ICPA BLOG

Join Trade Compliance Professionals at the 2012 NETWORKING RECEPTION Kick-off for the Export Control Forum in Irvine, CA – Sunday, February 26, 7-9 PM

2012-01-22T17:23:00.001-08:00

You, your clients, counterparts and anyone interested are all enthusiastically invited to attend the Amber Road (formerly Management Dynamics) Sunday Evening, February 26th, Networking Reception at the 6ix Park Grill, in the Hyatt Regency Hotel, prior to the 2012 Bureau of Industry & Security (BIS) Export Control Forum (ECF).

Please do what you can to get this message out to all your connections in and across academia, industry and the US Government as soon as possible. Anything you can do to energize your network to attend is most gratefully appreciated. A one-page invitation is available at http://www.scribd.com/doc/78609999/DOC-BIS-ECF-Networking-Reception-Invitation.

I hate to miss it, but I have other commitments that same week. This a GREAT way to connect. Last year’s Sunday Networking Reception proved to be a perfect way to kick things off and lay groundwork for the ECF and future--free food, drinks and even better company!

If you or anyone you know plan to attend the 2012 BIS ECF in Irvine CA, 27-28 February, 2012, at the Hyatt Regency Hotel, do NOT miss this no cost and timely opportunity to meet & greet attendees, exhibitors, organizers, speakers…. If anyone decides to go, they need to RSVP using the Internet address/link on the attached flyer/invitation.

For the complete US Department of Commerce, BIS, ECF agenda, more details and registration, go to: http://www.bis.doc.gov/seminarsandtraining/irvine_ca_february_27_28_2012.htm.

CERTIFIED GLOBAL BUSINESS PROFESSIONAL (CGBP) a Proven and Viable Program – Very Much Worth Considering!

2012-01-14T10:02:00.000-08:00

For those of you who are looking for a truly valid, independently verified certification program, this is one. Based on analysis by Betty Fishman, a reputable, experienced, unbiased, third-party Certification and Testing Consultant, with no vested interest, the CGBP program is, in fact, a credible certification that meets the requisite standards with all the necessary independent safeguards and no conflicts of interest.

Here is a link to the NASBITE International [a 501(c)(3) non-profit] website that validates the CGBP credential: http://nasbite.org/cgbp-info/. Check it out for yourself.

I have talked to Donna Davisson, NASBITE’s Executive Director and a variety of NASBITE CGBP’s. They have the right answers, a proven history of professionalism and the documentation to back it up. The evidence proves NASBITE took the time and thoroughly did their homework in setting it all up. Further, they accurately portray what is offered and the value of being a CGBP. Unlike other bogus certifications, they make no false or misleading claims and do not misrepresent who they are and what they do.

According to Ms. Davisson, there are more than 1200 CGBPs. Additionally, senior representatives from the US Department of Commerce indicate more than 100 US Commercial Service Trade Specialists and managers have been certified and more are slated to go through this year.

Further, NASBITE International is having their 25th Anniversary and Annual Conference in Portland, Oregon, April 17-21, 2012. I am going to see first-hand and learn more about the organization and their programs. I also want to talk to as many CGBPs as possible face-to-face. I recommend you consider doing so as well in the interest of diversity, due diligence and expanding your learning and knowledge base about what is out there and what is going on in the competitive, dynamic and demanding global trade compliance community. Here is a link to their Conference website: http://nasbite.org/conference-info/. Again, check it out for yourself.

This is an opportunity to color outside our normal education and training boxes, do something different, expand the possibilities and perhaps even enhance our expertise and credibility in a more meaningful way.

I did not know NASBITE International or the CGBP program existed until the Fall of 2010 as a result of our in-depth research in conjunction with The Export Practitioner article: “Certificate vs. Certification: Buyer Beware!” I am constantly amazed about what I do not know and/or have not heard about. This is a prime example of a long overdue and timely discovery for me, but hundreds of others are already well connected with NASBITE International and the CGPB program. I recommend you find out more for yourself and your organization….

Long Promised and Anxiously Awaited Proposed International Traffic in Arms Regulations (ITAR) Part 129 Leaves Much to Be Desired….

2011-12-22T08:23:00.000-08:00

As many seasoned trade compliance professionals have pointed out you need to be careful what you ask for. A good example of that is the proposed revision to Part 129 of the ITAR. If you have not read it carefully you most certainly should.

Additionally, if you want a right between the eyes assessment of its significant impact and implications, read the two articles in Jim Bartlett’s Ex/Im Daily Update from Clif Burns, Counsel, at Bryan Cave LLP’s Washington DC Office. The first titled “DDTC Releases New Proposed Brokering Rules” is in the Monday, December 19th, 2011, edition. The second: “And It Just Gets Worse and Worse“ is in yesterdays, December 21st edition.

If your organization or you are in any way affected by these changes, I strongly encourage you to take the time and make the effort to submit comments. They are due by February 17th, 2012. Do not expect the US Government to appreciate or understand the impact and implications, unless you tell them. In the context of changes like this or evolving Export Control Reform, you have got to speak up. If you do not, you deserve what you get. Remember: New does not necessarily mean better.

NOTE: If you are an Empowered Official or trade compliance professional at any level and you are not already on distribution for Jim Bartlett's Ex/Im Daily Update, you most definitely need to be! Make your request directly to Jim at James.Bartlett@NGC.com. I guarantee you will find it invaluable. Consider it a fitting Christmas present to yourself and your organization.

SOUTHWEST AEROSPACE & DEFENSE TRADE COMPLIANCE FORUM, Las Cruces, New Mexico; April 4-5, 2012 - A Unique Outreach, Education and Training Opportunity!

2011-11-23T11:34:00.000-08:00

This low-cost, high-quality, hands-on, practical-application and case study focused effort is hosted by the US Commercial Service and the New Mexico Economic Development Department. It includes a seminar, networking reception, workshops and a tour of Spaceport America.

Day one Seminar topics include: Overview and Update on US Export Controls; International Traffic in Arms Regulations (ITAR) HOT Topics: State Department Trends, Defense Service Exports, Export Control Reform Initiatives, Agreements, Brokering, Third-Country/Dual Nationals, D-Trade, Merger & Acquisition Due Diligence, and much more…; Automation & Software Essentials in Trade Compliance; Industry Panel - How to Successfully Navigate the ITAR Minefield; Enforcement Update and Latest Consequences of Non-Compliance with Important Case Studies and Lessons Learned. Day one ends with a Q&A session followed by a networking reception.

On day two attendees have two workshops to pick from.

TRACK 1 is “Challenges Facing Empowered Officials and Trade Compliance Professionals: Minimizing Exposure, Liability and Risk” and includes sessions on Investigations, Disclosures and Decision Making; What the Regulations Don’t Say and How to Prepare for What’s Ahead, Hands-on Interactive Case Studies and ends with a presenter Q&A period.

TRACK 2 is “Commercial Space and the ITAR” with sessions on What Every Commercial Space Entrepreneur Needs to Know; USML Categories IV, VIII and XV, as well as Relevant CCL Entries; Obstacles to Export; Interagency and Regulatory Conflicts Launch/Spaceflight Insurance Issues, Defense Services, etc.; Spaceports and the ITAR: Compliance Requirements for the Owner, Operators, Tenants, Suppliers, etc.; Hands-on Interactive Case Studies and also ends with a presenters Q&A.

In the afternoon of day two there is a special Spaceport America Tour.

For a flyer with additional details including hotel information, a complete agenda and registration link, go to http://www.scribd.com/doc/76317513/Southwest-Aerospace-Defense-Trade-Compliance-Forum-Flyer.

