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U.S. Customs and Border Protection Reviewing Liquidated Damages Cases Issued for Late and Non-Payment of Duty Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP

During discussions with U.S. Customs and Border Protection, officials noted that recent liquidated damages cases assessed for late or non-payment of duty may have been issued in error.

According to CBP, a technical error arose in the agency’s internal computer system during the recent migration to the Automated Commercial Environment. This error caused CBP’s internal software to reflect inaccurate release dates that in some cases generated erroneous dates of entry and affected the duty payment deadline. Liquidated damages cases were issued automatically based upon these incorrect deadlines and, in some cases, the liquidated damages assessment was doubled when the broker petitioned for relief.

CBP has formed a working group to oversee this matter and correct the computer glitch. CBP has also directed field offices to cancel outstanding liquidated damages cases where appropriate and, if necessary, refund the amounts that were paid in connection with improperly issued claims. These cases will then be stricken from the importer’s history so as not to create a record of non-compliance. Going forward, field offices have been directed to carefully review suspected instances of late or non-payment of duties prior to issuing liquidated damages.

While Customs stated that it will try to remedy those cases it can identify, we encourage brokers and importers to be proactive in reviewing recent liquidated damages cases rather than relying on CBP’s own internal review of this matter. Open liquidated damages should be resolved as soon as possible to avoid further complications with sureties and future CBP enforcement action. We have also excerpted below an e-mail from CBP’s Los Angeles Field Office on how to proceed locally. We will update this post should additional ports offer similar guidance.

“As part of our ongoing effort to keep the Los Angeles Trade Community updated on ACE, we want to provide you with information concerning a technical issue with ACE cargo release that may cause incorrect release dates to be set. CBP Headquarters has determined this is a complex problem, involving both CBP and Trade system issues. CBP is working with the Trade to identify the cause to address the issue and find a workable solution.

As a result of this issue, liquidated damages may have been initiated in error due to incorrect release dates for late filing of entry summaries and late payments of Periodic Monthly Statements (PMS). The Office of Administration, Revenue Division initiates liquidated damages for PMS non-payments and late-payments. Port Entry Personnel initiates liquidated damages for Non-PMS late filing of entry summaries.

For liquidated damage cases that broker/filers believe may have been issued in error due to incorrect release dates, they may submit a written request for cancellation. We will also accept request to refund liquidated damages that may have already been paid for this same issue. The request should be submitted to the below CBP personnel with the case number, entry number, and proof of release.

• PMS Liquidated Damage Cases (Port Code 4111)– Send an email with the above information to Program Manager Delia Crawford at delia.m.crawford@cbp.dhs.gov. The email subject line should read “Cancel PMS Liquidated Damages – ACE Cargo Release”

• Non-PMS Liquidated Damage Cases (Port Code 2704) – Send an email with the above information to Entry Branch Chief Anthony Turner at anthony.c.turner@cbp.dhs.gov. The email subject line should read “Cancel Liquidated Damages – ACE Cargo Release”

Questions regarding the issue should be directed to Program Manager Delia Crawford at the email address above or at (562) 256-8771.”


ITA: Press Release - International Trade Administration

A major milestone for the global trading system was reached on 22 February 2017 when the first multilateral deal concluded in the 21 year history of the World Trade Organization entered into force. In receiving four more ratifications for the Trade Facilitation Agreement (TFA), the WTO has obtained the two-thirds acceptance of the agreement from its 164 members needed to bring the TFA into force.

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Louisana Drug and Dietary Supplement Maker Ordered to Cease Operations Due to Federal Violations  - U.S. Food & Drug Administration

On Friday, U.S. District Judge Robert G. James for the U.S. District Court for the Western District of Louisiana entered a consent decree of permanent injunction against Pick and Pay Inc./Cili Minerals, a manufacturer and distributor of drugs and dietary supplements, and its owner, Anton S. Botha, requiring the business to immediately cease operations until it comes into compliance with federal laws.

The complaint, filed by the U.S. Department of Justice, sought a permanent injunction against the company and its owners for unlawfully manufacturing and distributing unapproved new drugs, misbranded drugs, adulterated dietary supplements and misbranded dietary supplements.

