Resent Regulatory Changes

Very few things in the world remain unchanged.  This link will endeavor to provide you quick access to the most recent regulatory changes that may affect goods and products you wish to ship to the U.S.A.  Customs and Border Protection Services and the numerous participating Government Agencies that hold jurisdiction over the products you wish to ship to the U.S.A., are in a consent state of flux.   Because of these chronic changes, it is very important that you stay focused on the ever moving goal posts.

Informal Entry Value to Increase:  CBP has advised that their “informal” entry value will increase from $2000 to $2500.  The anticiapted effective date for this change is slated for January 7th, 2013.  The posting from the CBP website provides the following information:  Washington— The United States Government announced that it is delivering on a key commitment under the U.S.-Canada Beyond the Border Action Plan through the publication of a final rule in the Federal Register titled “Informal Entry Limit and Removal of a Formal Entry Requirement,” which will increase the value threshold for expedited customs clearance. The rule will increase the value thresholds to $2,500 for expedited customs clearance from the current levels of $2,000.

This rule will facilitate trade for low value shipments. Importers will realize an annual benefit of an estimated $13 million. The final rule is effective on January 7, 2013.

On October 28, 2011, CBP published a proposed rule in the Federal Register proposing to amend title 19 of the Code of Federal Regulations to increase the informal entry limit from $2,000 to $2,500, the maximum statutory limit, in response to inflation and to reduce the burden on importers and other entry filers. CBP received comments on the proposed rule for 60 days. Currently, for any merchandise valued over $2,000, CBP requires importers to provide a surety bond, complete CBP form 7501, and pay a minimum of $25 in Merchandise Processing Fees.

Historically CBP has required “formal” entries on a number of differing commodities such as textiles, rubber/plastic goods, and furniture (to name a few).  This proposed change in informal entry values does NOT change any previous regulations demanding formal entries on special commodities.

FSMA – Food & Drug Modernization Act:  UPDATE!  In conversations with local FDA we have been advised that the ability for importers to re-register their facility with FDA has not yet been completed.  Further information from FDA indicates that this functionality may not be in place by the end of the year (2012).  However FDA has asked that at very least people and firms impacted by this legislation at very least update their existing registration information so that addresses and contact information are current.  More to follow on this situation.

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Everyone, please note that the New FDA Food Safety Modernization Act (FSMA) was signed into law by President Obama on January 4th, 2011 and brings with it the most sweeping food safety laws in more than 70 years.  The goal of the FDA and our government is to shift the focus from responding to potential food contamination’s to preventing food contamination’s before they occur.

One sweeping change is that foreign exporters to the U.S.A. and importers must re-register their FDA Registration existing with the Food & Drug Administration every other year on even years starting (this year) in 2012.  Re-registration processes will be available from October of 2012 to December 31, 2012.

From our understanding this includes the existing companies that were required by law to register with the FDA due to the Bio-Terrorism Act thereby enabling FDA Prior Notices to be issued on their food products.  If your importations require an FDA Prior Notice it is our understanding that your business entity will have to “re-register” your existing with the Food & Drug Administration every two years going forward.

For more information on this subject please visit the FDA FSMA website at:

http://www.fda.gov/Food/FoodSafety/FSMA/default.htm

FDA Regulatory Compliance: If you haven’t noticed we would have to say that the United States Food & Drug Administration (FDA) has been advised to turn up the heat on import compliance.  This is strictly our opinion but locally we have seen FDA exam and sample more importations with the apparent end result being 100% compliance to import regulations such as the cosmetic labeling act, food labeling act, and other import regulations.  Importers are advised to ensure their their labels, websites and published brochures do not reference unsupported medical claims.  Making medical claims could infer to FDA that your product might be a drug, and as you may know the importation into the USA of unapproved drugs is restricted (drugs must be registered and listed with the FDA).  Please check out our links for further helpful FDA information:  http://www.sandersbrokerage.com/dev/resources/tools/links/f-d-a-links/

Solar Panels made in China:  Anti-dumping and Countervailing Duties have been imposed by the U.S. Government.  The scope of the new duties are extensive.  The following quote is provided by one of our surety companies (Roanoke Trade Services) and their take on the situation.  “

The preliminary findings of dumping and subsidies on solar cells from China and products containing them are having far-reaching effects. The extremely broad wording of the scope definition in the ADD/CVD cases goes well beyond solar panels from China to include many goods which contain Chinese solar cells even if the imported article into which the cells are incorporated qualifies as being of non-Chinese origin. View the full scope definitions for cases A-570-979 and C-570-980 (“Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules”) in the Federal Register Notices on the preliminary determinations.

