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Over the past year Customs has been tasked with even more regulatory enforcement, much of it centered on new anti-forced labor policies. Partner government agencies such as the FDA also are having to ramp up their oversight. Travel restrictions, especially those on foreign travel, brought on by the COVID pandemic sharply curtailed their ability to make in person visits to importers or shippers. Virtual visits will be giving way to more in person interviews but certainly these agencies have found improved methods to validate compliance. They are leaning more on business intelligence tools to identify areas of concern and to focus their efforts where they may have the best results. Customs is adding auditors to tackle the increased enforcement workload so importers can expect a higher number of focused audits in the coming months.

Two years ago, Customs stepped up their efforts to combat money laundering disguised as legitimate international trade. That effort continues but the last year has seen a significant increase in their efforts to identify and refuse entry to goods made with or containing components made with forced labor. Withhold Release Orders (WRO) were established to stop the importation of products known or suspected of having a forced labor input. Then the Uyghur Forced Labor Prevention Act (UFLPA) took the effort a step further by establishing a “rebuttable presumption” that any goods made in or containing components from the Xinjiang Uyghur Autonomous Region (XUAR) in China are produced by forced labor. Companies which accept labor transfers from the XUAR are also covered by this act. UFLPA requires the importer to provide evidence their goods are not produced by forced labor. Once detained these goods are subject to seizure unless the importer can provide “clear and convincing “evidence that forced labor is not a part of the production of the product. UFLPA is responsible for numerous and expensive container detentions on a variety of products.  The battle against forced labor does not stop here, recent reports have claimed that the auto parts industry has a direct or indirect exposure to forced labor issues, again from the XUAR. Both manufactured parts and raw materials used in their manufacture may be sourced in the XUAR and Customs is expected to increase their scrutiny of these products in the coming year. These moves make it imperative that importers be aware of their supply chain, regardless of the country of origin. Laws against the importation of goods made with forced labor are not new; the means of enforcing these laws has however evolved.

The Department of Commerce has increased the initiation of anti-dumping (ADD) cases based on a perceived circumvention of the additional tariffs. These cases are brought when there is evidence that goods under an existing ADD case are being transshipped via another country with only minor production being performed in the third country. This is another area where lifting COVID restrictions could assist in making new cases as investigators make more trips to foreign manufacturers to access their capabilities.  Trade legislation which failed to clear reconciliation in Congress would make the expansion of current ADD cases easier to initiate. Likely some of this legislation will be brought back up in 2023 so more circumvention cases may be on the way.

Not to be left out, the Food & Drug Administration (FDA) has stepped up enforcement of the Foreign Shipper Verification Program (FSVP).  Most food importers are required under the FSVP to institute and maintain a program verifying their suppliers meet applicable FDA standards for food safety. FDA inspectors will review the importer’s records for deficiencies and importers who fail to institute or maintain an FSVP are subject to fines. If you are an importer of food products and have not established a FSVP you need to look further into the program, fines are already being assessed.

The conflict between Russia and the Ukraine has resulted in numerous sanctions and export license requirements for goods moving directly or indirectly to Russia. Always a problem, goods with potential defense or governmental uses need to be scrutinized for licensing requirements prior to exportation. Once again this is an area where substantial fines can be assessed.

The recently enacted Modernized Customs Broker Regulations places more responsibility on licensed brokers to inform Customs of potentially fraudulent activity by importers. The rules expand the requirement to keep records of discussions with clients on issues such as classification and to make them available to Customs on demand. As is the case with most import regulations, the goals are laudable and deserve support. However, importers and shippers need to take steps to ensure they are within the regulations so they can avoid any unintentional problems with their shipments.



Best Regards,

Sam McClure, LCB

Director of Compliance & Customs Services


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Meet one of CVI’s Customs Brokerage & Compliance experts, Sam McClure:

Sam serves as Director, Compliance and Customs Services for CVI. He serves as CVI’s corporate compliance officer and is responsible for overseeing all aspects of our Customs related services, including growth.

Sam started his career in 1977 with Waters Shipping Company in Charlotte, NC. He began as a document runner, soon becoming a leader in operations and customer service for the branch. Sam, along with Linda Masten, founded Central Carolina Shipping Inc. in 1983 as an independent Customs Brokerage firm where he served as Vice President for 26 years. Sam and Linda grew Central Carolina into a successful and highly respected member of the Carolinas trade community. When Charlotte opened their local chapter of the IFFCBA Sam was part of the organizing group and he headed the Customs committee for several years. Sam obtained his Customs Brokers License in 1984 and remained with Central Carolina until the company was acquired by CVI in 2009.

At CVI, Sam has held several positions in both the operations and sales departments. As an expert in U.S. Customs regulations, Sam is often called upon on to provide guidance to importers on Customs compliance issues. He makes regular presentations on matters related to importation and broader regulatory compliance.

– Sam McClure, LCB, Director of Compliance & Customs Services, CVI
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