Monday, February 13, 2012

Intellectual Property and Imports

Enforcing intellectual property (ip) rights has become the hallmark area to which a majority of seizures stem from. It is vital that companies go through the procedures for registering their trademarks, copyrights, etc with Customs. There is a balancing act that must be accounted for, the rights of the owner protecting its exclusive property interest versus any user (whether innocent or not) who is subject to intelectual property infringement. However, if Customs is unaware as to the "marks" (i.e. they are not registered) goods may come in that violate a true owners ip rights. Thereafter it is too late; the damage has bee done, and consumer attitude towards a product becomes compromised.

Once an ip right is registered with Customs, all ports are given notice as to detain merchandise that is believed to be infringing. Customs will then give the ip holder with the opportunity to confirm or deny that a violation has occurred. Further, Customs will allow the potential infringer with the opportunity to remedy the situation by geting permission from the ip holder to import the goods. Absent this permission the violator will be fined and the merchandise subject to forfeiture actions. Further, the ip holder will know the identity of the violator who may sue them individually or keep tabs on their importing activity.

It is recommended that you be careful as to any product you import. Failure to take precautions will leave the importer subject to liability and severely tarnish your business.

Happy Importing :)

Tuesday, February 7, 2012

Made in the good old USA

There are often substantial differences depending on the country regarding the determination as to the country of origin. A product that is produced for export in the United States may not be eligible for sale in the United States.

It is wonderful to see and hear of companies keeping production within the United States and bring jobs to Americans as opposed to having production done overseas. All the more so I give these companies credit because to use the term "Made in USA," on products requires strict adherence to the laws. Goods that are distributed in the United States are governed by United States law, and the rules instituted by the Federal Trade Commission ("FTC").

The FTC does not pre-approve claims for labeling products as "Made in USA". In order for a a product to be called "Made in USA," the product must be "all or virtually all" made in the U.S.

What does "all or virtually all" mean?

The FTC states that "All or virtually all" means that all significant parts and processing that go into the product must be of U.S. origin. That is, the product should contain no — or negligible — foreign content.

Therefore, be sure that you have a reasonable basis for complying with the "Made in USA" requirements and have all documentation necessary in case you are questioned.

Happy Importing :)

Tuesday, January 24, 2012

Marking Continued

As discussed in the last marking post the requirements for marking must be:

1. in a conspicuous place
2. legible
3. permanent
4. English name as to the country of origin

Let us explain these even further shall we.

Legible and Conspicuous
The person who ends up with the product the "Ultimate Purchaser," must be able to find the marking easily without straining him or her self. Some uses I have seen include, tags and stickers depending on the type of good.

What size font should I use? Depends on the type of product. For example, CBP found that lettering which was 1.7mm was the smallest font acceptable as a country of origin marking on a pen barrel according to HQ ruling 733940.

Ultimate Purchaser
Who is the ultimate purchaser?...that depends:
Article imported for retail - the end consumer will be the ultimate purchaser
Article imported as gift - the recipient will be the ultimate purchaser
Article imported for manufacturing - the manufacturer will be the ultimate purchaser if the article is going to be substantially transformed.

The marking should be as permanent as the article permits it to be. It should should be sufficiently permanent so as to handle shipping and distribution until it finally reaches the ultimate purchaser.

English Name
Only the English name of the country of origin may be used unless Customs approves otherwise. Common forms for marking include "Made in..." "Product of..."

Tuesday, January 17, 2012


Generally, every imported or exported good is subject to marking regulations from at least one of the federal agencies. Marking requirements are enforced by physical inspection of the goods and also after release of the goods via a notice of redelivery and marking (CF4647). If Customs finds that marking is incorrect, they will delay the release of the goods until the marking is corrected.

Incorrect markings can result in delays and high expenses for remarking goods or may result in a liquidated damages claim against the importer for failing to redeliver the goods (example: when the goods were sold and shipped to buyers). Further, marking which is fraudulent may result in seizure and/or penalties.

Marking laws are not only U.S. Customs based. Customs enforces marking requirements for other agencies as well. For example the Federal Trade Commission requires clothing to have certain labels and information relating to fiber content, dry cleaning information, etc.

U.S. Customs marking requirements are as follows, the marking must be:

in a conspicuous place
have English name of the country of origin.

Thursday, January 5, 2012

U.S. Customs Seized Your Money at the Airport - Learn More

Recently, more than a few clients had called me regarding the seizure of money by Customs at the airport and I figured I would share the information with my readers.

Can U.S. Customs seize your money at the airport?

Yes, if one failed to properly report all cash and cash equivalents transported into or out of the country. See Currency and Foreign Transaction Reporting Act (31 U.S.C. 5311, et seq.)

When do I have to declare my money to Customs?

Most people are uninformed of the reporting requirement however, "If you transport, attempt to transport, or cause to be transported (including by mail or other means) currrency or other monetary instruments in an aggregate amount exceeding $10,000 or its foreign equivalent) at one time from the United States to any foreign country, or into the United States from any foreign country, you must file a report with U.S. Customs and Border Protection." Currency Reporting

In other words: More than $10,000 you must declare whether entering or leaving the U.S.

What is the required form one has to fill out prior to transporting more than $10,000?

FINCEN Form 105

Does it cost anything to declare one's money over $10,000 to Customs?


What happens if you do not declare your money over $10,000?

If Customs catches you, the money will most likely be taken from you. Thereafter, one will receive a seizure notice to which it is highly recommended to seek advice from an attorney experienced in these matters.

What is the reason for the government seizing the money under these circumstances?

In a nut shell the government believes that you are trying to evade paying taxes by transporting the currency without reporting it.

Happy Importing :)

Tuesday, December 27, 2011

Substantial Transformation

A quick explanation of substantial transformation:

As mentioned in the earlier post - Country of Origin - substantial transformation is the degree to which processing of an article leads to a new article, with a different name, character, and use. In addition, Customs uses a second method known as the “tariff shift” i.e. change in tariff classification, which is also used to determine substantial transformation. As of now, there are no uniform rules that settle country of origin questions.

As a result, substantial transformation can be highly subjective and tend to be based on political considerations. There has been much litigation in this area and have case-specific interpretations. Further, determinations as to what is considered a substantial transformation change periodically. Thus, it would be wise to discuss the nature of the product with Customs prior to importation because you are not excused from exercising reasonable care when determining the proper country of origin for your goods.