached at Bureau of Dangerous Goods (609) 860.0300 Ext. 327 or via E-mail 

Go jump in a lake, an ocean or a kayak

By Tom Buysse

 Are you having a black-and-white work week? Nothing wrong with that: you’re current on your email replies, your boss hasn’t given you “the look” yet and maybe you even made a customer laugh.

But last week I went to Newfoundland with my wife for our 25th Anniversary, and it was a 4-color week.

Many of the contiguous row houses there are painted in primary colors: a red house with a yellow door connected to a blue house with an orange door connected to a green house with a purple door. But it’s not just the paint colors that made it a 4-color week.

At risk of sounding like I work for the Newfoundland Board of Tourism, try to find the time and money to go someplace different from where you live.

A “town” in Newfoundland is really just a few homes along a beautiful cove or bay overlooking the ocean, with anywhere from a couple commercial fishing boats to a couple dozen tucked into the harbor. Throw in a church, a cemetery and a Royal Canadian Legion Hall and you’ve got a Newfoundland town.

Hike a trail with breathtaking views but don’t get too close to the edge of the cliff because Newfoundland should be called Newrockland. Take a sea kayak tour and figure out how to steer through the crevices of an island filled with nesting puffins. Slow down your stroke rate so you don’t lose sight of a family of eagles resting atop the highest pine trees (it’s not too easy to twist your body and do a double-take in a sea kayak).

Feel the salt air breeze in a rubber raft racing to the open ocean and try following a humpback whale as he searches for food. Count the puffins while your guide is trying to move in the right direction at the right speed in an effort to guess where the whale will surface next.

There is no Motel 6 or Holiday Inn in Newfoundland. Nothing but B & Bs. Wake up to a delicious breakfast at a table with an ocean view and enjoy the company of fellow travelers while sharing stories and ideas on what to do next.

History? Most towns were founded in the 1600s. The first transatlantic cable terminated in a small Newfoundland town, allowing communication between North America and Europe for the first time. Visit a wooden fishing boat museum and help hold boards while the master boat builder carefully constructs a 16-foot punt.

The seafood, as you would expect, is fresh and mouthwatering. You haven’t tasted mussels or codfish like this before. They’re long on fresh seafood but short on vegetables (except Irish potatoes) in this land with a short growing season. That’s OK. You can catch up on your Vitamin C next week.

Many “Newfies” are struggling since the codfish stocks collapsed 30 years ago, severely curtailing the commercial fishing industry which was the backbone of the economy. They need the tourism dollars but are too nice to be greedy. Nobody gouges you. Nobody tries to sell you trinkets. In fact, nobody really tries to sell you anything. You have to look hard to find open restaurants. You have to go to the big city of St. Johns to find souvenirs. The people are genuinely nice. They treat you well and welcome you into their world.

So go find YOUR 4-color place. Maybe it’s in your country or even your state; or maybe it’s on another continent. But it’s out there. Take a week off and find it. Come home smiling. Then promise yourself that you’ll do it again soon.

“Tag, you’re it!” Who has best access to importer’s true intentions?

By Carl Soller

Soller Law Intl

Through the years, United States Customs (hereinafter Customs) and its successor agency United States Customs and Border Protection (Customs) have issued numerous proposed Regulations amending 19 CFR 111, regulations pertaining to Customs broker responsibilities. From former commissioner William von Raab to the current commissioner, proposals suggesting “doing away with Customs brokers” to the current proposal imposing stringent requirements on Customs brokers with regards to obtaining importer of record/owner identification prior to designating a client as “importer of record.” Subsequent to each of the proposed Regulations previously promulgated, the industry has responded with practical reasons as to why the proposals did not resolve issues relating to securing our population or protection of the US revenue. Unfortunately, in conjunction with many of these proposals, the livelihood of the “Customs broker” has been ignored or would have complicated the process to the extent that information required would be impossible to timely acquire.

Its sister agency, Transportation Security Administration (TSA), has in the past few years gone through similar reviews relating to identifying exporters to ensure the security of our air export freight. The “known shipper program” initially required the forwarder, exporter, or carrier to verify the legitimacy of the exporting entity as well as certifying all businesses taking the freight from the exporter to the air carrier. After many months of discussions, it was recognized that the forwarder usually has no way to verify the efficacy of the individual exporter. As a result, the TSA along with other government agencies were tasked with the responsibility of ensuring that the export “entities” were legitimate companies or related entities. Once the shipper was properly designated, the carrier could safely accept freight after ensuring its inspection or examination.

