Brazilian Firms Closer to Tax Advantages in Export Zones

Brazil's President Luiz Inacio Lula da Silva April 9 signed a decree creating the regulatory organ for companies in special export processing zones to receive tax advantages.

These zones, called ZPEs, were created by a 1988 law, and although 17 of them have been approved, they have never become operational because of disputes over their rules and other regulatory questions. In June 2008, the rules passed Brazil's congress, but they could not take effect without the presidential decree signed by Lula.

The decree established a special governmental council that will be responsible for overseeing the export zones. “This is not a new process and most countries have export zones that function with great success. Here in Brazil the only thing that was missing was the regulation of the zones,” said Minister of Development and Trade Miguel Jorge.

To read the full article, please visit ABCC News.

Dubai Quality Group Concludes Partnership with Ajman Free Zone Authority

Dubai Quality Group (DQG) announced that Ajman Free Zone Authority (AFZA) has entered into a strategic partnership agreement with the Group as an investor partner to enhance quality standards in the trade and business sector and boost the UAE’s position as a global trade destination.

Osama Al Rahma, Deputy Chairman of DQG Board, and Shaikh Mohammad Bin Abdullah Al Nuaimi, General Manager of Ajman Ports and Customs and Free Zone, signed the agreement at the headquarters of the Group.

Shaikh Mohammad said: “Our partnership with the Group comes in line with AFZA’s keenness to develop the quality standards of its services and programs to prepare an appropriate investment climate for investors.”

The agreement is aimed at enhancing quality standards in Ajman Free Zone in its capacity as a key contributor to the emirate’s economic growth.

To read the full article, please visit Al Bawaba.

Near-Sourcing: The Way Forward

In the immortal warning of the Jaws movie poster, ‘Just when you thought it was safe to go back into the water,’ so it is with near-sourcing.

“Last spring and summer,” recalls Charlie McGee, Vice President of International Development for Averitt, “near-sourcing was hot as firecrackers.” The competitive advantages that had been driving U.S. supply chains in a mad dash to China over the previous decade had seemingly all turned sour. Now, though, he’s seen that wave of enthusiasm begin to ebb.

The pressures to bring sourcing closer to home came to a focus when hefty ocean fuel surcharges (remember $150 a barrel oil?) were wiping out much of the savings from cheap labor. But compounding that difficulty was the rising levels of the ‘China price’ of goods themselves. With the economy flush, the government started eliminating the energy subsidies to domestic companies it had granted to spur production. There were other concessions to the pressures from global trading partners to level the playing field. Minimum wage laws were instituted (while demand pressures were putting workers in industrial regions in short supply, also pushing up pay). The melting of scrap into steel was subject to environmental oversight, adding costs. And hovering over the entire economy, like the perennial grey pollution, was inflation in basic commodities.

“Lots of people started to re-think their overall supply chains,” observed McGee. “Near-sourcing got pretty strong legs.” This was especially true with products which less labor intensive, like tooling and metals. The Americas started looking good again.

To view the full article, visit World Trade Magazine.

10+2 Deadline to Coincide with Vessel Departure

U.S. Customs plans to change the filing deadline for advance import data required under the “10+2” rule to make compliance easier for shippers, according to a program official.

About 45 % of Importer Security Filings are being submitted on time, but CBP believes that figure is low because it has been measuring timeliness against the time the first bill of lading is filed by the carrier under the 24-hour advance manifest rule. Many bills of lading are filed more than two days prior to vessel lading, which makes it difficult for importers to compile and file the necessary cargo details on time.

“We’re going to change that so that the ISF filing date will be compared to the vessel departure date,” said Customs and Border Protection’s Steven Silvestri during a presentation to the National Customs Brokers and Forwarders Association of America conference in Rancho Mirage, Calif.

The rule allows the border agency to issue penalties of up to $5,000 per violation. Silvestri clarified that the penalty applies to mistakes made in each transmission, not just the final ISF transaction. That means an importer or broker who files a submission with incorrect information and then files an amendment to that submission that also has incorrect information could be subject to $10,000 in penalties -- $5,000 for each transmission.

