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

U.S. Customs and Border Protection (CBP) issued a February 22, 2011 60-Day Notice and Request for Comments regarding its use of a "Notice of Detention".  I know, a lot of you are saying to yourselves, "When did CBP starting using Notices of Detention," and my response to you is "That's a darn good question!"

The law, 19 U.S.C. 1499 and 19 CFR 151.16, allows CBP officers at the border to stop and search persons for merchandise.  If the CBP officer discovers something suspicious, and takes it from you, then it has been "detained".  In exchange, the CBP officer is required to send to the importer or passenger a Notice of Detention form no later than 5 business days from the date of the examination, stating that: (1) the merchandise has been detained, (2) the reason for the detention, and (3) the anticipated length of the detention. 

That all sounds reasonable, but the problem is that the legal requirement is often ignored by CBP.  Often, a Notice of Detention is never issued by CBP to the importer, or is issued late or does not state the reason for the detained merchandise.  I  have seen a few hundred Notices of Detention over the past 21 years as a customs lawyer, but have never seen one that described "the anticipated length of detention."

The Request for Comments asks the public for "ways to enhance the quality, utility, and clarity of the information to be collected."  I have a way to enhance the quality of the CBP Notice of Detention - follow the law and issue it every time, on time, and accurately.   For those who want to respond formally to CBP, click on the link for the address to address comments before April 25, 2011.

If you want to share some stories of your own, please click on the "Comment" icon or contact me.

Peter Quinter, Partner, Customs and International Trade Department

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

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I read a fascinating article entitled "HOMELAND SECURITY HASN'T MADE US SAFER," written by Anne Applebaum, a columnist for the Washington Post and Slate.  It was in the January/February issue of Foreign Policy magazine.  The article criticized the massive spending of time and money by the U.S. Department of Homeland Security.  Ms. Applebaum aimed her barbs right at the Transportation Security Administration (TSA) with the comment:  "As for the TSA, I am not aware of a single bomber or bomb plot stopped by its time-wasting procedures."

I started thinking about it, and even as a pretty well informed customs and international trade attorney, I could not recall a single incident either.  I have seen the indignities of TSA personnel at the airport force handicapped and elderly people out of their wheelchairs.  I have also been the victim of TSA officers groping around my private areas during one of their random, 'enhanced pat down' searches.  For a rollicking good laugh, I encourage you to read the official TSA Blog.  People say the strangest things about their air travel experiences to the TSA from the supposed privacy and safety of their computers.

The TSA submitted a budget request of $8.1 billion for fiscal year 2012. With the billions of dollars spent by both the Bush and Obama Administrations over the past 10 years in the 'War on Terrorism' and in support of 'homeland security,' the question of whether or not the TSA's 43,000 trained and certified Transportation Security Officers make us safer through its passenger and baggage screening procedures is still debatable.

I would still like to meet the idiot savant who came up with the 3-1-1 TSA rule about carrying liquids aboard an airplane.  I can't figure out why we had the technology to send men to the moon in 1969, but in 2011 still have to take our shoes off before walking through a TSA x-ray machine.  I guess the silver lining in all this is that, relatively speaking, the air and ocean cargo screening procedures by the TSA are much better thought out and reasonable.

If you think you have answers to my questions, please click on the "Comment" icon or contact me.

Peter Quinter, Partner, Customs and International Trade Department

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

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The U.S. Department of Homeland Security's Immigration and Customs Enforcement (ICE) is seizing a record number of bank accounts for money laundering.  In summary, here is how it works.  A Special Agent from ICE submits an Affidavit to a Federal Judge, the Judge signs a Seizure Warrant authoring the Special Agent to serve that document upon the bank to seize whatever money is in that account.  Although the seizure of such accounts may accomplish a legitimate law enforcement purpose in attempting to stop the illicit sale of narcotics by taking the money generated from those sales, the process is too easily abused by the U.S. Government.

The Affidavit filed by the Special Agent is usually "sealed" which means it will not be available to the public or even the person or company for which the bank account monies were seized. Due process should allow a claimant prompt access to that information so the account holder may meaningfully challenge the seizure in Federal Court.  At a minimum, the Seizure Warrant should specify what the facts were that supported an allegation of money laundering. Right now, the standard language in the Seizure Warrant only states:

The bank account is subject to seizure and grounds exist for the issuance of this seizure warrant pursuant to 18 U.S.C. 981(a)(1(A) and 21 U.S.C. 881. 

That's it; that's all you get from the U.S. Government as the reasons that your entire bank account has now been cleaned out, potentially leaving a company unable to pay its bills, including to its employees, or leaving  a person desperate to pay his or her daily living expenses.