The proposed Regulations with regards to “Customs broker verification of importers’ identity” does not resolve security issues. Any changes in an attempt to identify fraudulent imports must begin with the required “informed compliance” as required by the current US Code Title 19 and attendant regulations. Customs’ reliance on private industry to certify the legitimacy of importers is beyond the capability of most Customs brokers. The entities which can more properly identify those false or fraudulent imports are Customs and other government agencies which have access to confidential tax and corporate filings, as well as individual or partnership tax returns and IRS information. It is thus unlikely that a Customs broker  exercising due diligence is equipped to  identify an import that is false or fraudulent except by reviewing the historical  background of that importing company. For new entities or new clients without certification by Customs, the legitimacy of that entity is open to question, and is not available in most circumstances to either the Customs broker or the freight forwarder. The solution to this problem lies within Customs existing regulatory scheme. As has been argued many times in the past, control of the “importer of record definition” lies with Customs. In the 1980s, the JFK Airport Customs Brokers and Forwarders Association brought an action in the Court of International Trade to require a limited definition of “consignee.” However, the Court decided that the consignee could be the entity named in an air waybill/transportation document; it did not require any additional ownership interest in the imported cargo. The “Customs Regulations” amended subsequent to that opinion created rules which continue until today. It provided that a non-owner consignee could not be importer of record but can appoint an entity which is a Customs broker to submit an entry in the name of that Customs broker. That created a circumstance where “express consignment entities” often designate its Customs broker corporate sister as the importer of record and the entity authorized to act as the broker. In those circumstances, Customs rarely looks to the actual owner until after import review.

The two entities most likely able to properly identify legitimate importers are Customs and the surety companies which write the bonds ensuring that Customs is paid the required duties and/or liquidated damages should the “importer of record” fail to pay.

It is difficult to dispute that certain of the “minimum information” identified in the proposal, that a Customs Broker is required to collect, is often either difficult or impossible to obtain; it is often corporate information that in the course of business the Customs broker has no need to collect.  Copies of credit reports or similar financial information is either too expensive to gather or nonexistent; state regulations regarding corporate governance differ from state to state: for example New York does not require reporting of the names of corporate officers or officials to the state of New York.

Other issues that need to be reviewed are for example in section A 5 on page 40305 of the previously cited Federal Register notice such as the circumstance where the client has multiple physical locations and sometimes only the corporate headquarters and locations where merchandise is not located but drop shipped after import. To insist upon the Customs broker to physically visit its clients is impractical and often impossible. This is particularly so as most Customs brokers operate under “national permits” and are not local, making it inconvenient to visit the clients’ locations. Also, under corporate state or local governance, the proposed rules may be contrary to what is required by those state statute or corporate regulations.

There are many other reasons why the Aug. 14 proposed rules may be inappropriate or too onerous. The likelihood of requiring a broker to obtain information which is more easily obtained by either the Department of Homeland Security, Customs, or surety is questionable. We would expect those importers and Customs brokers impacted by these proposed regulations to file comments before the expiration date of Oct. 15, 2019. Should you wish to discuss the issues or any other related support to include in your comments, please do not hesitate to contact us.

Carl R. Soller, Customs, International Cargo and Regulatory Compliance Attorney is counsel to companies engaged in all elements of the import/export supply chain and a recognized expert in his practice areas.  He and his firm concentrate their International, Regulatory and Cargo Practice in all business and regulatory matters on a nationwide basis.  He offers advice on supply chain security and its related Government Regulations to the Cargo Community as well as advice and a vast range of assistance to importers and exporters of all kinds of consumer goods.  He can be reached at (516) 812-6650 or (212) 643-6650 or

How Important are Hazardous Materials to the Semiconductor Industry?

By Stephanie Congiusta
Lead Sales and Marketing Administrator
Bureau of Dangerous Goods, Ltd.

How lucky are we to be living in a world full of modern technology?  While some of us may not be as thankful for technology as others, we can’t overlook the fact that our world has become reliant on various technologies.  Many modern day technologies require the use of raw hazardous materials to create and power them.  Just how important are hazardous materials to the technology industry?

Recently, Japan and South Korea have been featured in international news regarding a trade dispute of sorts over the export and import of hazardous materials.  South Korea has historically relied on Japan for the import of fluorinated polyimide (UN1250), hydrogen fluoride (UN1052), and resist (UN3077).  It’s been reported that Japan produces around 90% of the world’s supply of fluorinated polyimide and about 70% of the world’s hydrogen fluoride.*  These hazardous materials are essential to the semiconductor industry.  South Korean companies such as Samsung, SK Hynix, and other manufacturers of memory chips, microprocessors, and integrated circuits rely on the import of these raw materials from Japan to sustain.  While South Korea was once able to obtain these materials as needed from Japan, recently the Japanese government has put measures in place that have restricted and delayed the export of the three chemicals to South Korea.  

