A newly released report on the relevance, performance and efficiency of CBSA’s Export programs shows that CBSA collects compliance information at a national level only for the marine mode of transportation, which accounts for less than half of all export declarations.
Missing Pieces
Of the two modes of transportation where compliance data is not collected at a national level, the air mode has the highest number of declarations, at 54% in 2012-2013. And while use of the paper-based B13A has now fallen to just 5% of all export declarations, in the air mode of transportation the document is still used 27% of the time.  This is a concern given that the last compliance verification review disclosed that 45% of B13A declarations examined contained information that “was often inaccurate, incomplete or was untrue.”

The report notes that the 2013-2014 National Border Risk Assessment identified commercial air cargo as “the most frequently abused stream for illegal export of controlled or sensitive goods and technologies, in contravention of Canada’s counter proliferation efforts.”  It also points out that a prior review showed that 72% of goods declared using B13A forms were coded as commodities that could possibly be “strategic or dual-use” in nature.

With regards to the highway mode of transportation, though representing just 4.5% of total export declarations in 2012-2013, it accounted for 32.4% of the total value of exports in the 2013 calendar year. This means that almost one-third of the value of all Canadian exports was destined for the U.S. for which an export declaration was not required, and furthermore, no inbound permit-related or compliance-related data pertaining to it is shared by U.S. Customs and Border Protection with Statistics Canada, or with the CBSA. This mode of transportation, the report says, “is therefore exposed to unknown risks.”

 

The Canada Border Service Agency (CBSA) recently announced that the 2015 version of the Canadian Automated Export Declaration (CAED) software will be available and ready for download when it is released on December 8, 2014. The current version of CAED will expire on January 30, 2015 at which point, only the 2015 version will be valid.

As part of its Mandatory Electronic Export Reporting policy, the CBSA has been taking steps since 2012 to eliminate the manual reporting process (paper-based B13A) altogether and replace it with electronic reporting using either the CAED system or the G7 Electronic Data Interchange Export Reporting (G7-EDI) method.

Once available, the 2015 CAED can be downloaded free of charge from the Statistics Canada website by clicking here.

 

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On October 23, the Canadian government finalized the regulatory process to amend the Export Control List (ECL). This amendment serves to add controls, clarify controls and remove controls over specific items as agreed upon in the various multilateral export control and non-proliferation regimes in which Canada participates. A list of the key changes to the ECL is provided on the Export Controls Division website here.
Bomb
Earlier this week, the government also published on the Canada Gazette website the Regulatory Impact Analysis Statement concerning the ECL amendment which says the following: “This amendment to the ECL is not expected to result in any significant increase in the administrative burden for small businesses within Canada. In the event that this amendment does result in a small business being required to obtain a permit in order to export, the Department of Foreign Affairs, Trade and Development will assist the enterprise with the application process.”

The current December 2012 version of A Guide to Canada’s Export Controls remains in effect until December 4, 2014. On the following day, the December 2013 version of the Guide will formally come into effect and be posted on ECL’s website.

 

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Subsequent to the announcement last month that the Customs-Trade Partnership Against Terrorism (C-TPAT) will now be accepting applications from exporters, the Customs and Border Protection Agency (CBP) has published a 4-page document to address frequently asked questions about this new aspect of the program.
C-TPAT
In addition to general questions such as the reasons why C-TPAT is being now being expanded to include exporters and what kind of trade facilitation benefits participating companies can generally expect in terms of how their shipments will be differently handled by customs, the FAQ also provides details about a number of specific features of the program structure and the security criteria involved.

Unfortunately, in some instances, the “answers” to particular questions seem rather vague, if not even woefully inadequate, as demonstrated by the following example:

Q: We understand the responsibility that exporters have as trade initiators; however, there are concerns regarding the extent of the liability to which exporters would be subject if they are made ultimately responsible in certain situations (e.g. routed export transactions) in which the purchaser selects the transportation service provider and pays for the transportation, since these types of situations allow for minimal control, visibility, and/or constantly challenged authority. For these reasons, the assignment of liability is undesirable beyond that set forth in applicable export control regulations such as the International Traffic in Arms Regulations (“ITAR”) and the Export Administration Regulations (“EAR”). How will CBP address this issue?