Bank account seizures now commonly allege trade based money laundering.  According to the U.S. Department of Homeland Security, global trade is frequently used by criminal organizations to move money around the world such as by Colombian drug cartels to repatriate drug proceeds, a process commonly referred to as the Black Market Peso Exchange.

Fortunately, the law demands that the U.S. Attorney's Office file a Complaint of Forfeiture against the bank account in Federal Court within a few months of the seizure of the bank account.  The Complaint will finally state the general factual basis for the seizure, and you finally get your 'day in court'.  Typically, the assigned Assistant U.S. Attorney will share information with the attorney representing the owner of the seized account in an attempt to avoid a litigation battle.  It is often to the advantage of both the Government and the account holder to attempt to work something out, otherwise, a lot of time and money will be spent in Federal Court litigation fighting over whether the money really is the proceeds of some 'specified unlawful activity' and whether or not the account owner is an 'innocent owner' to whom the money should be returned.

The Federal laws and procedures are the same throughout the United States for bank accounts seized pursuant to a Seizure Warrant for alleged trade-based money laundering.  Such seizures are most likely to occur in Miami, the State of Texas, and the metro area of New York City. 

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Click on the "Comment" button below to share your thoughts.

Peter Quinter, Partner, Customs and International Trade Department

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

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I am still troubled by the Wall Street Journal lead article on October 4, 2010 with the headline "Recession-Weary Americans Sour on Free Trade."  I asked myself why would Americans who live in an economy built successfully on the principles of capitalism and free enterprise be against international trade?  The WSJ article stated that a poll concluded that 53% of Americans said free trade hurt, rather than helped, the U.S. economy, a statistic that increased from 46% in 2007 and 32% in 1999.  My bold prediction is that 2011 will be the year that the Obama Administration successfully finalizes free trade agreements with South Korea, Panama, and Colombia, and then Congress passes laws approving them.

Americans sometimes want their cake and eat it too. They want American companies to make and export more airplanes, more tractors, and more wheat and corn, all the while shopping at their local department stores and buying merchandise made in, and exported from, China, Indonesia, and Mexico.   As stated in the WSJ by my law school friend Myron Brilliant, Senior Vice President at the U.S. Chamber of Commerce:

When we knock down [trade] barriers in those [foreign] markets, we create jobs here [in the United States]. We've got to trade to create jobs in our country.

Boeing employs tens of thousands of employees in the United States to produce airplanes to sell overseas.  American farmers grow wheat and corn in amounts far beyond what could be consumed in the United States.  Caterpillar sells more tractor equipment overseas than it does in the United States. According to CNN.com, the U.S. International Trade Commission has estimated that reducing customs duties in the U.S.-Korea trade agreement will increase exports of American goods to South Korean by at least $10 billion per year.

With the Republicans now in control of the U.S. House of Representatives, and the Democrats maintaining control of the U.S. Senate, it is my hope that both my Republican and Democratic friends who understand and appreciate the benefits of international trade will embrace free trade agreements. That sure would help achieve President Obama's ambitions of doubling U.S. exports within 5 years.  Customs duties imposed by the United States on foreign made, imported products, and customs duties imposed by Panama, South Korea, and Colombia on U.S. made products is really just another form of taxation. Since we all detest taxes, let's join together and pass these free trade agreements in 2011.

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I welcome your response by clicking on the "Comment" box below.

Peter Quinter, Partner, Customs and International Trade Department

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

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On May 20, 2010, the top management of both U.S. Customs and Border Protection (CBP) and the U.S. Immigration and Customs Enforcement (ICE) testified before the U.S. House of Representatives' Committee on Ways and Means Subcommittee on Trade.   Chairman Tanner said the hearing was "to strike the right balance" between trade facilitation and security.  Unfortunately, the Committee heard all about the enforcement success of both ICE and CBP without hearing about the difficulties faced daily by importers and customs brokers.

Chairman Tanner accurately stated:

There has been a growing concern that, in particular, CBP's modernization of trade functions, facilitation of trade, and enforcement of traditional customs laws have appeared to lag while the agency tightened security screening of passengers and cargo.

ICE was particularly proud of its accomplishments by its National Intellectual Property Rights Coordination Center.  In ongoing Operation Guardian, ICE has interdicted substandard, tainted, or counterfeit products, including food and medicine that pose health and safety risks to American consumers.  $26 million of such condoms, circuit breakers, toys, extension cords, honey, and shrimp were seized by ICE and CBP.

What was not revealed was how many unnecessary delays and expenses were caused by ICE and CBP for the legitimate merchandise that entered or transited the United States.  In order to determine the effectiveness of the targeting programs used by CBP, Congress needs to inquire about the number of detentions and examinations by CBP, and the consequential financial costs to importers.  The U.S. Government Accountability Office (GAO) is also concerned with properly targeted imported food shipments, as indicated in its May 6, 2010 report on "Food Safety".

