Headquartered in Chicago, IL, Michael A. Capuzzi Trade Law is devoted exclusively to Customs and International Trade Law for both import and export legal and regulatory matters. Our firm provides representation and counsel to importers, exporters, air, ocean, rail, truck, and express consignment carriers, NVOCC's, freight forwarders and customs brokers, warehouse and logistics operators, and manufacturers. We serve all members of the International Trade community import/export supply chain.

Importing

The ability to import merchandise into the U.S. is a privilege granted to U.S. citizens and corporations by the Government.  At the Law Offices of Michael Capuzzi, we realize the importance of this privilege to our clients.  We are experts in tariff and trade laws.  We strive to offer clients understanding and solutions to problems in this complex and ever changing area of trade.

In 1993, the Customs Modernization Act (MOD Act) was passed by Congress.  The MOD Act forever changed the way the Bureau of Customs and Border Protection enforces trade laws sharing responsibility with Customs to achieve compliance with import laws and regulations.  Importers who wish to avoid the pitfalls of compliance and to fulfill their obligations of "reasonable care" mandated by the MOD Act, need to have a greater understanding of the issues that effect their individual businesses.

Understanding the tariff laws and regulations keeps importers ahead of unnecessary and costly delays, additional duties and fees, compliance issues, and penalties or fines.  Moreover, that understanding provides positive advantages for those who desire to take advantage of all the import laws have to offer for duty reduction and preferential trade programs.  It's about doing importing the right way - the way to realizing higher profits for a business.

Classification of Imported Merchandise
under the HTSUS
Each item of imported merchandise must be classified underthe HTSUS with a corresponding ten digit classification number.  Theclassification governs the rate of duty applicable at entry.  Proper classification requires a thorough knowledge of the HTSUS, the merchandise being classified, Customs rulings and practices,as well as court decisions in the Court of International Trade. We provide importersour experience and expertise in determining the best classification for their merchandise resulting in the lowest, legally correctduty rate.

Valuation
Proper valuation of imported merchandise is another critical element in the importing process. It is also necessary in satisfying the compliance requirements under the MOD Act. The MOD Act requires that importers provide accurate valuations of imported merchandise to Customs and that importers use reasonable care in determining what those valuations are. Failure to declare proper valuations will likely result in penalties or an audit of the importer's entries by Customs.

Country of Origin Marking
The Bureau of Customs and Border Protection laws and regulations require that the country of origin of imported articles be marked in a conspicuous place on the article as legibly, indelibly, and permanently as the nature of the article permits.  The name of the country of origin must be indicated in English so that the ultimate purchaser in the United States is aware of the country in which the article was manufactured or produced.  Certain articles are specifically exempted from marking by law and regulation. The excepted articles and marking rulesare discussed in greater detail by following the link below.

Moreover, the origin of merchandise imported into the U.S. is important for several other reasons.  The origin can effect the rate of duty, the entitlement for special trade and tariff programs (NAFTA, GSP, or African Growth and Opportunity Act (AGOA), etc.), admissibility, quota and visa requirements, anti-dumping or countervailing duties, and, of course, the actual marking of the merchandise. Two sets of rules exist when determining the country of origin. One set for importations where no bilateral or multilateral trade agreements apply, "non-preferential." The second set for importations where special treatment under various trade agreements or special legislation exists, "preferential." In addition to these rules, textiles and apparel have their own special rules used to determine the country of origin.

Determining the actual country of origin under the correct set of origin rules can be an arduous task for an importer especially if the article is only partially produced in the country of export. We provide expertise in guiding importers through these complex rules and laws so that the article's origin is correctly declared andmarked, and the importer can take advantage of any reduced or free rates of duty at time of importation. 