As those of you who are subscribers to CBP’s *Cargo Systems Messaging Service are already aware, a notice was issued on Wednesday, June 13 informing the importing public that importers of solar panels (from all countries) not containing Chinese solar cells must certify that their imported solar panels do not contain such cells. If you are not a CSMS subscriber and want to view CSMS #12-000215, click here.

Standard ADD/CVD underwriting requirements (specific approval, etc.) apply to all bonds, single or continuous, for principals importing products containing solar cells from China.

MPF Retroactive Collection:  Many months ago Customs (CBP) imposed a new percentage rate for Merchandise Processing fees.  Sadly the computer programing required to validate and calculate the new percentage rate was not completed timely.  By the following posting CBP will be going back and issuing duty increase bills to importers for additional MPF not collected at entry summary.  This change included a entry time frame from early October 2011 to late October of 2011.  Here is the posting from CBP:

The purpose of this memorandum is to announce that the Office of International Trade will begin billing for the increase in merchandise processing fee (MPF), as established by the Trade Adjustment Assistance Extension Act of 2011 (TAA), retroactively effective on October 1, 2011. CBP automated system programming was completed in November 2011 and ACS began accepting the new MPF rate on November 5, 2011. CBP could not begin the retroactive billing process for merchandise entered between October 1, 2011 and November 4, 2011 until the refund processing was completed for the Generalized System of Preferences, Andean Trade Preference Act, and the Andean Trade Promotion and Drug Eradication Act retroactive renewals.

The Entry, Summary, and Drawback Branch (ESD) will script liquidate entries with a future liquidation date to generate a bill for the additional MPF due. Differences of less than $20.00 are de minimis, and as such will not be processed for retroactive MPF. Entries which are flagged for reconciliation shall have the MPF increase accounted for via the reconciliation entry. Once the scripting begins, ESD will post weekly results on CBPnet Secure at the following link: https://cbpnetsecure.cbp.dhs.gov/sites/ot/tpp/tfa/Pages/Welcome.aspx. Entries for which CBP system successfully generated a bill will be listed in the file titled, “MPF Increases”. This list is being provided to the ports for use as back-up documentation in relation to the B12 report (Bulletin Notice of Entries Liquidated – by Batch and Sequence). Entries that failed the scripting process will be available via the same link, in the file titled, “MPF Script Errors”. Ports must manually liquidate all entries that are included in this list.

C.B.P.  and the 9801.00 Provisions of the Tariff Schedule:  Things ebb and flow with any government agencies.  Current hot topics, catch phrases, the issues of the week frequently change.  Recently C.B.P. has impressed upon the trade (importing public) of the need for full compliance with the duty free provisions of 9801.00.  These include the return of U.S. manufactured articles, the return of goods following a trade show, circus, scientific or education endeavor abroad (perhaps in Canada), the return of goods following lease or similar use agreement while abroad, and the return of goods that were rejected or refused by the foreign recipient.  Manufacturer’s Statement of U.S. Origin is being required on most return entries of American Goods Returned.  CBP is also demanding compliance wtih 10.66 and 10.67 of the Customs Regulations and that CBP 3311 and CBP 4455 be completed and present for trade-show, circus, scientific and education returns.  Please see our web posting in regards to this issue.

U.S.D.A. turns up the heat on Wood Packing Material: Make sure your wood packing material has been properly heat or methyl bromide treated!   U.S.D.A. is refusing shipments that contain pallets and wood packing material that is not properly marked are treated with ISPM 15 or IPPC logos.  Make sure your shipment is admissible and become familiar with the information on the web site links listed below.  Having your shipment refused by the U.S.D.A. is costly, inconvenient and not fun.

In a multi national effort the U.S.D.A. has been working to stop the infestation of bugs and pests.  A major part of their endeavor are regulations that prohibit or restrict the importation of wood packing material that whose origin are other than Canada or the USA.  Wood packing materials must be affixed with the proper ISPM 15 or IPPC logo.

For more information click on Resources and navigate to our web site for U.S.D.A. and W.P.M. (Wood Packing Materials).