This program is intended for anyone who deals with global trade compliance (including exports, imports, customs, logistics, business development, marketing, procurement, engineering, operations, security, human resources, contracting, supply chain...) and related regulatory, compliance and enforcement issues.

FY-2010 and 2011 State Department Enforcement Statistics - Is an Organization You Know or Work with Included?

2011-10-16T21:54:00.000-07:00

Glenn Smith, Chief of the Enforcement Division, Office of Defense Trade Controls Compliance (DTCC), Directorate of Defense Trade Controls (DDTC), Bureau of Political-Military Affairs, U.S. Department of State was a speaker on Wednesday, October 12, 2012 at the monthly meeting of the National Council on International Trade Development in Washington DC.

During his very well done and informative informal remarks, he reviewed and discussed DDTC DTCC compliance, enforcement and settlement statistics and trends for FY-2010 and 2011. He approved public release and distribution of the data.

The one page document is available online at http://www.scribd.com/doc/68891888/DDTC-DTCC-Disclosure-Stats-101211.

Supreme Court Denies Dr. Roth Appeal - CASE CLOSED!

2011-10-11T19:20:00.000-07:00

The appeals for indicted Dr. John Reece Roth, former University of Tennessee Professor, that have dragged out for years have now come to a final conclusion. On October 3, 2011, the US Supreme Court decided not to hear his case.

Roth, now 73, will likely serve his four-year sentence in a minimum security prison close to his family near Knoxville, TN. He is eligible for early release after serving 86% of his term. Additionally, he may be allowed to spend the last 6 months of his sentence in a halfway house.

According to prosecutors Jeff Theodore and Will Mackie, Roth repeatedly and arrogantly ignored warnings because he disagreed with the Arms Export Control Act (AECA) and International Traffic in Arms Regulations (ITAR) restrictions. Roth and his lawyers countered he was merely ignorant of the law and that the AECA and ITAR only applied to finished products and not to those in research and development.

If your organization does any work with academic institutions and/or research and development facilities, you need to be well up-to-speed on what happened here. Dr. Roth has been and remains “the example” to point to regarding knowing and willful violations of the AECA and ITAR in the academic arena and what ultimately happens to those who intentionally violate the law.

An updated version of the one-page Indictment Summary is available on my Linked in Homepage in the “View Full Profile” mode at http://www.linkedin.com/in/johnpriecko. Scroll down to SlideShare Presentations and click on “October 10th Dr. John Reece Roth Updated Indictment Summary.” A copy is also available online at http://www.scribd.com/doc/68421595/Dr-John-Reece-Roth-Updated-Indictment-Summary-101011.

1st ARIZONA EXPORT COMPLIANCE SUMMIT - September 7th & 8th, 2011

2011-08-17T12:12:00.000-07:00

REMINDER: This two-day high-quality low-cost program is at the Scottsdale Resort and Conference Center, 7700 East McCormick Parkway, Scottsdale AZ 85258.

Further details and registration are available at http://www.regonline.com/azexportsummit or from contact Sally Chambers, 480-884-1658 or sally.chambers@trade.gov, U.S. Commercial Service, Arizona. Registration discounts are available for ICPA members and there is a special rate at the hotel for attendees.

For a two-page flyer on the program go to: http://www.scribd.com/doc/62509935/1st-ARIZONA-EXPORT-COMPLIANCE-SUMMIT-Flyer-September-7th-8th-2011; and for a Detailed Agenda: http://www.scribd.com/doc/62510410/1st-ARIZONA-EXPORT-COMPLIANCE-SUMMIT-Detailed-Agenda-September-7th-8th-2011.

October 20th ESSENTIALS of US EXPORT CONTROLS and TRADE COMPLIANCE for Practitioners and Counterparts in the Maryland, Virginia and Washington DC Area

2011-08-15T20:15:00.000-07:00

Are you looking for an outstanding full day program of high-quality, low cost and unique hands-on practical application-oriented session focused on small and medium size organizations new to international trade or those considering business expansion globally? If so, this program will tell you exactly what you need to do and know to abide by the letter and spirit of the law in our demanding, dynamic and very competitive international marketplace.

This engaging, instructive and interactive program is a MUST ATTEND if you: Think your organization’s exports are not regulated; Are not sure your organization’s exports are regulated; Are certain your organization’s exports are regulated.

The agenda includes: An Overview of US Export Controls: the Essential Players, Policies and Processes, the Critical Importance of Jurisdiction, Consequences of Non-Compliance, Related Hot Topics and Case Studies, Export Control Reform: Impact and Implications, Interactive Trade Compliance Automation and Software Workshop, a local area Industry Panel with three representatives from diverse small, medium and large companies who will share best practices, lessons learned and how to most effectively navigate the demanding and regulation driven minefield. Q&A is included with each session and periodically during the program to ensure all your questions are addressed.

In the afternoon there are also free 30-minute individual sessions with the presenters to discuss your issues of interest. Sign-up for these (first-come first-served) when you register online. Do not miss this unique opportunity!

This valuable education and training is hosted by the US Commercial Service and the Virginia-Washington DC District Export Council and jointly sponsored by: Trade Compliance Solutions (TCS), Management Dynamics Inc (MDI), the law firm of Jones Day (JD), Northern Virginia Technology Council (NVTC), Virginia Economic Development Partnership, (VEDP), The Export Practitioner and International Compliance Professionals Association (ICPA).

A copy of the one-page flyer is available at http://www.scribd.com/doc/62284732/Oct-20th-Export-Essentials-Flyer. For more information, please contact: Emily Thornton, Phone: 404-418-5490, Email: emilythornton@managementdynamics.com. Register now at http://bit.ly/usexportcontrol. There are discounts for DEC, NVTC and ICPA members.

Condensed Version of the US Department of State Settlement with BAE Systems plc--Intriguing Food for Thought...

2011-07-01T15:17:00.000-07:00

For a one-page overview and Settlement Summary of the May 16, 2011, Directorate of Defense Trade Controls (DDTC), Consent Agreement with BAE Systems plc (BAES) go to http://www.scribd.com/doc/59079036/BAE-Systems-Plc-051611-Settlement-Summary-with-the-US-Department-of-State-as-of-070111. This follows a March 2010 Department of Justice (DOJ) action against BAES that resulted in a guilty plea and $400 million dollar criminal fine, one of the largest penalties in history.

This template summary is a factual overview of the two-thousand five-hundred and ninety-one alleged violations of the Arms Export Control Act and International Traffic in Arms Regulations for BAES unauthorized brokering of US defense articles and services. The overall case and details make for “very interesting reading.”

NOTE: In my experience in putting these summaries together for the last 8 years, this is one of the most convoluted and inconsistent settlements ever. When carefully scrutinized, one has to wonder what the message from DDTC is. Clearly there were no winners here, but the obvious disconnects between the facts stated and in the settlement documents and actions taken, do not track.

To really appreciate all this, you must carefully read the entire settlement package on the DDTC website and then start comparing the text in different sections and with the consequences. I recommend you do just that and see what conclusions you come to and what you take away. Add your candid comments to this discussion thread.

This summary consolidates material from the Proposed Charging Letter, Consent Agreement and Order. It is a much more concise and consistent summary in a format that is particularly useful for C-level executives and trade compliance professional’s education/training at all levels.

Thoroughly reading settlements and monitoring various US Government enforcement and compliance resources should be an integral part of any trade compliance professional’s reading and an essential element in any comprehensive Trade Compliance Program. One-page summaries like these help get the word out in a bite-size way and allow readers to more quickly digest and compare individual cases.

This settlement summary is also available on my LinkedIn home page in the “View Full profile” mode at http://www.linkedin.com/in/johnpriecko. Scroll down to the SlideShare Presentations portion and then click on the graphic “BAE Systems plc Settlement Summary.”