The company and its owner marketed their products online at www.ciliminerals.com, www.cilihealthstore.com and www.cil-ergy.com. They also sold their products through a retail location in Lafayette, Louisiana.

“The FDA works with companies to ensure their processes comply with the public health requirements in our laws and regulations,” said Melinda Plaisier, FDA associate commissioner for regulatory affairs. “But when a company refuses to comply, we will take enforcement action.”

The FDA inspected Pick and Pay Inc./Cili Minerals four times since 2012. During the inspections, the FDA found Pick and Pay Inc./Cili Minerals was manufacturing and distributing misbranded and unapproved new drugs as well as misbranded and adulterated dietary supplements. The defendants marketed their products with claims that they could treat medical conditions such as cancer, cardiovascular disease, multiple sclerosis, autism, bipolar disorder, brain injury and epilepsy. The FDA has not approved Pick and Pay Inc./Cili Minerals’ drugs for any use.

During the inspection, FDA investigators also found numerous violations of the agency’s current Good Manufacturing Practice (cGMP) regulations for dietary supplements, including failing to establish specifications for dietary supplement components and failure to test or verify that components and finished products meet product specifications for identity, purity, strength or composition. Because the defendants failed to follow cGMP regulations, their dietary supplements are adulterated under the Federal Food, Drug, and Cosmetic Act.

In May 2015, the FDA issued a Warning Letter to Pick and Pay Inc./Cili Minerals for similar violations.

The consent decree prohibits the company and its owner from marketing and distributing misbranded or unapproved new drugs and adulterated or misbranded dietary supplements. Before the company and its owners can resume operations, they must, among other things, recall and destroy their existing stock of drugs and dietary supplements, hire labeling and good manufacturing practices experts, and receive written permission from the FDA to resume operations.

Pick and Pay Inc./Cili Minerals is based in Lafayette, Louisiana.

The FDA, an agency within the U.S. Department of Health and Human Services, protects the public health by assuring the safety, effectiveness, and security of human and veterinary drugs, vaccines and other biological products for human use, and medical devices. The agency also is responsible for the safety and security of our nation’s food supply, cosmetics, dietary supplements, products that give off electronic radiation, and for regulating tobacco products.


USITC Makes Determination in Five-Year (Sunset) Review Concerning Artists' Canvas from China - U.S. International Trade Commission

The U.S. International Trade Commission (USITC) today determined that revoking the existing antidumping duty order on artists’ canvas from China would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.

As a result of the Commission’s affirmative determination, the existing antidumping duty order on imports of this product from China will remain in place.

Chairman Rhonda K. Schmidtlein, Vice Chairman David S. Johanson, and Commissioners Irving A. Williamson, Meredith M. Broadbent, and F. Scott Kieff voted in the affirmative. Commissioner Dean A. Pinkert did not participate.

Today’s action comes under the five-year (sunset) review process required by the Uruguay Round Agreements Act. See the attached page for background on this five-year (sunset) review.

The Commission’s public report Artists’ Canvas from China, (Inv. No. 731-TA-1091 (Second Review), USITC Publication 4674, March 2017) will contain the views of the Commission and information developed during the review.

The report will be available by March 23, 2017; when available, it may be accessed on the USITC website at: http://pubapps.usitc.gov/applications/publogs/qry_publication_loglist.asp.


Truck and Bus Tires from China Do Not Injure U.S. Industry, says USITC - U.S. International Trade Commission

The United States International Trade Commission (USITC) today determined that a U.S. industry is not materially injured or threatened with material injury by reason of imports of truck and bus tires from China that the U.S. Department of Commerce (Commerce) has determined are subsidized and sold in the United States at less than fair value.

Chairman Rhonda K. Schmidtlein and Commissioner Irving A. Williamson voted in the affirmative. Vice Chairman David S. Johanson and Commissioners Meredith M. Broadbent and F. Scott Kieff voted in the negative. Commissioner Dean A. Pinkert did not participate.

As a result of the USITC’s negative determination, Commerce will not issue antidumping and countervailing duty orders on imports of these products from China.

The Commission’s public report Truck and Bus Tires from China (Investigation Nos. 701-TA-556 and 731-TA-1311 (Final), USITC Publication 4673, February 2017) will contain the views of the Commission and information developed during the investigations.