Does CBP do a good job at targeting imported shipments?

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

pquinter@becker-poliakoff.com or (954) 985-4101

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I attended the Advisory Committee on Commercial Operations of Customs and Border Protection (COAC) meeting on February 25, 2010 in Miami.  The 20 private sector members of COAC are jointly selected by the Department of Homeland Security and the Department of the Treasury, and include knowledgeable customs compliance and logistics personnel from such prominent companies as DHL, APL, Hasbro, and GE.  The COAC meets four times a year to discuss creating or changing the policies and procedures of U.S. Customs and Border Protection (CBP) as they affect the international trade community. 

The Miami meeting included an introduction by Acting Deputy Commissioner David Aguilar, referred to as "Chief" which is his title with the CBP component U.S. Border Patrol.  Chief Aguilar spoke about "security," "resilience," and "protecting customs and exchange" which apparently is the new terminology for the former "facilitating international trade".  His introduction focused on assessing and mitigating risks of people and cargo entering the United States.

Substantive presentations were made by, among others, Therese Randazzo, Director, IPR Policy and Programs, Office of International Trade on behalf of the IPR Subcommittee.  Therese discussed the new IPR sample bond form for trademark and copyright owners to use to get samples of detained or seized merchandise from CBP. 

Rich DiNucci, Director, Secure Freight Initiative, Office of Field Operations on the topic of Importer Security Filing, stated there were 2,300 ISF filers with 141,000 unique importer record numbers. Rich stated that the timeliness of the ISF or "10+2" filing has increased to 75%.  No penalties would be issued by CBP for ISF filing errors or failure to file...for now.

Bradd Skinner,  Director, Industry Partnership Programs, Office of Field Operations, spoke about C-TPAT (Customs-Trade Partnership Against Terrorism). Bradd announced that CBP now had 9,710 certified C-TPAT members, a dramatic increase from the original 7 members in 2001.  1,200 new members were added in 2009.  CBP Security Supply Chain Specialists conducted 14,000 validations so far in 87 countries.  297 companies were suspended or removed from C-TPAT in 2009.

The COAC is an excellent way for private sector persons and companies to interact with top level CBP and Treasury personnel regarding the critically important, and sometime competing, objectives of security and trade. Now more than ever, our Government needs to listen closely how to improve the daily lives of its citizens. Chief Aguilar, thanks for listening.

Peter Quinter, Partner, Customs and International Trade Department.

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

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On February 1, 2010, Department of Homeland Security Secretary Janet Napolitano announced that the Department's budget for fiscal year 2011 would be $56 billion.  This was the first time for the Democratic Obama Administration to formally unveil its budget priorities after taking over from the Republican Bush Administration.  Guess what - it's more of the same.

The Federal Government's fiscal year runs from October 1 to September 30, so the Fiscal Year 2011 budget begins on October 1, 2010. Examples of more of the same include more Federal Air Marshals on international flights, 500 more machines at airport checkpoints to detect dangerous materials, 275 more explosive detection canine teams, and more machines to scan 40 foot ocean containers entering the country for weapons of mass destruction, explosives, contraband, and illegal aliens. Compare this with prior budgets or the 2008 Five Year Plan for DHS, and you too may conclude that this is more of the same.

The Department of Homeland Security includes U.S. Customs and Border Protection, the U.S. Secret Service, the U.S. Coast Guard, the Transportation Security Administration (TSA), Immigration and Customs Enforcement, FEMA, and the U.S. Citizenship and Immigration Services.  There are 230,000 employees in this mega-Department.

There are 3 items I especially like in the proposed budget. 

(1) raising the journeyman level for uniformed Customs Inspectors, Border Patrol Agents and Agricultural Specialists from the GS-11 to GS-12 level (a $10,000 base salary increase to $60,000);

(2)  a substantial increase in funding for stopping counterfeit merchandise from entering the United States, something which is very serious when we are talking about medicines, car and aviation parts; and

(3)  dual immigration priorities of (a) making it easier for legal immigrants to become citizens, and (b) removing from the United States illegal aliens who have been convicted of a crime, and are serving time in state and local jails.

If people voted for Obama with the expectation of drastic changes in homeland security policies, they will be sorely disappointed.  If people who did not vote for Obama were anxious that he would change the course of national security and counter-terrorism efforts of the prior Bush Administration, they will be pleased. 

For me, my desires are much simpler. If and when Secretary Napolitano announces that TSA no longer requires us to take off our shoes at the airport, then I'll know there is progress.  When my local police department gets rid of the huge barriers in its parking lot around the police department building, I'll be pleased. Unfortunately, the hundreds of billions of dollars spent on homeland security efforts since 9/11 will probably not result in my local library soon re-opening the after-hours book return slot.

Peter Quinter, Partner, Customs and International Trade Department.

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

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