September 7th and 8th Arizona Export Compliance Summit – Seminar, Networking Reception, Workshops and No Cost One-on-One Sessions

2011-05-31T21:22:00.000-07:00

This unique high-quality and low cost program in Phoenix, Arizona, is a hands-on, practical application-focused two-day review and update of the compliance challenges facing technology exporters, manufacturers, brokers, freight forwarders and academic institutions of all sizes.

If you are involved in any way with international trade and the related regulatory requirements this is a must attend local/regional effort that has a proven track record of excellence with experts in the field who make themselves available before, during and after the sessions.

Experienced and insightful speakers will review a wide range of issues facing trade compliance executives, empowered officials and practitioners at all levels including: automation in trade compliance; best practices; export control reform; merger and acquisition due diligence; enforcement, disclosures and investigations; real world case studies, lessons learned from industry peers; and much more ….

The program is being held at the Scottsdale Resort and Conference Center, 7700 East McCormick Parkway, Scottsdale, Arizona 85258. Further details and registration are available at www.regonline.com/azexportsummit. There are event discounts for ICPA members. There is also a hotel discount for attendees.

The first day ends with a free networking reception to connect with counterparts and the speakers in preparation for the 2nd day workshop on Challenges Facing Empowered Officials and Trade Compliance Professionals and the afternoon free one-on-one sessions with presenters to discuss attendee issues of interest.

Hosts for this event are the US Commercial Service and Arizona District Export Council. Sponsors include Trade Compliance Solutions, the Law Firm of Snell and Wilmer LLP and Management Dynamics Inc. Industry Partners are the Arizona Chamber of Commerce & Industry, Arizona International Growth Group, Arizona Technology Council, The Export Practitioner and International Compliance Professionals Association.

Along with cost effective and superb outreach, education and training, the agenda also provides extensive networking opportunities to connect with counterparts and get up-to-speed with what’s going on across the trade compliance community.

MIST CLEARS OVER 2012 HS REVISIONS

2011-05-13T14:19:00.000-07:00

In order to correctly reflect the World Customs Organization (WCO)’s amendments to the Harmonized System (HS), the United States International Trade Commission (USITC) published their proposed modifications to the Harmonized Tariff Schedule of the US (HTSUS) in June 2010. Much water has flowed under the bridge since then (some would argue not as much due to drying up rivers but this topic is for another time) and with reality due to hit January 1, 2012, importers need to know now what these changes are, how they will affect their imports come Monday, January 2nd and what they need to do to comply.

In all, the WCO recommendation includes 204 amendments in 53 different HS chapters, affecting 39 legal notes, 108 different headings and changing 1266 unique 10-digit HTSUS numbers.

While studying the changes, it becomes quite obvious in which categories most of these lie. Unlike in 2007 when the last significant change to the HTS was announced, changes in the electrical, electronic, and textile/apparel categories do not prevail. Most of the volume of changes is in the food categories resulting from a request by U.N.’s Food and Agriculture Organization for separate identification of food products. These are reflected in HTS chapters 1 through 21. Other amendments arose from a need to address technological changes as well as to capture trade data on products swinging their weight in the volume of trade. Biodiesel fuels harked to be identified separately as did nickel-metal hydride batteries (used in hybrid motor vehicles), and lithium-ion batteries (used to power consumer electronics products) contributing to their particular economic and technological importance. The U.S. proposal to segregate sanitary goods, such as diapers, tampons, and sanitary pads led the WCO to combine these products into a single heading, the all-new 9619 for a more uniform and simplified classification. They had hitherto been classified under various sections of the nomenclature, depending on the essential character of their composite constituent materials.

So, here is a readable summary of some of the important changes.

It seems our endearing cold-water friends, the seals, sea lions and walruses have now their own habitat within the confines of our capacious HTS. They will henceforth be identified under sub-heading 0106.12.01 and their meat and offal under 0208.40.01.

Not to isolate the dromedaries and the Bactrian, camels will now be identified under 0106.13.00 and their meat and offal under new sub-heading 0208.60.00.

Atlantic and Pacific bluefin tunas are under 0301.94.01 while heading 0302 for fresh and chilled fish has undergone extensive revision with the addition of many new sub-headings as for example, subheadings 0302.40.00 through 0302.70.40 now containing a variety of other fish species identified also by their scientific names.

Sea cucumbers, sea urchins, jellyfish, high-priced dishes in Chinese restaurant menus, any one of which being an essential component in any respectable Chinese banquet are now in their very own heading 0308 with subsequent new sub-headings 0308.11, 0308.19 and 0308.30. Here’s one scientific name to remember Stichopus japonicas for a sea cucumber!

Chapter 3’s fish, crustaceans, molluscs and other aquatic invertebrates’ 17 pages of nomenclature has almost doubled to 35 pages. Whew! These pages can be viewed here.

The new description for tobacco smoked through a “water-pipe” as described by WCO means tobacco intended for smoking in a hookah or a similar vestibule which consists of “a mixture of tobacco and glycerol, whether or not containing aromatic oils and extracts, molasses or sugar, and whether or not flavored with fruit”. The new sub-heading for this is 2403.11. Of course products that are tobacco-free smoked through water-pipes or hookahs would not fall into this category.

Chapter 27 containing minerals and fuels now identifies biofuels as being “mono-alkyl esters of fatty acids of a kind used as a fuel, derived from animal or vegetable fats and oils” .This is outlined under the new sub-heading 2710.20.

In extension, products from biodiesel fuels are referenced in Chapter 38 under their very own brand-new heading 3826 with subheadings 3826.00.10 to 3826.00.30 addressing them. A 4.6% duty will be levied for mixtures containing no or less than 70% by weight of petroleum oils compared to 6.5% for others. On the other hand, a duty-free status on this category may have served as an incentive to importers to reduce reliance on substances containing more polluting oils. The biodiesel pages are here.

The wonderful world of leather and those who just love the smell of finished leather will praise the inclusion of the elusive chamois in Chapter 42 containing leather goods which now also covers metalized leather. Both chamois and metalized leather are currently covered in Chapter 41 for leather. Metalized? This obviously means laminating the leather with some sort of plastic or PVC coating of the color of metal not the substance itself. Cannot imagine a leather handbag coated with a sheet of metal. Looking around for the meaning of metalized, this is what came up, “metalizing is to protect metal surfaces from corrosion and oxidation using a metalizing process to apply Thermal Sprayed Aluminum (TSA), Zinc or other non corrosive metals”. Shopping sites selling “metalized” handbags do not specifically mention the word metalized though gold and silver handbags were common. Presumably the Explanatory Notes to the HS would define this term being used by the WCO.

In Chapter 85, it is interesting to note that in respect of televisions the term “black and white” will go out of the window and only “monochrome” will be used. Which country manufactures B&W anyway?

Video game consoles now have their own new category 9504.50.00 what with the proliferated sales of X-Box’s, WII’s and PlayStation’s, this was bound to happen.

The all new heading 9619 has been created with subheadings 9619.00.11 through 9619.00.90 for sanitary towels, pads and tampons, and baby diapers and diaper liners. Depending on the material composition whether of natural textile, plastic, synthetic or artificial fabric, the import duty ranges from 0% for paper-based to 16%, you guessed it, for man-made fibers like nylon or polyester-based. They are now no longer spread about in chapters 48, 56, 61 or 62. New note 1 (f) in chapter 56 now clearly states “Sanitary towels (pads) and tampons, napkins and napkins liners for babies and similar articles of heading 9619” are not covered here.