Preferential Duty Programs
We specialize in NAFTA Compliance Programs that include: Thorough training in the Rules of Origin found in the NAFTA treaty with a detailed discussion of tariff shifts, regional value content, the de minimis rule, accumulation and self-produced goods or intermediate materials; Recordkeeping requirements; NAFTA Marking Regulations; NAFTA Drawback Regulations; Certificate of Origin completion; Origin Verifications and Audits; and Implementation and maintenance of a NAFTA compliance program integrating all of the above-referenced requirements.
Import Compliance Management Program
Trying to keep on top of all the requirements can be an overwhelming task. We will work with you to develop a program that will include all areas together, including:
  • Selecting and assessing the performance of a Customs Broker;
  • Properly classifying and valuing imported merchandise;
  • Country of origin marking and labeling;
  • Use of preferential duty programs, including NAFTA and GSP;
  • Recordkeeping;
  • Drawback;
  • Foreign Trade Zones, Bonded Warehouses, TIBs;
  • Preparation for assessments, audits and verifications;
  • Informed use of administrative procedures, protests and legal recourses;
  • Training;
  • Policy and Procedure Manuals;
  • Internal Audit Protocols and Self-Assessments.
Other Government Agency Requirements
The Bureau of Customs and Border Protection enforces the laws and regulations for, or works in conjunction with, over 40 various government agencies, bureaus, and departments. Because of the vast number of rules and regulations that come in to play with one simple transaction, you need to ensure you are in total compliance with every applicable requirement. We can assist you in reviewing the laws and regulations of those agencies and departments that would have oversight with your merchandise. We can assist you to ensure that you are in compliance with issues involving other government agencies such as recordkeeping and inspection requirements.

These organizations have their own rules and regulations that are enforced by Customs at the time the merchandise enters or is exported from the customs territory of the United States. Other government agencies involved in the import transaction include, but are not limited to:

  • The Food & Drug Administration (FDA);
  • Federal Trade Commission (FTC);
  • Fish and Wildlife Service (FWS);
  • Federal Communications Commission (FCC);
  • Consumer Products Safety Commission
Please visit our Resources for a complete listing.
 

  

Exporting

Export is one of the engines of international trade that powers the U.S. and global economies. At the Law Offices of Michael Capuzzi, we realize the importance of exporting to our clients. We find creative solutions to export licensing, embargoes, compliance, and enforcement problems as well as provide innovative strategies for realizing opportunities in foreign markets.

We provide expertise to clients in the following areas:

Export Compliance
Export Regulations under the Export Administration Regulations (EAR) of the Bureau of Industry and Security (BIS), formerly the Bureau of Export Administration (BXA), require that an exporter review the circumstances surrounding export transactions and determine if there are any licensing or re-export issues that need to be addressed.

Some areas of concern under the EAR include:

Does the article to be exported require an export license? Does the export article fit into the overseas buyer's line of business? Is the product compatible with the technical level of the destination country? Does the buyer refuse routine installation, training, or maintenance services as part of a purchase? Is the buyer unfamiliar with the products performance characteristics or capabilities? Is the buyer requesting equipment configurations incompatible with the stated country of destination (e.g., the purchase of 120 volt AC rated equipment in a country on a 220 volt AC standard). These are just a few of the causes of concern that must be examined before an export can legally occur. You cannot always rely on information provided to you from your customer. The presence of questionable information obligates the exporter to verify the information prior to export.

Additionally, embargoes that have been issued by the Office of Foreign Assets Control of the Treasury Department and the State Department may apply to the export transaction. The embargo regulations are often complex and subject to continual changes. Moreover, the agency's involved offer little guidance in the way of published rulings or opinions.

At the Law offices of Michael Capuzzi, we can quickly analyze future or current transactions and apply the appropriate laws and regulations to determine whether an Export License is required, an embargo applies, or any other export requirement needs to be met. If so, we can provide representation of the matter to the appropriate governmental agency to get a license issued or any other requirement fulfilled as quickly and efficiently as possible.

We also advise our clients of the scope of an export license and its proper application to the transaction so that the client understands their responsibilities and privileges of exporting. As part of this, we advise clients on the course of action they must take to comply with U.S. law and regulation while not unnecessarily bypassing export business opportunities.

Investigations and Enforcement

Our firm is prepared to assist clients in the event a client receives a summons, subpoena, or otherwise be the subject of any civil or criminal investigation. Such enforcement tools are becoming more prevalent to ensure export compliance. Substantial financial penalties have been issued to exporters by the Government for failure to comply with the export laws and regulations. We stand ready to assist our clients through any proceeding initiated by the Government with expert and experienced counsel.


