If you’ve taken the customs broker exam and missed a passing score by a couple of questions, it’s likely that you filed an appeal with CBP. Good for you! It never hurts to appeal several questions if you only missed it by a few. The next dilemma rears its ugly head if the appeal is denied. First, your appeal may not be resolved prior to the next exam date. Do you gamble and not sign up for the exam? If you don’t sign up and the appeal is denied, you won’t be able to take the exam for another 6 months, which means it will have been a year since your first attempt. However, if you sign up for the exam and end up receiving approval and a passing grade on the appeal, then you may have spent $200 that is not refundable unless you are able to notify CBP of your intentions not to take the exam within two business days prior to the exam date.
Let’s say you don’t sign up for the exam and your appeal ends up being denied. What next? If you want CBP’s decision reviewed, then you may request the review by submitting a request to the Assistant Commissioner, Office of International Trade, U.S. Customs and Border Protection within 60 calendar days of the notice of CBP’s decision. Depending on the number of questions you appealed, this might be a good option; however, you are now coming up on the one-year anniversary of your exam. Do you apply to take this exam or do you wait, hoping that the Commissioner will reverse the decision on the initial appeal? The gamble gets a little riskier since it has now been almost a full year since you first took the exam and you might have passed up two opportunities to take and pass it. Consider the options! Pay $200 and take the test or wait on the results from your request for review by CBP? Now, let’s assume that you were confident that CBP would approve the appeal and didn’t sign up for the exam, but the Commissioner affirmed the initial decision. You still have options. You could file an appeal to the Court of International Trade. Understand that it has been a year since you first took the exam and you have passed up two opportunities to re-take it. While you are filing the lawsuit and waiting to be heard by the CIT, the third exam comes up. Do you take it? While you are still waiting for the CIT to hear your case, a fourth exam comes along. Finally, the CIT hears your case and affirms the reviews by CBP. Game over; you did not pass the exam. If you want a customs broker license, you must take the exam again. The next exam is just a few months away. Because of the length of time it takes to complete this process from the first appeal to CBP to the hearing by the CIT, you have waited almost 2 ½ years to take the exam since you first took the exam How much has this process cost you in time and money? Click HERE to read the real life example of Depersia v. United States, a case decided on August 11, 2009.
Filing an appeal is a great idea. Make strong arguments supported by as many facts and examples as possible. However, seriously consider the consequences of not taking the exam if you do not receive a favorable appeal and decide to pursue the review. It might cost less in time and money to retake the exam and you might get your license faster!
To view other decisions decided by the CIT related to CBP’s denial of an appeal, click on the following case name. Only one of the following cases was decided in favor of the individual plaintiff.
Kenny v. United States
Dunn-Heiser v. United States
Harak v. United States
O’Quinn v. United States
Thursday, May 27, 2010
Tuesday, May 25, 2010
Free Trade Tuesday - NAFTA
Welcome to Free Trade Tuesday! This week we are discussing the North American Free Trade Agreement.
The North American Free Trade Agreement (NAFTA) was implemented in 1994 between Canada, Mexico and the U.S. to reduce and eliminate duties, remove barriers to trade and facilitate cross border movement of goods and services between the territories. Goods eligible under NAFTA for duty-free or reduced-duty status are designated by a "CA" or "MX" in the "Special" sub-column of the HTSUS. No other Free Trade Act has had a greater impact on U.S. trade than NAFTA. Many of the subsequent FTA's are modeled after NAFTA.
Preferential NAFTA treatment will only be afforded to goods that “originate” in a NAFTA country as that term is defined in NAFTA. A product will be considered to be originating and eligible for NAFTA treatment if:
· It is wholly obtained or produced in a NAFTA country.
· Its raw materials or components undergo a qualifying change in tariff classification and/or satisfy any regional value content requirement in a NAFTA country.
· It is produced wholly of originating materials in a NAFTA territory.
· The goods are unassembled, or goods classified with their parts, which do not meet the Annex 401 rule of origin, but contain 60% regional value content using the transaction value method or 50% using the net cost method.
