AirCityandSEKOLogisticslaunchinternationalparcelsserviceintotheUS

Seko Logistics has filed a court action against US Customs and Border Protection (CBP) following its suspension in the C-TPAT and Entry Type 86 imports programme at the end of May.

The CBP has already conditionally reinstated Seko, but Seko has asked the Court of International Trade to compel CBP to identify the violations which led to its suspension.

“The details of such violations have never been provided to Seko despite repeated requests to the agency and threat of legal action,” said the company in a statement.

“Seko also seeks in its court filing injunctive relief to remove any conditions for reinstatement until such time as the alleged violations leading to the agency’s action are identified, if these violations even exist.

“While CBP has conditionally reinstated Seko back into C-TPAT and the Entry Type 86 program, the agency did so only after threat of litigation and still has failed to identify the violations that are leading to exceptional harm to our clients and our role as leading provider of Entry Type 86 services,” it added.

Seko claimed it was given next to no notice of the suspension, and that the CBP has yet to provide evidence or details on the “draconian” action. It said it had filed a temporary restraining order in a bid to get CBP to provide any information on potential violations, and an unconditional reinstatement.

“Since receiving the first notice from CBP, Seko has made repeated attempts to seek information from CBP and clarify what alleged deficiencies exist and what proof of compliance issues they have specific to Seko,” added the company. “The agency’s lack of a direct response in this matter has led to a clear and present danger to Seko’s business, its reputation and its clients.”

It explained in its court filing: “On May 21, 2024, one day after receiving its T86 Suspension Letter, Seko received a notification from [an] online retailer customer, stating that CBP had made public an internal memo, in which Seko was listed as a customs broker who would be prohibited from filing T86 customs entries beginning May 30, 2024.

“This indication from a client evidenced that CBP’s anticipated suspension of Seko’s
participation in the T86 and CTPAT programs was already in the public domain; as such, Seko’s reputation as a leader in the ecommerce industry had already been unlawfully harmed.”

It added the action had caused it “significant monetary loss”.

CBP has been using technology to identify and seize packages will illegal contents. Sources noted that there was a particular focus on some of the major Chinese etailers, including Shein – which is listed on Seko’s website as a customer – although this was not confirmed by CBP.

CBP said it had begun running two pilot schemes aimed at increasing advanced electronic data, the Entry Type 86 test, and Section 321 data. The agency is also working to implement programming in the Automated Commercial Environment (ACE) to automatically reject Entry Type 86 transactions that are not filed in the necessary timeframe.

Automation was set to begin on April 13, but has been postponed to allow for additional testing.

CBP claims that ACE reduced processing times by 800,000 hours and saved $2.64bn in 2023, for trade. For CBP itself, it said it cut 16.8m hours of processing time, and saved $1.35bn.

In fiscal year 2023, ACE processed 660m cargo entries and 20m export shipments, generating more than $94bn in duties, taxes and fees – some $258m per day.

CBP said last week that it aimed to boost compliance.

Acting commissioner Troy Miller said: “While the majority of brokers, carriers and supply chain businesses that participate in CBP’s Entry Type 86 Test are compliant with applicable laws, we are enhancing our enforcement efforts to ensure that all participants are held accountable…  

“To date, CBP has suspended multiple customs brokers from participating in the Entry Type 86 Test after determining that their entries posed an unacceptable compliance risk.” 

James Gagne, CEO of Seko, which claims 99.999% compliance rates, said: “We are incredibly disappointed by, and strongly disagree with, the original decision by CBP.

“We intend to pursue all appropriate actions to protect our company, our clients, and the US consumer while we continue working as an important compliance partner in global supply chains in good standing with US Customs and with C-TPAT.”

Seko added that the Entry Type 86 programme is “beneficial”, and pointed instead to the “millions of packages a day sent through postal channels, and not through Entry Type 86, that continue to be cleared with no data associated with them”.

One source working on finding a technology solution to ecommerce said Seko was a “very good” operator, and that its suspension had been a surprise. They added that the current focus was a political move before the US elections.

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