A: C-TPAT asks that partners in the C-TPAT program do their part in securing the supply chain in exchange for benefits. C-TPAT partners are required to demonstrate due diligence in protecting the security of their supply chains.

Click here to download the document.

 

U.S. Customs and Border Protection (CBP) published a fact sheet last week indicating that applications from exporters for participation in the Customs-Trade Partnership Against Terrorism (C-TPAT) will now be accepted. The effort is seen as bolstering the administration’s National Export Initiative to facilitate export cargo shipments.
C-TPAT Logo
CBP has been working towards opening the program to exporters since 2012 when it conducted test validations for an Exporter pilot and in July of this year released a list of eligibility requirements. As stated at the time, CBP felt that “developing an export component for C-TPAT would further enhance both the program and its relationship with other mutually recognized Foreign Customs administrations.”

The fact sheet outlines a number of benefits exporters who have been certified, validated and are in good standing can be expected to gain from participating in C-TPAT including, among other things: mutual recognition arrangements (heightened facilitation from foreign partners); reduced examination rates; and time priority processing.

 

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On March 14, 2013, the U.S. Census Bureau (Census) published a Final Rule amending the Foreign Trade Regulations (FTR) contained in 15 CFR Part 30. The final rule established the requirement, effective April 5, 2014, for mandatory filing of export information through the Automated Export System (AES) or through AESDirect for all shipments of used self-propelled vehicles and temporary exports.

U.S. Customs and Border Protection (CBP) established a 180 day Informed Compliance period, effective from April 5, 2014 through October 2, 2014 “to educate the trade the trade on the new requirements.”

Once the informed Compliance period ends as scheduled on October 2, 2014, exporters should be aware that penalties may be issued for violations of the new FTR requirements such as:

  • New EEI data elements – Ultimate Consignee Type and License Value
  • Removal of the EEI filing exemptions for some temporary imports and exports
  • Reduction of the post-departure filing time frame from ten calendar days to five calendar days
  • Expanded EEI data element – Foreign Trade Zone (FTZ) Identifier

Click here for additional information on the FTR.

 

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On July 9, U.S. Customs and Border Protection (CBP) announced the planned eligibility for exporters to participate in the Customs-Trade Partnership Against Terrorism (C-TPAT) and issued a list of applicable admissibility requirements and guidelines.
C-TPAT Logo
C-TPAT is a voluntary program designed to improve supply chain security and was only accessible to importers in the past. CBP officials and industry representatives have been working since last year to expand the C-TPAT into a broader authorized economic operator-type scheme by extending eligibility to exporters.

According to the release, “As the C-TPAT program has continued its evolution, it has become apparent that exports also have an important role in international supply chains and while this sector is not as heavily owned by CBP and the C-TPAT program, developing an export component for C-TPAT would further enhance both the program and its relationship with other mutually recognized Foreign Customs administrations.”

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The Canada Border Services Agency (CBSA) this week issued Customs Notice 14-005 reminding Canadian exporters of their obligation to correctly report the Harmonized System (HS) Code when completing their export declarations.

Customs Act, Sub-Section 95(4) states: “If goods are required to be reported in writing, they shall be reported in the prescribed form containing the prescribed information or in such form containing such information as is satisfactory to the Minister.” Indicating the correct HS classification code on the B13A export documentation pertaining to goods being exported is an essential part of this statutory requirement.

Non-compliance may result exporters in not being approved for the Summary Reporting program, having Summary Reporting privileges terminated and/or being fined under the Administrative Penalty System (AMPS).  The AMPS infraction in this particular case attracts a penalty of $150 per document in the first instance. If a second infraction is detected after 30 days, a penalty of $225 per document would be assessed.  Any subsequent infractions would be charged a penalty of $450 per document.

