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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Industrial Safety & Rescue

Rob Wallace of UMass Amherst demonstrates how an auto descender works. #OSHASummerSummit

Mitch Kostoulakos, LCB Ad Hoc Logistics LLC, Int’l Logistics Consultant/Licensed Customs Broker

Since this is a safety demo where is the pad on the floor in case of a mishap?

https://www.linkedin.com/posts/adhoclogistics_logisticsmanagement-export-compliance-activity-7083429538281463808-UvV7?utm_source=share&utm_medium=member_desktop

John Monahan commented on this

Herb Sargent• We’re building great people with great lives — those people build GREAT projects.We’re building great people with great lives — those people build GREAT projects.

Next time you’re driving down the road and caught in a construction zone, give them a smile.

Mitch Kostoulakos, LCB Ad Hoc Logistics LLC, Int’l Logistics Consultant/Licensed Customs Broker

No one likes delays caused by construction. I always try to remember a couple of things: 1) Our aging infrastructure won’t fix itself and we need to repair as well as build new. 2) Construction jobs put people to work at good wages which get pumped back into the economy.

I have always advised clients that export compliance equals good risk management. Furthermore, compliance functions should be viewed as value adds rather than as a cost center. Whether or not a formal ECP (Export Compliance Program) is implemented, there are a number of best practices that are essential for any company involved in international trade.

Compliance is often a “back burner” project for several reasons including: Don’t know where to start, lack of C-level commitment, reluctance to allocate resources, too small to worry about compliance, no previous problems, or just plain inertia.

While the ROI for export compliance will vary for individual firms, we can identify an overall value proposition.

Risk Management– avoid the cost of fines and penalties which can reach $1 Million for criminal violations. Think of compliance as insurance.

Save Time/Save Money– export compliance means less re-work or follow up of requests for information from customers, government agencies, or forwarders.

Make Money/ Grow the Business- basic competence in exporting enables expansion to international markets. Compliance problems will cause customs delays and be an impediment to growth.

Enhance the Brand– similar to ISO certification and C-TPAT, an ECP demonstrates professionalism. Show customers and prospective customers that you know what you are doing.

I would be interested in hearing other value propositions for compliance. In the meantime, why not get started?

Contact mitch@adhoclogistics.com for help with export compliance.

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:

Voluntary Self-Disclosure

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.

Voluntary Self-Disclosures and Disclosures Concerning Others 

Pursuant to Part 764.5 of the EAR, one copy of the information constituting a VSD or any other correspondence pertaining to a VSD may be submitted to:

Director, Office of Export Enforcement
1401 Constitution Ave.
Room H4514
Washington, DC 20230
Tel: (202) 482-5036
Facsimile: (202) 482-5889

Due to the current COVID-19 response measures, BIS is now accepting VSDs electronically.  Voluntary Self Disclosures, exhibits, and requests for filing deadline extensions may be submitted to BIS_VSD_INTAKE@bis.doc.gov .  Hard copy filing is not required in addition to electronic filing, and please be aware that receipt and processing delays may occur in instances where only a hard copy VSD is submitted.

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

Mitch Kostoulakos, LCB• Ad Hoc Logistics LLC, Int’l Logistics Consultant/Licensed Customs Broker

Proud to serve on the MeVa Advisory Board and continue to be impressed by the cutting edge initiatives of Noah S. Berger and his team. MeVa is fare free on all routes!
https://www.mvrta.com/
Christina Minicucci

Pete MentoPete Mento•Global Trade And Customs Professional

Fellow Customs House Brokers – With the October Test looming for many looking forward to joining our ranks, I think it makes sense for us to set up a separate group here to answer questions from those preparing. I’ll be happy to set it up. All of us benefit from keeping this profession strong and thriving. Let me know if you think it’s a good idea. if we can get 8-10 of us to join it’ll be enough to help folks prepare. Let me know!

Status is online

Mitch Kostoulakos, LCB Ad Hoc Logistics LLC, Int’l Logistics Consultant/Licensed Customs Broker

I’m in….I answer a lot of questions leading up to exams but a “clearinghouse” is a good idea…With a 5.5% pass rate on the last exam it obvious people need help

Clients often say “we’ve used the same harmonized codes for years” and “our products are duty free“. As a Licensed Customs Broker and consultant this tells me that I need to do some checking on the client’s behalf. Using obsolete or invalid HTS (Harmonized Tariff Schedule) codes is a sign of an amateurish operation. The risks are customs delays, fines and penalties, or surprise duty/tax bills. It is likely that, for these clients, commercial invoice descriptions need updating. If they are also an exporter we should check ECCNs, License Exceptions, Countries of Origin, and Schedule B numbers as well.

The tariff archives show that the 2022 HTS was revised 15 times. The 2023 version already lists 8 revisions. Schedule B codes change frequently too. Here are the links to the changes:

https://hts.usitc.gov/download/archive

https://www.census.gov/foreign-trade/schedules/b/index.html

Don’t assume that your codes are valid. A little due diligence helps avoid problems down the road. Contact mitch@adhoclogistics.com for a review of your HTS codes.