Customs and International Trade Law Blog : International Trade Lawyer & Attorney : Becker & Poliakoff Law Firm : Customs Law, Border Protection

The simple answer to this question is: YES. 

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U.S. Customs and Border Protection's Global Entry program is a smashing success. I have been a member for a few years, and have personally experienced its principal benefit of rapidly and easily clearing Customs upon arrival in the United States.  Global Entry allows expedited clearance for pre-approved, low-risk travelers upon arrival in the United States.   Applicants must first pass a comprehensive background investigation  Not everyone gets accepted, however, and for those people who have applied and been denied, there is an appeal process.

To apply, simply answer some questions on-line at www.globalentry.gov, then schedule an appointment at one of the many CBP enrollment centers. Bring with you a few required documents such as a passport, answer a few simple questions about your international travels, and you will soon be notified of your acceptance or disapproval into Global Entry.

If disapproved, you will be notified electronically and the CBP disapproval letter will be from "Supervisor, Global Entry Enrollment Center, U.S. Customs and Border Protection," located in Williston, Vermont.  A typical disapproval letter will say.

We regret to inform you that your membership in Global Entry has been disapproved for the following reason(s):

You have been found to have violated CBP laws, regulations, or other related laws.

CBP has never set forth any specific guidelines for disapproving an applicant except "other circumstances that indicate to CBP that you have not qualified as 'low risk' - whatever that means.  

Fortunately, there is an administrative appeal process which the applicant should pursue.  There is no court, no judge, no meeting with CBP, and not even any conversation with CBP as part of the appeal; it is all done by paper to the Vermont address.  You get one chance to do it right, so make sure your appeal is comprehensive and persuasive.

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Comments or questions, click below, or contact me directly.

Peter Quinter, Partner in Charge, Customs and International Trade Law Department

(954) 270-1864 or pquinter@becker-poliakoff.com

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Hundreds of people apply every year to become a customs broker. Customs brokers are licensed by U.S. Customs and Border Protection (CBP). The process requires passing a rigorous multiple choice examination, and then passing a background investigation.  For many applicants who successfully pass the examination, they are denied a license because the background investigation revealed a poor credit history and rating. 

Although the application to be a customs broker is submitted to the local port, the decision letter granting or denying a broker license is issued by Allen Gina, Assistant Commissioner, Office of International Trade, CBP Headquarters in Washington, D.C.  A typical denial letter would state:

After careful evaluation of the information obtained from the background investigation, we must deny your application due to your financial history.

The denial letter always cites the CBP regulation at 19 CFR 111.16 - a failure to establish the business integrity and good character of the applicant.  Fortunately, the letter also cites 19 CFR 111.17 which provides the right of appeal of the denial of the customs broker license.

The appeal must be filed, in writing, and submitted to Mr. Gina no later than 60 days from the date of the denial letter. The appeal must persuasively argue why the applicant has business integrity and good character.  For example, if the applicant went through a divorce, and the former spouse failed to pay certain bills which negatively affected the applicant's credit history and rating, that is an important fact that must be argued, and documented, in the appeal.  

There are numerous reasons why CBP may legitimately deny a customs broker license to an applicant who has a spotty financial history. Similarly, there are numerous reasons to explain to CBP that despite what appears to be a questionable financial history, the applicant has business integrity and good character, and should still receive the customs broker license.

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Comments or questions, click below, or contact me directly.

Peter Quinter, Partner in Charge

Customs and International Trade Law Department

(954) 270-1864 or pquinter@becker-poliakoff.com

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This past year has seen an explosion of seizures of bank accounts by the Drug Enforcement Administration (DEA) and the U.S. Immigration and Customs Enforcement (ICE) or Homeland Security Investigations (HSI) for alleged trade-based money laundering or "structuring". In 2011, I have handled these cases in Miami, New York, San Diego, Boston, Phoenix, San Juan, and Norfolk.  The funds in the bank accounts are taken when the bank is served with a Seizure Warrant signed by a United States Magistrate Judge, based upon an affidavit prepared by the DEA or ICE Agent.  

Typically, the bank (and its customer) do not get to see the Affidavit because the criminal proceeding is ongoing, and the Affidavit is sealed.  The Seizure Warrant itself typically alleges that the money is subject to seizure because it is the proceeds of drug activity in violation of 21 U.S.C. 881 and 18 U.S.C. 1956. 