CBP has received more than 600,000 ISFs since Jan. 26, of which 87 percent have been accepted without errors, while 8.5 percent have been rejected, Silvestri reported.

Submissions have ramped up in recent weeks, with an average of 60,000 filings per week in the past month. The largest cause of errors is duplicate transmissions from impatient filers. Silvestri urged importers or third party filers to wait 20 to 30 minutes after filing to get a conformation from the system before attempting to file again.

CBP will begin sending out progress reports later this month to third party filers, who are supposed to break out the results of each customer and share them, he said.

For more information on Importer Security Filing, please visit the CBP website.

Customs Launches New Version of ACE

The Automated Commercial Environment is open for business – almost – U.S. Customs and Border Protection said April 22. Customs has begun an advanced pilot program to test features that will allow importers to file entry summaries electronically, one of the major benefits of the new processing system.

“ACE 2.2” will allow importers to file the two most common entries, the consumption entry for merchandise that’s being imported for distribution and sale, and informal entries, which are used for goods valued at less than $2,000, Customs said.

Louis Samenfink, ACE executive program director, said that the features that are being introduced will allow importers to file entry summaries through the ACE online portal, and respond electronically to inquiries sent by the agency.

Samenfink said that some 20,000 importers that have signed up for the pilot will be able to file entries online. The pilot began April 12 at the port of Buffalo. By early May, it will extend to Laredo, Chicago and Long Beach.

The new features kick ACE development back into high gear. The entry summary features were scheduled to be operational in July 2008, but software glitches forced Customs to delay the introduction.

Samenfink said that introduction of the entry summary portion of ACE has paved the way for development of ACE ocean and air manifest systems. The new manifest systems will replace similar operations on the older Automated Commercial System.


To view this article, visit the April 2009 edition of the Journal of Commerce.

Turkey Sees Continued Growth in Shipbuilding

Foreign Trade Minister Kürşat Tüzmen has said Turkey will continue to grow in the shipbuilding industry, improving its standing as the third largest yacht builder in the world and eighth in shipbuilding.

Speaking Friday in Kocaeli Tüzmen said shipbuilding in Turkey is primarily supported by free trade zones (FTZs) that currently provide jobs to some 50,000 workers. Tüzmen was in the Kocaeli Free Trade Zone (KOBSTAŞ) to participate in a ceremony to deliver to Saudi officials the luxury yacht Nourah of Riyadh (Riyadh's Splendor), built for Saudi Arabian Prince Mohammed bin Nawaf bin Abdul Aziz Al-Saud by Turkish-Lebanese yacht builder Yachtley Gemi Yapım A.Ş.

Underlining that each FTZ has become specialized in certain areas, the minister said FTZs in Kocaeli, Antalya and Adana have concentrated on shipbuilding. "We thank all our entrepreneurs who have contributed to the development of free trade zones," he added.

To read the full article, visit Today's Zaman.

Closing the Loop with Entry Visibility

Managing the import process requires visibility into the entire importing process especially when it comes to entry validation. Companies need to be able to validate 100% of their entries 100% of the time to ensure compliance with regulatory requirements around the globe. But how can companies validate entries without spending an inordinate amount of time and resources?

The white paper “Closing the Loop with Entry Visibility” does an excellent job of explaining the challenges companies face in their importing process, how closing the loop by validating entries and facilitating a post-entry amendment process can greatly increase compliance as well as provide bottom-line savings.

Click here to download this entry visibility white paper and learn how your organization can start closing the loop and saving money.

Now's the Time for an India Strategy

In 1602 when Sir James Lancaster arrived in India, commanding the first trading expedition of the East India Company, the economy of the Indian subcontinent dwarfed that of the British Isles. What many people in the West don't realize is that, except for the last 500 years, this has always been the case. What even fewer realize is it likely will be true again. A huge, educated, and motivated population with access to capital—such as India's—will demand a strong economy, and India is reclaiming its traditional role as an economic power.

