Drawback Now Allowed on Section 301 Duties, CBP Says; Worst of Shutdown Effects Limited to Seafood

The shutdown won’t stop CBP from meeting its Feb. 24 deadline for phasing out old “core” drawback processes, Leonard said. That date for full use of drawback under the Trade Facilitation and Trade Enforcement Act is congressionally mandated, so while there may be less support available if the shutdown is still in effect at that time, CBP will “from a system angle” still be able to make the change and no longer accept “core” drawback claims after Feb. 24, he said.

Despite work stoppages at many partner government agencies (PGAs), things seem to be going relatively smoothly compared to previous shutdowns, with one important exception. Contrary to CBP’s normal guidance, the National Oceanic and Atmospheric Administration has told CBP that it should not release goods regulated by the agency without the appropriate permit or license. Instead, such goods must be exported, said Jim Swanson, CBP director-cargo and conveyance security and controls. With NOAA’s permitting and licensing unit on furlough, that has brought processing of some seafood to a halt.

One major importer has 20 containers of Patagonian toothfish (aka Chilean sea bass) unloaded and sitting at the port but unable to be entered, Swanson said. In certain circumstances NOAA-regulated goods may be put into a warehouse to avoid costs and prevent goods from going into general order, in particular if they are already unloaded and are prohibited from entry.

Overall, importers should be wary if they get a conditional release and don’t get an expected response from a PGA, Swanson said. “I would be careful about releasing that,” because it’s possible that when the agency is back up and running that they might have something to say about it, he said. Most agencies have 30 days to order redelivery, and some, such as the Food and Drug Administration, have 60 days for some products. On the other hand, importers getting a “may proceed” or “1USG” message have “significantly reduced” odds of seeing a request for redelivery.

The trade community should work with the contacts that have been provided by the PGAs for specific circumstances, so as to avoid penalties or scrambling to redeliver merchandise, Swanson said. CBP has after “some work” been able to identify its own contacts at PGAs, including at NOAA, so importers and brokers may want to remind port personnel that CBP headquarters has contacts available if any additional issues arise. “We’ve passed that along to the field folks, but it never hurts to reinforce,” he said. Other issues discussed during the shutdown conference call are as follows:

Cut flowers staffing at CBP Miami. As a result of the shutdown, CBP would be unable to deploy additional staff to South Florida to handle a surge in imported cut flowers in the run-up to Valentine’s Day, said an official from CBP’s Agriculture Programs and Trade Liaison office. The agency has in past years put additional resources in place at the Port of Miami, where 90 percent of cut flowers come into the United States, he said. “We want to work with the port as best we can, but it should be noted there may be an impact from this, based on what many are accustomed to.” The official did not rule out rumors that there could be deployment of staff from elsewhere in Florida, but said that “anything that would require any internal travel by the agency would not be able to be approved.”

Broker exam. The next customs broker exam is still scheduled for April 24, Leonard said. The exam will be based on 2019 resources, including the as-yet unreleased 2019 Harmonized Tariff Schedule. CBP will make a final determination on whether the exam will proceed on its scheduled date as April 24 approaches, in line with the “case by case” approach it has been taking. The agency plans to draft questions based on the 2018 HTS, then make changes once the new version comes out, Leonard said. Test takers will have to wait to register until the government is back up and running if they hadn’t registered by the time the shutdown began, he said.

Broker annual fees. Ports are accepting payments and sending out receipts for broker annual permit fees. However, any broker that doesn’t get a receipt and is worried about needing one in the event they must demonstrate they paid their fee should reach out to the port of entry first, and then to CBP headquarters if they’re still having difficulties, said Valarie Neuhart, deputy director-trade relations.

ACE deployments. CBP is not at this time pushing back any of the deployments it has scheduled for later this year, besides the already announced delay of its new Form 5106 (see 1901170046), Leonard said. As for the 5106, “we will not discuss any particular date until well after we’re open,” he said. “Once we are open we will determine a date that is realistic for everybody.”

EPA wood formaldehyde standards. A list of tariff codes subject to upcoming import certification requirements as of March 22 under new Environmental Protection Agency regulations (see 1803140035) will have to wait until after the shutdown ends, Leonard said. The agencies are working together in a “very limited fashion” but most staff that would be involved in the effort are on furlough.

Currency rate of exchange. With the Federal Reserve no longer publishing exchange rates as a result of the shutdown, brokers and importers should go online and use a “reputable source,” Leonard said, declining to endorse any particular website.

21st Century Customs Framework. CBP will not as a result of the shutdown extend its deadline for comments on its new customs framework, which were requested in a notice issued in December (see 1812200003). Nor will the agency push back the deadline a result of the recent one-day outage of regulations.gov (see 1901170040). A public meeting on the effort is still set to take place on March 1, and CBP recently opened up more space for registration to attend by teleconference. In-person registration is already full, Neuhart said.