A related legal basis for the seizure of bank accounts is 'structuring' - the deposit of $10,000 or less in cash repeatedly in a bank account to avoid the filing by the bank of a Currency Transaction Report (CTR) with the Financial Crimes Enforcement Network (FinCen), U.S. Department of the Treasury .  See 31 CFR 1010.314.  A CTR is FinCen Form 104.  A CTR is required to be filed by all banks whenever a deposit of cash over $10,000 is made in a single day into a single account or by a customer into different accounts.  Be aware that deposits of cash into multiple branches of a bank or in multiple transactions is still structuring.  See 31 CFR 1010.313.  Whenever a bank suspects that its depositor or customer is depositing $10,000 or less to avoid the bank filing the CTR, the bank often instead files a Suspicious Activity Report (SAR) .  The SAR reports are analyzed by FinCen, and often referred to the DEA or ICE for investigation.  Some of the investigations results in seizures of bank accounts as mentioned above.

Bank account holders absolutely have the right to challenge the taking of their money by the DEA or ICE.  If your money has been seized, you have a right to know the legal basis for the seizure, and should, through your attorney, contact the DEA or ICE Agent, or the Assistant U.S. Attorney.  In civil forfeiture cases, there is an administrative process to follow once a Notice of Seizure is issued to the bank account holder by the Fines, Penalties, and Forfeitures Office of U.S. Customs and Border Protection (CBP) or a Notice of Seizure by the DEA.  If the Notice of Seizure is from CBP, file a Petition, and if the Notice of Seizure is issued by the DEA, file a Sworn Claim with the Asset Forfeiture Section located in Quantico, Virginia.  The procedures of both agencies are very specific, and must be followed carefully, otherwise, your right to challenge the seizure will be lost forever.

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Comments or questions, click below, or contact me directly.

Peter Quinter, Partner in Charge, Customs and International Trade Law Department

(954) 270-1864 or pquinter@becker-poliakoff.com

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In the past year, the Mexican Government (SAT) has issued questionnaires to exporters from the United States which provided a NAFTA Certificate of Origin to the Mexican importer. The North American Free Trade Agreement (NAFTA) Certificate of Origin is always created and signed by the U.S. exporter or producer, and always provided to the Mexican importer at the time of importation so that the Mexican importer may importer the merchandise into Mexico without paying any customs duties.    Years later, the Mexican Government may send a questionnaire to first the U.S. exporter, and then the Mexican importer, demanding proof that the merchandise really "originated" in the United States and properly entered Mexico without any payment of customs duties. 

The problems are (1) the U.S. exporter falsely completed the NAFTA Certificate of origin either intentionally or by ignorance, (2) the U.S. exporter relied on the U.S. producer who provided misleading information to the U.S. exporter, or (3) the records establishing that the merchandise originated in the United States are not available.

I usually recommend the U.S. exporter who received a letter from the SAT of the Mexican Government to respond. Moreover, it is best to seek the assistance of the supplier of the merchandise to the U.S. exporter and the Mexican importer. If the questionnaire is not answered properly and timely, the SAT will deny the NAFTA preferential treatment, and demand payment of customs duties, late fees, interest, and penalties from the Mexican importer, plus perhaps antidumping duties.  The Mexican importer may end up paying those charges to the Mexican Government agency and then seek full reimbursement, plus legal fees, from the U.S. exporter.  

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For any questions or comments, please contact Peter Quinter, Partner in Charge

Customs and International Trade Department at (954) 985-4101

or

pquinter@becker-poliakoff.com

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 Alan Becker, Board member of Enterprise and Chair of Beacon Council, with Gov Scott meets with business leaders in Sao Paulo, Brazil

Editor's Note: Thanks to Managing Shareholder Alan Becker, our guest blogger, who just returned from the Enterprise Florida Trade Mission to Brazil with Governor Rick Scott and a delegation of Florida business leaders. Alan is the Chair of the Beacon Council, MIami Dade County's Economic Development agency.

Alan S. Becker

Brazil was the # 1 trading partner for the Miami Customs district in 2010 and has been the top trading partner for more than a decade. It is Florida's # 1 trade partner with over $15 billion in annual trade. Of that, $13 billion is export to Brazil, so there is a lot of room for increased trade importing to Florida.
 
Many of the largest Brazilian companies already have regional or US headquarters in Miami, such as Odebrecht, Itau Bank, TAM Airlines, and many others.
 
Miami - Dade County is the area where most of this trade takes place, which is not surprising. Of Dade's 2.5 million residents, half are foreign born and 2/3 speak a second language in addition to English, almost all from the Caribbean, Central and South American. There are at least 50,000 Brazilians living in South Florida.
 
In 2010, 555,000 visitors came from Brazil just to Miami-Dade County and spent $1 billion--the first country to reach $1 billion in visitor spending. It is estimated that if there were a waiver of the visa requirement, those figures would immediately double.