Considering the bright future that lies ahead for India, now is a good time for companies to develop their supply chain strategies for serving the country. India's 7% growth rate for its gross domestic product (GDP) may not be as attention-grabbing as China's. But India is the second fastest-growing economy in the world, and it is more diversified. Its burgeoning middle class is employed in a wide variety of business services, leading some experts to believe that India will be more resilient in the current economic downturn than China.

India's government has begun implementing tax-law changes that will make delivering goods to consumers and businesses much more efficient, making products more affordable and spurring demand. The government also is gradually lowering barriers to foreign direct investment, and soon retailers will be able to operate in India by taking majority positions in Indian subsidiaries.

Although India offers a huge growing market for outside products, setting up a distribution network there presents a host of challenges in areas ranging from infrastructure to human resources, from warehouse site selection to hiring a trustworthy trucker. These challenges shouldn't discourage companies from expanding into the country. Rather, they should simply motivate firms to start their planning now. Based on our experiences in India, we believe that if a company starts to navigate the obstacles now, it will be well-positioned to reap the benefits when government regulation and economic reforms finally align behind this very large consumer economy.

To read the full article, visit CSCMP's Supply Chain Quarterly.

ISF Filers Can Register for Report Cards

Importers or their logistics providers need to register to receive performance reports on how well they are complying with the “10+2” rule, U.S. Customs and Border Protection said in a message to the import community on Monday.

CBP is preparing to send out the report cards to companies that have submitted Importer Security Filings under the advance trade data rule that went into effect in late January. The reports are expected to indicate how many filings a company has submitted, whether they have been accepted or rejected, the on-time ratio, and grade for accuracy each of the 10 data elements in the document.

Filers must send an e-mail to progress_report@cbp.dhs.gov and include the following information:

• Filer’s corporate name.
• Filer code used for ISF.
• Point of contact and telephone number.
• Corporate e-mail address to which report will be sent.

CBP will call the point of contact to verify the information. Questions should be directed to Chuck Miller, (703) 553-1772.

For more information, visit CBP's site.

Understanding 10+2 Requirements

The Customs and Border Protection (CBP) agency's Importer Security Filing (ISF) regulation has become commonly known as the 10+2 initiative because it requires importers and vessel-operating carriers to provide trade data for non-bulk cargo shipments arriving into the United States via ocean.

Below are 10 abbreviated ways to comply with the new regulations. For more information regarding each tip, please visit Inbound Logistics.

1. Remember that 10+2 pertains to goods transiting through the United States, not just imports.

2. Be aware of the "flexible enforcement" loophole.

3. Understand who is responsible for filing the data.

4. Engage your carriers.

5. Don't wait until the last minute.

6. Know what data can be amended.

7. Learn how to file electronically, or engage a partner to do it for you.

8. Transition now toward electronic filing.

9. Know the penalties for compliance failure.

10. Get help and the most current information on 10+2 regulations from CBP.

Updates on Free Trade Agreement Negotiations

The following is a list of updated efforts to conclude new free trade agreements around the world:

1. Chile and Turkey conclude FTA talks

2. Belarus signs FTA with Serbia

3. Nicaragua walks out of talks on EU-Central America FTA

4. Korea-EU FTA hung up on drawback


To read the details of each agreement, please visit WorldTrade\Interactive.

WTO Launches new Regional Trade Agreements Information System

The World Trade Organization (WTO) has launched a new Regional Trade Agreements Information System (RTA-IS). The RTA-IS contains all the notified Regional Trade Agreements (RTAs), links to the text of relevant RTAs, legal cover and information on considerations of RTAs by the WTO. RTA-IS users can conduct searches by country, by region, by legal cover, by notification date or by date of entry into force of the RTA. They can easily download summary tables showing all the RTAs in force and a variety of additional information.

Access the RTA-IS here.

Canada Moves Forward on FTAs with Colombia, Peru

The Canadian government announced recently that legislation has been introduced to implement the free trade agreements Canada recently concluded with Colombia and Peru. Trade minister Stockwell Day said these FTAs will provide Canadian companies with “a competitive edge in many sectors, including wheat, paper products, mining, oil and gas, engineering and information technology.” The agreements also include “robust” side agreements on labor and environmental standards.