So what does this mean for South Korea’s semiconductor industry?  As you can imagine the industry is slotted to be disrupted by these delays and restrictions.  Being that Japan is the majority producer of these chemicals, it will likely be difficult for South Korea to seek out an alternative provider of these materials.  Major players in the semiconductor industry such as Samsung and SK Hynix have been reported to account for 61% of the global supply of memory chips.* Their customers include high-profile tech companies such as Apple and Huawei.  

With all of this being said, it’s safe to say that hazardous materials play a major role in our modern world.  We hope that South Korea and Japan will soon be able to remedy their import and export situation in order to minimize the impact on the industry.

*Statistic cited from IHS Markit.

*Statistic cited from CNBC.

Written by Stephanie Congiusta, Lead Sales and Marketing Admin at BDG

Roundup of Developments at the CBP Trade Symposium

By Lara A. Austrins

Benjamin L. England Customs and Trade Team

Here’s a roundup of developments of interest to the transportation and customs broker communities which were announced at the Trade Symposium recently hosted by U.S. Customs and Border Protection (CBP) in Chicago July 23 – 24, 2019:

  1. Risk-Based Increases in Importer Bond Amounts

CBP officials emphasized several times at the Symposium that it has been issuing insufficiency notices on bonds to better reflect importers’ increased liability for Section 301 and Section 232 tariffs.  While the increase in premiums for higher value bonds in most cases is not terribly significant, as the face value of the bond increases, so does the sureties’ liability.  Increased liability has had a significant impact on the cash collateral that sureties are demanding in connection with ADD/CVD entries, and we wonder if similar cash collateral requirements will make their way into bonds securing entries subject to Section 301 and Section 232 duties as well.

  1. Potential for Increased Enforcement Actions

Knowledgeable CBP officials stated at the Symposium that “trade remedy enforcement” is “one of the major priorities” of the Centers of Excellence and Expertise (CEE).  Our experience is that the CEEs are bringing meaningful sophistication to trade agreement and trade remedy enforcement, with their greater expertise, product knowledge, sharing of information, and improved targeting models. 

Symposium participants told us that given the large duty increases imposed under Section 301 and Section 232 and the easy accessibility of unlawful transshipment and other methods for evading the tariffs, they expect a wave of CBP enforcement actions to hit starting approximately six months from now.  Indeed, CBP officials told reporters (but not attendees) at the Symposium that they would like Congress to amend the Enforce and Protect Act (EAPA) to expand the CBP’s current ability to investigate and punish antidumping and countervailing duty evasion to all duty evasion (including evasion of Section 301 and Section 232 tariffs).

Given these developments, now would be a good time for importers to increase their due diligence in assuring themselves of the actual origin of their goods.  If importers have not already done so, we believe that it would behoove them to conduct factory visits, verify the presence and good working order of production equipment, confirm factory purchases of raw materials sufficient to produce the goods they are importing, verify that an adequate, trained workforce is in place at the factory to produce their imported goods, etc.

  1. Changes to Broker Regulations

The customs brokerage community has long been waiting for the issuance of the proposed broker regulations, which would include changes to powers of attorney and cybersecurity requirements.  One major change anticipated in the proposed broker regulations will be the replacement of the district permit and national permit with one single permit that operates at the national level within the Customs territory of the United States.  Additional guidance will most likely be issued at some point addressing the factors customs brokers of varying sizes must satisfy to ensure that they are exercising responsible supervision and control over their customs business.  Knowledgeable CBP officials tell us that the proposed regulations are undergoing review, and we are hopeful that they will be published within the next year or sooner.

  1. Enhancements in Cargo Inspection on the Southwestern Border

CBP has received significant funding to put new, non-intrusive inspection systems in place on the Southwestern Border, which should significantly speed the flow of truck traffic.  Due to the strength of energy emissions from CBP’s current truck-scanning equipment at the border, drivers of trucks seeking to cross the border from Mexico are required to exit the cab before the truck is scanned.  However, CBP officials stated at the Symposium that new equipment will be put in place which will allow truck drivers to remain in the truck while the truck is scanned, thereby significantly speeding the pace of inspection (truck drivers will retain the option to exit the truck during scanning if they wish).

  1. Ways to Manage Risk Presented by Rapid Growth in e-commerce

Finally, the rapid growth in the e-commerce environment and how to manage the increased risks that come along with such growth were central discussions at the Trade Symposium.