Miami International Airport has more daily direct flights to South America than all other US airports combined. There are 93 weekly direct flights to cities in Brazil with 20,000 seats. The Port of Miami services 13 Brazilian Ports with cargo ships each week. With the deep dredge of the Port, making us the first ready for the post Panamax super ships, and the tunnel to move Port travel, the Port of

Miami, already # 1 in international cargo, is positioned to double its cargo capacity by 2014.

This affinity between Miami and Brazil underscores the reason why business activity is so great and is growing.

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Michael De Biase

Among its other duties, U.S. Customs and Border Protection ("CBP") has the daunting task and responsibility to search and seize products that are counterfeit or otherwise infringe the intellectual property rights of original goods manufacturers. This is accomplished through CBP's Intellectual Property Rights Recordation System. As the name suggests, trademark and copyright owners record their intellectual property rights with CBP and CBP keeps records of such recordings via this system, which can be accessed online at http://iprs.cbp.gov/. Using this system, an importer can determine if any of the products that it is importing actually violate the intellectual property rights of somebody else. However, there is a big problem with this system that can cause CBP to wrongfully seize goods, thereby inflicting substantial monetary damages and significant delays in delivery times.

Intellectual property rights are not absolute and can therefore be challenged and cancelled through the U.S. federal court system. When a trademark is cancelled, the U.S. district court has to notify and direct the Director of the U.S. Patent and Trademark Office ("USPTO") to remove the trademark registration from the USPTO's registrar. Until CBP is notified that the trademark has been cancelled, CBP will continue to seize products that potentially infringe the rights of the now cancelled trademark. This causes products to be wrongfully seized, and, in turn costs the importer tens of thousands of dollars as well as significant delays.

To avoid falling victim to this situation, you must contact an attorney. An attorney can perform the proper legal research to determine whether your shipment contains products that are likely to be seized for infringement of intellectual property rights. In such an instance, the old saying "an ounce of prevention is worth a pound of cure" really holds true.

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The U.S. Food and Drug Administration ("FDA") has strict labeling requirements for cosmetic products.  One area that consistently causes confusion among companies that distribute cosmetic products to countries on different continents is the area of labeling. Different products have different labeling requirements depending on the application of the product, the type of ingredient being labeled, the size of the product, and the country to which the product will be shipped. For example, the rules regarding how to describe color additives for products entering the U.S. are different than those for Canada and Europe.

Fortunately, it is possible to comply with the labeling requirements for the U.S. as well as Canada and Europe using only one label. In fact, it can even be accomplished with a product bearing a label as small as that of mascara. Accomplishing this is greatly beneficial to these companies because they can take advantage of economies of scale and taper production costs by merely having one label printed to be distributed to several countries.  However, this is a delicate maneuver that, if not done properly, will likely result in seizure and detention by the FDA or a foreign country's equivalent agency. This will cause delays in the shipments, and may cause civil penalties and forfeiture of the products.

To avoid this common mistake and take advantage of the fact that one label may be used throughout the U.S., Canada, and Europe, you should contact an attorney well versed in the FDA regulations. Taking this precautionary measure is an investment in greater profits and peace of mind.

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On September 8, 2011, from 2:00-3:00 p.m. EST, the Journal of Commerce will host a webinar entitled "Recovering Your Seized Cargo".  The speakers will be Dennis McKenzie, Director, Fines, Penalties, and Forfeitures Division, U.S. Customs and Border Protection (CBP), Washington, D.C., and Peter Quinter, Partner in Charge, Customs and International Trade Department, Becker & Poliakoff law firm.  The panel experts will explain the CBP detention and seizure process, as well as the administrative petition and judicial forfeiture process.

If you have ever had your money seized by Customs for failure to declare over $10,000, had merchandise seized for misdeclaring its value or not paying enough customs duties, had your bank account seized for alleged trade-based money laundering, or had any other items detained or seized by U.S. Customs for violating another Federal agency's regulations, you should sign up for this webinar.  

The fee is only $155 for this most informative webinar taught by experts with a comprehensive understanding of the internal policies and procedures of U.S. Customs and Border Protection.  A little knowledge now could save you time, frustration, and a lot of money by learning how to avoid a seizure, or when a seizure has already occurred, how to get your seized cargo back as quickly as possible.

Whatever the type of merchandise, whether it is an import or an export shipment, whether it will be sold in the United States or just moving in-transit through the United States, whether it needs a special import or export license, U.S. Customs seizes and forfeits tens of millions of dollars of merchandise every year.  Download the Powerpoint presentations, and get involved in the Q&A session. Click  "Recovering Your Seized Cargo" to register at the Journal of Commerce website.

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For questions or comments, please contact:

Peter Quinter, Partner, Customs and International Trade Department

pquinter@becker-poliakoff.com or (954) 270-1864

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