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


CBP updates mitigation guidelines for advance cargo information violations
U.S. Customs and Border Protection (CBP) has amended its 2005 mitigation guidelines regarding penalties involving advance electronic cargo information. To view the new guidelines in full, click here.

The updated mitigation guidelines apply when penalties are issued to vessel, air and rail carriers after they fail to provide the required advance electronic cargo information in the proper timeframe and manner, or if the information is inaccurate or invalid. The guidelines also apply when liquidated damages are assessed against carriers, NVOCCs, slot charterers and others that transmit advance cargo information to CBP. Important changes include:

Benefits for C-TPAT Members
Mitigation is now available to any Customs-Trade Partnership Against Terrorism (C-TPAT) participant that has been validated and is currently in good standing. The previous mitigation guidelines only applied to carriers that were certified C-TPAT members.

In addition, C-TPAT members may now receive lower liquidated damages of no more than 50% of the normal mitigation amount. For example, consider a penalty normally mitigated to $1,000, which is the lowest amount for a first-time violation from a company not in the C-TPAT program. If the penalty was assessed against a validated C-TPAT member, the company would be able to mitigate the penalty to $500.

Maximum and Subsequent Liquidated Damages
Liquidated damages are set at a maximum of $100,000 per conveyance arrival and may also be assessed for subsequent violations related to subsequent arrivals. The new guidelines clarify the term “subsequent” violation when it relates to liquidated damages.  

What’s Your Action Plan for Liquidated Damages, Fines or Penalties?
Litigation and government penalties can be costly – even from one mistake. Avalon offers a Regulatory Defense program that provides immediate legal advice to defend you against penalties initiated by U.S. government agencies. While Regulatory Defense does not pay the actual penalty, significant legal expenses are often incurred to defend and mitigate the penalty.

Regulatory Defense appoints a legal expert for advice and to assist in mitigation, while paying all legal fees in full. Avalon also offers Regulatory Defense to importers and exporters through their customs broker or freight forwarder, in combination with their Import Bond and/or Cargo Insurance program. Marketing support is also available to assist you in promoting Regulatory Defense to your export and import clients.

For more information, please contact your local Avalon office or 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



The Quest newsletter is published quarterly and is designed to provide critical information to the transportation and logistics industry. Subscribers to The Quest also benefit by receiving policy change notifications, special industry information bulletins, and notifications of upcoming conferences. Avalon Risk Management is not responsible for the accuracy or reliability of information contained herein. The reader/user assumes all risk in the use of such information. Privacy Policy

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