The November 2019 edition of Logistics Management magazine includes an excellent article on trade compliance. 2020 Trade Update: More Complexity in Compliance by Patrick Burnson is a worthwhile read for trade professionals.
Some of the complex global issues to be monitored are the US-Mexico- Canada agreement, US-China tariffs, and the status of Brexit. Compliance managers and shippers are advised to get back to basics irrespective of international trade agreements.
Here are a few takeaways from the article:
Incoterms 2020 – changes can impact the price paid for materials and products. Shippers should review DDP contracts to make sure they are being accurately invoiced especially in light of the China 301 tariffs.
Antidumping and Countervailing Duties (AD/CVD) – CBP has increased focus on imports subject to AD/CVD . Internal controls and periodic assessments can help reduce risk.
HTS Classifications – Review of HTS and Schedule B classifications is one of the most basic compliance tasks. Tariff numbers are frequently changed, updated, or deleted. Failure to keep on top of this can result in customs delays and/or inaccurate duty assessments.
Bond Sufficiency- Recent changes to duty rates, especially China 301 tariffs, are requiring shippers to increase their bond amounts. The difficulty is in projecting duties, fees, and taxes over the next 12 months.
Preparation and Planning- CBP reports an uptick in mistakes from traders who are trying new strategies to save on tariffs. Experts recommend looking at data in the same light as CBP does and then establishing compliance procedures. A strategic approach toward Section 301 tariffs could be analyzing the biggest dollar amounts paid to see where changes can be made in your supply chain.
In summary the challenge for compliance and logistics professionals is to both get back to basics and, at the same time, pay attention to new regulations.
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