Do you have questions about importing/exporting?

Do you have questions about importing/exporting?

The Florida Association for Food Protection November 30, 2016 Whole Foods Market www.gray-robinson.com Peter Quinter, Attorney Customs & International Trade Law Group GrayRobinson, P.A. Mobile (954) 270-1864 Office (305) 416-6960

[email protected] Skype: Peter.Quinter1 www.gray-robinson.com Recognized as one of the Best Lawyers in America in the area of FDA law: 2009 to 2016 www.gray-robinson.com 3

Do you have questions about importing/exporting? http://www.GRCustomslaw.com www.gray-robinson.com 4 Learning Objective Avoiding common and costly errors for seafood importation and distribution Latest practical experiences in food safety measures required by the federal government

Compliance with U.S. Customs and FDA regulations and procedures to avoid detentions, delays, seizures and penalties www.gray-robinson.com 5 QUESTIONS?? www.gray-robinson.com 6 Arrival

CBP Demand for Redelivery Entry to CBP and FDA Selection of Examination by FDA Proof of Destruction Under FDA Supervision on CBP Form 7512 or Proof of Exportation under

CBP Supervision on CBP Form 3499 Liquidated Damages Claim by CBP for 3 Times the Value of Shipment Up to the Maximum Amount of the Import Bond www.gray-robinson.com Refusal by FDA for Misbranding or Adulteration Petition Mitigation

7 Detention without Physical Examination (DWPE) DWPE is appropriate when there exists a history of the importation of violative products, or products that may appear violative, or when other information indicates that future entries may appear violative Detention without physical examination properly places the responsibility for ensuring compliance with the law on the importer.

www.gray-robinson.com 8 February 2009 GAO Report on Seafood Fraud CBP focuses on detecting schemes to avoid paying customs duties as seafood products enter the country, such as transshipment to avoid antidumping duties. CBPs import specialists review seafood import documentation on product type, value, and country of origin to ensure that importers have paid the appropriate duties. The agency also uses information provided by one of its National Targeting and Analysis Groups to help identify potentially fraudulent seafood shipments. This group analyzes data on foreign producers and importers that may be involved in transshipment

schemes to avoid paying antidumping duties and works with port officials to examine these shipments as they arrive. www.gray-robinson.com 9 Congressional Research Service April 7, 2015 Report on Seafood Fraud Mislabeling or Substituting Species Substituting an inexpensive species for one of higher value can be relatively easy. The differences in the taste and texture of different fish species flesh may be subtle, and therefore it is frequently difficult to identify a species in fillet form, especially after it is prepared for consumption.

A 2011 Consumer Reports Magazine study of seafood sampled from New York, New Jersey, and Connecticut found that 20% to 25% of seafood products were mislabeled. www.gray-robinson.com 10 Lacey Act and Food, Drug, and Cosmetic Act Mislabeling of foods such as fish and shrimp is prohibited by the Lacey Act, 16 U.S.C. 3372(d)(1) and 3372(d)(2), and the FDCA, 21 U.S.C. 331. The Lacey Act, in pertinent part, makes it unlawful for a person to falsely identify any fish that has been, or is intended to be, imported, sold, purchased, or received from any foreign country or transported in interstate or foreign

commerce. The FDCA, in pertinent part, prohibits the alteration or removal of the whole or any part of the labeling of food, if such act is done while such article is held for sale after shipment in interstate commerce. www.gray-robinson.com 11 Transshipment and Mislabeling to Avoid Customs Duties Transshipment occurs when foreign producers ship goods through a second country en route to the United States. Although transshipment is generally legal and commonly used in the ordinary course of business, it is illegal if done for the purpose of circumventing duties and other applicable trade restrictions. For

example, shrimp from China reportedly have been shipped to the United States by way of Cambodia and Malaysia to avoid paying antidumping duties levied by the United States on shrimp imported from China. In other cases, seafood such as Asian catfish has been mislabeled as sole specifically to avoid paying antidumping duties. www.gray-robinson.com 12 Wednesday, January 20, 2010 CEO OF SEAFOOD IMPORTER PLEADS GUILTY TO IMPORTING AND SELLING FALSELY LABELED FISH FROM VIETNAM Attempts to Evade $60 Million in Federal Tariffs

