Wood packaging materials enforcement again in the news
Oct 12, 2017
U. S. Customs and Border Protection (CBP or Customs) issued a Notice (CSMS # 17-000609) on September 25, 2017 advising of a change in its policies for issuing penalties for violations of the Wood Packaging Materials (WPM) regulations. These regulations provide the authority to exclude shipments or require remediation under an Emergency Action Notification (EAN), to impose Liquidated Damages of up to 3 times the value of a shipment or the cost to CBP to perform required remediation, and to impose additional penalties for attempts to conceal violations or for repetitive violations. The policy change is that the use of additional penalties will no longer require repetitive violations.
The U. S. has adopted, as 7 CFR 319.40-3, the rules established by the International Plant Protection Convention (IPPC) regarding the treatment of non-exempt wood packaging materials imported into the U. S. The rules, known as ISPM 15, require such materials to be treated at approved facilities to kill harmful timber pests (by heat or chemical treatment) and to display a visible, legible, and permanent mark certifying treatment. Any covered WPM lacking the required IPPC mark, or actually infested with a timber pest, is in violation of the regulation. The responsible U. S. party, generally the importer, must remedy the problem, normally by exporting the offending WPM, sometimes with the merchandise, and pay any costs or charges associated with that disposition.
Exclusion of merchandise, EANs, and liquidated damages remain the primary remedies for any WPM violation. Currently, except for attempts to conceal violations, CBP allows up to five violations in a calendar year before imposing additional penalties under 19 USC 1592 or 1595a(b) for WPM violations. Effective on November 1, 2017, CBP may impose such penalties beginning with the first violation; there is therefore no longer any need for an annual reset in counting repeat violations. This change is being made to “to motivate WPM compliance.”
CBP “encourages” importers to educate their suppliers about the ISPM 15 WPM requirements.
“Augmented Enforcement Measures” for ISF Violations
CBP Boston has announced that it has seen an upward trend in ISF violations and will use “augmented enforcement measures” – liquidated damages, and withholding the release or transfer of cargo – until all ISF requirements have been satisfied. Expanded use of liquidated damages claims has also been reported at other ports.
Importers are required to file shipment data in advance of entry to the U. S. for all containerized and break bulk maritime cargo. These Importer Security Filings (ISF) are required to load containers at foreign locations, and in advance of arrival for break bulk shipments. Failure to file and late filing of an ISF can result in a refusal to allow the cargo to be loaded, or a refusal to allow unlading on arrived cargo. Liquidated damages claims are also available, and are a charge against the surety bond that must be maintained by the ISF filer.
In mid-2016, CBP shifted the authority to issue ISF liquidated damages claims from HQ to the ports. These claims can be in an amount up to $5,000 for each violation.
These changes both demonstrate that CBP is moving beyond education and warnings towards more enforcement actions to ensure compliance in priority areas.
Steven W. Baker
AIIS Customs Committee Chair
Follow us on social media: