Possible Change in Liability for Those Who Help Import Goods Gets Mixed Reaction on Hill
A proposal by the administration to change the standard of liability for companies that have a role in importing, but are not the importer of record, has been met with some support and some wariness by Congress members who focus on trade. The idea, which was in the Department of Homeland Security report on combating the sale of counterfeits through e-commerce platforms (see 2001240043) and the executive order that swiftly followed (see 2002100042), would require a change in law. According to a recent analysis from Crowell Moring, “the initiative seeks to extend liability beyond the importer of record for gross negligent actions by a service provider that 'facilitated' the import of such goods, an effort that likely would require additional statutory authority.”
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Crowell & Morning said “CBP usually would pursue parties such as customs brokers, warehouse operators, or e-commerce platforms only if they knowingly aided or abetted an importer in the importation of illegal goods.” The executive order also notes that criminal charges will be considered, the firm said.
Rep. Ron Kind, D-Wis., a House Ways and Means Committee member, questioned whether criminal cases could be brought without mens rea, evidence that the defendant had knowledge of wrongdoing. But if it is just designed to increase civil liability, he told International Trade Today in a recent hallway interview, “we'll have to check and see whether we should at least be having a hearing on this information. Obviously, they see a problem that should be addressed, we should at least get briefed, find out what they're going after.”
Rep. Henry Cuellar, D-Texas, said he'd want to hear from the trade community before forming an opinion. “If you change liability issues, what does it mean, how does it affect trade? How does it affect their day-to-day operations,” he said he'd ask customs brokers.
Rep. Gregory Meeks, D-N.Y., said, “I'd look at that very closely.” He said the government does need to cut down on counterfeits, and if it's helpful “to those that are legitimately in the business of manufacturing these products, then yes, it's something that I would look at.” But when asked if it helped rights holders but hurt express shippers, would he still support it, he said he'd need to evaluate that.
“If in fact it becomes overly burdensome to those who legitimately are just trying to transact business as far as the shipment is concerned,” that would be problematic. “Because they have nothing to do with it. I want to make sure it is focused on the counterfeiters.”
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, told International Trade Today during a conference call with reporters that he thinks he would support a stricter liability standard. “I think we have a bigger problem than the changing law,” he added. “We need to make sure there’s a bigger cooperation between the government and a lot of the platforms and the retailers. More of this stuff needs to be caught at the borders.”