Sobel Network Shipping is licensed by Customs and Border Protection to clear imported cargo. The Customs regulations require that the duty be tendered to CBP within ten days from the date of the release, excluding weekends and holidays.
Years ago, payment was made with an individual check attached to the paperwork which was submitted to the port for review and final liquidation. The agency now permits payment electronically and also offers a program called Periodic Monthly Statement, where multiple entries over a time period are permitted to be paid in the following month – not unlike a credit card.
For customs brokers like Sobel, a bankruptcy filing by an importer triggers what is called a clawback provision wherein any money paid out by the company which filed is required to be returned for division and payment first to secure creditors and then to everyone else.
As a customs broker, if we are invoicing clients for duty and remitting to CBP on their behalf, this requires us to engage legal counsel to defend and explain, in each filing, why we cannot return duties which were collected and passed through as agents of the federal government.
For decades, the NCBFAA has been working to secure bankruptcy protection in the law to say that duties collected and remitted cannot be included in clawback efforts. During the pandemic, a temporary version of this was passed, but only for one year.
Sobel and our fellow customs brokers around the United States are now working with Congress to permanently enshrine this temporary exemption into law. During the fall, we will be working with our Congressional representatives to identify a vehicle to attach the bill as a rider to be passed and changed.
The events of the past several years, including Section 301 and 232 duties and the pandemic, have led Sobel to focus on the financial wellbeing of our company for customers as well as our company. We encourage clients – for compliance and for relationship-building reasons with CBP – to pay their duty directly.
For those who we are collecting and remitting, please be advised of this potential change to what happens in the unfortunate event a company must file for bankruptcy.
If you have any questions about Sobel’s credit policies and terms, please contact your representative today.
