Pay duties while protest is pending? Importers may not have a choice

protest cbp form

Eye-opening piece by Susan Kohn Ross, Esq. of  Mitchell Silberberg & Knupp LLP:

Due Your Duty

With the ever-increasing scrutiny being brought to compliance and the payment of duties on imported goods by Customs and Border Protection (CBP), it is worth commenting that any duties which are due when an entry liquidates may, in fact, end up having to be paid even if the related protest remains pending due to the legal and contractual relationship between the importer and his surety company.  Simply put, if a surety insists on receiving payment of any amounts demanded by CBP upon liquidation, the importer does not have any solid grounds to object.  Why would the surety do so if a protest is pending? Because the surety is looking to mitigate its risk. If the importer does not pay, the surety will have to do so, at least up to the face amount of any bonds it has written, and sureties try their best not to be put in that position.

Pursuant to the provisions of 19 U.S.C. 1514(a), when CBP liquidates an entry, that decision is final and so any monies owed are due, unless a protest is filed.  While the protest is pending, the importer is not obligated to pay any additional funds to CBP as the liquidation is not final.  However, as mentioned above, the mere possibility of financial exposure resulting in the surety having to pay the monies owed results in the surety typically demanding upfront payment. If the protest is granted, CBP reliquidates the entry accordingly.

The outcome could be as simple as the entry being reliquidated with nothing more due. Alternatively, the protest could be granted but with additional monies due related to the approved change(s). At that point, the liquidation becomes final, unless there are grounds to again protest if there is a belief the reliquidation was done incorrectly (see the reliquidation limitation in 19 U.S.C. 1514(d)).  If the protest is denied, the importer must, of course, pay all that is due, including interest, even if he desires to further challenge CBP in court. Given it generally takes 2+ years to get a decision on a protest once referred to Regulations and Rulings, the amount of interest owed can be staggering.  In fact, it is not unusual with antidumping and countervailing duty cases to have the amount of interest be equal to 50% or more of the principal amount owed and that is just at time of liquidation!

Read entire post.


Get the latest scoop on CBP’s Simplified Processes Initiative

On March 24, the NCBFAA sponsored a webinar on the Simplified Processes Initiative, presented by Randy Mitchell, Director, Commercial Operations and Entry Division, US Customs Office of Trade Policy & Programs.  Here’s a summary:

In 2011, CBP launched the Simplified Processes Initiative, a collaborative effort to develop innovative solutions to critical issues emerging at the intersection of trade facilitation, enforcement, and national security.  An early success was the implementation of the Simplified Entry (Cargo Release) pilot aimed at simplifying the importation process.

CBP reengaged the Simplified Processes Initiative in 2014 to advance border security and management; enhance U.S. competitiveness by enabling lawful trade and travel; and promote organizational innovation.

A Simplified Processes Working Group was established to identify challenges and discuss potential solutions to critical trade needs; gather requirements; and develop a proposed alternative. To date the group has identified five post-release areas of opportunity:

Monthly Summaries and National Statements

  • Filers may submit a monthly summary that includes releases over a calendar months’ time.
  • Each line of a monthly summary is considered a “reconfigured entry” that is subject to liquidation, protest and any other downstream process.
  • A separate National Financial Monthly Statement will include debits (duties, taxes, fees, bills and interest) and credits (refunds) netted as a total balance due for a calendar month.

If an importer elected to participate they would receive only one statement per month covering all ports of entry and there would be no Daily Statements to approve.  Also, the statements could include both Debits and Credits.


  • Allow for deemed liquidation of all consumption entries at one (1) year from the date of entry.
  • Implement processes to accommodate line-level liquidation.
  • Allow for the importer to obtain liquidation status details from their ACE portal account or

This will allow lines within an entry to liquidate without having to wait for lines subjected to AD/CVD case reviews to be resolved.  Also, it would benefit Drawback filings since they are also filed at the line-level.


  • Transition the protest process to an electronic format (this has already occurred and all Protests must now be filed in the ACE Portal.)
  • Expand the electronic protest filing to a broader range of trade stakeholders such as attorneys, importers, and sureties.
  • Auto-populate numerous Entry Summaries onto one protest while providing protest statuses on ACE.


  • File all reconciliation data electronically and only with necessary data elements.
  • Eliminate the requirement of having to file an 09 entry and extend liquidation for flagged entries/lines an extra year from the date of entry.
  • Manage reconciliation by account and permit filing at any Center or POE.

