Background
A large, national solar panel manufacturing company first engaged Alba for a single customs entry to evaluate our capabilities. The transaction went smoothly as expected, leading to an invitation to compete for their full brokerage business as part of a formal Request for Proposal. Alba placed second in the bid, falling short because of the solar manufacturer’s desire to have a service provider’s facility close to their manufacturing site. Another broker was selected for the business.
However, the onboarding with the winning broker was delayed. The solar manufacturer needed an interim customs broker to aid with shipments in the meantime – Alba stepped in. Rather than seeing this as a short-term stopgap, Alba treated the opportunity as if it was the start of a traditional new client relationship.
The Problem
As part of Alba’s detailed onboarding, the Alba team reviewed the solar manufacturer’s existing Standard Operating Procedure (SOP). The company was familiar with anti-dumping and countervailing duties (ADD/CVD), but were relying on procedures used by two prior brokers – very established names in the brokerage business.
On the very first new entry Alba processed, Alba’s Brokerage Manager noticed a critical omission: the SOP did not include Section 201 HTS codes -the Chapter 99 numbers used to identify products subject to US quota restrictions.
The imported product’s primary HTS classification fell under Section 201 safeguards, meaning imports beyond the quota limit are charged significantly higher “out-of-quota” duty rates. This omission was a problem:
- 6–9 months of prior entries had been filed without quota coding
- Those entries were now considered out-of-quota
- The solar manufacturer owed substantial additional duties on those entries
- The solar manufacturer faced potential negligence charges from Customs and Border Protection (CBP), which could have resulted in penalties two-to-three times the amount of the duty owed
The Solution
Instead of simply filing the entry, Alba took a proactive advisory role, sitting down with the solar manufacturer and walking them through exactly what Section 201 meant for their products and how quota overages impacted duty costs.
Once they understood the situation, we guided the solar manufacturer through a prior disclosure to CBP – a proactive step that allows companies to report mistakes before CBP finds them. This approach meant:
- Identifying the missing Section 201 codes before the entries were finalized
- Educating the solar manufacturer on quota rules, Section 201 requirements, and the impact of quota overages on duty costs
- Guiding the solar manufacturer through a prior disclosure to CBP, a legal step allowing them to self-report errors before CBP initiates its own investigation
- Calculating and submitting all past due “out-of-quota” duties to bring their account into compliance
By intervening immediately, Alba prevented a potentially huge fine and further quota violations from happening. Alba also stopped the financial damage to the solar manufacturer from compounding.
The Outcome
Even though the solar manufacturer had to pay back the out-of-quota duties, they avoided what could have been a multi-million-dollar penalty by CBP, thanks to Alba’s standard onboarding protocols being followed.
Now a client, the solar manufacturer also benefited from a much clearer understanding of their Section 201 obligations, confidence that every future entry through Alba would be compliant, and peace of mind knowing they have someone watching out for their best interests.
The trust Alba built during what was supposed to be a temporary arrangement outweighed the perceived advantage of having a local broker office in the vicinity of the manufacturing facility.