USITC’s HTSUS modifications document can be found at http://www.usitc.gov/tariff_affairs/hts_documents/1205-7FinalReport.pdf that also contains the 2007 to 2012 and the 2012 to 2007 HTS numbers correlation tables.

An adapted Excel-file version of the correlation tables is at: http://www.asmara.com/hts2012.htm.

Do NOT miss the upcoming four-part Audio Conference Series "ITAR Basics for Exporting Industry Employees" beginning Wednesday, April 13th

2011-03-29T20:09:00.000-07:00

This comprehensive remote-learning program introduces the International Traffic in Arms Regulations (ITAR) to employees of defense suppliers, manufacturers, exporters and brokers who are newly assigned to export compliance responsibilities as well as those who must understand ITAR rules to do their jobs, including personnel involved in sales and marketing, engineering and design, international and government contract management, mergers and acquisitions, finance and billing, human resources, legal, operations, security, procurement, shipping, logistics and transportation.

It is also for those who work for commercial and dual-use firms who need or want to know how the ITAR does or might affect their organizations. Additionally, if you think you are ITAR free or do not have any ITAR related issues, you could be “very wrong.” If you are, it can be a costly mistake on many fronts.

Each of the four 90-minute sessions is on Wednesdays from 2:00 to 3:30 P.M. Each session will address different parts of the ITAR. Programs will be held on April 13, 2011; April 27, 2011; May 11, 2011; and May 25, 2011.

The instructors, who are proven expert legal and compliance specialists, include: John Priecko, Trade Compliance Solutions; Greg Hill, DRS Technologies, Inc.; Suzanne Kao, Huffman Riley Kao PLLC; Ginger Carney, Network Centric Operations Industry Consortium; and Phil Rhoads, Rhoads & Reed PLLC. All the sessions will be moderated by Sam Gilston, Editor and Publisher of The Export Practitioner and Washington Tariff and Trade Letter.

If you are unable to participate in this four-part, remote-learning series in person, you can order a CD recording of all four sessions along with all the PowerPoint slides.

For more information and registration go to http://www.exportprac.com/ht/d/Store/name/BRIEFINGS/pid/7801 or call Gilston-Kalin Communications, LLC at 202-463-1250. If you would like a copy of the complete flyer, contact John Priecko at 703-895-1110 or jpriecko@comcast.net. The flyer is also conveniently posted on John's LinkedIn page at http://www.linkedin.com/in/johnpriecko, in the “View Full Profile” mode under SlideShare Presentations.

ATTENTION: Free Webinar “Export Compliance: Best Practices in High Volume Screening” live Thursday, March 31st, 2 PM EST

2011-03-17T18:43:00.000-07:00

American Shipper's Associate Editor Eric Kulisch moderates a one-hour Webinar broadcast exploring the latest trends and best practices in screening restricted parties.

When do you screen? Who do you screen? How often do you screen? How many lists are enough?When it comes to screening, what does the US Government require? Is manual screening still even possible or prudent? and much more…

The discussion will include a focus on the solutions Verizon Business employs to overcome the compliance challenges faced by a hi-volume exporter. This session is hosted by Management Dynamics, Inc. and features panelists: Kishore Gundamraj, Export Compliance Manager, Verizon Business; Nathan Pieri, SVP Marketing, Management Dynamics, John Priecko, President and Managing Partner, Trade Compliance Solutions

New Coalition Seeks Best Practices for Export Control Compliance

2011-03-12T23:41:00.000-08:00

The Coalition for Excellence in Export Compliance (CEEC) is an enthusiastic all volunteer group of experienced trade compliance professionals focused on long overdue harmonization, standardization and consistency in export compliance best practices.

Different than other organizations like the Defense Trade Advisory Group, the President’s Export Council Subcommittee on Export Administration and the six Department of Commerce Technical Advisory Committees, the CEEC is not directly affiliated with any US Government (USG) organization. However, the CEEC advocates mutually beneficial ongoing relationships with virtually any individual or organization that has an honest interest and stake in the export control equation and wants to improve long overdue compliance consistency.

The CEEC is already working with the USG on various initiatives. It was invited and briefed the members of the Export Control Reform Task Force and Interagency Export Control Modernization Compliance Working Group. The CEEC was also invited to make a presentation to the US Department of Commerce, Bureau of Industry and Security, Regulations and Procedures Technical Advisory Committee to get them in the loop and further explore mutual benefits.

Other discussions are underway and more such sessions will follow with organizations like the US Commercial Service, various trade and professional associations, the National District Export Council and Export University.

This is truly a team effort seeking clarity, consistency and specificity in export compliance best practices and standards. The CEEC’s mission statement is to Identify and recommend export compliance best practices that provide practical guidance to better detect and prevent violations of law.

For more information about the CEEC, its various initiatives and how you might contribute, please contact John Priecko, 703-895-1110 or jpriecko@comcast.net. A CEEC Fact Sheet is also available on John’s LinkedIn home page in the “View Full Profile” Mode at http://www.linkedin.com/in/johnpriecko.

Do NOT miss the free Sunday evening reception at the Bureau of Industry & Security, Export Control Forum (ECF) in Irvine, California!

2011-02-07T15:52:00.001-08:00

Please join Management Dynamics and ECF attendees, organizers and speakers for a Meet & Greet Reception at the 6ix Park Grill located in the Hyatt Regency, 17900 Jamboree Road, Irvine, CA 92614, on Sunday evening, Feb 27, 7-9 PM. Cocktails, hors d’oeuvres and networking opportunities will be served.

If you plan to attend the reception, please RSVP with an email to emilythornton@managementdynamics.com no later than February 22nd.

As a seasoned ECF attendee and trade compliance veteran, the reception is a great way to start the ECF and a proven way to connect or reconnect with counterparts.

Based on first-hand past experience the US Government (USG) organizers and high-level speakers from DC will also be there, readily available and always willing to discuss whatever is on your mind. Thus, I enthusiastically encourage you to attend both days of the ECF and do NOT miss the valuable networking reception to kick things off.

The ECF and Sunday night reception are great ways to connect and get up-to-speed on what’s going on in the world of export control. It’s also a timely opportunity to get the inside scoop on what’s happening in your region and what’s really going on with export control reform and other timely and hot topics.

If you are or aspire to be an Empowered Official (EO), responsible authority or senior trade compliance person, there is a new LinkedIn Group for you.

2011-01-17T16:27:00.000-08:00

After discussion with and encouragement from counterparts, we started a new LinkedIn Group expressly for EOs and other senior trade compliance personnel. I do a great deal of work in this area and know there is a significant gap and need to address the unique concerns and interests of this growing community of professionals.

The idea behind EO Net is to provide an open, hands-on, practical application focused forum to discuss case studies, challenges, hot topics and issues of interest. We enthusiastically welcome factual, honest, courteous and productive communications on any related topic.

Membership is open to interested practitioners who are willing to share their experience, expertise, lessons learned and resources to better appreciate, understand and deal with the responsibilities, roles and real world exposure, liability and risk that come with the EO and senior trade compliance leadership positions.

Unfortunately some EOs are target of opportunity selections and may not be the best or right person for the job. Additionally, the regulations are inadequate in preparing EOs and others for what they are in store for or addressing the breadth and depth of the problems they will face. Adequate selection criteria do not exist in the Export Administration Regulations or International Traffic in Arms Regulations. All too often people in this career field learn the hard way on the job.

Further, EOs and other senior trade compliance team members are critical elements in any trade compliance program. They are crucial to success or failure and instrumental in executing and maintaining a culture of compliance (or non-compliance) from the top down, vertically, laterally and globally in an organization.

The goal behind EO Net is to help educate, train and inform so we can collectively better deal with problems, situations and as a result better comply with the letter and spirit of the law. We encourage and welcome you participation and contributions....