CBP Reinstates the requirement for Single Entry Bonds (SEB) on Informal Entries:  For years CBP had allowed brokers and the public to prepare informal entries without the posting of a surety companies (insurance company) bond.  CBP changed this concept on Wednesday January 25th.  Informal entry importations where the importer of record does not hold an annual Continuous Bond now require the posting of a single entry bond for their importation.

Air Import – Entry Simplification (cargo release process) in draft:  As announced in CSMS #11-000280 (issued November 09, 2011), U.S. Customs and Border Protection announced via a Federal Register Notice on November 9, 2011 a plan to conduct a test of the simplified entry capability. This notice clarifies that the deadline for submission of applications to participate in the Simplified Entry Test is Thursday, November 17, 2011 at 11:59pm. Parties interested in participating in the test must submit an email to cbpsimplifiedprocess@dhs.gov with the subject heading ‘‘Simplified Entry Participant Request.’’ The email must also include information regarding estimated volume of entries anticipated to be filed under Simplified Entry and the identity of the ports where filings are likely to occur.

Merchandise Processing Fee:

Recent trade legislation H.R. 2832 changed the merchandise processing fee rate for formal entries (class code 499) from 0.21% (.0021) to 0.3464% (.003464). The minimum merchandise processing amount of $25.00 and the maximum merchandise amount of $485.00 were not changed.  Additional “informal” entry MPF rates will remain unchanged.

CBP’s implementation of the new rate for Merchandise Processing Fee (MPF) from .21% of the value to .3464% of the value tells a tale of economic times in which we live.  H.R. 2832 was implemented but it would appear that the sole deterrent to the new rates implementation was computer programers at CBP.  Once CBP completed the programing for the change and put the calculations in place their operating system demanded recalculations for entry purposes.

In short what this means is that while the programing was not completed and in place until November 5th, 2011 any and all entries re-processed through CBP’s computer system back to October 1, 2011 would require the higher MPF rate.

Ergo, the new MPF rate was implemented on October 1st, 2011.  All entries completed and finalized on or before November 4th would utilize the lower MPF rate.  All entries processed after November 4th will require the new MPF rate of .3464% of the value.  By the way, if you’re calculating the increase it is a 60.62%.

I.S.F. (Importer Security Filing) also known as the “10 +2″ came into existence in 2008 and became a mandatory Customs law in January of 2010.  The I.S.F. submission tenders 10 + 2 information data elements to CBP for their advance screening of all shipments entering the U.S.A. via Ocean Carriers.  I.S.F. submissions must be on file 24 hours before the cargo is tendered to the carrier in the foreign port of lading.

ACE E-Manifest is required for all carriers and individuals bringing commercial goods to the U.S.A. via truck lines or other vehicular modes of transportation.  ACE E-Manifest has been a Customs law for more than four years.

“One-Time Exemption” to ACE E-Manifest requirements:  Importers, carriers and individuals are provided a one-time exemption to the ACE E-Manifest regulations.  The short of this is that the carrier, driver, or individual must phone to CBP at the port of entry, contact a Supervisory Inspector and obtain approval for the exemption.  The Supervisory CBP Officers name must be provided to the broker for them to complete the entry.  Importers, carriers and individuals MUST understand that “One-Time Exemption” means that the can only be provided this exclusion one time.  The next time they attempt to bring goods to the USA they (importer, carrier or individual) must have obtained their carrier SCAC (standard carrier alpha code) from the National Motor Freight Traffic Association (www.nmfta.org) and procured services for the preparation of their ACE E-Manifest

SCAC Code:  The Standard Carrier Alpha Code is obtained from the National Motor Freight Traffic Association (www.nmfta.org) and must be obtained and filed with CBP in Washington, DC.  Finding your way to the National Motor Freight Traffic Associations web site will lead your directly to the link to apply for (on line) and obtain your SCAC code.  There is a fee for making the application and then the SCAC code must be renewed annually.

ACE E-Manifest:  The ACE E-Manifest module derived its name from the CBP’s new operating system, the Automated Commercial Environment (ACE).  Users can obtain an ACE Portal account form preparing and submitting their own electronic manifest (E-Manifest) with CBP.  Alternatively they can employ the services of a third party logistics provider to make the ACE E-Manifest.  Sanders Brokerage Services provides ACE E-Manifest services.  Another alternative (yet very costly) is that you could obtain the services of a software vendor and underwrite you own ACE E-Manifest interface application.

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