CBP Establishes New Policy and Procedures for PMS Rejections and Liquidated Damages

CBP states that the benefits of allowing this procedure for PMS is that filers should submit fewer Supplemental Information Letters (SILs) and Post Entry Amendments (PEAs). This procedure will also lead to a reduction of refund requests since the majority of the corrections can be made prior to payment. In addition, there will be fewer liquidated damages for PMS.

Liquidated Damages for Late Payment No Longer 'Automatic' for Entries Removed from PMS After 10 Days

In August 2005, CBP issued a notice which stated that entries removed from PMS after expiration of a 10-day working period after release would be subject to an automatic claim for liquidated damages for late payment of estimated duties. See ITT's Online Archives or 08/08/05 news, 05080805, for BP summary.)

In its new interim policy and procedures, CBP states that entries removed from PMS after the 10-working-day period following release may be subject to liquidated damages.

Entries May be Removed to Correct Errors (Without Liquidated Damages)

CBP states that it will allow entry summaries to be removed from PMS without liquidated damages when an error has been made to the entry summary and a correction is necessary. In order for CBP to waive liquidated damages, entry summaries removed from PMS must be processed in accordance with this policy.

Procedures to Follow for an Entry Summary Rejected by CBP

CBP states that when it rejects an entry summary scheduled for PMS and the filer promptly resubmits the entry summary, liquidated damages will not be assessed. In order to ensure that liquidated damages are not assessed, entry summaries scheduled for PMS that are rejected by CBP after the 10-working-day period following release are to be processed as follows:

CBP personnel must reject the entry summary within 30 days in the Automated Commercial System (ACS) using function ENRJ. They must also complete a Port Activity Tracking System (PATS) rejection notice that must be properly time-stamped before rejecting back to the filer.

The filer must remove the entry summary from PMS. The filer must return the time-stamped PATS document to CBP with a paper copy of the entry summary package and payment. Additionally, the filer must retransmit via ABI. The submission of the paper documents with payment and the retransmission via ABI must be completed within 48 hours of the time-stamped date of the PATS rejection notice.

Liquidated damages for failure to timely resubmit the entry summary will not occur until the 48 hours have elapsed.

Procedures to Follow When Filer Decides Correction is Needed

CBP states that if the trade community needs to make a correction to an entry summary scheduled for PMS after the 10-working-day period following release and prior to the PMS due date, the following steps must be taken:

The filer must remove the entry summary from PMS and immediately request that CBP place the entry in reject status using ACS function code ENRJ.

CBP will complete the function ENRJ in ACS and will also complete a rejection notice in PATS. The rejection notice must be properly time-stamped before rejecting back to the filer.

The filer must return the time-stamped PATS document to CBP with a paper copy of the entry summary package with payment. The filer resubmission must include a cover sheet regarding the fact that the entry summary was removed from PMS. This cover sheet must also request a waiver from liquidated damages. The filer must retransmit via ABI. The submission of the paper documents to CBP and the retransmission via ABI must be completed within 48 hours of the CBP time-stamped rejection notice.

Liquidated Damages for Failure to Follow New Procedures

CBP states that an entry summary will be subject to liquidated damages when a filer fails to utilize a cover sheet, fails to re-submit timely, and/or fails to request ENRJ/rejection by CBP on the date that the entry is removed from PMS.

Quota Entries

CBP states that a quota entry scheduled for PMS will be processed under the procedures outlined above; however, quota information must be removed and a new date of presentation will be ascertained.

In the instance of a tariff rate quota (TRQ) the filer may end up paying a higher rate of duty and in the instance of an absolute quota the filer may get a redelivery notice and will be subject to a penalty for failure to re-deliver.

Abuse of New Policy and Procedures, One Time Waiver, Etc.

CBP states that although this policy allows for the removal of entry summaries to make corrections, field offices should ensure that filers do not abuse this allowance. As PATS will be utilized to track all instances when an entry summary is removed from PMS, field offices should routinely review PATS for signs of abuse. If a filer is found to be delaying payment by routinely utilizing this procedure, a penalty action should be pursued.

Additionally, all port offices should be aware of the ACE "Aged Accounts Receivable" report. This report will identify any PMS that are unpaid. Port offices should run this report on a monthly basis to ensure that all PMS filers under their jurisdiction are timely with their PMS payments. Any PMS found to be late after the due date should have liquidated damages issued against each entry summary. A late PMS is not subject to the $500 daily statement penalty allowed for late daily statements.

CBP may waive liquidated damages for first late PMS if system problem, etc.. CBP states that the liquidated damages for PMS must be for each entry summary and cannot be consolidated as a statement penalty; however, port offices should note that due to the newness of PMS, Headquarters may waive the liquidated damages for the first late PMS when the filer notifies that office, in writing, that a system problem occurred resulting in a late PMS.

In such instances, the entry summaries must be removed from the PMS and immediately paid. In order to ensure that liquidated damages are not issued, Headquarters will notify the appropriate port offices via email that the liquidated damages are being waived. Filers will be notified that CBP is waiving liquidated damages and that a waiver will only be granted one time.

CBP contact - Sharon Taylor (202) 344-2326

CBP notice (dated 04/07/06) available at http://www.cbp.gov/linkhandler/cgov/import/cargo_summary/sop_pms_liqui_damages.ctt/sop_pms_liqui_damages.doc.