To make a claim for NAFTA preferential tariff treatment, the importer must be in possession of a valid NAFTA certificate of origin. However, the importer has a right to make a post importation claim to obtain a refund of duties when imported merchandise would have qualified as originating when it was imported, but no claim for preferential tariff treatment was made at the time. The importer may file a claim for a refund of any excess duties at any time within one year after the date of importation of the goods. See 19 CFR 181 for information concerning NAFTA Certificates of Origin, drawback and more!
NAFTA - Key Facts
Expiration: None
HTS General Note: GN 12
Imported Directly: Yes - unloading/reloading in third countries allowed. No additional production allowed.
SPI: CA, MX
De Minimis:
7% - Non Textiles (Value)
7% - Textiles (Weight)
Some Exceptions
Origin Criteria
Tariff Shift
RVC
Accumulation
MPF: Originating goods exempt
Regulations: 19 CFR 181
Join us again next Tuesday when we continue our discussion of NAFTA.
The North American Free Trade Agreement (NAFTA) was implemented in 1994 between Canada, Mexico and the U.S. to reduce and eliminate duties, remove barriers to trade and facilitate cross border movement of goods and services between the territories. Goods eligible under NAFTA for duty-free or reduced-duty status are designated by a "CA" or "MX" in the "Special" sub-column of the HTSUS. No other Free Trade Act has had a greater impact on U.S. trade than NAFTA. Many of the subsequent FTA's are modeled after NAFTA.
Preferential NAFTA treatment will only be afforded to goods that “originate” in a NAFTA country as that term is defined in NAFTA. A product will be considered to be originating and eligible for NAFTA treatment if:
· It is wholly obtained or produced in a NAFTA country.
· Its raw materials or components undergo a qualifying change in tariff classification and/or satisfy any regional value content requirement in a NAFTA country.
· It is produced wholly of originating materials in a NAFTA territory.
· The goods are unassembled, or goods classified with their parts, which do not meet the Annex 401 rule of origin, but contain 60% regional value content using the transaction value method or 50% using the net cost method.
To make a claim for NAFTA preferential tariff treatment, the importer must be in possession of a valid NAFTA certificate of origin. However, the importer has a right to make a post importation claim to obtain a refund of duties when imported merchandise would have qualified as originating when it was imported, but no claim for preferential tariff treatment was made at the time. The importer may file a claim for a refund of any excess duties at any time within one year after the date of importation of the goods. See 19 CFR 181 for information concerning NAFTA Certificates of Origin, drawback and more!
NAFTA - Key Facts
Expiration: None
HTS General Note: GN 12
Imported Directly: Yes - unloading/reloading in third countries allowed. No additional production allowed.
SPI: CA, MX
De Minimis:
7% - Non Textiles (Value)
7% - Textiles (Weight)
Some Exceptions
Origin Criteria
Tariff Shift
RVC
Accumulation
MPF: Originating goods exempt
Regulations: 19 CFR 181
Join us again next Tuesday when we continue our discussion of NAFTA.
Monday, May 24, 2010
What Does Change in Security Strategy Mean for the Trade?
As President Obama addressed the graduating class at West Point on Saturday, he provided a glimpse of his new plan for security. The media indicates that Obama’s plan seeks security through international alliances, which is a change from the unilateral approach of Bush presidency.
The official national security strategy is scheduled to be released this week and is rumored to include four main principles:
(1) to build strength abroad by building strength at home through education, clean energy and innovation;
(2) to promote renewed engagement of our diplomats and support international development;
(3) to rebuild alliances; and
(4) to promote human rights and democracy abroad.
Although the United States was involved in trying to bring other countries on board by working with the WCO on the AEO Guidelines and Safe Framework of Standards, it appears that the U.S. will do more to reach out to other countries. The new plan raises some questions. Will other countries return the efforts and support us in our time of need? How is this plan different and what does this mean for the current security programs? Stay tuned to the news this week as the new security plan is announced.
The official national security strategy is scheduled to be released this week and is rumored to include four main principles:
(1) to build strength abroad by building strength at home through education, clean energy and innovation;
(2) to promote renewed engagement of our diplomats and support international development;
(3) to rebuild alliances; and
(4) to promote human rights and democracy abroad.