Shippers Export Declaration (SED)
Accurate Information provided to U.S. Customs and the Department of Census on the Shippers Export Declaration (SED) or the Automated Export System (AES) is the first step to a compliant export program. Accuracy of the information on the SED or in AES is the responsibility of the PPII, even if the PPII has a freight forwarder or carrier complete the SED or send information through the AES system.

The Law offices of Michael Capuzzi are able to provide training and support to your export staff regarding the proper completion of the SED and the responsibilities of the PPII regarding electronic submission of information through AES.

Principal Party in Interest
When export documents are submitted to U.S. Customs for review, regardless of who completed the documents, the Principal Party In Interest (PPII) is responsible for the accuracy and correctness of the information submitted. Here are two representative examples of this principle.

If a manufacturer sells merchandise on a domestic or ex-factory basis, and the merchandise is later exported, the manufacturer who first sold the merchandise is responsible as the PPII.

If an exporter's freight forwarder completed the Shippers Export Declaration (SED), the exporter is responsible as the PPII for the information that the freight forwarder submitted on the SED. Although the exporter may have relied on another party to complete and submit the SED, the exporter as the PPII, is liable for its correctness and accuracy. The exporter is held accountable for any fines or penalties that may be issued as a result of the incorrect or inaccurate information presented.

We offer expert legal advice and counsel to manufacturers and exporters in the responsibilities and duties of the PPII to satisfy the export laws and regulations.

Schedule B Number
A critical step in completing the SED is the Schedule B (Harmonized Tariff Schedule (HTS) classification number) of the product(s) being exported. The Schedule B number determines what commodities may be subject to an export license requirement. Without a correct Schedule B number, the information on the SED is already inaccurate and open to potential fines and penalties from Customs, in addition to shipping delays.

We are experts in the correct classification of merchandise under the HTS for both import and export transactions. We maintain a large database of Customs Ruling Letters, Treasury Decisions, the Explanatory Notes to the HTS, and court cases in the Court of International Trade (CIT) and Court of Appeals for the Federal Circuit (CAFC) in determining the correct classification of an article.

 
The C-TPAT Program from Customs: An overview of C-TPAT
 
Everyone involved in world trade has a vital interest in protecting the import/export supply chain from terrorist attacks in the U.S. and abroad.  Serious disruptions in the chain will assuredly result in negative financial repercussions for all parties involved.  In an attempt to pre-empt the financial consequences to any terrorist attacks, Customs and many of the corporate and private entities that comprise the supply chain, have joined forces to initiate and implement an innovative program against terrorist attacks - C-TPAT.
 
The goal of the C-TPAT program is to fortify the security of goods entering the U.S., thereby reducing the threat of terrorist attacks.  This goal can only be acheived through the joint support and participation of all involved entities - corporate, private, and governmental.  The program's focus is not only to enhance Customs' enforcement of security protocols at each point of entry, but also to increase the integrity of the import supply chain by instituting additional security measures and by communicating these enhanced measures to every other partner in that chain.
 
Once implemented, C-TPAT will provide Customs and the owners of the supply chain - importers, air, ocean, rail, truck, and express consignment carriers, freight forwarders and customs brokers, warehouse and logistics operators, and manufacturers an opportunity to play an active role in the war against terrorism and to protect national security.  Moreover, C-TPAT members will enjoy expedited processing at ports of entry thereby promoting an increase in international commerce.  It's in everyone's best interest to become a C-TPAT member.

Who is eligible to participate in C-TPAT?
 
C-TPAT is open to all importers, air, ocean, rail, truck, and express consignment carriers, NVOCC's, freight forwarders and customs brokers, warehouse and logistics operators, and manufacturers.  Ultimately, C-TPAT membership will also be available for port authorities and terminal operators.

The benefits of C-TPAT membership

By participating in C-TPAT, member companies can provide their employees, suppliers, and customers increased security in the import/export supply chain.  Beyond these initial security benefits, Customs will offer members:

  • Reduced inspections of cargo entering the U.S. and a "fast lane" through borders
  • Assigned account manager from Customs to handle any problems or issues
  • Eligibility for account based processes, e.g., bimonthly/monthly payments of duties
  • Emphasis on self-policing, not Customs verifications or auditing
  • Eligibility for the Importer Self-Assessment (ISA) Program that conveys further benefits to importers
  • Access to the C-TPAT membership list

How do I apply, and what is required for membership?
 
