by M. Sigmund Shapiro
July 11, 2000
U. S. Customs has proposed a new initiative, which they call
their Entry Revision Project (ERP). It’s supposed to streamline
import entry procedures and bring them into the realm of modern
business practices. A part of the project modifies how a Customs
transaction is finalized or liquidated.
At least 20 years ago, I made a recommendation to Customs, which
they’ve been mulling over ever since. In doing so, they’ve modified,
altered, tweaked and overly-discussed the idea which various
officials have assured me would see the light of day before my
demise. It’s long overdue, especially since current regulations
provide for a written notice of liquidation on each entry.
Customs has unnecessarily complicated the procedure, and in fact
has tried its best to limit the importer’s rights. As a result, the
trade community is raising a bit of a fuss.
Current law states that, with some exceptions, an entry is deemed
liquidated by operation of law if it has not been actually
liquidated by the government within one year from date of entry.
Theoretically, an importer has ninety days to protest the entry. But
the government takes the stand that liquidation "by operation of
law" means that Customs did not make a decision that is protestable.
And just recently they even refined that audacious pronouncement by
saying that even if an entry is liquidated prior to the one year
limit, and that liquidation had no change in the entry, it did not
actually come under Customs scrutiny for decision making but was a
product of an automated process.
This, of course, means that an importer is only able to protest a
changed entry. But since, under current law, the importer, under
reasonable care rules, is responsible for accurately classifying and
valuing his goods, any change made by Customs to a higher valuation
or duty rate, could automatically say that the importer didn’t use
care. A nice, ripe penalty investigation is the usual follow up. A
classic" Catch 22".
Under ERP, Customs has developed alternatives for correction of a
transaction during its gestation period – one more complex than the
next and both exposing the importer to fraud allegations by the
government. The intent, of course is to simplify the post-entry
process. But it’s an expensive and unwieldy way to do it. So, why
not do the following:
- Declare that any no change liquidation or one liquidated by
operation of law constitutes a protestable decision.
- Let all entries liquidate by operation of law, with
exceptions at the request of either government or importer for
an earlier liquidation – with appropriate notice to start the
protest period.
- Retain the current extensions of up to three years.
- Have it happen in my lifetime.