The vision is that Reconciliation entries will be replaced with Post Summary Corrections.  One of the biggest benefits would be that the Trade would only need to provide the reconciled amounts and not the original amounts since ACE already knows the original amounts.  Also, if no PSC is made, it indicates no changes are needed on the reconciled entry and is then subjected to liquidation. Finally, the process would allow a filer to retroactively flag/un-flag an entry/line through a PCS in ACE up to the deemed liquidation date.


  • Develop a process for the claimant to submit a “drawback profile” electronically along with automating other Drawback processes in ACE.
  • Track/validate if the bond coverage is sufficient prior to processing an Accelerated Payment requests.
  • Initiate the Desk Review and response processes electronically, to include DIS.

ACE controls will track and validate if the bond coverage is sufficient prior to processing an Accelerated Payment Request.  Drawback profiles will be submitted electronically using the 5106 form.

These process improvements are continuing to be reviewed and approved as necessary and are subject to budget approval.  Therefore, there is no firm date on when they will be rolled out.   Meanwhile, here’s the PowerPoint presentation from the webinar > Simplified Process Initiative_Webinar_March_2017

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CBP offering free Simplified Processes Initiative webinar

The Simplified Processes Initiative (SPI) is an effort to develop a transformation strategy to optimize the process of importing goods through collaboration with the trade and CBP.

Click here to view a summary of the information that presenter Randy Mitchell, Director, Commercial Operations and Entry Division, Office of Trade, Trade Policy and Programs will cover during this free webinar on March 24 from 3 to 4 p.m. ET.


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New guidance on post-importation claims for preferential tariff treatment

claimOn February 28, 2017, US Customs issued CSMS# 17-000110 – Post-Importation Claims for Preferential Tariff Treatment.  The message announces a change in policy as a result of a recent Court of International Trade decision

Specifically, the court determined that CBP must allow the claimant, Zojirushi America Corp., to claim a post-importation claim for preferential treatment (Generalized System of Preferences in this case) according to 19 U.S.C. § 1514(a) which means they can file either a Post Summary Correction or Protest to recoup duties paid on GSP eligible entries not claimed at the time of entry.

Prior to the CIT decision, CBP’s policy was much more restrictive on post-importation claims.  In August 2014, US Customs  issued guidance specifying that when the implementing legislation for several preference programs specifically provides for post-importation claims, set forth in 19 USC §1520(d), such claims are the only appropriate mechanism to seek preference when not claimed at the time of entry.

This interpretation by CBP precluded the filing of a PSC or Protest for those preference programs that do not specifically allow for post-entry claims under 19 USC §1520(d).  In other words, since the GSP implementing legislation did not require post-importation claims to be satisfied via the 1520(d) CBP was essentially not allowing for post-entry claims for GSP.

However, the CIT decision changed this.  Now,

  • For those preference programs that do not specifically provide for claims under the statutory post­ importation mechanism of 19 USC §1520(d), CBP will permit use of the protest mechanism set forth in 19 USC §1514 to submit initial post-importation preference claims.
  • CBP will continue to allow un-liquidated entries to be amended by filing a PEA or PSC prior to liquidation in accordance with current PEA and PSC procedures.
  • For preference programs that by law have a post-importation provision, a 1520(d) post­ importation claim remains the only appropriate mechanism to seek preference when not claimed at the time of importation.

Also on February 28, 2017, the CBP Port of Los Angeles issued Public Bulletin number LA17-011 Post-importation Claims for Preferential Tariff Treatment which reiterated the language in the CSMS and which included a better table for interpreting when a post-importation claim should be made under the 1520(d) process versus the 1514(a) process:






Coincidentally, on March 1, 2017, US Customs issued a message clarifying the process for making post-importation claims for NAFTA under the 1520(d) process.

ACE reporting: CBP publishes updates for protest filers and more

seal_aceWith the postponement of the deployment of ACE post-entry functionality, shippers now have some time to familiarize themselves with US Customs’ recent update of ACE reporting capabilities.

Specifically, the ACE Reports Team has recently deployed a new ACE Reports Workspace for Protest Filer Accounts and published new and updated ACE Reports documentation available in the “View ACE Reports Training Resources” page of the ACE Reports tool. The new report workspace and reference materials have been deployed to enhance user understanding of ACE Reports and support new enhancement made to the ACE Secure Data Portal. The new and updated items include:

  • New Protest Filer Workspace – The new Protest Filer workspace provides users access to the newly developed Protest Data Universe and the ES-403 Protest Details Report.
  • New ACE Reports Catalog for Trade Version 2016 -10 – This document provides a comprehensive inventory of all public “canned” reports currently available in ACE Reports.
  • Updated ACE Reports User Guide for Trade Version 1.1 (November 2016) – This user guide describes the steps to follow for viewing, modifying, and creating reports using the updated ACE Reports interface.