Although the United States was involved in trying to bring other countries on board by working with the WCO on the AEO Guidelines and Safe Framework of Standards, it appears that the U.S. will do more to reach out to other countries. The new plan raises some questions. Will other countries return the efforts and support us in our time of need? How is this plan different and what does this mean for the current security programs? Stay tuned to the news this week as the new security plan is announced.
Tuesday, May 18, 2010
Free Trade Tuesday - ATPA
Welcome to Free Trade Tuesday! This week we are discussing the Andean Trade Preferences Act.
The original enactment of the ATPA provided free or reduced rates of duty for merchandise imported into the United States from Bolivia, Columbia, Peru and Ecuador. In 2002, the Andean Trade Promotion and Drug Eradication Act (ATPDEA) renewed and amended the ATPA to provide duty-free treatment for certain products previously excluded under the ATPA. Benefits for Bolivia were suspended effective December 15, 2008. The ATPA was intended to stimulate trade between the United States and the designated countries. Origin criteria is determined similar to the rules found in the GSP. The ATPA was originally scheduled for expiration in 2006; however, the current expiration is set for December 31, 2010.
Products that are the growth, product or manufacture of Colombia, Ecuador or Peru are eligible for duty-free treatment if the articles meet the specified eligibility requirements. Eligible articles will be designated by a "J" in the "Special" sub column.
To be eligible, articles must be imported directly from a beneficiary country, and the sum of the cost or value of the material produced in a beneficiary country, or two or more beneficiary countries under the ATPA or CBERA, plus the direct costs of processing operations performed in a beneficiary country or countries, is not less than 35% of the appraised value at the time it is entered. Substantial transformation can confer eligibility for ATPA.
Similar to GSP, there are some articles for which General Note 11 will not be applicable, found in GN 11(d).
ATPA - Key Facts
Expiration: 12/31/2010
HTS General Note: GN 11
Imported Directly: Yes
SPI: J
De Minimis: None
Origin Criteria: 35%, with 15% U.S. Origin Content Allowable
MPF: No exemption
Regulations: 19 CFR 10.201
Join us again next Tuesday when we discuss the North American Free Trade Agreement.
The original enactment of the ATPA provided free or reduced rates of duty for merchandise imported into the United States from Bolivia, Columbia, Peru and Ecuador. In 2002, the Andean Trade Promotion and Drug Eradication Act (ATPDEA) renewed and amended the ATPA to provide duty-free treatment for certain products previously excluded under the ATPA. Benefits for Bolivia were suspended effective December 15, 2008. The ATPA was intended to stimulate trade between the United States and the designated countries. Origin criteria is determined similar to the rules found in the GSP. The ATPA was originally scheduled for expiration in 2006; however, the current expiration is set for December 31, 2010.
Products that are the growth, product or manufacture of Colombia, Ecuador or Peru are eligible for duty-free treatment if the articles meet the specified eligibility requirements. Eligible articles will be designated by a "J" in the "Special" sub column.
To be eligible, articles must be imported directly from a beneficiary country, and the sum of the cost or value of the material produced in a beneficiary country, or two or more beneficiary countries under the ATPA or CBERA, plus the direct costs of processing operations performed in a beneficiary country or countries, is not less than 35% of the appraised value at the time it is entered. Substantial transformation can confer eligibility for ATPA.
Similar to GSP, there are some articles for which General Note 11 will not be applicable, found in GN 11(d).
ATPA - Key Facts
Expiration: 12/31/2010
HTS General Note: GN 11
Imported Directly: Yes
SPI: J
De Minimis: None
Origin Criteria: 35%, with 15% U.S. Origin Content Allowable
MPF: No exemption
Regulations: 19 CFR 10.201
Join us again next Tuesday when we discuss the North American Free Trade Agreement.
Friday, May 14, 2010
More Commissioner Controversy
Appointed by the President of the United States, the Commissioner of Customs and Border Protection is a government official responsible for the overall management of U.S. Customs and Border Protection. The Commissioner is charged with the enforcement of all rules and regulations, and for setting internal procedures, consistent with the regulations, for the CBP staff.
