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Regulatory Updates

What Does EAR99 Mean?

While assisting a client this week they made a common, but inaccurate, assumption that if their commodity is classified for export as EAR99 then NLR (No License Required) automatically applies. Not necessarily.

Here is some info from the BIS (Bureau of Industry and Security) website:

What does EAR99 mean?

If your item falls under U.S. Department of Commerce jurisdiction and is not listed on the CCL, it is designated as EAR99. EAR99 items generally consist of low-technology consumer goods and do not require a license in most situations. However, if your proposed export of an EAR99 item is to an embargoed country, to an end-user of concern, or in support of a prohibited end-use, you may be required to obtain a license.

Contact mitch@52.91.45.227 for assistance

Uncategorized

So you want to be a Customs Broker ?

Congratulations to all who passed the October 2020 Customs Broker exam. To those who came up short give it another try in April. The test is difficult and passing rates are typically in the 10-12% range.

Here are a few questions from the exam. Answers below.

  1. What are the Customs Territories of the United States?
    A. The states, District of Columbia, and the Commonwealth of Puerto Rico
    B. The states, Virgin Islands, and the Commonwealth of Puerto Rico
    C. The states, District of Columbia, Virgin Islands
    D. The states, District of Columbia, the Commonwealth of Puerto Rico, Virgin Islands,
    American Samoa
    E. The states, Commonwealth of Puerto Rico, Virgin Islands, American Samoa, and island of
    Guam
  1. Cotton napkins are imported into the United States. The cotton fabric comprising the
    napkins is woven in China and the sewing thread is made in Taiwan. The fabric and thread are
    shipped to Vietnam to be cut, sewn, and finished into the napkins. The finished napkins are then
    shipped in bulk to Singapore for packaging before being imported into the United States. What is
    the country of origin of the napkins?
    A. Vietnam
    B. China
    C. Taiwan
    D. Singapore
    E. United States
  1. Which of the below drawback periods is CORRECT?
    A. Drawback is permissible on exported or destroyed merchandise, which was imported,
    sold at retail, and returned to the importer, within 3 years of the date of import
    B. Unless a waiver is applicable, a Notice of Intent to Export, Destroy, or Return
    Merchandise for Purposes of Drawback (CBP Form 7553) must be filed with CBP at
    least 15 working days prior to the date of intended exportation
    C. At least 10 working days before the intended date of destruction of merchandise under
    CBP supervision, upon which drawback is intended to be claimed, a Notice of Intent to
    Export, Destroy or Return Merchandise for Purposes of Drawback (CBP Form 7553)
    must be filed
    D. A party may challenge a denial of an application for certification as a participant in the
    drawback compliance program by filing a written appeal within 30 days of the issuance
    of the notice of denial
    E. Drawback is allowed on imported merchandise if the merchandise is exported or
    destroyed within 3 years of the date of importation and was not used within the United
    States.

Answers: 26-A, 27-B, 63-D

Uncategorized

LinkedIn Post

Here’s a shout out to Mike Allocca for a good refresher on classification and in depth discussion of General Rules of Interpretation (GRIs).

Maine International Trade Center3,512 followers2w • 2 weeks agoWho is responsible for correct HTS and Schedule B classifications? Don’t miss our live webinar with Mike Allocca on Nov. 17th. Learn more and register today!Harmonized Tariff Schedule and Schedule B Classification – Maine International Trade Center

Nuts & Bolts

Export Compliance = Risk Management

Posted on LinkedIn

I have often noted that export compliance is good risk management. While risk management always gets C level attention, export compliance is often a mid-management or lower level function. Fines and penalties for violations should make export compliance a basic part of risk
management.

Best practices, including an Export Management Compliance Program, will reduce exposure to steep fines and penalties as described by BIS (Bureau of Industry and Security) on their website.

If you are relying on your logistics service providers, or your busy shipping department, for export compliance you may be at risk. Both upper management commitment and front line training are essential parts of an EMCP.

BIS offers a number of on-line courses at no cost. Check them out under the Compliance and Training tab and get started!

Under the EAR (Export Administration Regulations) criminal penalties can reach 20 years imprisonment and $1 million per violation. A denial of export privileges prohibits a person from participating in any transaction subject to the EAR. Furthermore, it is unlawful for other businesses and individuals to participate in any way in an export transaction subject to the EAR with a denied person.

contact mitch@52.91.45.227

Nuts & Bolts

What’s In a Name?

We have been working with a New Hampshire client to determine the cause, and reduce the frequency, of customs delays on their imports. More accurate commodity descriptions on the commercial invoice and airbills will no doubt solve the problem.

As everyone involved in international trade knows, the commercial invoice is one of the primary documents in the transaction. While there is no universal standard format for commercial invoices, including the following key elements will help reduce customs delays and entry mistakes:

Description of goods – If you do nothing else take an objective look at your commodity descriptions. Avoid trade names, brand names. A good description answers the questions: What is it? What is it made of? What is it used for? Most customs brokers and integrators pre-clear shipments electronically so descriptions can sometimes be truncated in the process. Best practices would include leading the description with the most critical info. Additional data such as part numbers or specs can be included in the body of the CI if necessary.

Invoice Number, Page Numbers – Avoids confusion for entries with multiple CIs or CIs with multiple pages.

Country of Origin– Best to use ISO country codes.

Related/Not Related parties

Incoterms and currency- these are elements of the sales contract. Indicate version of Incoterms (2010, 2020) as all parties may not be aware of updates.

Harmonized tariff # and duty rate if known

Summary of Value- must include IV Invoice Value. Can also include NDC Non Dutiable Charge (subtractions), AMMV Add to Make Market Value (additions), NEV Net Entered Value (bottom line- dutiable)

For immediate assistance contact mitch@52.91.45.227

Nuts & Bolts

ECCN Order of Review

One of the key elements in export compliance is the ECCN or Export Control Classification Number. In order to determine if a license is needed for your exports it is first necessary to determine the ECCN for your commodity. As we have noted in previous posts, many exporters automatically enter EAR99 and NLR on shipping documents. This is a mistake unless you have done due diligence on your products. EAR99 indicates that a commodity is subject to Export Administration Regulations but is not specifically listed on the Commodity Control List (CCL). NLR states that no license is required.

ECCN can be determined by consulting with manufacturers of products, filing a classification request with BIS (Bureau of Industry and Security), or self classifying. BIS offers a specially designed decision tool that is very easy to use. Check it out on the Exporter Portal @ bis.gov.

Contact mitch@52.91.45.227 for immediate help.

Regulatory Updates

Heads Up Exporters

New mandatory EEI filing requirements effective 9/27/2020. Here is one of the the FAQs from the BIS website.

Q28: Are exporters required to file EEI for shipments of commercial items valued under $2,500 if destined to China and it is for commercial end use?


A: Yes. The new mandatory filing requirement in Section 758.1(b)(10) applies to all items that have an ECCN and are destined to China, Russia, or Venezuela, regardless of value, end use or end user. The only one of the exemptions in Section 758.1(c) that is available to overcome this requirement is License Exception GOV.

Need help? Contact mitch@52.91.45.227