If you have any questions or suggestions on how to maximize the benefits from this unique group, feel free to contact me directly at 703-895-1110, jpriecko@comcast.net or via my LinkedIn profile at http://www.linkedin.com/in/johnpriecko/.

Nov. 8th Los Angeles & Nov. 10th San Diego Workshops Focus on Requirements, Responsibilities, Problems, Exposure, Liability and Risk...

2010-10-30T16:45:00.001-07:00

Do NOT miss these two unique US Commercial Service and District Export Council sponsored low-cost and high-quality workshops in Southern California titled: “Challenges Facing Empowered Officials and Trade Compliance Professionals.”

These unique programs will much better prepare, educate and train you and your organization to be ready for a wide-range of real world situations, consequences and other adverse outcomes in the currently invigorated enforcement environment.

The agenda for these unique practical-application local/regionally-oriented half-day workshops includes: Legal / Export Administration Regulations and International Traffic in Arms Regulations Requirements and Other Concerns; What the Regulations Don’t Say and How to Prepare for What’s Ahead; Hands-on Interactive Case Studies and Lessons Learned; the President’s Export Control Reforms: Impact & Implications; and afternoon free one-hour sessions with the presenters to discuss your issues of interest

For more details and online registration including ICPA member discounts go to:
Los Angeles: http://www.buyusa.gov/pacificsouth/compliance.html
San Diego: http://www.regonline.com/trade_compliance_workshop

2010-10-24T20:16:00.000-07:00

Incoterms® 2010 Simplified

Incoterms® is a registered trademark of the International Chamber of Commerce (ICC), Paris, France.
The 11 new Incoterms® go into effect on January 01, 2011

RULES FOR ANY MODE OR MODES OF TRANSPORT
EXW
Ex Works (named place of delivery)
FCA
Free Carrier (named place of delivery)
CPT
Carriage Paid To (named place of destination)
CIP
Carriage And Insurance Paid To (named place of destination)
DAT
Delivered At Terminal (named terminal at port or place of destination)
DAP
Delivered At Place (named place of destination)
DDP
Delivered Duty Paid (named place of destination)

RULES FOR SEA AND INLAND WATERWAY TRANSPORT
FAS
Free Alongside Ship (named port of shipment)
FOB
Free On Board (named port of shipment)
CFR
Cost And Freight (named port of destination)
CIF
Cost, Insurance and Freight (named port of destination)

Incoterms® define the responsibilities of buyers and sellers for the domestic and international delivery of goods and determine how costs and risks are allocated.
The words, “importer” and exporter” have been used instead of “buyer” and “seller” that relate more closely with international (cross-border) trade.

1.
EXW
Ex Works (named place of delivery)

Exporter places goods at their premises at importer’s disposal, i.e. works, factory or warehouse. For example: EXW Street Address, City, Country or EXW City, Country if the named address has been specified in the contract of sale.
Exporter has limited obligations to provide export information and is not obliged to load the goods on any conveyance. Moreover, importer has to organize export clearance from the country of shipment.
It should not be assumed that export formalities such as licenses, authorizations and security-related information are the responsibility of the importer. The exporter must provide, at importer’s request, risk and expense, assistance in these export formalities.

2.
FCA
Free Carrier (named place of delivery)

Exporter delivers the goods to the carrier or another person nominated by importer at the exporter’s premises or another named place. For example: FCA Street Address of Forwarder/Consolidator, City, Country.
Exporter is required to clear the goods for export.
Delivery is said to have taken place when the exporter places the goods at the named place. It is then up to the importer to arrange for further means of transport.
Transfer of risk for loss or damage from exporter to importer takes place when said delivery has taken place in said manner.

3.
CPT
Carriage Paid To (named place of destination)

Exporter delivers the goods to the carrier or another person nominated by them at an agreed place and pays the costs to ship the goods to the named place of destination. For example: CPT Destination City.
Exporter is required to clear the goods for export.
The agreed place of delivery is where the risk passes to the importer. The costs of transportation to the destination place (named city) are borne by the exporter but the risk for damage or loss to the goods passes when delivery is made at the agreed place. The agreed place may be the carrier’s or the nominated person’s premises, the airport or port terminal warehouse or any other place, as agreed to in the contract of sale.
Several carriers may be used to transport the goods to its destination.
Example:
- Goods transported from factory address by a trucking company (first carrier)
- Then from the trucking company’s address to a rail yard by a another trucking company (second carrier)
- Then from the rail yard to the port rail yard by rail (third carrier)
- Then from the port rail yard to a dock by another trucking company (fourth carrier)
- Finally by vessel to the final destination (fifth carrier)

4.
CIP
Carriage And Insurance Paid To (named place of destination)

Exporter delivers the goods to the carrier or another person nominated by them at an agreed place and also contracts for insurance cover against risk of loss or damage to the goods during the carriage in addition to paying the costs to ship the goods to the destination. For example: CIP Destination City.
CIP can be considered similar to CPT with insurance cover added.
Exporter is required to clear the goods for export.

5.
DAT
Delivered At Terminal (named terminal at port or place of destination)

Exporter delivers the goods after unloading from the arriving vessel or other means of transport and places them at the disposal of the importer at a named terminal at a named port. For example: Port name, Terminal number.
Terminal could also mean a port warehouse, container yard, rail station or air cargo terminal.
Exporter bears all risks and costs involved up to unloading the goods at the named terminal.
For LCL (Loose Container Load) cargo, it would be the obligation of the exporter to have the LCL cargo unloaded from the container and placed in their NVOCC (Non-Vessel Operation Common Carrier) or freight forwarders warehouse at the disposal of the importer. The exporter bears all the costs up to this point. It is then the obligation of the importer to arrange for pick-up.

6.
DAP
Delivered At Place (named place of destination)

Delivery takes place at a named destination and when the goods have been placed at the disposal of the importer but have not yet been unloaded from the arriving vehicle. For example DAP City name.
In this case, the street address of the importer could also be included or indicated separately in the contract of sale as the named place of destination or any agreed to point.
Risks and costs up to the named address and prior to the time the goods are unloaded are the exporter’s responsibility.

7.
DDP
Delivered Duty Paid (named place of destination)

Exporter places the goods at the disposal of the importer with all import duties and taxes paid. The exporter is also responsible for all costs associated with importing the goods and assumes risk for damage to or loss of the goods up to the named place of destination. For example: DDP City name. Street address of the importer could also be included or indicated separately in the contract of sale as the named place of destination.

8.
FAS
Free Alongside Ship (named port of shipment)

Exporter places the goods alongside the vessel nominated by the importer at a named port of shipment. For example: FAS Port name.
For exporters who ship goods in containers, placing a container alongside a vessel is most likely not possible because containers are usually first sent to a terminal or loaded at a NVOCC’s warehouse before being loaded onto the vessel. It is therefore advisable to use FCA in these cases. FAS is usually used for bulk cargo.
Risk of loss of and damage to the goods up to the port is the exporter’s responsibility and the importer then assumes risk and bears all costs thereafter.

9.
FOB
Free On Board (named port of shipment)

Exporter is required to deliver the goods on board a vessel. For example: FOB Port name.
This is sometimes not possible for exporters who ship goods in containers because containers are usually first sent to a terminal or loaded at a NVOCC’s warehouse before being loaded onto the vessel.
Risk of loss of and damage to the goods is the exporter’s responsibility up to when the goods are on board the vessel.
FOB is good to use for bulk cargo.
The point of delivery here is the named port.
Usually the exporter hands over a loaded, ready-to-ship container to the carrier at a warehouse or terminal (named place) before being loaded onto the vessel. This then cannot be an appropriate FOB transaction which states Free On Board. In the case of container shipments, it is advisable to use FCA.

