LEGAL CORNER June 2015 – The NEW, the OLD and the FUTURE
LEGAL CORNER
The NEW, the OLD and the FUTURE
by Carl R. Soller, Esq., McBreen & Kopco
The Automated Commercial Environment (ACE) a newly developed CBP system (see LEGAL CORNER March 2015) has entered (on May 1) its first “mandatory use” phase eliminating the now replaced Air Automated Manifest System. Thus the impacted carriers, manifest filers, and software developers endured the extensive integration process. Happily, at least apparently, no serious problems have arisen; if I am wrong please take this opportunity to let me know.
However, the scheduled progress is far from the expected. The “one window” release concept involves participation from a number of Other Government Agencies and getting the Agencies on board is a complex and time-consuming task. Required data elements from Food and Drug Administration (FDA), Fish and Wildlife, and the Environmental Protection Agency (EPA) among many others, vary substantially. Collection of that data by Customs from Agencies, importers, and others is still in the defining and developmental stages.
Implementation also involves the signing of a “Memorandum of Understanding” between CBP and any of the Governmental Agencies participating in ACE. That process has not been implemented and agreeing on terms is often not an easy task. The results, on trade, of these unresolved concerns remain unknown.
As for the “OLD,” Generalized System of Preferences (GSP) retroactive and future renewal has passed the Senate (May 14) as part of a larger piece of trade legislation which includes other “preference programs.” It is “expected” that the House “may” act upon the Bill sometime this summer. Although the legislation is reported to be “non-controversial” in the House, that remains to be seen. Opposition to GSP has regularly been expressed in terms of passage only if the dollars “lost” to the U.S. are made up by some other income sources. No substitute income stream has yet to be identified.
GSP was last renewed in 2001 for five years.
The “FUTURE” change, of particular interest to Customs Brokers, involves a change in the bankruptcy law. The change would accord “priority status for a Customs Broker” for Customs duty paid arising out of the importation of merchandise if paid to CBP either directly or through a licensed Customs Broker, by a debtor arising out of the importation of merchandise within one year before the date of filing a bankruptcy petition.
The noted change will further protect a Broker who pays duty to CBP and has received payment from a debtor within 90 days of the filing of the bankruptcy petition.
Currently a Broker is subject to a claim of a bankruptcy trustee to recover payments made to the Broker within that 90 day period, even though it represents duty paid by a Broker on behalf of the importer, to CBP.
We trust that Brokers nationwide will aggressively support this legislative change through their local Congressmen and women.
Carl R. Soller, Special Customs, International Cargo and Regulatory Compliance Counsel to McBreen & Kopko is counsel to the JFK Airport Customs Brokers and Freight Forwarders Association and a recognized expert in his practice areas. He and his firm concentrate their Air Cargo Practice in all business and regulatory matters on a nationwide basis. He offers advice on supply chain security and its related Government Regulations to the Air Cargo Community as well as advice and a vast range of assistance to importers and exporters of all kinds of consumer goods. He can be reached at (646) 502-5791 or csoller@mklawnyc.com