As noted in a recent post self-blinding carries risk for exporters in addition to the fines and penalties associated with export violations. Mistakes happen and it is best to take corrective action on your own as a part of your compliance program.

Export compliance means attention to detail, consistent procedures, up to date knowledge, and oversight. Due diligence is required for EEI filings, Schedule B and ECCN classification, Licensing entries, and Country of Origin determination. In spite of best efforts, mistakes will be made. In these cases a Voluntary Self-Disclosure is a smart move. Here is some info from the BIS (Bureau of Industry and Security) website:

BIS encourages the submission of Voluntary Self Disclosures (VSDs) by parties who believe they may have violated the Export Administration Regulations (EAR). VSDs are an excellent indicator of a party’s intent to comply with U.S. export control requirements and may provide BIS important information on other ongoing violations. BIS carefully reviews VSDs received from disclosing parties to determine if violations of the EAR have occurred and to determine the appropriate corrective action when violations have taken place. Additional information regarding VSDs can be found in Part 764.5 of the EAR, or the enforcement section of our website www.bis.doc.gov.

https://www.bis.doc.gov/index.php/documents/enforcement/3262-vsd-policy-memo-04-18-2023/file

Contact mitch@adhoclogistics.com for help with Voluntary Self Disclosures.

I have posted about this topic in the past and use this approach whenever the situation arises. “Quick Question” queries are frequent and I look at them as an opportunity. I am always happy to hear from former clients, colleagues, and business associates. The scope of their requests vary so need to be handled accordingly. For a consultant this is a good problem to have.

Consultants often receive “Just a quick question?” queries from clients or others and everyone responds differently. Most likely the questioner believes that their question is an easy one and may be looking for pro bono service. In fact, while it is easy to ask a quick question, an accurate response is not always quick.

I have been offered lunch or dinner as compensation for quick questions. Others have assumed that, since their question is quick, there will be no charge for the answer. As a solo practitioner I know that I need to remain flexible and avoid rigid procedures while making sure that I am compensated for my time and expertise. Based on trial and error, here is how I handle “quick questions”.

Active clients– I truly value my long-term clients who are the foundation of my business. It is easier to keep clients than to gain new ones. So, if I can help a client on the spot I will do so as a part of my service. This usually involves something simple like identifying a resource for them. If time and/or research is required I let the client know how I will handle the request and what I will charge. Most clients understand this approach because I have added value for them in the past. If they have frequent quick questions I may suggest my retainer service which allows them to prepay for brief consultations by choosing a set number of hours.

Prospective clients– This is a little trickier because of situations such as the ones I have described, so I am more selective in my responses. I do try to be helpful as I want them to remember me when they have a real project. If I can answer a question without expending time and research I may do so and consider it a free sample of my work. If time and research is required I will propose the retainer option or quote a minimum charge. I will always try to learn about the potential client’s business so that I can determine their real needs and follow up at a later date.

Former colleagues– One of the benefits of being a FedEx alum is having contacts with excellent colleagues all over the world. A number of active clients have been the result of referrals by former colleagues. Any questions they have are on behalf of their clients which can potentially become mine. Their referrals are my compensation. If they have a project requiring time and research I may ask them to connect me to the client if possible. I’m always happy to hear from former colleagues so FedExers don’t hesitate to reach out.

Friends and family- This is rare as I try not to mix personal with professional and I don’t want to charge friends or family. I will accommodate a minor request and give them a referral for anything more complex.

This method is not perfect but works well enough for me in my growing practice. I would be interested in hearing how other consultants handle “quick questions”

Contact mitch@adhoclogistics.com

No doubt you stay in close contact with your customers. Perhaps you even perform due diligence on prospective customers. In any case, exporters are required to screen all exports using the various watch lists or the Consolidated Screening List. Export software is a valuable tool for this purpose.

Most SMEs (Small and Medium-Sized Enterprises) do not have an ECP (Export Compliance Program) or in-house expertise. If you are the CEO, COO, or CFO of one of these companies we advise assessing the risk of non-compliance and taking action. Fines and penalties for export violations can be as high as $1 million. In the meantime, here is a list from the Bureau of Industry and Security (BIS) website of things to look for in an export transaction. Make sure you are not doing business with the bad guys. A little due diligence up front saves a lot of trouble later on.

The customer or its address is similar to one of the parties found on the Commerce Department’s [BIS’] list of denied persons.

The customer or purchasing agent is reluctant to offer information about the end-use of the item.

The product’s capabilities do not fit the buyer’s line of business, such as an order for sophisticated computers for a small bakery.

The item ordered is incompatible with the technical level of the country to which it is being shipped, such as semiconductor manufacturing equipment being shipped to a country that has no electronics industry.

