Archive for February, 2010

CANADA BORDER SERVICES AGENCY - Monetary Penalty System Review
Thursday, February 25th, 2010

In 2006, the BCCC created a sub-committee to undertake a fundamental review of the CBSA Administrative Monetary Penalty System (AMPS). The purpose of the review was to make amendments to AMPS to ensure it was fair, consistent, and transparent, and was easy to administer. Streamlining the penalty regime and reducing the number of contraventions was also part of the sub-committee’s mandate.

Some of the changes to AMPS will be implemented on April 14th of this year. These changes include:

- a new penalty amount structure, based on risk;
- new penalty amounts; and
- a 30-day delay in the escalation of certain penalty levels.

The collapsing and renumbering of penalties will take place at a later date.

Available at this time is a Customs Notice highlighting the phases of implementation ; a short document listing all current and revised penalty amounts ; a summary of the 30-day escalation of certain penalty levels ; and the penalty grid .

A few contraventions have penalty amounts that are outside the grid as penalty escalation was not considered suitable, for example, failure to keep any records at all which attracts a flat penalty amount. Note that most of the percentage of value for duty penalty amounts have been eliminated, as well as penalty amounts based on the value for duty less than $1,600. Consequently, this led to the elimination of a number of contraventions.

Members should note in particular changes to the following two penalties: 1) late accounting and 2) failing to provide a certificate, licence, permit or information that is required before interim or final accounting, and before the goods are released (C071).

The penalty for 1) late accounting has increased from $25.00 to $100.00 and 2) the penalty under C071 has increased from $100 t o $500 for the first infraction.

To improve access to the corrections process, regions have been advised to include the issuing office fax number on the Notices of Penalty Assessment for a faster application process.

The CSCB Board of Directors has managed our participation in the AMPS review, and continue their work on this issue.

Members will be provided with additional information, as soon as it becomes available.

Comments can be directed to the CSCB at cscb@cscb.ca.

Related Links:

http://cscb.ca/listinfo/cn10-002-eng.pdf
http://cscb.ca/listinfo/30-DayNon-escalationRequirement.pdf
http://cscb.ca/listinfo/RevisedBCCCAMPSContraventions_201002.pdf
http://cscb.ca/listinfo/PenaltyGrid PenaltyAmounts_20090122.pdf

EU Report Blasts 100 Percent Scanning Requirement
Monday, February 22nd, 2010

The following was reported on in today’s edition of ST&R’s “WorldTrade Interactive”.

The European Commission (EC) issued a working paper this month that blasts a U.S. statute that requires all foreign cargo containers shipped to the United States (except U.S. and foreign military cargo) to be scanned by non-intrusive imaging equipment and radiation detection equipment at the foreign port before being loaded on a U.S.-bound vessel by July 1, 2012. The EC believes that if 100 percent scanning were implemented in European ports “it would be excessively costly, would be unlikely to improve global security, would absorb resources currently allocated to EU security interests, and would disrupt trade and transport within the EU and worldwide.” The report states that the EU does not contemplate implementing 100 percent scanning of containers at export and will instead prioritize investments to enhance multilayered risk management systems for targeting and inspecting dangerous cargo and strengthening international cooperation to facilitate this process.
The report indicates that European port procedures and regulations would have to be fundamentally redesigned to comply with the 100 percent scanning requirement. This would represent a considerable financial burden, including 430 million for investments for scanning and radiation detection and an increase of  200 million per year in operational costs. The EC also estimates that the direct transport costs of U.S.-bound consignments would increase by approximately 10 percent and observes that ports unable to implement 100 percent scanning would lose access to the U.S. market, increasing congestion and environmental costs for other ports. Furthermore, the EC believes that the annual welfare loss from trade disruption could total some 10 billion for the EU and U.S. combined and some 17 billion worldwide. According to the report, these welfare costs could skyrocket to about &euro150 billion per year if 100 percent scanning were replicated on a world scale.!

The report favors a system where all exports and imports undergo comprehensive and effective multilayered risk management processed using a range of methods and technologies. The EU is working to fully deploy such a system by the end of this year that will (1) combine electronic systems and practical tools of collection of information prior to arrival to and departure from the EU; (2) enhance risk analysis and risk management procedures; (3) develop new technologies; and (4) coordinate enforcement by customs authorities in all EU member states.

