U.S. Customs and Border Protection (CBP) is a critical player in the global supply chain. Traditionally, CBP has been the collector and protector of the revenue derived from duties imposed on imported products and the agency responsible for interdicting at the border illicit drugs and other contraband. Since 9/11, however, CBP has taken the lead in developing, implementing, and administering supply chain security programs designed to identify and interdict weapons of mass destruction, bio-hazards, and other goods that would threaten the health and safety of Americans.
These changes affect all companies that import goods into the United States. In this heightened security environment, importers are expected to cooperate with CBP’s efforts to tighten controls of all aspects of the importing process. For example, importers are now required to provide manifest information about what they are importing up to 24 hours before their containers are loaded on carriers; soon they will be required to provide additional details about each shipment. They are asked to participate voluntarily in the Customs-Trade Partnership Against Terrorism (C-TPAT) program and work with suppliers, 3PLs, carriers, and customs brokers to enhance the security of their supply chain. In addition, in response to recent discoveries of importations of tainted food and toys with lead paint, importers are facing even tighter controls over general product safety. At the same time, CBP continues to emphasize customs regulatory compliance, developing new audit programs and increasing the number of civil and criminal enforcement actions against importers. Consequently, today importers work in an environment of ever increasing government regulation and scrutiny.
While understanding and navigating CBP’s import regime is a core focus of our customs practice, we also recognize that a majority of the consumers of U.S. goods and services lie outside of our borders. Because of this, we understand and have experience in foreign customs import regimes and regularly help our clients navigate these different procedures. In particular, we advise our clients on how to access existing and new export markets, as well as how to utilize various U.S. and non-U.S. preferential trade agreements.
Miller & Chevalier’s Global Customs and Import Trade practice helps importers negotiate the maze of CBP requirements and helps U.S. exporters navigate the patchwork of foreign customs import regimes, procedural requirements, and preferential arrangements. Led by a former Chief Counsel of the U.S. Customs Service, our Customs team includes significant government experience and provides the full range of import-related advice, from basic compliance counseling and audits to enforcement and litigation.
Compliance Programs and Audits
CBP’s latest form of regulatory audit, the Focused Assessment and the Quick Response Audit, is in full swing. Most major importers can expect to be targeted for a Focused Assessment within the next several years and can prepare for it by conducting a self-assessment to ensure that internal controls over customs operations are satisfactory and identifying and correcting any deficiencies. Alternatively, an importer may avoid an audit by choosing to participate in a compliance management program known as an Importer Self-Assessment (ISA). Many importers are also opting to participate in C-TPAT, voluntarily committing to enhancing their supply chain security in a cooperative effort with CBP to reduce the risk of terrorist attacks in the commercial cargo environment.
CBP is also at the forefront of implementing the Lacey Act, as amended, including the new import declaration requirement and the prohibition on the importation of illegally logged timber and products containing illegal logged timber. Central to importers’ Lacey Act compliance efforts are supply chain security, robust internal controls and inventory management and tracing capabilities. We help importers and manufactures of products governed by the Lacey Act to develop and administer internal compliance programs to comply with applicable CBP and APHIS obligations.
CBP is heavily involved in the Kimberley Process Certificate Scheme, the international public-private partnership to eliminate so-called “conflict diamonds” from the international diamond market. Central to compliance with Kimberley Process requirements are supply chain security, robust internal controls and customs operations, and compliance with applicable CBP regulations.
We assist importers with all of these programs. Our team is experienced with both the old Compliance Assessment audits and the new Focused Assessment audits. We have worked with more than 13 companies undergoing Focused Assessments or applying for the ISA program. We also help companies determine whether to participate in C-TPAT and have assisted many clients with the application and approval process for this program. We help importers perform internal customs self-assessments and establish and maintain effective internal customs compliance programs and security measures. Without rigorous monitoring and evaluation, the chances of inadvertently violating the customs laws increase greatly.
Enforcement and Litigation
We defend companies in customs enforcement proceedings and court cases, including import/export seizures and penalty actions, and provide representation before CBP, the United States Court of International Trade, and the United States Court of Appeals for the Federal Circuit. Where appropriate, we call upon the resources of our top-notch criminal defense team. When a client independently discovers an error in its import transactions, we advise and assist in evaluating the matter and in preparing voluntary (prior) disclosures to CBP and the U.S. Department of Commerce, where appropriate. This can eliminate, or greatly reduce, monetary penalties for violations.
General Customs Counseling
We provide clients with knowledgeable counseling on all types of customs matters, no matter how complex the problem or transaction. We regularly advise on tariff classification, valuation, and marking of imported merchandise, as well as country-of-origin determinations. Our clients include companies in a broad array of industries, including the appliance, automotive, camera, machine tools, high technology and electronics, HVAC, petroleum and petroleum products, chemicals, jewelry, biotechnology, food, and hand tools sectors, as well as counseling customs brokers, freight forwarders, and air couriers.
As CBP is responsible for enforcing the import-related requirements of other federal government agencies (such as the Environmental Protection Agency, the Food and Drug Administration, and the Fish and Wildlife Service), we assist clients in complying with substantive and documentary requirements in those areas as well. To help our clients develop and enhance their own internal customs compliance procedures, we offer on-site training seminars, tailored to each company’s specific industry and focused on issues of particular importance to the their business. In addition, we have taught a customs broker exam preparatory course for many years.
Duty Savings Programs and Opportunities
The proliferation of free trade agreements (FTAs) and special trade programs has created a complicated legal and regulatory patchwork that multinational corporations and service providers must navigate in order to fully realize the market access gains from these preferential arrangements. We frequently counsel clients on how to structure their transactions, production, and sourcing to gain maximum benefit from FTAs and preference programs.
We have considerable experience in the benefits and customs requirements in U.S. FTAs, including NAFTA, CAFTA-DR, and bilateral U.S. FTAs with Australia, Bahrain, Chile, Colombia (pending), Israel, Jordan, Morocco, Panama (pending), Peru, Singapore, and South Korea (pending).
U.S. preference programs also offer significant opportunities for manufacturers to gain preferential access to the U.S. market. We understand these preference programs and have extensive experience in helping manufacturers benefit from them, including the Generalized System of Preferences (GSP), the Caribbean Basin Economic Recovery Act (CBERA), Caribbean Basin Trade Partnership Act (CBTPA), Andean Trade Preferences Act (ATPA), and the African Growth and Opportunity Act (AGOA). We also provide guidance regarding duty reduction programs for U.S. goods returned and goods assembled abroad with U.S. components, and help companies take advantage of the often complex duty drawback, foreign trade zone (FTZ), temporary importation, and prototypes rules to reduce or eliminate their overall duty obligation on imported goods and materials.
We have developed an extensive network of proven trade professionals in key markets around the globe to better advise clients on foreign customs matters, if the need arises. We also frequently work with systems solutions providers and non-lawyer consultants to provide efficient, cost-effective service to our clients.