Customs Facilitation and Trade Enforcement Reauthorization

Tuesday, September 22, 2009

 

The “Customs Facilitation and Trade Enforcement Reauthorization Act of 2009” was introduced on August 6, 2009 and contains numerous changes effecting trade:

 

In-Bond Movements

 

Importer of Record Program

 

Drawback

 

Penalties for Customs Brokers

 

Amends 9801.00.20, 9801.0040, and  9802.00.50 for Previously Imported Goods

 

Section 321(a)(2)(C) Value Change

 

Allows for Fungible Merchandise Exported to be Imported may Qualify for Chapter 98

 

This Bill is currently being reviewed in the Senate Finance Committee.

 

 

SECTION 214: REPORT ON SECURITY MEAUSRES FOR MERCHANDISE TRANSPORTED IN BOND

 

Section 214(a) requires the Secretaries of Treasury and Homeland Security to submit to the Senate Finance and House Ways and Means Committees joint annual reports in 2009, 2010, and 2011 that detail efforts taken to ensure the secure transportation of merchandise in bond through the United States.

 

Section 214(b) requires the report to include information on the number of entries, entry location, average transportation time, total duties owed, and number of carrier notifications of destination changes of in bond merchandise. The report must also provide the average time taken to reconcile records created at the time the merchandise arrives with final clearance records, and the number of records that remain unreconciled.

 

SECTION 215: IMPORTER OF RECORD PROGRAM

 

Section 215(a) requires the Commissioner to establish an importer of record program within 180 days of enactment of this Act.

 

Section 215(b) requires CBP to develop criteria and a process for assigning importer of record numbers, ensuring that duplicate importer of record numbers are not assigned, and maintaining and evaluating the accuracy of a database of importer of record numbers.

 

Section 215(c) requires the Commissioner to provide the Senate Finance and House Ways and Means Committees with a report on the importer of record program within one year of the date of enactment of this Act.

 

Section 215(d) defines key terms used in this section.

 

SECTION 302: DRAWBACK FOR EXPORTED MERCHANDISE

 

Section 302(a) amends section 313 of the Tariff Act of 1930 as follows:

 

Section 313(a) defines key terms used in the section.

 

Section 313(b) provides that 99 percent of any duties, taxes, or fees paid on imports that are subsequently exported shall be refunded, or subject to “drawback.” Monies may be refunded if the merchandise imported is substituted for other merchandise exported, so long as the export is classified under the same eight-digit HTS subheading number, and the claim for drawback was filed within five years of the date of importation. In special cases, monies may be refunded for merchandise that was classified under the same eight-digit HTS subheading number before January 1, 2000, or in the case of wine, if it is classified under a closely related eight-digit HTS subheading number. Current law is maintained with respect to substitution drawback for imports of ethyl alcohol or a mixture of ethyl alcohol. Imported merchandise is subject to drawback even if it is incorporated into other merchandise multiple times. 21

 

Section 313(c) sets forth the eligibility requirements for claiming drawback and provides that a person may claim drawback if the person (1) imports the merchandise on which the drawback claim is based or obtains the importer’s permission to claim drawback; and (2) exports the merchandise on which the drawback claim is based or obtains the exporter’s permission to claim drawback. If drawback is claimed on imported merchandise incorporated into other merchandise, the person making the drawback claim shall submit a bill of materials or formula identifying the merchandise by the 8-digit HTS subheading number and the quantity of the merchandise. Drawback claims must be filed electronically within five years of the date the subject merchandise is imported. If subject merchandise is imported on more than one date, the claim must be filed within five years of the earliest date of importation.

 

Section 313(d) provides that the amount of drawback paid shall be equal to 99 percent of  the number of export units claimed multiplied by the lesser of the average of duties, taxes, or

fees (1) paid per unit of the designated import; or (2) that would apply to the designated export, if imported. The monies refunded should be reduced by any monies previously refunded to a

person with respect to such merchandise.

 

Section 313(e) provides special rules for calculating drawback where such refunds are governed by U.S. trade agreements with Mexico, Canada, or Chile.

 

Section 313(f) requires a person claiming drawback to submit as proof of exportation (1) the record of exportation entered in the U.S. automated export system or information similar to that contained in such record; (2) in the case of exports to Canada or Mexico, entry records from such countries; and (3) in the case of a deemed export, a record that establishes such export.

 

Section 313(g) establishes special eligibility rules for destroyed merchandise, vessels built for residents of foreign countries, agricultural products, and merchandise not regularly entered.

 

Section 313(h) provides that merchandise that is exported or destroyed to claim drawback under this section shall not be eligible for other drawback claims, except for appropriate credits or deductions.

 

Section 313(i) provides that any person claiming or authorizing drawback shall be jointly and severally liable for the full amount of the drawback claim made or authorized by the importer.

 

Section 313(j) provides that drawback shall be paid from the customs receipts of Puerto Rico if the duties on which drawback are claimed were originally paid into the Treasury of Puerto Rico.

 

Section 302(b) makes conforming amendments to sections 505(b), 508(b), and 515(a) of the Tariff Act of 1930. 22

 

Section 302(c) provides that amended section 313 shall take effect on the date the Commissioner publishes in the Federal Register a finding that ACE is the exclusive U.S. entry summary record system and applies to drawback claims filed on or after that date.

 

Section 302(d) requires the Government Accountability Office to provide the Senate Finance and House Ways and Means Committees with a report evaluating the costs to the Federal Government of administering the changes to drawback made by this section.

 

SECTION 303: PENALTIES FOR CUSTOMS BROKERS

 

Section 303(a) amends section 641 of the Tariff Act of 1930 to add a new section that allows the Secretary to impose fines, or revoke or suspend a customs broker license, if a broker has been convicted of committing or conspiring to commit an act of terrorism.

 

Section 303(b) makes technical and conforming amendments to section 641 of the Tariff Act of 1930.

 

SECTION 304: ARTICLES REPAIRED OR ALTERED

 

Section 304(a) amends subchapter I of chapter 98 of the U.S. Harmonized Tariff Schedule (HTS) by adding a new note 3 that authorizes goods that were exported under bailment agreements, or for warehousing, repackaging, or both, and reimported without having been advanced in value or improved in condition by any manufacturing process or other means abroad, to be reimported under chapter 98 of the HTS.

 

Section 304(b) amends subchapter II of chapter 98 of the HTS by adding at the end of U.S. note 3 a new subsection (f) that authorizes commercially identical goods that were exported and reimported after having been advanced in value or improved in condition by any manufacturing process or other means abroad, to be reimported under chapter 98 of the HTS.

 

SECTION 311: DE MINIMIS AND INFORMAL ENTRY ISSUES

 

Section 311 amends section 321 of the Tariff Act of 1930 to permit the Secretary to admit articles valued at less than $500 to be imported by one person on one day duty-free. The Secretary may also prescribe regulations to permit the informal entry of merchandise when the aggregate value of the shipment is $2500 or less.

 

There will be more to follow regarding this bill as the information is received.