The first significant customs modernization legislation in nearly 30 years is beginning to take shape in Congress. This legislation would advance U.S. Customs and Border Protection’s 21st Century Customs Framework, although observers note that it focuses more on enforcement than trade facilitation.
According to materials made available by Sen. Bill Cassidy, R-La., the Customs Modernization Act of 2021 includes the following provisions.
Trade Data
- allows CBP to collect additional information from additional parties, including information related to the sale, purchase, transportation, importation, or warehousing of a product through a commercial or marketing platform
- authorizes CBP to utilize this information for any lawful purpose, including commercial enforcement
- allows CBP to impose penalties of $5,000 for the first violation and $10,000 for subsequent violations
Entry Filing
- requires all data related to entry, and a single entry filing of all data, to be electronically filed by the importer of record or its broker (though paper-based filing would be allowed in limited circumstances)
- allows an IOR or its agent to convert documentation or information submitted in advance of entry into an entry
- requires the IOR or its agent to certify electronically-filed entry data (or sign the entry if the data is not electronically filed)
- allows CBP to utilize entry information for any lawful purpose, including commercial enforcement
Recordkeeping
- expands recordkeeping requirements to additional parties that facilitate cross-border transactions, including those that (1) submit, transmit, or otherwise make available or visible to CBP documentation or information under U.S. customs and trade laws or (2) own or operate a commercial or marketing platform or marketplace through which imported goods are offered for sale or purchase
- provides if a person fails to comply with a CBP demand for records CBP may use an inference adverse to that person’s interests in (1) ascertaining the correctness of any entry, (2) determining the person’s liability for fines, penalties, duties, fees, and taxes, and (3) promoting compliance with U.S. laws
Penalties
- removes the gross negligence standard
- redefines standards for negligence and fraud and aligns the definition of fraud with standards in other civil fraud statutes
- provides an exception to requiring pre-penalty notices if the claim is $500,000 or higher per regulation
- establishes a standard for issuing penalty determinations and claims and provides for CIT enforcement without issuing a notice in the case of fraudulent violations
- expands liability to any person in any way concerned with unlawful acts, and increases civil penalties, for violation of arrival, reporting, entry, or clearance requirements
- authorizes CBP to issue penalties against violative trade actors that seek to intentionally spoil evidence or assets
- clarifies CBP’s authority to assess penalties for unlawful imports, regardless of a seizure
IPR
- expands permissions for CBP to share information on intellectual property rights-related import violations that has been provided or shared by online marketplaces, e-commerce platforms, express consignments operators, freight forwarders, and other entities that facilitate imports or the sale of imports to verify the legitimacy of those shipments
- requires counterfeit imports or exports to be seized and, in the absence of written consent of the owner of the mark or copyright being infringed, summarily forfeited
- subjects persons in any way concerned in infringing or counterfeit activity to civil penalties
- provides that challenges to Section 337 exclusion order enforcement can only be filed with the International Trade Commission
Forfeiture
- allows CBP to summarily forfeit items found in violation of the Food, Drug, and Cosmetic Act and other counterfeit goods
- grants discretionary authority for the seizure of exports and excludes goods summarily forfeited from notice requirements
AD/CV Evasion
- allows CBP to disclose the importer name in an Enforce and Protect Act investigation if the importer is not identified in the allegation and CBP has a reasonable suspicion that evasion has occurred
Suspended or Debarred Persons
- authorizes CBP to prevent persons suspended or debarred from doing business with the federal government from participating in the IOR program
- authorizes CBP to deny administrative exemptions for imports involving suspended or debarred persons
- authorizes CBP to issue special rules for entry and declaration of goods whose importation is caused or facilitated by suspended or debarred persons
For more information on this legislation, please contact Lenny Feldman (at (305) 894-1011 or via email) or Nicole Bivens Collinson (at (202) 730-4956 or via email).
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