All posts by mitch

Regulatory Updates

New Regs for Cuba

BIS has issued new regulations for exporting from the US to Cuba. More to come on this as I plan to participate in BIS conference later this month. For help with export regulations contact mitch@52.91.45.227

Cuba – Amendment to EAR and Treasury Regulations

January 16, 2015 – The Bureau of Industry and Security published a rule in the Federal Register today to implement some of the changes in Cuba policy that the President announced on December 17, 2014. The rule makes changes to License Exceptions GFT and CCD. It also creates a new license exception Support for the Cuban People (SCP). It also creates case-by-case licensing policy for items for environmental protection of U.S. and international air quality, waters and coastlines. This was published simultaneously with a rule amending the Cuban Assets Control Regulations of the Department of the Treasury, Office of Foreign Assets Control.

 

The Addition of a New License Type (C62) for Support for the Cuban People (SCP) has been added to the Automated Export System

A new license type (C62) SCP was created in AES for the reporting of certain items exported and re-exported to Cuba that are intended to improve the living conditions of the Cuban people; support independent economic activity and strengthen civil society in Cuba; and improve the free flow of information to, from, and among the Cuban people.

 

Link to BIS rule

Link to Treasury rule

Nuts & Bolts

Mitch’s Comment in Talking Logistics

  • Mitch Kostoulakos CTL,LCB Good article. I would add that a preferred shipper should understand the difference between negotiating a good deal with carriers vs rate shopping every move. 
Nuts & Bolts

Comment in Airlines and Aviation

 

Mitch Kostoulakos CTL,LCB started a discussion in Northeastern U. Alumni.
Nuts & Bolts

Customs Broker Exam Tips Re-Visited

 

If you are planning to take the customs brokers exam in April you should be well into your preparations by now. In a previous post I shared the prep strategies that worked for me. Here is the info again with the key steps highlighted. Best of luck but don’t rely on luck.

According to CBP Customs and Border Protection passing rates for the customs brokers exam average only 3-11% nationwide. The test is given twice per year in April and October. It consists of 80 multiple choice questions and a passing grade is 75%. The exam is open book which makes it seem easy. However, the books consist of  the HTUS Harmonized Tariff of the United States and CFR 19 Code of Federal Regulations, totaling hundreds of pages. The difficulty is in being able to quickly access the right section for each question. It is a four hour exam so three minutes per question is not much time.

I took a prep course in Boston taught by  Atty. Mary Wright. The class met two nights per week for 6 weeks prior to the exam. Mary explained the material very thoroughly from her background as a customs attorney and prior experience as an import specialist for CBP. We also reviewed previous exams in class. As good as this class was, I would not have been able to pass the exam without additional study. I estimate that I spent about 40-50 hours on weekends leading up to the exam.

I used 6 previous exams and a 3 step process. In step 1 I took each test for accuracy, ignoring the clock. In step 2 I took the tests again in the same order, while timing myself to make sure I could finish within 4 hours. I believe that step 3 was the key to my success. For this phase I circled all the questions I had missed in steps 1 and 2 and created a separate mini exam which I took several times until I answered all the questions correctly.

 

Regulatory Updates

2015 Schedule B Codes

Schedule B codes have been updated for 2015. Best practices for exporters include checking to make sure Schedule B codes are up to date. Using obsolete or inaccurate codes can mean customs delays, onerous re-work and lengthy communications with customs agencies in destination countries, as well as possible fines and penalties. Take the time now to verify  codes and update your parts lists.

For help contact mitch@52.91.45.227

 

 

Publications

Mitch’s Article Featured in AST&L Newsletter

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AST&L

University of North Florida’s 22nd CTL Cohort Graduation

University of North Florida's 22nd CTL Cohort GraduationThis cohort was very diverse. In the beginning, they weren’t so sure about giving up their Friday nights and Saturdays. But as we proceeded, we heard time and again from these students how they wished they’d taken the course years ago!

This was the first cohort to include remote attendees, with two people from Tampa participating in live feed classes. The students ranged from young people just entering the workforce to experienced practitioners close to retirement. Job titles spanned responsibilities from “Coordinator” to “Colonel.” Those of us who teach and oversee the program felt like we were the lucky ones to have learned so much from this group. We look forward to hearing about their successes!

The 25th Cohort begins January 15, 2015. Register today!

Lori Fredrick, Program Director

IN THIS ISSUE

The Value of Professional Certification | Transportation Journal | Upcoming events and professional development hours

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IN THIS ISSUE
The Value of Professional Certification

Mitch Kostoulakos, CTL, Ad Hoc Logistics LLCI recently completed recertification of my CTL (Certified Transportation and Logistics) through AST&L (American Society of Transportation and Logistics). I believe that professional certifications are a valuable credential. Professionals prefer to do business with other professionals.

Chances are if you’re looking to hire an accountant, financial planner or engineer, their credentials are important to you. Preference goes to the accountant who is a CPA, the financial planner who holds the CFP designation and the engineer who has earned PE status. Why should the field of transportation and logistics be any different? Read more.

