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Visibility - Saving Organizations Time & Money

According to research by Deloitte of Procurement Leaders, just over half of businesses consider import duties as an area to increase savings. Since import duties are being overlooked, it is clear that the opportunity to minimize costs sits in the filing of the customs entry itself, where goods are declared based on HS number as well as qualified for any eligible free trade agreements.

Often times, importers and brokers are not working from the same parts database when creating the filing and have not provided correct or consistent information, enabling only 10% of entries to be audited. An average company that only audits 10% of its entries under a regular random audit is likely to be losing millions of dollars due to misclassifications and missed opportunities. Therefore, utilizing an entry visibility system to correctly classify products can lead to savings with free trade agreements, free trade zones, and other special programs!

3-Way Audit to Ensure Compliance of the EEI Transmission

In a recent discussion held at the 2009 AAEI Annual Conference, it was noted that exporters heavily rely on freight forwarders to file their EEI (Electronic Export Information) to the US Census Bureau. Many shippers hand over the filing to their forwarders without any type of follow up, although the US PPI (Principle Party of Interest) is still ultimately responsible for non-routed cargo information.

A suggestion made by an attending compliance director stated that exporters should conduct a 3-way audit of the EEI transmission at the end of each year, completing the following three processes:

1. Solicit freight forwarders for the data that was filed on the EEI transmission. Freight forwarders are required, by law, to turn over this information to the US PPI.

2. Obtain all data from Census. Exporters can request up to 12 months of free EEI data.

3. Gather the data sent to the freight forwarder by the US PPI and compare all three, making sure they match.

GTIN: The Next Standardization?

The Product Information Committee (PIC), a subdivision of the International Trade Data System (ITDS), has recommended a method to obtain more precise product classification and description information. The Global Trade Item Number (GTIN) has been proposed to help identify any product or service that can be priced, ordered or invoiced at any point in the supply chain, enabling other government agencies (OGAs) as well as consumers to quickly identify the data elements surrounding a specific product. This information would be captured in the Global Data Synchronization Network (GDSN), a network of certified data pools that enable product information to be captured and exchanged in a secure environment conforming to global standards. The following are some proposed benefits that surround this idea of the GTIN standardized identification system:

• Faster cargo release
• Cheaper importation costs, as only those high risk GTINs will be detained
• Better cargo management as OGA’s target inspections on high risk products

Although the next steps are to move to Customs and Border Protection (CBP) regarding the proposed GTIN, the Food and Drug Administration (FDA) has already incorporated the GTIN for healthcare with enforcement beginning in 2012. It is anticipated that other organizations and agencies will soon follow.

With the new proposal of the GTIN, organizations involved in the global trade industry should consider moving toward automation. An electronic global database, with the ability to store multiple data elements and identification numbers will become more advantageous as new regulations and enactments become enforced. With the influx of individual standardized systems along with the various entities involved in a supply chain, more information will be required with each transaction, further illustrating the necessity of a global classification database that will encompass all data elements.

Obama's Trip to Egypt - Paving the Way for Increased Commerce

President Obama arrived in Egypt 5 days ago on June 4 to deliver a much anticipated speech on global trade between the US and Middle East. Fostering bilateral trade and investment could benefit both nations and help stabilize political relations.

Egypt is striving to become a trade hub in the Middle East on the strength of its favorable geographic location, purchasing power, and consumer culture. The United States is stuck in the worst recession since the 1930's, worsened by sluggish consumer spending.

Put the two together and benefits will flow. "Egypt can offer US companies many advantages, including a large domestic market of almost 80 million consumers and Egypt's many bilateral trade agreements with almost all major world markets," said Rachid Mohamed Rachid, Egyptian minister of trade and industry.

Egypt is the 36th-largest export market for U.S. goods, totaling $6 billion in 2008, up from $5.3 billion in 2007. U.S. imports from Egypt were down 0.3% last year to $2.4 billion.

Secretary of State Hillary Clinton promised strong US backing to promote economic opportunity in Egypt. "I want to stress economic opportunity because out of it comes confidence, comes a recognition that people can chart their own future," she said.

To read the full article, please visit the Los Angeles Times.

US Census Data Deemed Highly Secure

The 35th Annual National Customs Brokers and Forwarders Association of America (NCBFAA) Conference was held in Rancho Mirage, CA on April 19 of this year. A topic of interest discussed during a popular seminar, “CBP Imposition of Penalties for Violation of AES” included the security of the Electronic Export Information (EEI). To maintain the security of census data, exporters are restricted from submitting EEI data to any foreign country, regardless of the reason for the request.

The US Census Bureau publishes only a summary of statistics of the information included on the EEI. The details of individual exporter information are strictly confidential. The only government agencies with access to the census data are the following:
• US Principal Party in Interest (PPI)
• US PPI’s Agent
• US Bureau of Industry and Security (BIS)
• US Customs and Border Protection (CBP)
• US Immigration and Customs Enforcement (ICE)
• US Bureau of Economic Analysis (BEA)
• US Bureau of Labor Statistics (BLS)

Parties that are denied access to the EEI data include:
• Internal Revenue Service (IRS)
• Foreign Governments
• Private attorneys


For more information on the security of your census data, please visit the US Census Bureau.

For more information on EEI filing, please visit the Automated Export System (AES) Filing Mandate.

Chinese Rules of Origin - The Basics to Lowering Costs and Ensuring Compliance

Companies doing business in China can lower the costs of cross-border trade and avoid compliance risks by ensuring that they have a sound understanding of China’s preferential and non-preferential rules of origin (ROO).

There are two types of rules of origin:
1. Most-favored-nation trade (non-preferential ROO)
2. Imports under bilateral and regional trade agreements (preferential ROO)

The World Trade Organization does not have an agreement on product-specific and detailed ROO, and international trade is governed by national laws and bilateral and multilateral international agreements.

Non-preferential ROO provide that if an imported good is wholly obtained in a particular country, that country is the country of origin. If, on the other hand, a good is produced or manufactured in two or more countries, the country in which the good is finally materially changed is the country of origin.

Preferential ROO under FTAs and CEPAs vary from agreement to agreement, but in each case there are key differences from non-preferential ROO, including in the areas of regional value content, product-specific rules and standards, content accumulation, direct transportation, and certificate verification cooperation.

To further understand Chinese Rules of Origin, please visit WorldTrade\Interactive.