Contributing Lawyers


Cyndee Todgham Cherniak

United States

Susan Kohn Ross


Andrew Hudson


Originally printed in the Journal of Commerce -

As the new year begins, many trade professionals wonder what is 2010 likely to hold? One can never be sure how events will unfold, but from what we know right now, it will be another lively year.


For starters, the Importer Security Filing's enforced compliance takes hold on January 26th. From the comments of retired Acting Commissioner Jay Ahern, we are led to believe that direct communications, warning letters, increased exams and the occasional withholding of cargo releases are the preferred forms of gaining compliance, instead of going directly to liquidated damages. That is not to say liquidated damage cases will not be issued, but rather any such cases will first be cleared through Headquarters. The bottom line is Customs will issue liquidated damages, but it would seem as a last resort rather than a routine action, but only for those attempting to comply. Anyone who waited until January 2010 to start filing ISF should not expect a lot of sympathy from Customs when encountering filing problems.


Customs is, however, not alone when it comes to regulatory activity. APHIS has published additional Lacey Act guidance, the latest having to do with composite, recycled and reused materials. We also saw in October the publication of a Federal Register notice which changed the phase-in period for goods subject to the Act. At the same time, lurking in the background remains the possibility of additional tariff numbers being added to the list of products subject to the Lacey Act. Perhaps equally frustrating is the on-going lack of a definition for "common cultivar" and "common food".


There was also news out of Tennessee that federal agents raided Gibson Guitar. Fish & Wildlife agents were reportedly seeking illegally harvested rosewood and mahogany from Madagascar. Gibson holds a Forest Stewardship Council Chain-of-Custody certificate from the Rainforest Alliance (an international conservancy group) which guarantees that all certified wood comes from legal sources. The terms of the Chain-of-Custody certificate allow only wood grown using best practices to become part of the supply chain. Beside the fact the company is Gibson Guitars, what makes this raid notable is it is the first under the 2008 revisions to the Lacy Act.


CPSC also enacted a number of regulatory changes in moving forward with implementation of the Consumer Product Safety Improvement Act. Now, as part of its greater involvement in the import process, the Commission is also part of a new targeting center, see details about CTACT in another posting. Similarly active throughout 2009 was FDA as it, too, sought to heighten the security of the food supply chain and it, too, is part of this new targeting center. More regulatory activity is likely from FDA as well in 2010 once the new food safety bill is enacted into law.


The Customs Reauthorization Act is also making its way through the legislative process. It seeks to raise the attention paid to trade facilitation by Customs, and none too soon. In its 2009 Review Fact Sheet, Customs spends the first 2 1/2 pages touting drug seizures, immigration apprehensions, intelligence improvements, trade enforcement and currency seizures, and the like. Only then does trade facilitation get mentioned, and then in the limited context of CBP seeking a balance between facilitation and enforcement, modernization, IPR violations and audit efforts. One is forced to ask why 5 1/2 pages has to do with enforcement and only 1/2 page with facilitation? Is that really the best the agency can do even given the Congressional pressures put upon it?


We are also likely to see activity before the World Trade Organization. While the settlement proceedings before the WTO are lengthy, dispute resolution panels have already been formed to hear the Mexican and Canadian challenges to the COOL rules, those country of origin marking rules dealing with meat, fish, perishable agricultural commodities, peanuts and similar products. There will be other issues arise in 2010, no doubt.


One cannot talk about 2010 without mentioning free trade agreements. The WTO continues to struggle with the Doha Round. At the same time, other countries continue to adopt free trade agreements, but the U.S. still has not enacted the ones with Korea, Panama and Columbia. When added to the Buy America provisions in the stimulus package, this will continue to make our trading partners wonder where the U.S. is headed. Perhaps a valid question for international traders, too?


One more very important phenomenon needs to be mentioned in closing. More and more violations which were once simply treated as civil penalties are now becoming not only fines of significant size but are also frequently end up as criminal prosecutions. Make sure your internal controls are up-to-date and closely followed, and hold your breath - 2010 portends to be another bumpy ride!

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