WASHINGTONThe chief executive officer of Sterling Seafood Corporation located in Cresskill, N.J., pleaded guilty today to importing falsely labeled fish from Vietnam and evading over $60 million in federal tariffs, as well as selling over $500,000 in similarly misbranded fish purchased from another importer in the United States, the Justice Department announced. The U.S. Department of Commerce establishes antidumping duties or tariffs on certain imported products. In January 2003, an anti-dumping duty or tariff was placed on all imports of Vietnamese catfish into the United States because the Vietnamese catfish was being marketed at a significantly lower price than was market rate at the time. That initial anti-dumping order imposed a duty of up to 63.88 percent on fish. The CEO specifically instructed the Vietnamese company to fraudulently identify the Vietnamese catfish as "grouper" on commercial contracts, purchase orders, and other documents because grouper fish was not subject to any anti-dumping duties. The charge of importing of falsely labeled goods into the United States carries a maximum statutory sentence of two years in prison and a $250,000 fine, or twice the monetary gain derived

from the offense. The second count, which charges selling misbranded fish in the United States, carries a maximum statutory sentence of three years in prison and a $250,000 fine, or twice the monetary gain derived from the offense. www.gray-robinson.com 13 19 CFR 113.62 Basic importation and entry bond conditions. BASIC IMPORTATION AND ENTRY BOND CONDITIONS (a) Agreement to Pay Duties, Taxes, and Charges. (d) Agreement to Redeliver Merchandise. If merchandise is released conditionally from CBP custody to the principal before all required evidence is produced, before its quantity and value

are determined, or before its right of admission into the United States is determined, the principal agrees to redeliver timely, on demand by CBP It is understood that any demand for redelivery will be made no later than 30 days after the date that the merchandise was released or 30 days after the end of the conditional release period (whichever is later). (See 141.113(b), 12.73(b)(2), and 12.80 of this chapter.) (e) Agreement to Rectify Any Non-Compliance with Provisions of Admission. If merchandise is released conditionally to the principal before its right of admission into the United States is determined, the principal, after notification, agrees to mark, clean, fumigate, destroy, export or do any other thing to the merchandise in order to comply with the law and regulations governing its admission into the United States within the time period set in the notification. www.gray-robinson.com 14

19 CFR 113.62 Basic importation and entry bond conditions. (Continued) (f) Agreement for Examination of Merchandise. If the principal obtains permission to have any merchandise examined elsewhere than at a wharf or other place in charge of a CBP officer, the principal agrees to: (1) Hold the merchandise at the place of examination until the merchandise is properly released; (m) Consequence of default. (1) If the principal defaults on agreements in this condition other than conditions in paragraphs (a), (g), (i), (j), (k)(2), or (l) of this section the obligors agree to pay liquidated damages equal to the value of the merchandise involved in the default, or three times the value of the merchandise involved in the default if the merchandise is restricted or prohibited merchandise or alcoholic beverages, or such

other amount as may be authorized by law or regulation. www.gray-robinson.com 15 Notice of FDA Action Products that appear (from examination or otherwise) to be violative may be detained and ultimately refused entry into the U.S. The standard for detention and refusal is extremely low- detention is permissible without actual observation of a product or its labeling.

www.gray-robinson.com 16 Refusal The product then has to be exported or destroyed (in accordance with CBP Bulletin) within 90 days otherwise subject to Liquidated Damages. www.gray-robinson.com 17

CBP Form 301 Customs Bond www.gray-robinson.com 18 CBP Form 3499 Application and Approval to Manipulate, Examine, Sample or transfer goods

www.gray-robinson.com 19 CBP Form 7512 Transportation Entry and Manifest of Goods Subject to CBP Inspection and Permit www.gray-robinson.com 20

We all know adulterated food leads to illness and even death. Both US Customs and Border Protection (CBP) and the US Food and Drug Administration (FDA) make it a priority to secure the international food supply chain, and use risk analysis to select and test imported food shipments. Know the policies and learn standard operating procedures by CBP and FDA, and the legal consequences for attempting to import unsafe food into the United States. www.gray-robinson.com 21 The Florida Association

for Food Protection November 30, 2016 Whole Foods Market www.gray-robinson.com

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