In addition, the EU is seeking to intensify international cooperation with the United States and other countries to “maximize effectiveness and efficiency” and may also consider strengthening bilateral cooperation on such matters as ensuring effective collection of quality data; exchanging relevant security information; implementing mutual recognition of trade partnership programs and other security controls; developing and spreading utilization of new security technologies, including scanning; and building capacities and training of staff for effective implementation.

Secretary of Homeland Security Janet Napolitano told the Senate Commerce, Science and Transportation Committee on December 2, 2009, that her agency will seek a two-year extension of the July 2012 deadline for achieving 100 percent scanning of all inbound ocean-borne cargo containers. Napolitano explained that the Department of Homeland Security would require significant additional human and technological resources that do not currently exist, as well as the redesign of many ports, to be able to comply with the current deadline. The law allows Napolitano to extend the 100 percent cargo scanning deadline by two years and to renew this extension in additional two-year increments if she certifies to Congress that systems to scan containers (at least two of the following criteria would have to be met).

-are not available for purchase and installation
-do not have a sufficiently low false alarm rate for use in the supply chain
-cannot be purchased, deployed or operated at ports overseas, including, if applicable, because a port does not have the physical characteristics to install such a system
-cannot be integrated, as necessary, with existing systems
-will significantly impact trade capacity and the flow of cargo
-do not adequately provide an automated notification of questionable or high-risk cargo as a trigger for further inspection by appropriately trained personnel

US Customs: Trade-Related Issues
Thursday, February 18th, 2010

The following article is excerpted from the 18 February 2010 edition of “WorldTrade Interactive”.

Trade issues, relatively neglected in 2009 as a new president and a strengthened Democratic majority in Congress focused on other issues, are set to take on a larger profile in 2010 as policymakers look to trade to help boost domestic employment. The Obama administration is expected to focus on negotiating two multilateral agreements and strengthening enforcement of existing pacts.

Congress, meanwhile, will consider issues such as trade preference reform and food safety as well as a customs reauthorization bill&hellip.

Pending FTAs. In recent weeks administration officials have repeatedly signaled an interest in advancing the free trade agreements the U.S. has already negotiated with Colombia, Panama and South Korea. These FTAs have languished for several years due to congressional concerns about labor rights in Colombia, Panama’s status as a tax haven and limited access to Korea’s auto and beef markets. …

New FTAs. Although the Doha Round negotiations are unlikely to see much if any progress this year, the Obama administration is pursuing only one new FTA, a regional agreement dubbed the Trans-Pacific Partnership that currently encompasses Singapore, Chile, Brunei, New Zealand, Australia, Peru and Vietnam. This choice appears to signal a focus on more commercially significant FTAs that would provide meaningful export opportunities, which could be easier for Congress to accept…

China. Until recently, neither the Obama administration nor Congress had much interest in pushing China on trade irritants for fear of jeopardizing economic recovery efforts, among other things. That may well change in 2010. The administration is making a major effort to double exports over the next five years as part of an effort to increase domestic employment, and observers say further opening China’s market will be vital to that initiative. …

Customs Reauthorization. Prompted in large part by trade community concerns that U.S. Customs and Border Protection needs to restore the balance between its trade facilitation and trade enforcement efforts, a wide-ranging customs reauthorization bill was introduced in the Senate last August, received a hearing by the Senate Finance Committee in October, and could be marked up this April or May. A similar bill is currently being drafted in the House.

Prospects for this legislation are unclear. Progress could be slowed if jurisdictional issues arise among the congressional committees that oversee trade and homeland security. In addition, the trade community is expected to seek the removal or revision of certain provisions, including one that would allow import data collected for national security reasons to be used for commercial enforcement efforts&hellip.

Mexican Trucks. In March 2009, Mexico imposed tariffs of 10% to 45% on $2.4 billion worth of U.S. exports in retaliation for the termination of a U.S. pilot project that allowed up to 100 Mexico-domiciled motor carriers to operate beyond the border commercial zones and the same number of U.S. carriers to operate in Mexico. Affected products include Christmas trees; certain fruits, vegetables, juices and nuts; health and beauty items; tableware, kitchenware and glassware; manmade fiber yarn; carpets; jewelry; home appliances; sunglasses; and pens and pencils.

Despite pleas for action by affected U.S. industries, the Obama administration had done little to address this issue. That changed recently when USTR Ron Kirk visited Mexico City and said there is “a sense of urgency” to find a solution.