Tag: customs law

U.S. Customs & Border Protection Officer's uniform, featuring the seal of the agency.

CBP Seizes $38k Bulk Cash in Texas

Posted by Jason P. Wapiennik on

I’ve not had much time for blogging about customs law, as CBP enforcement seems to have increased lately. But, I did see this story come up about a seizure of money in…. suprise: Texas! Not Dulles this time.

The money seizure occurred at the Del Rio International Bridge. Just three days ago, Customs officers stopped and searched a Mexican woman driving her vehicles out of the United States. During the course of the inspection, CBP found that she had “several bundles of cash in her possession” that totaled $37,901.

Although the story does not explain how, or if, the money was hidden, it does say that she will be prosecuted for bulk cash smuggling. It’s odd that, most of the time these seizure stories form CBP in Texas explain how they money was hidden but only calls those violations a failure to report; in this case, it is not explained how the money was hidden, but is called bulk cash smuggling. It’s becoming my pet peeve.

On to the story:

U.S. Customs and Border Protection officers at the Del Rio International Bridge recently seized more than $30,000 in U.S. currency from a woman leaving the United States bound for Mexico.

On Dec. 19, CBP officers, conducting outbound inspections at the Del Rio Port of Entry, encountered a 2010 SUV departing the United States for Mexico. During inspection, officers discovered the woman driving the SUV had several bundles of cash in her possession. Officers seized $37,901 in undeclared U.S. currency.The driver, a 30-year-old U.S. citizen residing in Mexico, was turned over to Homeland Security Investigations for federal prosecution for bulk cash smuggling – 31 USC § 5332.

“Seizing undeclared currency at ports of entry serves to deprive criminal organizations of their profits,” said Port Director Alberto D. Perez, Del Rio Port of Entry. “Large amounts of currency may be imported and exported with the proper documentation.

“Failure to report international transit of $10,000 or more could mean forfeiture of funds and criminal sanctions.”

Country of Origin Marking Requirements

Posted by Jason P. Wapiennik on with 1 Comment

In a global economy where a person can find products from every corner of the globe consumers are sometimes inclined to make their purchasing decisions based on the country of origin (meaning where the product is made and where it is imported from). Americans, for sure, like to base their decision of whether to buy certain products based on country of origin. We have all probably, at one time or another, been told to buy American, to look for a made in U.S.A. label, or not to buy anything from China or some other country. My grandpa, who grew up during World War II, wouldn’t buy anything made in Japan or Germany, and for a  time during the Iraq War there was a call among some to boycott French products for their unwillingness to join the U.S. efforts.

This sentiment is nothing new, and in fact, is the reason that all imports into the U.S. must be marked with the country of origin. Recognizing this tendency, Congress

Made in China Image
Country of Origin Mark

authored 19 U.S.C. § 1304 in order to specify the various rules and exceptions to the country of origin marking requirement, and set out penalties for failing to mark and/or properly identify the country of origin of imported products.

Marking Requirements for Country of Origin

This law plainly states that every foreign products or article entering the U.S. must bear a mark indicating the English name of its country of origin, unless the article fits into a listed exception, discussed below. The country of origin mark itself must meet two qualifications, simply stated:

  • First, it must be conspicuously located on the article;
  • Second, it must be legible, indelible, and permanent;

Id. at §1304(a). The reason for these requirements to enable the “ultimate purchaser” (i.e., the person who will receive the article in its imported form 19 CFR § 134.1(d)) to readily identify the article’s country of origin in case that will affect his decision to buy or not buy a particular product. Customs can require that certain articles be marked in a specific manner, without exception, by stamping, cast-mold lettering, etching, engraving, or cloth labels (e.g., coffee, tea, spices, manholes, pipes, fittings, etc.). 19 CFR § 134.42.

Interestingly, the country of origin marking requirement means if you cannot find a country of origin marking on a product or its container, you may presume that it was made in the United States, because there is no marking requirement under this law for non-imported products (it could also mean that the country of origin marks were intentionally destroyed, removed, or concealed, or that Customs failed to intercept violative country of origin marking).

Exceptions to the Country of Origin Marking Requirements

Exceptions to the country of origin marking requirement typically arise when marking an article is extremely difficult or purposeless to mark. For example, the statute can exempt particular articles which are physically incapable of being marked, cannot be marked prior to their shipment to the U.S., or are imported for the private use of the importer and not intended for sale in the U.S. Id. at §1304(a)(3). Even in those cases, however, while marking the article itself may be excepted, the law still requires the importer to mark the country of origin on the container of the article, like the packaging it comes in. Id. at §1304(b).