Alan Bersin was appointed as the interim Commissioner by President Obama on March 27, 2010. At his confirmation hearing on Thursday, members of the Senate Finance Committee questioned Commissioner Bersin concerning his failure to file I-9 forms for certain household employees for 20 years. The I-9 is the document used to verify employees have the proper documentation to work in the United States. Committee Chairman Max Baucus, stated that “as the person responsible for securing our nation’s borders, your failure to follow the law is unacceptable.” In addition to the I-9 violations, Bersin may be receiving extra scrutiny because the committee disliked the fact that Bersin and others were appointed prior to the completion of the vetting process.
Take our poll! Should Alan Bersin be confirmed at the Commissioner of Customs?
Alan Bersin was appointed as the interim Commissioner by President Obama on March 27, 2010. At his confirmation hearing on Thursday, members of the Senate Finance Committee questioned Commissioner Bersin concerning his failure to file I-9 forms for certain household employees for 20 years. The I-9 is the document used to verify employees have the proper documentation to work in the United States. Committee Chairman Max Baucus, stated that “as the person responsible for securing our nation’s borders, your failure to follow the law is unacceptable.” In addition to the I-9 violations, Bersin may be receiving extra scrutiny because the committee disliked the fact that Bersin and others were appointed prior to the completion of the vetting process.
Take our poll! Should Alan Bersin be confirmed at the Commissioner of Customs?
Wednesday, May 12, 2010
Would A $5 Million Penalty Get Your Attention?
Export penalties usually receive more publicity than import violations. Therefore, when we read about an import penalty, it must be a big one! Obviously, a $5 million violation for an importer is big enough news to warrant a prominent place on the CBP web site and several newspapers and online publications. To make a long story short, Pep Boys, a large automotive aftermarket retailer, imported over 200,000 vehicles and engines from China that did not meet U.S. emission standards under the Clean Air Act.
Other than the hefty price tag of $5 million in civil penalties, let’s examine some of the reasons why this story is newsworthy.
(1) Importers Receive Penalties
This case serves as a reminder to importers that they can receive penalties too! The EPA, CBP and the Department of Justice claim that the Pep Boys penalty is the largest importation case in Clean Air Act history.
(2) Large Importers Are Not Exempt
With over 580 stores in 35 states, Pep Boys is a large importer of automotive aftermarket parts and government employees like to go shopping too! We don’t know how this case was initiated, but let’s be honest, we think about importing and exporting when we go shopping. Come on, don’t deny that you flip over products to see where they are made. Have you ever gone into a store that sold textile samples and wondered how they could sell the clothing that had small rips or contained “sample” stamped on them? The EPA said its inspectors and CBP officers “discovered the violations through inspections conducted at Pep Boys stores, at U.S. ports, and through a review of importation documents” provided to the EPA by the company.
(3) CBP Isn’t the Only Agency Importers Need to Worry About
Classifying everything correctly, using the proper origin marking and declaring the correct value makes CBP happy, but it doesn’t mean that the importer is off the hook. Importers should take note that CBP is the gatekeeper for dozens of government agencies; however, most importers are primarily concerned with fewer than ten of those agencies. In this case, the importer was required to ensure that the imported engines and vehicles complied with the same EPA Clean Air Act requirements that applied to domestic products.
Learn from the lessons of your fellow importers! Review your products for compliance with other government agency requirements. Save your organization from the potential fines, penalties and publicity that result from a violation of CBP laws as well as those of other government agencies. Not sure if your products are subject to other agency regulation? Check with your broker, attorney or other trade compliance consultant. If in doubt, contact the government agency you suspect may regulate your product.
Click HERE to read the Settlement Summary.
Click HERE to read the Consent Decree.
Other than the hefty price tag of $5 million in civil penalties, let’s examine some of the reasons why this story is newsworthy.
(1) Importers Receive Penalties
This case serves as a reminder to importers that they can receive penalties too! The EPA, CBP and the Department of Justice claim that the Pep Boys penalty is the largest importation case in Clean Air Act history.