Applicants must submit an agreement to Customs representing their commitment to comply with the following C-TPAT security measures:

  • To conduct a comprehensive self-assessment of supply chain security using the C-TPAT security guidelines developed by Customs and the trade industry.  These guidelines encompass: procedural, physical, and personnel security, education and training of employees, access controls, manifest procedures, and security of conveyances.
  • Submission of a supply chain security profile questionnaire simultaneously with the agreement, or at a later specified time.
  • To develop and implement a security program using C-TPAT guidelines that improves security throughout the supply chain.
  • To communicate C-TPAT guidelines to other companies in the chain, e.g., vendors and customers, and work toward building the guidelines into the relationships with them.

The role of Michael Capuzzi Trade Law in assisting C-TPAT applicants

We add value by having experts in Customs Law and Regulations assist you with your application. Your C-TPAT application will be prepared by a team who is well versed in all aspects of the application process and regulatory procedures. We are committed to see your application be approved in the least amount of time. Additional services available to clients are:

  • Experts in reviewing all aspects of the import supply chain and security issues
  • Existing procedure review and correction
  • Current import documentation review and correction
  • Overview of hiring practices to withstand Customs scrutiny
  • Assessment of current compliance levels and recommendations for future action
  • Attorney-client privilege
  • Over 60 years of combined experience in Customs business

 

 

  

When will the application be processed and the benefits of membership begin?

Benefits will begin after Customs has completed their evaluation of the submitted C-TPAT application documents and notified the applicant of their findings.  Customs has committed themselves to complete the evaluations within 30-60 days after the supply chain security questionnaire has been submitted.

Other Customs Programs linked to C-TPAT

C-TPAT will serve as the umbrella program for all Customs and Border Protection Industry Partnership Programs.  C-TPAT's higher levels of security practices and broader scope will eventually supersede other Customs programs.

The current Carrier Initiative Program (CIP) and Super Carrier Initiative Program (SCIP) will continue as separate programs for the near future, but will be eventually phased into C-TPAT.  Carriers that are currently in the CIP or SCIP programs will need to apply for C-TPAT to realize the benefits of the new program.  Since carriers participating in these two programs are already focused on the importance of security from a narcotics smuggling standpoint, they are well positioned to expand their security focus to include anti-terrorism.  Updating to C-TPAT will not require duplicate work for CIP/SCIP participants and the additional benefits of reduced exams, a point of contact Account Manager, and expedited processing can be easily achieved.

Along the northern border, Customs and Border Protection is working with Canadian Customs to create a harmonized processing system to be used with existing programs.  The new program, currently referred to as "FAST" (Free and Secure Trade), will provide the platform for implementation of C-TPAT and will include the conduit for trucking companies to enroll in the program.  Customs says this program will be in place in the "near future." At the southwest border, similar systems and programs are planned with Mexican Customs and trucking companies to update current programs as C-TPAT is introduced into that region.

For importers, membership in C-TPAT confers eligibility for Customs' Importer Self-Assessment (ISA) Program.  The ISA program allows importers to assess their own compliance with Customs laws and regulations on a continuing basis.  It also provides a means to recognize and support importers that have implemented the program through additional benefits.  Four key benefits are:

  • the importer will be exempt from all comprehensive compliance audits
  • Customs will allow an importer a thirty day period to assess and determine whether to file a prior disclosure if any fraudulent violation is uncovered by the importer or Customs
  • participation in ISA will be considered in the assessment and disposition of any penalty or liquidated damage cases
  • the importer will have access to a Customs team consisting of an Account Manager, auditor, and a trade analyst assigned to service ISA participants.

For additional information on any of the above programs, please contact Michael Capuzzi Trade Law.

 

 

 

"The measure of success is not whether you have a tough problem to deal with, but whether it's the same problem you had last year."

-John Foster Dulles