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Contained: The Federal Regulations Of Importation

Apr 17, 2014
When importing goods to the U.S., a firm must be sure that the contents of their inbound containers conform to the articles present within the Code of Federal Regulations’ Customs Duties section. In addition, freight forwarders must be thorough in their container tracking, clearing and collection processes as wares arrive into port. Any failure in either area could result in the seizure or forfeiture of a container or containers. 

Container Tracking

While there are roughly 200 applicable customs regulations, for the sake of sanity, this blog post will focus on three of them. The first pertains to the act of entry and what is required of importers once a container reaches an American port. Highlights from CFR 19 Part 142 are such:

After arrival of merchandise. merchandise for which entry is required will be entered within 15 calendar days after landing from a vessel, aircraft or vehicle, or after arrival at the port of destination in the case of merchandise transported in bond.

Contents. The entry documentation required to secure the release of merchandise must consist of the following:

(a) (1) Entry

(b) (2) Evidence of the right to make entry. 

(c) (3) Commercial invoice. 

(d) (4) Packing list.

(e) (5) Other documentation. Other documents which may be required by CBP or other Federal, State, or local agencies for a particular shipment.

(f) (6) Identification. When merchandise is imported having been sold, or consigned, to a person in the United States, the name, street address, and appropriate identification number of that person must be shown on the entry documents.

Container Clearing

Another section of interest is CFR 19 Part 11, which details the packing, stamping and marking of specific items like alcohol and tobacco and wool, fur and textile products and the penalties one could incur if careless errors or blatant neglect are discovered:

(a) All cigars and cigarettes imported into the United States, except importations by mail and in baggage, shall be placed in the public stores or in a designated bonded warehouse to remain until inspected, weighed, and repacked, if necessary, under the Customs and internal-revenue laws. However, if the invoice and entry presented specify all of the information necessary for prompt determination of the estimate duty and tax on the packages of cigars and cigarettes covered thereby, the port director may permit designation of less than the entire importation for examination.

(b) (a) The port director, in his discretion, may require marks, brands, stamps, labels, or similar devices to be placed on any bulk container used for holding, storing, transferring, or conveying imported distilled spirits, wines, and malt liquors.

(c) (a) Wool products imported into the United States, except those made more than 20 years prior to importation, and except carpets, rugs, mats, and upholsteries, shall have affixed thereto a stamp, tag, label, or other means of identification.

(d) (a) Fur products imported into the United States shall have affixed thereto a label. The term “fur product” means any article of wearing apparel made in whole or in part of fur or used fur; except that such term shall not include such articles as the Federal Trade Commission shall exempt by reason of the relatively small quantity or value of the fur or used fur contained therein.

(e) (a) Textile fiber products imported into the United States shall be labeled or marked in accordance with the Textile Fiber Products Identification Act and the rules and regulations promulgated thereunder by the Federal Trade Commission. An invoice or other paper, containing the specified information may be used in lieu of a label where the textile product is not in the form intended for sale, delivery to, or for use by the ultimate consumer.

Container Collection

Our final look involves the components of CFR 19 Part 127, a section dedicated to the holding, abandonment and sale of imported merchandise; and its this last procedure that has become the conceptual springboard for a highly entertaining and widely viewed A&E show. The most prominent points of this regulation include the following:

Merchandise shall be considered general order merchandise when it is taken into the custody of the port director and deposited in the public stores or a general order warehouse at the risk and expense of the consignee for any of the following reasons:

(a) Whenever entry of any imported merchandise is not made within the time provided by law or regulations prescribed by the Secretary of the Treasury.

(b) Whenever entry is incomplete because of failure to pay estimated duties.

(c) Whenever, in the opinion of the port director, entry cannot be made for want of proper documents or other causes.

(d) Whenever the port director believes that any merchandise is not correctly or legally invoiced.

(e) Whenever, at the request of the consignee or the owner or master of the vessel or person in charge of the vehicle in which merchandise is imported, any merchandise is taken possession of by the port director after the expiration of 1 day after entry of the vessel or report of the vehicle.

Any entered or unentered merchandise which remains in Customs custody for 6 months from the date of importation or a lesser period for special merchandise as provided, and without all estimated duties and storage or other charges having been paid, shall be considered unclaimed and abandoned.

All unclaimed and abandoned merchandise will be sold at the first regular sale held after the merchandise becomes subject to sale, unless a deferment of its sale is authorized by the port director. Regular sales shall be made once every year or more often at the discretion of the port director.

From the proceeds of sale of merchandise remaining in public stores or in bonded warehouse beyond the time fixed by law, the following charges shall be paid in the order named:

(a) Internal revenue taxes.

(b) Expenses of advertising and sale.

(c) Expenses of cartage, storage and labor. When the proceeds are insufficient to pay such charges fully, they shall be paid pro rata.

(d) Duties.

(e) Any other charges due the United States in connection with the merchandise.

(f) Any sum due to satisfy a lien for freight, charges, or contributions in general average, of       which due notice shall have been given in the manner prescribed by law.

There are several additional details within section 127 that concern the seizure and sale of exceptional items like firearms, drugs, chemicals, agriculture, and alcohol, but, out of fact and commemoration of April 15th, it should be stated that failure to pay appropriate taxes or duties on such products is more often than not the reason for confiscation. 

However, a container doesn’t necessarily need to be taken into custody for it to be classified as abandoned. As viewers of that earlier mentioned A&E program quickly learn, many shipments are legitimately forgotten or lost in transit, but thanks to affordable, cloud-based monitoring solutions, freight forwarders and importing firms now have the ability to oversee, assess and address shipping conditions during container tracking, clearing, and collection processes. After all, no company wants to have its goods auctioned off on cable television.

Next week we’ll look at some publicly epic importing disasters from the past year or so. It should be a post filled with improbability and absurdity. Don’t forget. 

Written by:

Chris Monaco, Covert Content Creator

As a man of many achievements, Chris Monaco is Temperature@lert’s newest Covert Content Creator. Hailing from Beverly, MA, Chris is armed with a trifecta of degrees, from a BFA (Maine at Farmington), to an MFA (Lesley University), all the way up to his most recent achievement; the coveted MBA from Suffolk University. Outside of his academic travels, Chris has added many international stamps to his passport, including: Seoul, Korea and Prague, Czech Republic, wherein Chris taught English as a Second Language to dozens of international students. His hobbies include writing, skiing, traveling, reading, and the world of politics. His personal claims to fame include two cross-country car trips through the U.S. and a summer’s worth of courageously guiding whitewater rafting trips. Chris’ ideal temperature is 112°F, the optimal temperature for a crisp shave.

Chris Monaco Temperature@lert

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