Exemptions could be available in a variety of circumstances.  For example, marking a product could be economically prohibitive to the article’s importation or injure the article, or the origin could be apparent without explicitly marking the article.

How U.S. Customs Treats Mismarked or Unmarked Imports

In the absence of the required country of origin mark on imported articles, Customs will ensure that unmarked imported products are denied entry in commerce, or if already released from Customs custody, they will be required to be returned via redelivery notice. Customs may impose and collect an additional duty of 10% of the article’s value before allowing release, an amount in addition to any other duties normally owed, if any. Id. at §1304(i). Before release, Customs will  require that the article be marked with the correct country of origin and until marked duties paid.  Id. at §1304(j).

What to do When U.S. Customs Takes Issue with Country of Origin and its Marking

If you have a question about proper country of origin marking, identifying the actual country of origin, and otherwise determining how to comply with the Customs rules concerning proper country of origin marking for imported products, you should consult with an attorney experienced in the customs and related laws. It is possible to get a prospective ruling from U.S. Customs product which you intend to import, and an attorney can arguing for a particular manner of country of origin marking. Contact out office today to discuss your problem and your options.

Feel free to use this article to supplement your own knowledge, but do not let it serve as a substitute for legal counsel familiar with the various restrictions and exceptions of the law.

Customs penalties for fraud, negligence, and gross negligence under 19 USC § 1592

Posted by Jason P. Wapiennik on with 1 Comment

U.S. Customs & Border Protection (“Customs”) enforces its laws through the imposition of fines, penalties, and forfeitures. This article looks specifically at penalties imposed by Customs under 19 USC § 1592, which is the penalty statute for commercial fraud and negligence.

In essence, § 1592 is a law that penalizes any person that does or attempts to enter or introduce merchandise into the United States by means of any 1) material omission or 2) material and false document, written or oral statement, or act that has the potential to alter the classification, appraisement, or admissibility of merchandise. § 1592(a)(1)(A). It is also a violation to aid or abet anyone in violating this law. § 1592(a)(1)(B) This law is violated even if the government does not lose duties or other revenue.

Customs Penalty - Penalty Flag

Penalties can be assessed at three different levels of culpability, with more severe penalties for offenses committed with greater culpability. These levels of culpability are:

  • Negligence: defined by Customs as failure to exercise reasonable care;
  • Gross Negligence: defined by Customs as “actual knowledge or wanton disregard”; and,
  • Fraud: defined by Customs as “voluntarily and intentionally.”

For an alleged violation of § 1592,  Customs may issue a penalty on (sometimes on form 5955A) against the violator — which may be any person or people involved, including the importer of record, an employee, agent, consignee, etc. You are not immune just because a corporation, limited liability company, or someone else is the importer of record.

Before Customs issues the penalty, however, they must first issue a pre-penalty notice that typically gives the alleged violator 30 days to respond and provide reasons why they should not be penalized. § 1592(b)(1). Although somewhat rare, Customs can then decide against penalty; however, in most circumstances Customs goes forward and issues penalty notice to the alleged violator. If your company receives a pre-penalty notice Customs may still, in the future, go after certain individuals without issuing another pre-penalty notice to them. This often catches people by surprise and some will ignore a penalty notice thinking it will not be applied to them personally, but such is not the case.

If you or your company receives a pre-penalty or penalty notice it should be taken very seriously. Typically, a penalty notice requires a response within 60 days by either paying the alleged penalty, or as we typically recommend to clients, by making an offer in compromise or filing a petition for remission and/or mitigation. These responses – responses to both pre-penalty notices and penalty notices – should be drafted by an attorney experienced in the customs laws and should argue, where the facts and law allow, against imposition of a penalty or reduction in the level of culpability, along with a request to make an oral presentation to Customs.

After Customs first decision on any petition, there is an additional opportunity to file a second or supplemental petitions to argue for a more favorable decision. If you are faced with a penalty, or have recently discovered violations of  § 1592 and are considering a prior disclosure to avoid harsh penalties then please contact our office immediately by filling out our contact form or by calling (734) 855-499 and speaking with a customs lawyer directly.