(2) Large Importers Are Not Exempt
With over 580 stores in 35 states, Pep Boys is a large importer of automotive aftermarket parts and government employees like to go shopping too! We don’t know how this case was initiated, but let’s be honest, we think about importing and exporting when we go shopping. Come on, don’t deny that you flip over products to see where they are made. Have you ever gone into a store that sold textile samples and wondered how they could sell the clothing that had small rips or contained “sample” stamped on them? The EPA said its inspectors and CBP officers “discovered the violations through inspections conducted at Pep Boys stores, at U.S. ports, and through a review of importation documents” provided to the EPA by the company.
(3) CBP Isn’t the Only Agency Importers Need to Worry About
Classifying everything correctly, using the proper origin marking and declaring the correct value makes CBP happy, but it doesn’t mean that the importer is off the hook. Importers should take note that CBP is the gatekeeper for dozens of government agencies; however, most importers are primarily concerned with fewer than ten of those agencies. In this case, the importer was required to ensure that the imported engines and vehicles complied with the same EPA Clean Air Act requirements that applied to domestic products.
Learn from the lessons of your fellow importers! Review your products for compliance with other government agency requirements. Save your organization from the potential fines, penalties and publicity that result from a violation of CBP laws as well as those of other government agencies. Not sure if your products are subject to other agency regulation? Check with your broker, attorney or other trade compliance consultant. If in doubt, contact the government agency you suspect may regulate your product.
Click HERE to read the Settlement Summary.
Click HERE to read the Consent Decree.
Tuesday, May 11, 2010
Free Trade Tuesday - IFTA
Welcome to Free Trade Tuesday! This week we are discussing the Israel Free Trade Area Implementation Act
Implemented in 1985, IFTA provides free or reduced rates of duty for merchandise imported into the United States from Israel. The IFTA is intended to stimulate trade between the United States and Israel. Origin criteria is determined similar to the rules found in the GSP. IFTA has no termination date and duties for eligible products were completely phased out in 1995.
If a tariff number is eligible for IFTA, the symbol "IL" appears in the "Special" sub-column.
In order to qualify for special treatment under ITFA, the merchandise must be imported directly from Israel. Imported directly means that the goods were shipped from Israel to the U.S. without passing through the territory of any other country. However, goods may transit through another country without losing eligibility so long as nothing is done to the merchandise other than loading and unloading and the goods do not enter the commerce of the other country.
The sum of the cost of the material produced in Israel plus direct costs of the processing operations performed in the Israel must not be less than 35% of the appraised value of the imported article in order to qualify for benefits. In calculating the 35%, up to 15% of the 35% can be contributed from the United States.
If the article is not wholly from Israel, it may still be eligible if the article is substantially transformed into a different article of commerce.
IFTA - Key Facts
Expiration: None
HTS General Note: GN 8
Imported Directly: Yes
SPI: IL
De Minimis: No
Origin Criteria: 35%, with 15% U.S. Origin Content Allowable, Substantial Transformation
MPF: Exempt for all goods, whether or not originating
Regulations: N/A
In addition to special treatment for duties, the act also includes provisions for intellectual property, agriculture and more. Click HERE for more details on the IFTA and other trade agreements.
Join us again next Tuesday when we discuss the Andean Trade Preferences Act (ATPA).
Implemented in 1985, IFTA provides free or reduced rates of duty for merchandise imported into the United States from Israel. The IFTA is intended to stimulate trade between the United States and Israel. Origin criteria is determined similar to the rules found in the GSP. IFTA has no termination date and duties for eligible products were completely phased out in 1995.
If a tariff number is eligible for IFTA, the symbol "IL" appears in the "Special" sub-column.
In order to qualify for special treatment under ITFA, the merchandise must be imported directly from Israel. Imported directly means that the goods were shipped from Israel to the U.S. without passing through the territory of any other country. However, goods may transit through another country without losing eligibility so long as nothing is done to the merchandise other than loading and unloading and the goods do not enter the commerce of the other country.
The sum of the cost of the material produced in Israel plus direct costs of the processing operations performed in the Israel must not be less than 35% of the appraised value of the imported article in order to qualify for benefits. In calculating the 35%, up to 15% of the 35% can be contributed from the United States.