Mitch Kostoulakos, CTL, Ad Hoc Logistics LLC
Regulatory Updates

What is EAR 99?

When the ECCN (Export Control Classification Number) comes up on export documents most shippers automatically enter EAR 99. For license questions NLR (No License Required) is often used as a default exception. While these may be the correct entries, it is a good business practice to check and confirm. Here is some info from a previous post.

As part of any Export Management Program, exporters need to make sure they are using correct commodity classifications and license exceptions. While freight forwarders can provide expertise in these areas the exporter bears primary responsibility for compliance. If you are automatically using NLR and EAR 99 you may be at risk.  According to EAR part 732 “For items subject to EAR but not listed in CCL the proper classification is EAR 99. EAR 99 is a basket for items not specified under CCL and appears at the end of each Category on the CCL.”

If you need help contact mitch@52.91.45.227

Projects

Incoterms Project

Ad Hoc Logistics is currently helping a client resolve a conflict between Incoterms and Liner terms. In this transaction the Incoterm used is incompatible with the Liner term resulting in a dispute over payment of some fees. Following is some basic info from a previous post about Incoterms.

For help with Incoterms contact mitch@52.91.45.227

Incoterms Basics

Incoterms are rules used to facilitate global trade. Incoterms were created and are administered by the International Chamber of Commerce and are updated every 10 years. Incoterms 2010 published by ICC Services Publications, Paris FR is a very good reference. Some of the important points covered in the book are:

  • Incoterms must be in the contract of sale to apply
  • > 120 countries have endorsed Incoterms 2010
  • Now 11 rules in 2 groups
  • 2 new rules deal with geographic place
  • Incoterms is not a law…older versions can be used as long as all parties agree
  • Incoterms replaces Uniform Commercial Code (UCC) in domestic commerce
  • for reference  www.iccbooksusa.com
  • Incoterms cover;
    • Who does what
    • Who pays for what
    • When risk of goods passes from seller to buyer
    • Who is responsible for insurance, export clearance, import clearance, and other costs pertaining to delivery of goods
  • Incoterms do not cover;
    • Ownership or title to goods
    • Payment terms
    • Detailed requirements
    • Complete contract of sale

Incoterms 2010 includes several rules changes:

  • Now referred to as rules not terms
  • Remove DAF DES DDU DEQ
  • New Rules  DAT DAP
  • 2 Groups…Any Mode and Ocean/Inland Waterway Only
  • Any Mode…EXW FCA CPT CIP DAT DAP DDP
  • Ocean or Inland Waterway Only…FAS FOB CFR CIF

Attached chart is a quick guide to Incoterms 2010

Incoterms 2010 Quick Reference Chart 120610

Regulatory Updates

Exporting Best Practices for 2015

Do you want to get a handle on export compliance in 2015? Implementing a formal Export Management Compliance Program can be quite intimidating and expensive, especially for small and medium sized companies. An EMCP requires a significant commitment of time  on the part of management and usually involves hiring an outside consultant for the initial set up. There is no question that a written EMCP is a good investment for any company to make. An EMCP establishes clear accountability, written instructions, and reduces risk of non compliance. If the exporter has not experienced problems or incurred any fines it is easy to make an EMCP a “back burner” issue. If your company has not implemented an EMCP it is still good business practice to take some basic compliance steps. While these steps cannot take the place of a written EMCP they will help reduce risk of non compliance.  To get started I suggest the following:

  • Review and confirm correct Harmonized and Schedule B codes
  • Check EAR regulations for correct exception codes and license or NLR designations
  • If exporting under ITAR you need a responsible trained officer
  • Check common “Red Flags” such as denied parties lists, entities lists, and unverified lists
  • Review export documentation for possible improvements

Contact mitch@52.91.45.227 for help.

Regulatory Updates

Red Flags (cont.)

 In a previous post I discussed Red Flags to be aware of in export transactions. Here is more detail from the Bureau of Industry and Security about the Consolidated Screening List. The Department of Commerce lists that are included in the Consolidated Screening List are: Denied Persons List, Unverified List, and Entity List. For help with export compliance contact mitch@52.91.45.227

Consolidated Screening List

Prior to taking any further actions, users are to consult the requirements of the specific list on which the company, entity or person is identified by reviewing the webpage of the agency responsible for such list. The links below will connect you to the specific webpage where additional information about how to use each specific list is contained.

Department of Commerce – Bureau of Industry and Security

  • Denied Persons List – Individuals and entities that have been denied export privileges. Any dealings with a party on this list that would violate the terms of its denial order are prohibited.
  • Unverified List – End-users who BIS has been unable to verify in prior transactions. The presence of a party on this list in a transaction is a “Red Flag” that should be resolved before proceeding with the transaction.
  • Entity List – Parties whose presence in a transaction can trigger a license requirement supplemental to those elsewhere in the Export Administration Regulations (EAR). The list specifies the license requirements and policy that apply to each listed party.