10.
CFR
Cost And Freight (named port of destination)

Exporter delivers the goods on board a vessel and pays the costs and freight necessary to bring the goods to the named port of destination. For example: CFR Port name.
The point of delivery here is when the goods are on board the vessel at the shipment port.
Therefore, the exporter’s obligation for loss or damage to the goods is to this point of delivery. It is not up to the port of destination.
Here, the risk passes at the port of shipment even though the freight costs have been paid up to the port of destination. Point to bear in mind is that with CFR terms the destination port is known but not necessarily the origin port. It is entirely likely that the exporter may opt to ship from different ports each time. In all cases, risk passes to the importer at the port of shipment.
Similarly as with FOB, CFR cannot be an appropriate term to use for container shipments because containers are handed over to the carrier at a warehouse or terminal (named place) before being loaded onto the vessel. In this case, it is advisable to use CPT.

11.
CIF
Cost, Insurance and Freight (named port of destination)

Exporter delivers the goods on board a vessel and pays the costs and freight necessary to bring the goods to the named port of destination as well as covers insurance for risk of loss of or damage to the goods during carriage. For example: CIF Port name.
The point of delivery here is when the goods are on board the vessel at the shipment port.
The exporter’s obligation for loss or damage to the goods is to this point and not up to the port of destination.
The two critical points of when the risk passes from the exporter and the incurred costs are the same as in CFR.
Similarly, too, because of container shipments which are handed over to the carrier before being loaded onto the vessel, CIF is not an appropriate term to use. In this case, it is advisable to use CIP.

Meeting to Discuss Harmonizing Trade Compliance Best Practices, Standards, Benchmarking and Related Education & Training…

2010-10-08T15:47:00.000-07:00

On Wednesday, October 27th, seasoned trade compliance professionals are getting together in Washington DC for an “Exploratory Discussion on Trade Compliance Standards.” The session is hosted by the law firm of Baker & McKenzie LLP in cooperation with The Export Practitioner, University of Georgia and National Foreign Trade Council, Inc.

The purpose of the meeting is to discuss consistency and harmonization of best practices, benchmarking and trade compliance standards including related education, training and certification issues. Initial focus is on exports, but international trade is the overarching subject.

The August article in The Export Practitioner “Certificate vs. Certification: Buyer Beware!” energized and educated the constituency, generated a great deal of lively as well as informative discussion and received significant attention from a wide-range of practitioners and vendors alike. That and ongoing inconsistencies in best practices and a lack of consistent standards prompted this meeting.

Already invited representatives from industry, academia, the research & development community, consulting and law firms along with ICPA and District Export Council members and others from the public and private sectors will consider past history, present concerns, address specific actions and the way ahead.

Participants see this as a timely and unique opportunity to make a significant difference and move trade compliance best practices, harmonization, benchmarking and universal standards forward with greater clarity, depth and fidelity than ever before. Hopefully, fundamental export control reform will be a catalyst for significant progress in this arena. Unfortunately much of what needs to be done is long overdue.

November 8th and 10th Workshops on “Challenges Facing Empowered Officials (EOs) and Trade Compliance Professionals”

2010-09-23T12:14:00.001-07:00

There are two upcoming, unique, low cost, high-quality workshops in Southern California focused on individual and organizational exposure, liability and risk and key regulatory requirements, difficult problems and potentially devastating consequences that can have lasting dramatic impact.

These workshops are a MUST ATTEND if you are in any way involved in international trade compliance and want to be better prepared for a wide-range of possibilities. In particular, if you are an EO, responsible authority or trade compliance practitioner at any level, you do not want to miss this timely opportunity for hands-on, practical application case study-based education and training.

The programs also include first come/first served no-cost one-hour afternoon sessions to discuss your issues of interest with presenters.

For more details and online registration including an ICPA member discount go to:
LA: http://www.buyusa.gov/pacificsouth/compliance.html
San Diego: http://www.regonline.com/trade_compliance_workshop

One page flyers for both events are also available on my LinkedIn profile in the “View Full Profile” mode at http://www.linkedin.com/in/johnpriecko/.

If you have questions you are also welcome to contact me directly at 703-895-1110 or jpriecko@comcast.net

Overview and One-Page Summary of the State Department’s Settlement with Xe Services LLC

2010-09-15T07:11:00.000-07:00

As anticipated, following the State Department's Directorate of Defense Trade Controls (DDTC) settlement with AAR International, Inc. (AAR) in mid-July, DDTC settled about a month later with Xe Services LLC (Formerly Blackwater Worldwide), the seller and party responsible for the alleged violations of Presidential Airways, Inc, and numerous other alleged violations. Xe sold Presidential Airways, Inc. to AAR in April 2010 for $200 million.

A one-page summary of the Xe Services LLC Proposed Charging Letter, Consent Agreement and Order that addresses the 288 alleged violations of the Arms Export Control Act and International Traffic in Arms Regulations (ITAR) is available at
http://www.scribd.com/Xe-Services-081810-Settlement-Summary-090610/d/37482307. It consolidates 67 pages of material into a concise and consistent format that’s particularly useful for C-level executives and trade compliance professional’s education/training at all levels.

A unique aspect of the case is that while many of the alleged violations described were clearly knowing and willful, there’s no mention of that anywhere in the settlement documents. In fact, the words “knowing” and/or “willful” are nowhere to be found. That’s interesting in many respects including prior settlement precedents where there were knowing and willful violations and the State Department went out of their way to emphasize the ITAR Parts 127.1(d) and 127.3 violations.

Additionally, it’s interesting to note that Erik Prince, Blackwater’s founder and owner, has moved to Abu Dhabi and has the company up for sale. In closely reading the complete settlement summary and based on other research, it’s clear Blackwater had extensive, ongoing, serious and systemic compliance problems. The nature, multitude and significance of the repeated failures to comply reflect a culture of non-compliance from the top down.

In that regard, in April 2010, the Department of Justice indicted 5 senior Blackwater employees for conspiring to violate federal statutes, filing false forms, unlawful possession of automatic weapons, unregistered firearms and obstruction of justice. Sources indicate enforcement and other related actions continue.

If you are a trade compliance professional, you are encouraged to read the entire Xe Services LLC settlement package. It provides a wealth of valuable information. Monitoring various U.S. Government enforcement and compliance resources should be an integral part of any trade compliance professional’s reading and an essential element in any comprehensive Trade Compliance Program. One-page summaries like these help get the word out in a bite-size way and allow readers to quickly digest and compare individual cases.

*Mr. Priecko is the President and Managing Partner of Trade Compliance Solutions, a network of experienced compliance-related professionals. He is a trade compliance veteran with more than 15 years of experience. He can be reached at 703-895-1110 or jpriecko@comcast.net.

The BIG News at Last Week's 2010 Update Conference on Export Controls and Policy Was Not President Obama’s Comments

2010-09-10T07:16:00.001-07:00

Although it was precedent setting and reassuring to hear the President of the United States talk about and avidly support needed and long overdue export control reforms and use a variety of terms known to trade and export control practitioners (i.e. control lists, jurisdiction, licensing policies, transparency…), the news with immediate and significant impact that you may have missed is the pronounced shift in enforcement to focus on individual accountability.

Note, Under Secretary for Industry and Security Eric Hirschhorn’s opening remarks: ”But--and this is an important but--we are planning increased efforts against individuals who flout the rules and against companies whose inadequate internal compliance programs tell us that they are indifferent to whether they follow the rules.”