If the article is not wholly from Israel, it may still be eligible if the article is substantially transformed into a different article of commerce.
IFTA - Key Facts
Expiration: None
HTS General Note: GN 8
Imported Directly: Yes
SPI: IL
De Minimis: No
Origin Criteria: 35%, with 15% U.S. Origin Content Allowable, Substantial Transformation
MPF: Exempt for all goods, whether or not originating
Regulations: N/A
In addition to special treatment for duties, the act also includes provisions for intellectual property, agriculture and more. Click HERE for more details on the IFTA and other trade agreements.
Join us again next Tuesday when we discuss the Andean Trade Preferences Act (ATPA).
Friday, May 7, 2010
Are You Ready?
While Tennessee, Alabama and surrounding states were hit with floods last weekend, the Wizard was attending disaster response training classes in Florida. Everyone knows Florida is a perfect target for hurricanes, but other areas of the country have their share of disaster too. For those of you who think this article does not apply to you, do not dismiss this too soon. Even if you live in one of the very few areas that are not prone to disasters, one of your related businesses could be hit by a storm. Even if your area is usually safe, are your suppliers and customers located in areas prone to flooding, tornadoes, fires, tornadoes and other events? Need a special part for a machine that is down? Tough luck. Your supplier in Arkansas was hit by a tornado. Ready to ship a container of sporting equipment to your customer in Tennessee? Not today. Thanks to the floods, your customer’s store and warehouse were flooded. Think of your business and then think about how your business could be affected by disasters in other areas. Preparing for and surviving a disaster is everyone’s responsibility.
Many organizations implemented “business continuity” plans because of 9/11. After Hurricane Katrina, more organizations implemented some type of disaster response plans. Members of C-TPAT are likely to have some contingency plans. Does your organization have a plan? How will you and your organization respond to a disaster in your community?
Existing Plans
Some businesses already have disaster response plans. That’s great! Is everyone affected by the plan aware of his or her responsibilities and the resources available? Have you practiced your plan? Take time to review, update and practice your plan.
Consider this example from a company with a plan.
Many organizations implemented “business continuity” plans because of 9/11. After Hurricane Katrina, more organizations implemented some type of disaster response plans. Members of C-TPAT are likely to have some contingency plans. Does your organization have a plan? How will you and your organization respond to a disaster in your community?
Existing Plans
Some businesses already have disaster response plans. That’s great! Is everyone affected by the plan aware of his or her responsibilities and the resources available? Have you practiced your plan? Take time to review, update and practice your plan.
Consider this example from a company with a plan.
Anonymous Importers is located in Miami, Florida. The company purchased a $10 million dollar building to use for their headquarters. Hurricane shutters were made for the existing windows. The shutters arrived and were stored in the maintenance area. Late in August, a CAT 3 Hurricane warning was issued for the area, so the maintenance crew started to put up the shutters. Guess what? The shutters didn’t fit the windows. If the organization had practiced their disaster response plan, they would have known the hurricane shutters didn’t fit before the actual hurricane approached.
No Plan
Businesses should be aware of actions they can take to protect their facilities and employees. After taking measures to protect people, one of the primary objectives should be to ensure that the business could continue to function after a disaster has threatened the area. Without a complete plan to protect the business, a quick recovery from a disaster will be difficult. The current state of our economy makes these plans even more important.
To prepare for a potential disaster, organizations should:
· Create a disaster response and recovery plan that includes provisions for the disasters that could be encountered by your company.
· Identify and protect vital records and back up all key data.
· Protect electronic equipment and store back-up files in a safe place.
· Review the company's insurance policy and make sure it provides adequate coverage.
· Have cash and blank checks available in case extra money is needed after the storm.
· Establish a temporary location for business operations in case your facility is damaged.
· Train employees in the entire process, from pre-disaster preparation to post-disaster recovery procedures
Practice the plan.
