Fines, Penalties And Protests in International Shipping

Claims in international shipping practice are depending on type of transaction:

  1. PERSPECTIVE TRANSACTIONS - Internationally shipping goods had not arrived into the USA and entry had not been made.
  2. CURRENT TRANSACTIONS - International shipping entry had been made but not liquidated yet.
  3. COMPLETED TRANSACTIONS - International shipping entry is done but there is still a problem.

PERSPECTIVE TRANSACTIONS:

a. Importer write a letter (no special form) to Port Director with description of international shipping product. Port Director will respond.
Benefit: Quick response.
Drawback: Valid in the particular port only. Another port may assign higher duty on international shipping goods.

b. If international shipping/importing something new, then write a letter (no special form) to JFK National Import Specialist or to headquarters. It will be evaluated, assigned new HTS# and binding to all ports.

CURRENT TRANSACTIONS:

Importer has to request for Internal Advise (under part 177)

If importer wants correct clerical errors in liquidation (part 173) then importer writes a letter "Correction of clerical errors" to Port Director:

COMPLETED TRANSACTIONS:

Claim under part 173.3 "Request for voluntary re-liquidation".
Customs or Broker can re-liquidate entry within 90 days of the liquidation.
I.e. after liquidation you must wait 90 more day to be assured that the liquidation is final.

Re-liquidation is for correction clerical errors. After 90 days, if Customs does not respond, then the international shipping claim automatically becomes favorable to the importer.

 

PROTESTS IN INTERNATIONAL SHIPPING PRACTICE. (CFR 19.174)

Importer must file protest within 90 days of liquidation.

Protests CANNOT be favorable to Customs. It can be favorable to the importer only.

Acceleration of review or disposition of international shipping claim. This situation when importer informally knows that Customs will deny his protest and willing to appeal further:

  1. Importer files a regular protest;
  2. After 90 days he submits a Letter with title to Accelerate the review or Disposition;
  3. Now Customs has 30 days to respond;
  4. If Customs did not respond THEN IMPORTER LOSE and;
  5. Importer has right to appeal.
  6. Appeal to the international shipping Court of International Trade in 180 days. If you lose then;
  7. U.S. Court of Appeal. If you lose then;
  8. Appeal to Supreme Court.

Notice:

CLAIMS AND PROTESTS PROCEDURE IN INTERNATIONAL SHIPPING:

Perspective Transactions:
a. Bureau ruling;
b. Binding ruling

Current Transactions:
a. Request for Internal Advice;
b. 173.4(a) claim;
c. 520(a) claim

Completed Transactions:
a. 173.3 claim;
b. 520(c) claim OR 520(d) claim for NAFTA

Protest in 90 days, Customs responds in 2 years;
Request for further review
after 90 days, Customs must response in 30 days;
Court of International Trade
in 180 days;
U.S. Court of Appeal;
Supreme Court

 

FINES AND PENALTIES IN INTERNATIONAL SHIPPING (CFR 19.171 appendix):

Under Tariff act of 1930:

All fines and penalties in international shipping have different levels. As the result you can have a MITIGATING or AGGRAVATING factor.

NOTICE: Total value of fine is Value of international shipping goods (1) + Duty on it (2) + Fine itself (3)

19 USC 1497 - for PASSENGERS ONLY Non Commercial MT. 1.5 TIMES OF DUTY; or the domestic value*, whichever is lower
RG. 3 TIMES OF DUTY; or the domestic value, whichever is lower
AG. 3-6 TIMES OF DUTY; or the domestic value, whichever is lower
Commercial or
if it is 2nd offense.
MT. 3 TIMES OF DUTY; or the domestic value, whichever is lower
RG. 6 TIMES OF DUTY; or the domestic value, whichever is lower
AG. 8 TIMES OF DUTY; or the domestic value, whichever is lower
 
19 USC 1592 - for Customs Brokers and Importers** Pure negligence Revenue*** Min. 1.5 TIMES - Max 2 TIMES OF THE REVENUE LOSES; or the domestic value, whichever is lower.
Non Revenue**** 5-20% of the dutiable value.
Gross negligence Revenue*** Min. 2.5 TIMES - Max 5 TIMES OF THE REVENUE LOSES; or the domestic value, whichever is lower.
Non Revenue**** 25-40% of the dutiable value.
Fraud Revenue*** Min. 5 TIMES - Max 8 TIMES OF THE REVENUE LOSES; or the domestic value, whichever is lower.
Non Revenue**** 50-80% of the dutiable value.
 
19 USC 1641 - for Customs Brokers ONLY
  • PENALTY CANNOT SUBSTITUTE REVOCATION OR SUSPENSION OF USHCB LICENSE.

  • Customs issues a penalty notice. HCB has 30 days to respond.

  • All penalties over $10,000 come from headquarters.

  • $10,000 per entry;

  • $30,000 is the MAXIMUM penalty. Then Customs takes away USHCB license.

  • $1,000 for EACH missing Power of Attorney.

  • $30,000 for using HCB bond for client whom lost Immediate Delivery Privileges.

* - DOMESTIC VALUE is VALUE OF INTERNATIONALLY SHIPPING GOODS + DUTY & TAXES

** - This is for FALSE statements in documents. It DOES NOT apply to clerical errors or mistakes of facts. Customs officer issues to violator PRE-PENALTY NOTICE. It states a culpability level: Negligence (1); Gross Negligence (2); or Fraud (3). For Negligence and Gross Negligence it must be over $500.

*** - Government lost revenue.

**** - Duty free merchandises.

 

PETITIONS IN INTERNATIONAL SHIPPING

4097; 5092; 6041 forms letter must be sand from a Penalty Notice:

While filing a petition on an international shipping, you can request for the Oral Presentation. It must be in writing in the original petition. Otherwise, you lose right to the Oral Presentation.

 
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