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Customs Alert - Conditional CBP Release of Merchandise Subject to FDA Admissability, Determination/Liquidated Damages

04.06.2007

This is a reminder of the Final Rule published January 31, 2007 in the Federal Register relating to a change in the Conditional Release Period, Liquidated Damages Assessments of Imports Subject to FDA Admissibility Standards.

On May 1st new rules will be effective implementing a conditional release period of 30 days “for any food, drug, device, or cosmetic which has been released under bond and for which admissibility is to be determined under provisions of the Federal Food & Cosmetic Act.” There is also a clarification as to the amount of liquidated damages that may be assessed upon breach of the bond conditions.

The new regulations are easily understood and provide that a demand for redelivery be made no later than 30 days after the release of merchandise or 30 days after the end of the conditional release period, whichever is later.

The conditional release period ends upon the soonest occurrence of the following events:

  1. Issuance of the FDA may proceed notice;
  2. Issuance of a Notice of Refusal of Admission or;
  3. Expiration of the 30 day period after the release of the goods.

Thus, a Notice of Redelivery must be issued (if issued at all) within 30 days of the earliest occurrence of any one of the three events. The FDA conditional release period may be extended upon a written or electronic “Notice of Sampling, Detention” or other FDA action to the importer of record within 30 days of release.

A failure to comply with the demand for redelivery will result in the assessment of liquidated damages equal to three times the value of merchandise unless a single entry bond equal to the domestic value of the merchandise has been filed.

It should be noted and stressed that issuance of a May Proceed Notice does not preclude CBP from issuing a subsequent demand to redeliver within 30 days from the end of that conditional release period.

The Customs Alert is being sent to you as a service of the Cowan Liebowitz & Latman Customs Practice Group. Our desire is to better service the international trade community. Your comments regarding this alert are appreciated. Please respond at your earliest convenience.   If you would like additional information please contact: C.J. Erickson, (212) 790-9274 (cje@cll.com) or Carl R. Soller, (212) 790-9231 (crs@cll.com).

Meet our attorneys at either office: JFK International Airport  Japan Airlines Building 14, Suite 11B   Jamaica, NY 11430 (718) 244-8595 

Cowan Liebowitz & Latman, P.C. 114 West 47th Street
New York, NY 10036-1525 (212) 790-9200 Fax. (212) 575-0671

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