Trade Compliance
How would disaster affect trade compliance? In the event of a disaster, it is important that international trade compliance departments have procedures in place to minimize loss and to provide for resumption of services as soon as possible. While trade compliance may not be critical to the immediate functions of the company as a whole, prolonged disruption of services could ultimately affect the end user of your products. Additionally, trade compliance is responsible for the safe storage of certain required government documentation. Destruction of this required documentation would require extensive manpower and financial resources to reconstruct. The international trade compliance department should:
· Provide a list of critical functions performed by the department.
· Create storage plans for procedure manuals, compliance records, entry files and other documentation that compliance departments must retain.
· Identify the impact of a disaster to other departments that the group works with.
· Create temporary operating procedures.
· Determine the order/priority of restoration necessary.
· Identify staffing requirements.
· Identify equipment, office supplies and other tools needed to complete work assignments such as the CBP Regulations, HTSUS, EAR, ITAR, file folders, computers, software and miscellaneous supplies.
Do your part to protect your company, your job and yourself in the event of a disaster. For additional information on how to prepare for disasters, please visit the following web sites.
FEMA
State Emergency Management Links
Community Emergency Response Teams (CERT)
National Hurricane Survival Initiative
No Plan
Businesses should be aware of actions they can take to protect their facilities and employees. After taking measures to protect people, one of the primary objectives should be to ensure that the business could continue to function after a disaster has threatened the area. Without a complete plan to protect the business, a quick recovery from a disaster will be difficult. The current state of our economy makes these plans even more important.
To prepare for a potential disaster, organizations should:
· Create a disaster response and recovery plan that includes provisions for the disasters that could be encountered by your company.
· Identify and protect vital records and back up all key data.
· Protect electronic equipment and store back-up files in a safe place.
· Review the company's insurance policy and make sure it provides adequate coverage.
· Have cash and blank checks available in case extra money is needed after the storm.
· Establish a temporary location for business operations in case your facility is damaged.
· Train employees in the entire process, from pre-disaster preparation to post-disaster recovery procedures
Practice the plan.
Trade Compliance
How would disaster affect trade compliance? In the event of a disaster, it is important that international trade compliance departments have procedures in place to minimize loss and to provide for resumption of services as soon as possible. While trade compliance may not be critical to the immediate functions of the company as a whole, prolonged disruption of services could ultimately affect the end user of your products. Additionally, trade compliance is responsible for the safe storage of certain required government documentation. Destruction of this required documentation would require extensive manpower and financial resources to reconstruct. The international trade compliance department should:
· Provide a list of critical functions performed by the department.
· Create storage plans for procedure manuals, compliance records, entry files and other documentation that compliance departments must retain.
· Identify the impact of a disaster to other departments that the group works with.
· Create temporary operating procedures.
· Determine the order/priority of restoration necessary.
· Identify staffing requirements.
· Identify equipment, office supplies and other tools needed to complete work assignments such as the CBP Regulations, HTSUS, EAR, ITAR, file folders, computers, software and miscellaneous supplies.
Do your part to protect your company, your job and yourself in the event of a disaster. For additional information on how to prepare for disasters, please visit the following web sites.
FEMA
State Emergency Management Links
Community Emergency Response Teams (CERT)
National Hurricane Survival Initiative
Tuesday, May 4, 2010
Free Trade Tuesday - CBERA
Welcome to Free Trade Tuesday! This week we are discussing the Caribbean Basin Economic Recovery Act (CBERA).
CBERA was implemented in 1983 to promote economic revitalization in the Caribbean Basin region and encourage countries in the Caribbean to engage in manufacturing operations to produce articles for the U.S. These goods would enter the U.S. market without payment of duty. Like the GSP, CBERA is similar to GSP in that it is a system of duty reduction that gives favorable treatment to a select group of countries. Unlike the GSP, CBERA is a permanent program.
A list of the eligible countries is found in GN 7(a) of the HTSUS. If a tariff number is eligible for CBERA, the symbol "E" appears in the "Special" sub-column.
In order to qualify for special treatment under CBERA, the merchandise must be imported directly from the CBERA country and be wholly the growth, product or manufacture of the CBERA country or two or more beneficiary countries. Imported directly means that the goods were shipped from the beneficiary country to the U.S. without passing through the territory of any other country. However, goods may transit through another country without losing eligibility so long as nothing is done to the merchandise other than loading and unloading and the goods do not enter the commerce of the other country.