The customer is willing to pay cash for a very expensive item when the terms of sale would normally call for financing.

The customer is unfamiliar with the product’s performance characteristics but still wants the product.

The customer has little or no business background.

Routine installation, training, or maintenance services are declined by the customer.

Delivery dates are vague, or deliveries are planned for out of the way destinations.

A freight forwarding firm is listed as the product’s final destination.

The shipping route is abnormal for the product and destination.

Packaging is inconsistent with the stated method of shipment or destination.

When questioned, the buyer is evasive and especially unclear about whether the purchased product is for domestic use, for export, or for reexport.

For help contact mitch@adhoclogistics.com

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Congratulations to all who passed the May 2024 Customs Broker License Exam! You are now eligible to go through the application process, background check, and fingerprinting to obtain your license.

It may come as a surprise that it can take up to a year before your license is issued. In addition to a passing grade on the CBLE, eligibility to become a customs broker requires applicants to be a US citizen at least 21 years of age, not be a current Federal Government employee, and possess good moral character.

Character is determined by an extensive background investigation. From the CBP website:

“Each Broker license applicant must undergo a background investigation that includes a fingerprint analysis and review of character references, credit reports, and arrest records.  Arrests and convictions do not necessarily preclude the issuance of a license.  In partnership, association, or corporation applications, individuals identified as principals with controlling interest, officers, partners, or members will also undergo a background investigation.”

Licensed Customs Brokers, via their entry filings, are responsible for the assessment of revenue for the United States in the form of duties and taxes. They must also ensure that they, and their clients, comply with the laws and regulations in all transactions. So the background check is more than a mere formality. Be patient applicants!

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Read my latest Passages post

https://www.shippingsolutions.com/blog/export-compliance-needs-c-level-leadership

I recently posted about CBLE (Customs Broker License Exam) results including a link for appealing specific questions.

https://www.cbp.gov/trade/programs-administration/customs-brokers/how-appeal

From the CBP website: The applicant must submit a compelling argument why his or her answer is correct or why the appealed question has no possible correct answer.

We are well within the 60 day period for first appeals, but let me suggest a different strategy. If you are considering an appeal you are most likely very close to a passing grade and hoping to gain a reversal on a small number of incorrect answers.

In fact it is very difficult to gain additional points upon appeal, and preparing a compelling argument is time consuming. I know many brokers who have passed the exam on a second attempt. So, since you came close to passing the exam on May 1st, a better use of your time would be to begin preparing to pass the October exam instead of appealing your recent score.

I’m happy to discuss exam strategies. Contact mitch@adhoclogistics.com.

If you are a Canadian importer or NRI (Non-Resident Importer) you will want to keep up to date on CARM . Many US exporters act as Non-Resident Importers in Canada. A Non-Resident Importer is a business located outside of Canada that ships goods to customers in Canada and assumes responsibility for customs clearance and other import-related requirements.

The launch date for CARM has been pushed back to October 21, 2024. To register contact your Canadian Customs Broker or access the Client Portal on the CBSA website.

https://ccp-pcc.cbsa-asfc.cloud-nuage.canada.ca/en/auth/login

As a reminder, the Canada Border Services Agency (CBSA) Assessment and Revenue Management (CARM) project is a multi-year digital initiative that will change how CBSA collects duties and taxes for goods imported into Canada. Through CARM, the CBSA will modernize and streamline the process of importing commercial goods.

The Government of Canada has amended the Order that brings into force the final legislative changes for the Canada Border Services Agency (CBSA) Assessment and Revenue Management (CARM) digital initiative. These legislative amendments, and associated regulations, will now come into force on October 21, 2024. On this day, CARM will be made available to trade chain partners as it will become the official system for the collection of duties and taxes for goods imported into Canada.

Geek: “a person who has excessive enthusiasm for and some expertise about a specialized subject or activity”. Many compliance folks proudly refer to themselves as Geeks.

Demand for compliance professionals has never been higher, as LinkedIn users can readily see. Companies of all sizes and in all industries realize that being in compliance means fewer supply chain disruptions. At the very least compliance is good risk management. Think of it as insurance.

You may be looking to add a logistics or compliance pro to your staff and, understandably, want to make a good selection. In the meantime, let me suggest training your shippers in some export compliance basics. I have always warned that compliance should not be left to a busy shipping department; the factors are complex and need to begin early in the order cycle. However, a few hours of training is a good investment, enabling shippers to spot possible export violations before shipments leave your dock. It will also allow your new professional to focus on more strategic matters and hit the ground running.

Our copyrighted presentation “Exporting for Smart People” will provide your staff with upgraded skills and knowledge.

Contact mitch@adhoclogistics.com for more info.