The Quest
August 2011 - Issue 71
Inside this issue:
CBP updates 301 bond form

New bill proposed to fight fraud in trucking

Ways to red-flag fraud, by Andrew Spector, Esq.

New report identifies cargo theft trends

China proposes increase in FMC optional bond rider

Updates on liquidated damages for Periodic Monthly Statement

CBP updates mitigation guidelines for advance cargo information violations

U.S. government urges companies to strengthen Internet security
Trucking associations ask NHTSA to examine truck crashworthiness standards


Updates on liquidated damages issued for Periodic Monthly Statement
In June 2011, CBP issued CSMS #11-000114 to advise of an increase in Periodic Monthly (PM) Statement late payment penalties. In their message, CBP noted that the errors were a software issue with some vendors and that edits may need to be made to a broker’s ABI program to avoid future penalties.

A majority of these late payments were the result of unclear verbiage within the original Customs and Trade Automated Interface Requirements (CATAIR) for the PM Statement program. This language indicated that payment was triggered by the “entry date” (up to the 10th day), instead of the date of release. As a result, CBP has issued a corrected CATAIR, but the programming errors caused the agency to label several payments as late.

The NCBFAA recently circulated a bulletin indicating that 3,000 liquidated damages claims were issued to customs brokers and importers in connection with PM Statement when payments were made late. CBP is currently working to distinguish late payments made as a result of the CATAIR programming error compared to other issues, such as inadequate funding. It is expected that liquidated damages related to PM Statement because of the ABI glitch and error within the CATAIR will be canceled without the need to file a petition, however, we still await a final determination from CBP on this matter.

We are also awaiting further information regarding the customs brokers and importers who already paid liquidated damages while CBP is reviewing the issue. In addition, CBP has not yet stated if it will cancel the liquidated damages cases based on the agency’s failure to comply with a policy that requires CBP to provide the filer with 48 hours to remedy the late payment before imposing liquidated damages. 

Our Bond Claims department has already received some PM Statement claims related to these issues, and our customs broker clients have been notifying Avalon when programming errors have been the cause of the claim. CBP has put the liquidated damages cases involved with this issue in 2050 status, which should avoid the cases going to billing and formal demand status for payment. Avalon continues to monitor these cases to ensure they are closed by CBP. If you have any questions or require any assistance, please contact Zuleika Medina, Surety Claims Manager at zmedina@avalonrisk.com or (847) 700-8074.

Avalon remains committed to providing the highest level of service to our clients and keeping you apprised of governmental changes affecting your business. We are the leading provider of U.S. Customs bonds and other surety and insurance products for customs brokers and transportation providers.

For more information, please contact your local Avalon office or Andriana Davis at (847) 700-8087 or at adavis@avalonrisk.com. A list of our offices may be found at www.avalonrisk.com.

Avalon Risk Management
150 Northwest Point Boulevard | 4th Floor | Elk Grove Village, IL 60007
Phone: (847) 700-8100 | Fax: (847) 700-8116



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