The sum of the cost of the material produced in the beneficiary country plus direct costs of the processing operations performed in the country must not be less than 35% of the appraised value of the imported article in order to qualify for benefits. In calculating the 35%, “beneficiary country” also includes Puerto Rico and the U.S. Virgin Islands, as well as any former CBERA country. The former beneficiary countries include El Salvador, Guatemala, Honduras, Nicaragua, Dominican Republic and Costa Rica. Up to 15% of the 35% can be contributed from the United States.
If the article is not wholly from a CBERA country, it may still be eligible if the article is substantially transformed into a different article of commerce.
CBERA - Key Facts
Expiration: None
HTS General Note: GN 7
Imported Directly: Yes
SPI: E
De Minimis: No
Origin Criteria: 35%, with 15% U.S. Origin Content Allowable, Substantial Transformation
MPF: Exempt for all goods, whether or not originating
Countries: Multiple - Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, British Virgin Islands, Dominica, Grenada, Guyana, Jamaica, Montserrat, Netherlands Antilles, Panama, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Trinidad and Tobago.
Regulations: 19 CFR 10.191 – 10.198
Join us again next Tuesday when we discuss the United States-Israel Free Trade Area Agreement (IFTA).
CBERA was implemented in 1983 to promote economic revitalization in the Caribbean Basin region and encourage countries in the Caribbean to engage in manufacturing operations to produce articles for the U.S. These goods would enter the U.S. market without payment of duty. Like the GSP, CBERA is similar to GSP in that it is a system of duty reduction that gives favorable treatment to a select group of countries. Unlike the GSP, CBERA is a permanent program.
A list of the eligible countries is found in GN 7(a) of the HTSUS. If a tariff number is eligible for CBERA, the symbol "E" appears in the "Special" sub-column.
In order to qualify for special treatment under CBERA, the merchandise must be imported directly from the CBERA country and be wholly the growth, product or manufacture of the CBERA country or two or more beneficiary countries. Imported directly means that the goods were shipped from the beneficiary country to the U.S. without passing through the territory of any other country. However, goods may transit through another country without losing eligibility so long as nothing is done to the merchandise other than loading and unloading and the goods do not enter the commerce of the other country.
The sum of the cost of the material produced in the beneficiary country plus direct costs of the processing operations performed in the country must not be less than 35% of the appraised value of the imported article in order to qualify for benefits. In calculating the 35%, “beneficiary country” also includes Puerto Rico and the U.S. Virgin Islands, as well as any former CBERA country. The former beneficiary countries include El Salvador, Guatemala, Honduras, Nicaragua, Dominican Republic and Costa Rica. Up to 15% of the 35% can be contributed from the United States.
If the article is not wholly from a CBERA country, it may still be eligible if the article is substantially transformed into a different article of commerce.
CBERA - Key Facts
Expiration: None
HTS General Note: GN 7
Imported Directly: Yes
SPI: E
De Minimis: No
Origin Criteria: 35%, with 15% U.S. Origin Content Allowable, Substantial Transformation
MPF: Exempt for all goods, whether or not originating
Countries: Multiple - Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, British Virgin Islands, Dominica, Grenada, Guyana, Jamaica, Montserrat, Netherlands Antilles, Panama, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Trinidad and Tobago.
Regulations: 19 CFR 10.191 – 10.198
Join us again next Tuesday when we discuss the United States-Israel Free Trade Area Agreement (IFTA).
Monday, May 3, 2010
April 2010 Exam Pass Rate - 11.1%
Congratulations to all of our readers who passed the April 2010 Customs Broker Exam. The pass rate for this exam was 11.1%. CBP granted credit to everyone for three questions and allowed for multiple answers on two questions. Granting that much credit (5 questions) leaves very little to protest. Check out the comments section for comments by your colleagues concerning the questions that might be subject to protest. For those of you who purchased the Boskage Study Plans that included the detailed exam commentary, the explanations will be ready soon.
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