And Assistant Secretary for Export Enforcement David Mills’ expanding comments: “But, we will also be taking a harder line in other circumstances involving willful misconduct. While we have typically sought penalties against companies more so than individual employees, as Under Secretary Hirschhorn pointed out yesterday, this is about to change. Going forward, when a violation is a deliberate action of an individual, we will consider seeking penalties against that individual - including the denial of export privileges, fines and imprisonment. The same will hold true for a supervisor who is complicit in these deliberate violations by subordinates.”

The Commerce Department case against Carol Wilkins at RF Micro Devices may have been an early indicator of this direction. Stay tuned here on upcoming settlements and investigations across the US Government to see how this plays out and whether it is a much more extensive initiative. In light of the overall enforcement direction in conjunction with export control reform, I would not be surprised. For example, let’s watch what happens to the 5 indicted senior managers at Blackwater who are on the block at the Department of Justice for knowing and willful violations?

In balance, it appears that accountability and responsibility will now more equitably fall on both the organization and individual. Will that combination have a greater impact on compliance and send a clearer message about corporate and individual exposure, liability, risk and the consequences of intentional wrongdoing? Will it also be a much more effective deterrent?

As food for thought: What impact will this change have on you, your trade compliance team, senior management, engineers, marketing/business develop types and others in your organization? What action will you take to ensure this message gets out?

*Mr. Priecko is the President and Managing Partner of Trade Compliance Solutions, a network of experienced compliance-related professionals. He is a trade compliance veteran with more than 15 years of experience. He can be reached at 703-895-1110 or jpriecko@comcast.net.

CBP Import Compliance Statistics

2010-09-06T20:56:00.000-07:00

Despite the vast quantity of trade information we see every day, we rarely find information about what is happening to the import community as a whole; however, CBP recently released statistical highlights Mid-Fiscal Year 2010 (and 2009). Most interesting is the enforcement data provided below:

During the first six months of fiscal year 2009, U.S. imports rapidly declined, however, seasonal patterns resumed by mid-year 2010, resulting in a moderate recovery.
Imports are now at levels last seen in fiscal year 2006. Continued stability and modest growth are projected for fiscal year 2010.
In fiscal year 2009, the total value of imports processed by U.S. Customs and Border Protection was slightly more than $1.7 trillion, a 25 percent decrease from the previous year. By year end 2010, however, it is projected that the value of imports will increase 6 percent, totaling $1.8 trillion.
During the first six months of fiscal year 2010, CBP collected $15 billion in revenue. It is projected that $31 billion will be collected by year end.
Consistent with recent years, only 29 percent of imported goods were dutiable. The remaining goods were duty free or free under tariff preference programs. (About 49% are unconditionally duty free and 22% are unconditionally duty free.)
A total of $130 million in antidumping/countervailing duties were collected during the first half of fiscal year 2010, down slightly from the same period last year.
After the Revenue Gap (projected vs. collected) declined for five consecutive years, preliminary measurements indicate that the level of uncollected duties rose to 1.4 percent, which is roughly equivalent to levels reported in fiscal year 2007.
Based on a random sampling, 98.6 percent of the fiscal year 2010 imports were materially compliant with all U.S. trade laws and regulations. This compliance rate is slightly higher than recent years (This means that 2.4% of all import transactions are non-compliant.)
Entry volume at the mid-point of fiscal year 2010 is 13 million. By year end, 27 million entries are expected, an increase of 5 percent from fiscal year 2009.
China surpassed Canada as the United States’ top source of imports in fiscal year 2009, and is projected to maintain its lead through fiscal year 2011.
In 2009 the global downturn was evident by the decline of commercial imports. The preliminary total for year end import value was at $1.7 trillion, a decline of 25 percent or $600 billion from the all time high of $2.3 trillion in FY 2008. Preliminary data for other key indicators were also lower, including revenue collections, down by 15 percent, and entries filed, were down 15 percent. At the close of FY09 most indicators show that imports stabilized to levels seen in FY05.

Commercial trade enforcement actions

Through the end of FY09, CBP initiated more than 18,000 trade enforcement seizures valued at more than $300 million, which is comparable to FY08 enforcement levels. These include violations of intellectual property rights (IPR) having a preliminary count of 14,841 seizures with a total domestic value of $260.7 million.
Textile quota seizures declined this year with a change in the laws eliminating quotas from China, however, import safety related seizures maintained FY08 levels at about 2,600 total seizures.
Through the end of FY09, CBP initiated 488 commercial fraud penalties, compared to 453 in FY08, assessed at $98 million. Audits continue to be an effective tool for CBP in addressing larger importers beyond transaction by transaction reviews, with 345 completed audits, and collections of $24.9 million in revenue.
CBP trade efforts strike a balance between facilitation and trade enforcement. Compliance levels in FY08 and preliminary levels for FY09 are at 98.6 percent and 98.5 percent respectively. This provides CBP with a measure of confidence that most imports into the U.S. are materially compliant for trade purposes, and provides a basis for partnership programs such as Importer Self-Assessment (ISA). ISA members are vetted carefully, and are considered to be among the most highly compliant importers, and are accorded benefits such as an increased level of cargo facilitation. The ISA program has grown by more than 10 percent this year, to 194 importers.
The number of seizures for intellectual property rights (IPR) violations declined by one percent from 14,992 in FY08 to 14, 841 in FY09. The domestic value of goods seized decreased by four percent to $260.7 million from $272.7 million. China continued to be the top trading partner for IPR seizures in FY09 with a domestic value of $204.7 million, accounting for 79 percent of the total value seized. Footwear was the top commodity seized in FY09 with a domestic value of $99.7 million, which accounted for 38 percent of the entire value of infringing goods. The category of jewelry appeared on the top commodities list for the first time, accounting for 4 percent of the total value of IPR seizures by domestic value.
Regulatory Audit completed 345 audits of importers and other parties involved in the process of importing goods in FY 2009 and had another 233 audits in progress. Regulatory Audit identified approximately $61.8 million in recommended recoveries, including user fees, and collected about $26.5 million in revenue.

For more information, charts and tables, go to: http://www.cbp.gov/linkhandler/cgov/trade/trade_programs/trade_trends/itt.ctt/itt.pdf

FDA NEEDLESSLY HOSTILE??

2010-08-27T04:09:00.000-07:00

Sent in by Mark FeDuke
I know the subject line is very provocative but it is a sign of my frustration.
I don't know if it is due to a lack of resources, the agency's management culture or the on again / off again waiting for passage of pending food safety legislation but we increasingly find it challenging to deal with the FDA and I'm curious if others in the food import biz feel the same way.

We may not be perfect but we do take pride in being a responsible importer. We joined C-TPAT the second we heard about it. We piloted ISF before it became ISF and on a personal note I joined the Nexus program the second I heard about it...merrily giving my finger prints and retina scan to CBP/FBI. I know the civil libertarians would say I've given up part of my soul but I'm all about compliance. I can't count how many times I've heard Richard DiNucci comment at webinars, conferences etc on how CBP will handle ISF issues. Folks who have a hiccup but who've been submitting ISFs will be handled on a case by case basis and the fact that they've had a good compliance history will be taken into account if there's an issue while folks who haven't been filling.....well, the fact that you haven't been filling ( and ergo not following through on your compliance ) the fact that you haven't been filing will be held against you. As a responsible importer Mr. DiNucci's comments have been music to my ears.....a regulator who will reward and work with responsible companies while throwing the book at folks who don't seem to care about compliance. The fact that Director Skinner is in DHS' Partnership Programs division speaks volumes about how CBP views industry.

As for the FDA....well they do have PREDICT based in part on MIDs which we all know is a rock solid problem free issue ( yeah...right).

