Sunday, November 02, 2008

Who is Unfailingly Complicit?

A while back, an anonymous reader posted a comment to my post about the case in which Customs and Border Protection summarily denied a protest relating to the detention of merchandise in an origin case. The original post is here.

The issue I raised came down to whether Customs and we should assume that importers who end up presenting fraudulent origin documents to CBP are victims or accomplices. Obviously, there will be cases in which either one will be correct. But overall? What do you think?

The commenter said this:

The importer is almost unfailingly complicit when these types of dual documents are used. And these companies have no reservations in challenging adverse determinations against their false documents because the government does not have the resources to verify overseas production (ICE did not and will not take this kind of case, leaving CBP to its own devices). Attempts at informed compliance in these instances do not lead to future compliance as you suggest; it acknowledges Customs' inability to successfully prosecute violators, notifies them of possible investigative action, and emboldens them to open shell companies to import with or otherwise brazenly continue defrauding the government. Hiding behind the facilitation of legitimate trade and complaining that Customs is playing "gotcha" is always a nice route to take when you know the government can't prove your culpability.

My experience just does not line up with that. Companies, at least the ones that I have had the pleasure of dealing with, do not want to waste the considerable and time and effort it takes to fight with CBP. Keep in mind that, for the most part, the presumptions favor Customs and the importer needs to prove the origin of the merchandise. Customs, and the lawyers at Justice, can go a long way simply by raising questions as to origin. Plus, despite what the commenter suggests, my experience is that CBP will be more than happy to pursue a case at least as it relates to marking penalties, liquidated damages, or 1592 penalties. I agree that getting an Assistant U.S. Attorney interested enough to pursue a forfeiture case is another story, but I have been there as well (although in the copyright context).

I certainly respect the commenter's opinions and I would really like to know if that person is in CBP. Individual opinions are formed by experience. My experience differs; so, therefore, do my opinions. I genuinely believe that if CBP helped importers identify fraudulent documents, compliance would improve. Maybe, to provide a level of comfort to CBP, that information could be shared only with ISA members or some other select group and subject to some sort of non-disclosure agreements. I know people might call that naive, but I say, "So?" Trust can be a valuable commodity in business and in government. Working to build trust can earn dividends for both sides.

2 comments:

Anonymous said...

I enjoy the presumption that I must work with Customs if I believe those who pass the government false documents knowingly do so. You must be correct in saying our experiences are different. I also work in the legal field and routinely encounter businesses who desparately seek access to the American market. The scarce resources of the government and rarity of civil penalties results in road like conditions; sure there are posted speed limits, but how many actually obey them? We find ways to avoid the laws we don't find convenient when the penalties are few (in the case of Customs) or trivial (not so much with Customs). You must represent the good guys.

Anonymous said...

The presumption that companies are generally complicit starts with the unrealistic premise that most importers are sophisticated enough to make the rational decisions the commenter assume.

In my experience, importers don't know they are unlikely to be caught, don't know that ICE or CBP will not check up on them, and don't really ever seem to operate on the sort of risk-based approach that Customs does. They don't have enough facts to make those decisions.

That is not to say that I necessarily disagree with 11/06 anonymous. I don't, but I do think that the sort of legal avoidance s/he is talking about is different from a scheme to knowingly defraud the United States.