An FTA between the U.S. and Peru took effect Feb. 1 but a similar pact with Colombia has yet to pass Congress. Both the White House and key Democratic lawmakers have said they plan to establish benchmarks with respect to labor rights in Colombia that will have to be met before legislation to implement that FTA will be taken up. Minister Day indicated that Canada is taking a different approach, stating that “we believe that engagement, rather than isolation, is the best way to support positive change.”

To view the full article, visit WorldTrade\Interactive at http://www.strtrade.com/wti/wti.asp?pub=0&story=30702&date=4%2F6%2F2009&company=

Surface Trade Declined in 2009 between Canada and Mexico

Surface transportation trade between the United States and its North American Free Trade Agreement (NAFTA) partners Canada and Mexico was 27.2 percent lower in January 2009 than in January 2008, dropping to $47.5 billion, the biggest year-to-year percentage decline on record, according to the Bureau of Transportation Statistics (BTS) of the U.S. Department of Transportation (Table 1). The $47.5 billion in U.S.-NAFTA trade in January 2009 was the lowest monthly amount since January 2004.

The value of U.S. surface transportation trade with Canada and Mexico fell 10.3 percent in January from December. Month-to-month changes can be affected by seasonal variations and other factors.

Surface transportation consists largely of freight movements by truck, rail and pipeline. About 88 percent of U.S. trade by value with Canada and Mexico moves on land.

The value of U.S. surface transportation trade with Canada and Mexico in January was up 3.9 percent in the five-year period compared to January 2004, and up 31.6 percent over the 10-year period compared to January 1999 (Table 3). Imports in January were up 26.4 percent compared to January 1999, while exports were up 38.1 percent.

To read the full article, visit the Bureau of Transportation Statistics at http://www.bts.gov/press_releases/2009/bts015_09/html/bts015_09.html

WTO Predicts Large Decline in Trade in 2009

The World Trade Organization (WTO) recently issued a gloomy forecast for world trade in 2009, projecting a nine percent decline in total exports in volume terms from the previous year due to the collapse in global demand brought on by the current economic downturn. The WTO believes that this decline, the largest since World War II, will be even more severe in developed countries where exports are expected to drop by ten percent. In developing countries, which the WTO notes are far more dependent on trade for growth, exports are expected to decline by two to three percent this year. Signs of this pronounced deterioration in trade were evident during the latter months of last year, according to the WTO, as global demand lost considerable steam and production decelerated. Available data for the first two months of this year already shows large declines in merchandise trade for most major economies, with the exception of certain economies in Asia.

Despite the large magnitude of the projected decline, the WTO advises that there are still “substantial downside risks” to this projection. For example, a surge in protectionist measures and/or further adverse developments in financial markets could deepen and extend the recession, as could a sluggish recovery in consumer spending. On the other hand, the WTO believes that “growth could resume more quickly than expected if reforms to the financial sector are implemented quickly and credit markets begin to function more normally.”

To read more about the predicted trade decline, visit WorldTrade/Interactive at http://www.strtrade.com/wti/wti.asp?pub=0&story=30625&date=3%2F27%2F2009&company=

India Wary of Washington's Tax Plan on Outsourcing

New Delhi plans to discuss with Washington a plan by the Obama administration to end tax breaks to U.S. firms that outsources jobs to India.

"We have to ensure what they (U.S.) are doing is WTO (Word Trade Organization) compatible," India's Commerce and Industry Minister Kamal Nath said in New Delhi, according to Hindustan Times. "Outsourcing of technology development by large companies cannot be switched on and off."

Nath was reacting to U.S. President Barack Obama's speech in Congress last week that his administration will discourage American companies from outsourcing jobs to cheaper countries like India by eliminating the tax breaks given to such firms.

The plan affects about 1,000 U.S. firms or 60 percent of India's outsourcing market. The firms include General Electric, Microsoft, Hewlett-Packard, Motorola, Pepsico and Proctor & Gamble.

To view the article, visit All Headline News at http://www.allheadlinenews.com/articles/7014321174