This increase in e-commerce is further fueled by the fact that  the value of goods that can be imported by one person in one day free of duty and taxes, the so called de minimis value, under Section 321 of the Tariff Act of 1930, as amended, was increased in 2016 from $200 to $800 (“321 shipments”).  This increase in de minimis value along with the growing popularity of e-commerce has contributed to the exponential growth of low value shipments (321 shipments) crossing our borders over the past few years.

According to CBP 1.8 million 321 shipments are entering the United States daily.  The ease of online shopping clearly has changed consumer purchasing habits resulting in the growth of e-commerce, and the growth shows no sign of decreasing or leveling off.  At the Symposium, both CBP and FDA officials highlighted the greatly increased risk of entry of counterfeit goods (including counterfeit pharmaceuticals and health and beauty products) and other illicit goods via de minimis e-commerce shipments.

As per officials at the Symposium, CBP has taken the following actions to address these risks:

  1. Electronic Advance Manifest Submission for 321 Shipments by Truck

Advance electronic manifest submissions for all 321 shipments by truck must be filed in ACE in accordance with the guidelines specified in the Trade Act of 2002.  This requirement is in full effect and failure to include 321 shipments on ACE manifests could result in monetary penalties issued by CBP.

Prior to this year, 321 shipments were exempt from advance electronic manifest filing requirements.  However, the significant increase of 321 shipments by truck resulted in slower processing times and longer wait times at the borders, as CBP was unable to conduct risk assessments or perform advance targeting on 321 shipments.   As a result, CBP changed its policy at the beginning of this year to require electronic advance manifest filing submissions in ACE for all 321 shipments by truck.  While the current cargo manifest implementation guide states the maximum number of shipments is 9,999, the 9,999 shipments can be submitted multiple times against a single manifest using instructions which are provided for via a web link in CSMS #19-000156, which can be found at

As the advance electronic manifest submission in ACE of 321 shipments entering by truck is in full effect, the failure to include 321 shipments on ACE manifests may result in monetary penalties issued by CBP at $5,000 for the first offense.

  1. CBP Conducting Section 321 Data Pilot Program to Consider Advance Data Submission Requirements for Low Value Shipments

On July 22, 2019, CBP published Federal Register notice of its intention to begin a voluntary test to collect certain advance data for low-value entries that may be eligible for Section 321 exemptions. 

According to the notice, “CBP is conducting this test to determine the feasibility of requiring advance data from different types of parties and requiring additional data that is generally not required under current regulations in order to effectively identify and target high-risk shipments in the ecommerce environment.” See 84 FR 35408. 

CBP realizes that currently, it is not receiving sufficient advance information to determine the risk presented by 321 shipments. The purpose of the pilot is to allow CBP to use the advance information to improve its ability to effectively and efficiently identify and target high-risk shipments, including for narcotics, counter-proliferation, and health and safety risks.

Eligible participants that can join the pilot include carriers, customs brokers, freight forwarders, and online marketplaces of any size, location or commodity type, regardless of whether they offer delivery logistic services. 

The pilot applies to each Section 321 shipment destined for the United States, arriving by air, truck, or rail and will operate in all ports of entry utilized by the participants for Section 321 shipments.  It will not apply to any mail shipments, shipments arriving by ocean or shipments destined for a Foreign Trade Zone.

The benefits of participation may vary. One benefit is that CBP may expedite clearances for low-risk Section 321 shipments when enough test data has been received prior to the shipment’s arrival.

The pilot will begin Aug. 22, 2019 and operate for a one-year period.  Once the pilot program is completed, CBP will evaluate the results to determine whether to extend and/or expand the pilot to include additional participants.  It will also decide whether additional advance reporting requirements are necessary in the e-commerce environment.

  1. CBP Entry Type 86 Pilot

In addition to the test pilot for advanced data collection on Section 321 entries, CBP officials announced the creation of  a new entry type (Entry Type 86), which will allow customs brokers and importers to send Partner Government Agency (PGA) data in conjunction with the basic data elements for 321 shipments.  Use of this new entry type may alleviate the concerns raised by FDA and other PGAs regarding the potential for unlawful goods evading review through use of the 321 process.  CBP stated that it will be issuing a Federal Register notice in the near future regarding the pilot program to test the new Entry Type 86, and that it intends to roll out the new Entry Type 86 on Sept. 28, 2019.

Please contact me if you would like to get additional information regarding these or any other Customs and trade matters.

Lara A. Austrins is a member of Benjamin L. England & Associates’ Customs and Trade Team and concentrates on issues arising from the movement of goods between countries.  She regularly deals with U.S. Customs and Border Protection, Department of Commerce, and other agencies that regulate U.S. imports and exports. She can be reached by email at or at (410) 220-2800.