The report will be available by March 15, 2017; when available, it may be accessed on the USITC website at: http://pubapps.usitc.gov/applications/publogs/qry_publication_loglist.asp.


Keurig Green Mountain Agrees to Pay $5.8 Million Civil Penalty, Improve Internal Compliance for Failure to Report Defective Coffee Brewers - Consumer Product Safety Commission

WASHINGTON, D.C. – The U.S. Consumer Product Safety Commission (CPSC) announced today that Keurig Green Mountain, Inc., of Waterbury, Vermont, has agreed to pay a $5.8 million civil penalty to the government.

The penalty settles charges that Keurig knowingly failed to report a defect and unreasonable risk of serious injury to CPSC immediately with Keurig MINI Plus Brewing Systems, as required by federal law.

Between 2010 and 2014, Keurig received about 200 reports of hot water, coffee, and coffee grounds spraying out of the brewers. In more than 100 of these incidents, consumers suffered burn-related injuries to their faces, hands, and bodies. Some of these injuries were severe and resulted in second and third-degree burns.

In addition to paying a penalty, Keurig has agreed to develop, implement and maintain a compliance program that is designed to ensure that the company complies with the Consumer Product Safety Act.

Keurig recalled about 6.6 million MINI Plus brewers in December 2014. The brewers were sold at Kmart, Kohl’s, Target, Walmart and other stores nationwide and online at www.keurig.com, www.greenmountaincoffee.com, and www.keurig.ca from December 2009 through December 2014 for about $100.

Keurig’s settlement of this matter does not constitute an admission of CPSC staff’s charges.

The penalty agreement has been accepted provisionally by the Commission by a 4 to 1 vote.


Three Individuals Plead Guilty to Conspiracy and Trafficking of Counterfeit Electronic Goods into the United States - Department of Justice

Three individuals pleaded guilty today for their roles in a scheme to smuggle into the United States counterfeit electronic devices, including those purporting to be genuine Apple iPhones, iPads and iPods, from China for sale in the United States.

Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, U.S. Attorney Paul Fishman of the District of New Jersey, Special Agent in Charge Terence Opiola of Homeland Security Investigations (HSI) in Newark and Bergen County Prosecutor Gurbir Grewal made the announcement.

Andreina Becerra, 31, a U.S. citizen, Roberto Volpe, 34, an Italian national, and Rosario La Marca, 54, an Italian national and resident of Naples, Italy, each pleaded guilty before U.S. District Court Judge Kevin McNulty of the District of New Jersey to one count of conspiracy to traffic in counterfeit goods and labels, to smuggle goods into the United States, and to structure financial transactions, and one count of trafficking in counterfeit goods. Becerra and Volpe will be sentenced on Sept. 7. La Marca will be sentenced on June 14.

According to the documents filed in this case and statements made in court, from July 2009 through February 2014, the defendants conspired to smuggle and traffic into the United States from China more than 40,000 electronic devices and accessories, including digital cameras, iPads, iPhones, and iPods, along with labels and packaging bearing counterfeit Apple and Sony trademarks. Defendants also wired or transferred more than 100 monetary instruments and funds totaling over $1.1 million in sales proceeds from U.S. accounts into accounts in China.

Further, the documents filed in this case and statements made in court showed that defendants shipped devices separately from the labels bearing counterfeit trademarks for later assembly to avoid detection by U.S. Customs officials. The devices were then shipped to conspirators all over the United States. Proceeds from the sales of the devices were funneled back to the defendants’ accounts in Florida and New Jersey via structured cash deposits and a portion of the proceeds was then transferred to conspirators in Italy, further disguising the source of the funds.

Jianhua Li, also known as “Jeff Li,” a Chinese national currently residing in California, was charged as a co-defendant in an indictment filed on April 17, 2015, but has pleaded not guilty. The charges contained in the indictment against him are merely accusations, and he is presumed innocent unless and until proven guilty.

The HSI Newark Seaport Investigations Group and the Bergen County Prosecutor’s Financial Crimes Unit investigated the case with significant assistance from Europol and Italy’s Guardia di Finanza.

Senior Counsel Sarah Chang of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorneys Leslie Schwartz and Sarah Devlin of the District of New Jersey are prosecuting the case.

 
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