To access the new Protest Filer Workspace and review the ACE reports reference materials posted on the “View ACE Reports Training Resources” page, navigate to the “Home” tab from the ACE Reports tool. For more information on running ACE Reports, please see our series of ACE Reports Quick Training Videos on the “ACE Reports Training and User Guides” page of for step-by-step instructions on getting started with ACE Reports.

NCBFAA comments to CBP’s proposed electronic notice of liquidation rules



In follow up to our recent post regarding US Customs’ proposal to modernize the paper-based Notice of Liquidation process by making it a paperless electronic system, NCBFAA has submitted comments to the proposed regulations.  The comments are generally supportive of CBP’s efforts, but include suggestions to improve the new process:


  • The NCBFAA supports the posting of liquidation information to the website provided that the link is indeed conspicuous. In this regard, we believe that the regulation should specify that the liquidation link will be visible on the CBP home page so that it is indeed conspicuous and remains so without regard to current or future website design. The trade should not have to search the website to locate the liquidation link.
  • The commentary to the NPRM provides that once the liquidation information has been posted electronically, the information will be available on for a minimum of 15 months. This commitment is not echoed in the draft regulation and it should be. This is critical for issues relating to the timeliness of claims and jurisdiction in the Court of International Trade. Similarly, the process for requesting access to notices that are no longer available on the website should be codified in the regulations.
  • The NPRM proposes to modify section 159.9(c)(2)(i) but continue to provide that for entries that liquidate by operation of law, notice “will be posted on within a reasonable period after each liquidation by operation of law.” In the electronic environment, CBP has the ability to post these liquidations immediately when they occur. There is no longer a basis for delayed notification and the regulation should be revised to provide that notice of liquidation for these entries will be posted on the date of liquidation. There is no basis to distinguish these entries from entries which are manually liquidated.



ACE reports: New functionality to assist protest filers

Protest filers are truly benefitting from ACE.  In addition to the proposed conversion of the Notice of Liquidation process to a paperless one, US Customs has also launched a new workspace for protest filers in ACE reports.

  • The workspace provides Protest Filers with access to the newly developed Protest data universe and the ES-403 Protest Details report.  This standard “canned” report provides detailed protest information including: Protest Filer Number, Protest Filer Name, Protest Number, Number of Entries, Protest Status, Protest Assigned Team Number, and much more.
  • The ES-403 report can be modified by users wishing to add or remove columns of data.  Protest filers will also be able to create custom ad hoc reports using the Protest universe.

CBP has posted short training videos that provide step-by-step information on getting started with ACE Reports.

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CBP: Notice of Liquidation process to leave the Stone Age



Protest filers rejoice! As part of the ACE modernization process, US Customs is proposing to convert the cumbersome, paper-based Notice of Liquidation process to a more efficient paperless electronic system.

In today’s Federal Register, CBP has announced a proposal to post official notice of liquidation for all entries, including entries filed in paper form, as well as official notices regarding the extension or suspension of liquidation, at

This proposed electronic posting will replace both the physical posting or lodging of bulletin notices in the customhouse as the legal evidence of liquidation and the mailed notices of extension or suspension as official notice.


Some details:

  • The information will instead be accessible via a conspicuous link on the, labeled “Bulletin Notices of Liquidation. “
  • The electronic bulletin notices will be searchable on the CBP Web site by 10 data elements, such as entry number, IOR number, filer, etc.
  • The liquidation information posted electronically will be updated daily.
  • The information will be available on for a minimum of 15 months.
  • Electronic filers, using their ACE Portal Account, will be able to access historical liquidation information that is no longer available on the CBP Web site, run queries for information on recent liquidations, extensions, and suspensions, run targeted reports to conduct in-house audits, identify systemic errors, and more.

The public comment period on this proposed regulatory change is open until November 14, 2016.

ACE: e-Protest functionality on the way!

ace logo 2016On August 27, 2016, US Customs will deploy protest filing in ACE, at which time all electronic protests must be filed via the ACE Secure Data Portal (ACE Portal).  To that end, US Customs has announced that it will begin to establish ACE Protest Filer Accounts.  In addition, CBP will be testing ACE Protest Module functionality.  Once complete, a party with an established Protest Filer Account will be able to submit an e-Protest to ACE for processing by CBP.  There are different procedures for establishing these protest accounts, depending on whether the filing party is an existing vs. new ACE Portal Account Holder.  Details are available in the Federal Register.