Category Archives: Nuts & Bolts

Notice To Exporters

Did you know?

Exporters may use HTS codes in place of Schedule B. Go to https://hts.usitc.gov/current and choose the view tab. As always, there are exceptions, but you may be able to avoid toggling between lists. If you are maintaining separate parts lists for HTS and Schedule B codes this could be a time saver.

From the tariff:

For reporting exports, the provisions of this HTS publication may generally be used in place of the reporting codes of Schedule B on the Shipper’s Export Declaration, or under the program for electronic reporting of exports. Except as noted below, the statistical reporting numbers in the HTS (with the article descriptions and units of quantity) for articles falling in chapters 1 through 97 may be used in place of those in Schedule B. The special prefix symbols which denote preferential tariff treatment should not be included.

Contact mitch@adhoclogistics.com for help with Schedule B or HTS codes.

January Due Diligence

An annual customs review is a good business practice. As part of your due diligence check to make sure you are taking advantage of regulations that allow importing on a duty free or preferential basis. Here are a few basic items for your annual customs review:

 Contact mitch@adhoclogistics.com if you need help.

Classification– review annual updates to Harmonized Tariff to make sure your codes and descriptions are accurate. Proper classification and valuation of imported goods are the first step in compliance. If you do nothing else, do this.

Duty Drawback– this is a refund of duties paid on imports that are later exported. As supply chains expand there may be new opportunities for drawback. Record keeping is key here.

Chapter 98 of the Harmonized Tariff allows duty free entry of certain categories of goods. Examples are: American Goods Returned, American Goods Repaired or Altered Abroad, and American Components Assembled Abroad.

Trade agreements– programs which allow duty free or reduced duty rate entries. There are many agreements (such as USMCA) in place.

Customs rulings– consider requesting formal customs rulings prior to large transactions. This ensures compliance and eliminates uncertainty about imports. Rulings can be requested thru the CBP website.

Correcting errors– when an entry mistake is discovered it can be corrected by a prior disclosure to CBP. The formal process is a Post-Entry Amendment/Post Summary Correction. A prior disclosure can help mitigate penalties.

LinkedIn Comment- NLR

If NLR is your default entry this is a wake up call. Thanks Jim Dickeson – Trade Compliance Geek #compliance

It’s finally happened. I’ve been saying for years that AES needed this simple edit check.

As you know, when you export an item with an ECCN whose reason for control is the same as the reason for control for your destination country, there is a license requirement. Either you need an export license, or there may be a license exception available. But if you filed the EEI in AES with the License Type C33 for No License Required (NLR), you would have a BIS export violation. No, AES wouldn’t tell you this. You’d just get the bad news at some point in the future. Along with a penalty of up to $250,000. Cha-ching!

https://www.linkedin.com/in/adhoclogistics/detail/recent-activity/

Look This Way

Perhaps you have been “looking the other way” when it comes to export compliance. If you are lucky there have been no consequences for this negligence. CEOs and COOs, why not start off 2022 with a little executive action and move your organization towards compliance?

While a formal Export Compliance Program is the ideal solution, you may not be ready to commit the resources needed at this time. However, there are some steps that can be implemented immediately at little cost.

Here are a few best practices to help you get started :

1) Review and confirm correct Harmonized Tariff and Schedule B codes and maintain master list as updates occur. Proper classification follows established protocols and is the starting place for compliance.

2) Check Export Administration Regulations (EAR) for correct ECCN and license exception codes. Are you automatically using EAR99 and NLR? https://www.bis.doc.gov/ can help.

3) Confirm Country of Origin for all imports. This info is needed for your Commercial Invoice and is not always obvious, so consider consulting a Licensed Customs Broker.

4) Check common “Red Flags” such as denied parties lists, entities lists, and unverified lists. Once again, https://www.bis.doc.gov/ provides details and training.

5) Review export documentation for possible improvements.

Make export compliance a front-end process not a last minute shipping function. Remember, while Logistics Service Providers (LSPs) are valued partners, the exporter bears primary responsibility for compliance. Finally, if exporting under ITAR you need a responsible trained officer.

Contact mitch@adhoclogistics.com for immediate assistance.

File and Forget is Risky

Exporters, are you filing and forgetting? Auditing EEI (also referred to as AES) filings is a good business practice. If you are a self filer is anyone checking the accuracy of your submissions? Does your freight forwarder have an audit procedure in place if they are filing for you? Here is the risk of a “file it and forget it” policy:

§ 30.71 False or fraudulent reporting on or misuse of the Automated Export System.

(a) Criminal penalties –

(1) Failure to file; submission of false or misleading information. Any person, including USPPIs, authorized agents or carriers, who knowingly fails to file or knowingly submits, directly or indirectly, to the U.S. Government, false or misleading export information through the AES, shall be subject to a fine not to exceed $10,000 or imprisonment for not more than five years, or both, for each violation.

Are you aware of these potential filing errors?

A common misconception is that EEI and Commercial Invoice value should match. However, inland freight charges must be accounted for in the EEI filing whether or not they are on the commercial invoice.

or

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. 

For audits of your EEI filings contact mitch@adhoclogistics.com .

LinkedIn Comment- Responsible Parties

Deep SenGupta• 𝐂𝐨𝐧𝐭𝐢𝐧𝐮𝐢𝐧𝐠 𝐃𝐒𝐆 𝐆𝐥𝐨𝐛𝐚𝐥 𝐋𝐋𝐂’𝐬 𝐬𝐞𝐫𝐢𝐞𝐬 𝐨𝐟 𝐭𝐡𝐞 𝟐𝟓 𝐤𝐞𝐲 𝐞𝐥𝐞𝐦𝐞𝐧𝐭𝐬 𝐢𝐧 𝐚𝐬𝐬𝐞𝐬𝐬𝐢𝐧𝐠 & 𝐫𝐞𝐝𝐮𝐜𝐢𝐧𝐠 𝐨𝐮𝐫 𝐜𝐥𝐢𝐞𝐧𝐭’𝐬 “𝐈𝐧𝐭𝐞𝐫𝐧𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐓𝐫𝐚𝐝𝐞 𝐂𝐨𝐦𝐩𝐥𝐢𝐚𝐧𝐜𝐞 𝐒𝐜𝐨𝐫𝐞”

CHAPTER 2: RESPONSIBLE ORGANIZATION: When employees wear multiple hats (for example: the warehousing or procurement staff are also the Import-Export compliance go-to person), compliance usually falls through the cracks.

WHAT IS THIS AND WHY IS IT IMPORTANT TO THE TRADE COMPLIANCE SCORE?


Mitch Kostoulakos, LCB Ad Hoc Logistics LLC, Licensed Customs Broker, International Logistics Consultant

Excellent post Deep…in my opinion compliance officers should report directly to CEO, COO, or legal dept. They must have autonomy and authority

The Waters Edge- Part 2

As noted in a recent post, complying with US export regulations is only half of the battle in an international transaction. Clearing customs and arranging transportation in the destination country can be even more complex. Issues include choice of customs broker and freight forwarder, Importer of Record status, establishing EORI and VAT accounts, marking and labeling, and much more.

Experienced LSPs (Logistics Service Providers) are valuable partners and should be able to provide guidance. However, due diligence on the part of the exporter means doing some research in advance. This is especially true when shipping to a country for the first time.

The International Trade Administration publishes on-line Country Commercial Guides available at no cost. Check them out at https://www.trade.gov/ccg-landing-page

Contact mitch@adhoclogistics.com for help with international shipping.