CIT Orders $19,000 Penalty for Customs Broker with a Litany of Violations
The Court of International Trade ordered a customs broker to pay a $19,000 penalty for violations of several provisions of the Customs regulations, including failing to notify the importer of record when doing business with an unlicensed person; conducting business without a valid power of attorney; misclassification of entries; and failure to exercise due diligence and responsible supervision and control. The customs broker failed to respond to any of CBP’s pre-penalty notices, penalty notices, and final demands for payments, and did not respond to any notices or motions in this case, so was declared to be in default. As the defendant was in default, CIT took all of CBP’s factual allegations as true, and granted CBP’s motion to collect the penalties.
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In April 2009, Alejandro Santos, a customs broker, filed an entry that indicated it contained “U.S. goods returned,” classifiable under Harmonized Tariff Schedule subheading 9801.00.10. After inspection of the entry that the merchandise was not entirely U.S. goods returned, CBP notified Santos. CBP alleged that Santos acknowledged the discrepancy and indicated that the entry included goods originating in the United Kingdom, but never corrected the Entry Summary (CF 7501), nor did he ever pay Harbor Maintenance Tax on the entry.
Then, in September of the same year, Santos presented four entry summaries declaring the merchandise as “vegetable hair” under HTS subheading 1409.90.10. The entered merchandise, however, was corn husks, classified under HTS subheading 1404.90.90, CBP said. Santos had already received prior advice from CBP on the correct classification of corn husks, it alleged.
Finally, in September 2009, CBP import specialists visited the place of business of Santos. During its review, the import specialists found that Santos billed certain entries to a freight forwarder, rather than an importer of record or ultimate consignee, without transmitting a copy of the bill or obtaining a waiver from the importer. They also found that the power of attorney associated with one of those entries was dated after importation of the merchandise, CBP said.
Because Santos failed to respond to any of CBP’s notices or any CIT summons, complaints, or motions, Santos was declared to be in default. As such, any factual arguments made by CBP in the case were taken as true. Thus, CIT found that Santos had violated: 19 CFR 111.36, by failing to notify the importer of record by doing business with an unlicensed person; 19 CFR 141.46, by conducting business without a valid power of attorney; 19 CFR 152.11 and 141.90, by misclassifying entries; 19 CFR 140.90, 142.6, and 152.11, by improperly classifying goods originating from the U.K as U.S. goods returned; 19 CFR 11.29, by failing to exercise due diligence to correct a record filed with CBP and failing to pay money due to CBP; an 19 CFR 111.28, failing to exercise responsible supervision and control, by not ensuring that misclassifications were corrected.
CIT Noted that Santos had previously received sanction or warning from CBP. Santos had attended broker compliance meetings on classification of corn husks and U.S. goods returned; had been issued a prior penalty for improperly associating with a freight forwarder; and had violated the power of attorney regulation on three prior occasions. CBP also provided Santos with the opportunity to challenge the penalties, CIT said. Thus, the requested penalties are reasonable, said CIT, and well below the $30,000 maximum.
(United States v. Santos, Slip Op. 12-157, dated 12/21/12, Judge Pogue)
(Attorney: Karen Goff for plaintiff U.S. government; defendant Alejandro Santos in default.)