End of the Customs Broker’s District Permit?

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For the past several years, there have been efforts within CBP to remove the requirement for individual district permits. Just recently CBP published a Notice of Proposed Rulemaking to take the first step to getting rid of the district permits (see: https://www.cbp.gov/trade/programs-administration/customs-brokers).

The proposed rules will likely address the Commercial Customs Operations Advisory Committee’s (COAC) recommendations. Some recommendations are listed below:

  1. “District permit” and “national permit” will be replaced with “the permit” to reflect a single permit functioning at the national level.
  2. Single permit allows brokers to have authority to conduct customs business at the national level.
  3.  Transition to a single permit.
  4.  Brokers need to show evidence how they intend to exercise responsible supervision and control.
  5.  Enhancements to ACE for broker reporting and streamlining broker reporting.
  6.  Requires the Power of Attorney come from the importer to the broker.
  7.  Removing specific feed dollar amounts
  8.  Require customs business may be conducted only within the customs territory of the United States.

If you need help or have questions about this transition, give David Hsu a call/text at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

Support HR 2261 – Customs Business Fairness Act of 2019

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Representatives Peter King (R-NY) and Gregory Meeks (D-NY) have introduced H.R. 2261, the Customs Business Fairness Act of 2019. This act protects customs brokers in the event an importer-client declares bankruptcy. As currently written, the bankruptcy laws allow bankruptcy trustees to recover duty payments made by the importer to CBP through the customs broker during the 90-day “claw back” period.

The Customs Business and Fairness Act will allow customs brokers to be “subrogated” to the priority rights of CBP for duties paid by the customs broker on behalf of an importer that subsequently files for bankruptcy – allowing a customs broker to standing the shoes of CBP as a credit who collected duties from the importer.

Click on this link below to call or write to Congress about HR 2261:
https://www.govtrack.us/congress/bills/116/hr2261/comment

US Customs agents ensure pest-free flowers just in time for Valentine’s Day.

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Source: CBP.gov

According to a U.S. Customs and Border Protection (CBP) press release, Customs’ agriculture specialists are working hard to examine the hundreds of millions of cut flower stems arriving into the US in time for Valentine’s Day later this week. CBP will especially exam cut flower stems to look for plant diseases and plant pests before they enter the United States.

While it is okay to bring flowers and floral arrangements into the US, there are some prohibited plant species that will be used in the arrangement and that all agricultural products are declared.

CBP officers at the Laredo filed office processed 11.3 million cut flower stems from January to February 14th and ranks fifth largest office by volume for cut flower importations nationwide.

If you  have received a notice from Customs or have any further questions, call experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com.

Customs broker and freight forwarder found liable for “use of a counterfeit mark in commerce”.

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A New Jersey U.S. District Court found a customs broker and freight forwarder liable for trademark infringements on Nike trademarks. The customs broker was ordered to pay $240,000 in damages and the freight forwarder will pay a yet undetermined amount.

The court held the broker and forwarder liable because they determined the arrangement of transportation and creation of documents related to the importation of the shipments constituted “use in commerce” of the Nike trademarks under the Lanham Act even though forwarder argued it had no physical control or knowledge of the shipments. Unfortunately for the broker and forwarder, the Lanham Act is a “strict liability statute” and does not consider intent or lack of intent in whether someone is liable. Speeding violations are the most common type of “strict liability statute” in that the act of speeding is the violation and it is not required to have the intent to speed. In this instance, the “use of a counterfeit mark in commerce” is the violation – with intent only a factor when determining the damages.

According to the case, (Nike, Inc. v. Eastern Ports Custom Brokers, Inc., et al., D.N.J. 2:11-cv-4390, July 19, 2018), the forwarder created the bill of lading, made arrangements for the cargo, and gave the broker a POA to act on behalf of the importer. The court ultimately found the broker and forwarder “played an active role in arranging for transportation” of the footwear and took “responsibility for the goods and making representations regarding the nature of the goods”. These actions were enough of an “use in commerce” under the Lanham Act and therefore liable for the trademark infringement.

One interesting note is the forwarder lost the case because they were in default after their lawyer withdrew in 2013. Default means a party to a lawsuit was properly served and noticed, but failed to make an appearance at any of the required hearings. For example, all parties are required to provide notice of trial dates and hearing dates. Proper notices were most likely sent by Nike to the forwarder – however, on the day of trial, no one made an appearance on behalf of the forwarder and as such lost the case for because they were in default. The forwarder, being in default, did not make an appearance and had no way to present any evidence to support their position.

Definitely an interesting case and the first time I’ve heard of a forwarder and broker liable for trademark infringement.

If you have any questions about this case and are would like to know how this ruling may impact your business as a broker or forwarder, contact experienced trade attorney David Hsu at 832.896.6288 or by email at attorney.dave@yahoo.com.