We aren't perfect and with volume comes the increased chance for hiccups. With CBP our experience has been very positive. By contrast our experience with the FDA has been quite frustrating, especially because of inconsistencies from district to district. Some districts go out of their way to work with and educate importers/brokers....districts where, as long as you show good faith in compliance, you can expect to be treated fairly and even benefit from having the chance to dialogue with the agency. Other districts seem to operate on a shoot first ask questions later philosophy regardless of your approach to compliance. I've reached out to compliance officers listed on NOAs only to get a reply from some underling advising that he was doing me a favor 'cause the officer listed on the NOA really doesn't like talking to importers and if I called her again I might tick her off....or...after days of waiting replies are made by compliance offices who seem to be of the opinion that the fact that an NOA has been issued must indicate that you are bad guy and you must be up to no good.

In a post 9/11 world where CBP realized it can't inspect its way to security but needs by in from trade through meaningful partnership programs and a philosophy of working with compliant stakeholders....is it really too much to expect the same from the FDA?

“Certificate vs. Certification: Buyer Beware!” in the August 2010 edition of The Export Practitioner--Available online and in print.

2010-08-24T11:14:00.001-07:00

Due diligence is crucial in every facet of trade compliance including outsourcing education and training. Be especially aware of programs in this arena that inflate, mislead or misrepresent. They are out there and in growing numbers. This practical application approach arms you with essential information so you know what Red Flags to look out for, what questions to ask and thus better understand exactly what you are getting and what you are not.

To access this timely article via the Internet, go to http://www.exportprac.com. Usually a subscription is required to read the article, but you can get a one-day free pass to check it out for yourself. If you prefer, you can receive a free copy and a two-month trial subscription at no cost or obligation. For that or other questions, call 202-463-1250, Extension 193.

Once you read it we want to know what you think. We have documented a variety of stories from counterparts who have been burned here. Have you? Many practitioners are upset to learn that what was sold to them as a certification program is nothing more than an expensive certificate of training using a self-proclaimed standard without any external, independent, unbiased validation.

What’s your experience? What should be done? Are you interested and willing to help lay groundwork for truly independent and unbiased validation of such programs and setting consistent and harmonized trade compliance standards to get everyone on the same sheet of music? If so, add to this discussion and/or send an email to John Priecko at jpriecko@comcast.net. We welcome your input....

New HTS changes for 2012 announced by WCO

2010-07-19T10:49:00.000-07:00

Every five years, the World Customs Organization (WCO) revises the Harmonized System, the last one, as you all know took effect on January 1, 2007. Well, be prepared for the next update which CBP probably will announce after they get the correlation tables ready perhaps later this year.

Below you will find the link to the WCO-published HS amendments to enable an early start for all you importers and compliance folks out there.

You will surely notice the extensive revision in Chapter 3 and the detailed identification of various species of fish. One could assume this is necessary for accurate capture of trade data to help in formulating future environment policies because of continued and excessive fishing. In addition, illegal logging and the Lacey Act could have been better assisted with more scrutinized modifications in Chapter 44 and 48, wood and paper, respectively, rather than some skimpy description revisions.

Amusingly a new subheading note to Chapter 24 reveals for the first time ever, "water-pipe tobacco" and world customs' classy description of its embellished form that is smoked in great volumes in hookah bars of Adams Morgan-DC, Sunset Boulevard-West Hollywood and in almost every hip gathering hole in most U.S. cities every evening. Smiles are brought to the fore while reading, "containing aromatic oils and extracts, molasses or sugar, and whether or not flavored with fruit" hiding a vision of mysterious locales in the far corners of Morocco, India, Egypt, Syria and other exotic places. But surely, hookah bars mushroomed way before 2007, WCO's last HS revision. No one smoked hookah in Brussels at that time, we presume!

Watch for other changes in Chapters 29 and 30 for chemicals and pharmaceuticals in which new sub headings have been created for substances controlled under international conventions such as the Rotterdam Convention that monitors the international trade in hazardous chemicals and the Montreal Protocol, an international agreement designed to protect the earth's ozone layer by stipulating the phase-out of the production and consumption of depleting compounds.

Major revisions are not evident in Chapters 84 and 85 that was seen in 2007. However, it is pleasing to note the creations of new sub-headings 8507.50 for Nickel-metal hydride
and 8507.60 for Lithium-ion batteries. With the profusion of hand-held electronic devices, these categories are welcome additions.

But what of other products that are of so much concern to the world these days. Should not environment-enhancing goods be separately identified to promote duty-free trade in them? How about addressing nuclear proliferation by extricating each description of all the major components of such a weapon and putting it in its respective HS chapter? Going into details of munitions, for example, take cannon ammunition that is 20 mm to 57 mm which is presently lumped under 9306.30 that also contains cartridges for rifles and pistols. Is not the international trade in small weapons and their ammunition of concern to border security agencies the world over, especially in the trouble spots we read about daily? New, unique HS sub-headings for such products would provide for accurate data acquisition and steer global policy for a much safer and cleaner world.

The Harmonized System Nomenclature to enter into force on 1 January 2012 is published on WCO's Public Web Site: http://www.wcoomd.org/files/1.%20Public%20files/PDFandDocuments/HarmonizedSystem/HS%20Overview/HS2012E.pdf

The WCO web site is http://www.wcoomd.org/

Do AES Corrections make sense?

2010-06-24T08:02:00.000-07:00

Submitted by an ICPA member

In a recent response to an inquiry regarding AES horror stories, there was mention of routing changes by couriers due to the volcanic disturbances over the North Atlantic which caused the port of export to change. It was mentioned that if this detail was not corrected, the > filer would be subject to a hefty penalty. We understand that AES filings serve two major purposes - [1] providing > statistical data on value, reporting units per HTS [Sch B] to which foreign destinations and [2] advising where the shipment is located so an inspection could be made, if desired. We file our own AES - [99.75% accuracy over 5 years vs. 1.3% accuracy when we did not file our own] Our freight forwarder automatically emails "confirmed on board" notices for air and ocean shipments. The couriers do not. Any last minute change in the port of export does not affect the "balance of payments" data that is being collected. Is it really necessary to submit a change in the port of export - after the goods have been exported? What purpose does it serve? With over a thousand courier exports per month, this would be a monumental task to track each shipment to verify the flow from shipping point to final departure from the US. Our inquiries to Census have resulted in "accurate data is required". Does that mean a change in weight from 12,500 kgs to 12,499 kgs should be corrected? A reported departure of Friday, was actually exported on Saturday. Does that need to be corrected? Some of these variances do not seem to be significant. Having to hire additional staff just to revise these minor changes would not be acceptable. The result would be a decrease in the number of exports as we find them to be too costly to monitor. I thought our government wanted to promote exports. We have cleaned up the accuracy of data submission over the last several years, but do not think it is fair to the exporting community to become mired down in insignificant adjustments. Our audits of Routed Transactions indicate that most of them reflect shipping data far different from what we provided. This is not easily auditable by the government [that is why the values, classifications, etc are changed]. We cannot believe that so much "garbage" is accepted and then penalties will be issued for a change in departure airports!

Phoenix 2011!

2010-06-22T09:11:00.001-07:00

It is not too soon to start thinking about the 2011 ICPA conference in Phoenix.

One of the features of the conference will be the workshops on the last day. The ICPA conference already has a reputation for being a "hands-on" type event. The workshops will be the epitome (is that a good word?) of this. John Priecko and I were asked to do the planning for the workshops. There will be both export and import sessions. We are already finalizing the subjects and beginning to identify potential speakers. Stay tuned to the ICPA site for news on the conference and plan to be in sunny Phoenix next March. Be sure to include the workshops in your plans!

Welcome!

2010-06-03T10:17:00.000-07:00

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