Seko Logistics takes CBP to court over e-commerce enforcement

Seko Logistics is punching back against U.S. Customs and Border Protection for temporarily suspending certain import privileges, demanding in a court filing that the agency provide reasons for the enforcement move as Seko tries to minimize any reputational harm that could hurt business.

The Schaumberg, Illinois-based logistics provider said Monday night that it has filed action in the Court of International Trade seeking to compel CBP to identify violations that led to its suspension from the Entry Type 86 program and the Customs-Trade Partnership Against Terrorism (C-TPAT), despite having been conditionally reinstated.

Customs and Border Protection’s action is “draconian” because Seko has yet to be provided any evidence of compliance issues and has a strong history of regulatory compliance, the company argued.

“We are incredibly disappointed by, and strongly disagree with, the original decision by CBP,”

said James Gagne, president and CEO of SEKO Logistics, in a statement. “We intend to pursue all appropriate actions to protect our company, our clients, and the U.S. consumer while we continue working as an important compliance partner in global supply chains in good standing with U.S. Customs and C-TPAT.”

CBP has reportedly taken action against a half-dozen customs brokers for not properly filing informal entries on low-value imports that are allowed duty-free, expedited access to the U.S. market. Large e-tailers, predominantly in China, have taken advantage of the $800 de minimis threshold to ship each package directly to consumers rather than collectively to a large distributor. The government, in addition to losing potential revenue from import taxes, is also concerned that limited information requirements are allowing bad actors to smuggle fentanyl, counterfeit goods and other prohibited items in small packages.

Entry Type 86 is a voluntary program offered on a trial basis that gives customs brokers the ability to electronically transmit package data for e-commerce companies if they assume responsibility as the importer of record and provide a small amount of extra data in exchange for expedited clearance. Entry Type 86 provides the government more data and transparency about e-commerce parcels arriving in the U.S. than traditional manifest clearances of de minimis shipments or postal clearances, which require no submission of data about the shipper or contents.

C-TPAT is a voluntary trade facilitation program under which U.S. companies certified for following high-security standards throughout their supply chain receive lower scores in CBP’s risk rating system, making their shipping containers much less likely to be selected for nonintrusive scans at ports of entry.

Seko Logistics is the only customs intermediary that has been publicly disclosed after news outlet The Information reported it had been kicked out of the simplified entry program for 90 days. CBP has not named any of the alleged violators.

The company complained in the court filing that CBP never provided details about its violations despite repeated requests and threat of legal action. Seko is also seeking an injunction to remove any conditions for reinstatement to the programs until the alleged violations that led to the agency’s enforcement action are specified.

“SEKO remains committed to seeking a full and unconditional reinstatement into these

programs based on the agency’s unprecedented move to take enforcement action without

identifying specific violations,” the company said in the statement, which questioned whether any violations truly exist given the company’s “999.999+% compliance rate.”

Seko, which was one of the earliest freight forwarders to offer specialized logistics services catering to online retailers, said it was notified by CBP in late May of the suspension and given only seven days before the suspension went into effect. The company said it wasn’t given an opportunity to address any unverified deficiencies identified by CBP, which would be appropriate given its extremely high compliance rate.

“SEKO has always sought to be compliant and work in partnership with CBP to address any

concerns they have raised,” said Lila Landis, SEKO’s global chief compliance officer. “We continue to believe this program is beneficial and aligned with CBP policy of protecting U.S.

consumers.”

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

Sign up for the weekly American Shipper Air newsletter here.

US Customs tightens enforcement on low-value e-commerce trade

The post Seko Logistics takes CBP to court over e-commerce enforcement appeared first on FreightWaves.

Source: freightwaves - Seko Logistics takes CBP to court over e-commerce enforcement
Editor: Eric Kulisch

menu