Some exporters may not give the same attention to the HS classification of goods being exported as perhaps they do to the classification of goods at the time of import when the payment of duties and taxes are involved. But it should be appreciated that even when the payment of tariffs are not at stake, the accurate classification of goods at every stage is vital to the efficient functioning of the international trading system. Not only do these HS export codes feed into the trade database of Statistics Canada (thereby helping to better inform government policy and private enterprise strategy), but in more practical terms, may also affect how goods are dealt with on the receiving end by purchasers and customs authorities when being imported into the country of final destination.

For those compliance professionals who have seen their companies’ activities expand into exporting/re-exporting and/or for those who would like to gain a better understanding of U.S. export laws and regulations, this intensive one-day seminar will provide the necessary foundation.

Seminar Topics

  • Overview of the U.S. export regime (e.g., Export Administration Regulations, International Traffic in Arms Regulations and Foreign Assets Control Regulations)
  • Commodity jurisdiction determinations (internal and formal)
  • Principles of export classification (e.g., under the EAR, ITAR and Schedule B classifications) and best practices
  • Deemed export rule (EAR) and technical data transfer requirements (ITAR)
  • Export screening
  • Automated Export System requirements
  • Special export compliance challenges
  • Establishing an effective export compliance program
  • Consequences of non-compliance
  • Introduction and Update on the Export Control Reform

Note: As part of this seminar, attendees are asked to please bring a laptop with them.

Speaker: Erin Clark serves as an Export Compliance Senior Manager for Sandler & Travis Trade Advisory Services, Inc., and is based in San Diego.

Date: Wednesday | March 12, 2014

Time: 8:30 AM – 5:00 PM (Continental Breakfast and Lunch Provided)

Location:  Sandler & Travis Trade Advisory Services – Detroit
36555 Corporate Drive, Suite 400 | Farmington Hills, MI 48331

Cost: $370 US

Click here to register for this event.

 

Today it is not just exporters of military or dual-use (military/civilian) goods that need to be concerned about export compliance – everyone from Internet sellers to traditional shippers of otherwise innocuous products such as flowers and clothing needs to make sure they have an export compliance program in place. This webinar will provide you with the tools to create an effective export compliance program, which can not only help you avoid violating export laws and regulations but can also be instrumental in mitigating the penalties assessed when things go awry.

Key Topics:

  • identifying the export controls on your products and technology
  • understanding distinctions between the agencies that oversee the export and reexport of goods and technology
  • creating a technology control plan that allows access only to authorized parties
  • screening programs and when to conduct screening of transactions
  • licensing authority
  • training of staff
  • reporting violations and when to file a prior disclosure – recordkeeping

Speaker:
Donna Bade, manages the Chicago office of Sandler, Travis & Rosenberg, P.A. Her practice is focused on import and export trade law, trade regulations and customs law, regulatory law and transportation law.

Date:  Thursday | February 13, 2014
Time: 1:00PM-2:00PM EST
Cost:  $200 USD

Click here to register for this webinar.

Note: This event is in the process of being certified by NCBFAA Educational Institute for Certified Export Specialist (CES) continuing education credits.

CES credit: 1

 

Retaining Export Information

On November 5, 2013, in Trade Compliance & Strategy, by Martin Rayner

The U.S. Census Bureau posted to its “Global Reach” blog Oct. 30 a notice providing the following information in response to inquiries from the trade community regarding the requirements for retaining export information.

Every party involved in an export transaction (owners and operators of export carriers, U.S. principal parties in interest, foreign PPIs and/or authorized agents) should retain for five years from the date of export all documents, correspondences and other information relevant to the export transactions.

All documents, correspondences and other relevant information to the export transactions should be maintained. These should include but are not limited to items, such as:

  1. Electronic Export Information (EEI)
  2. Shipping documents
  3. Invoices
  4. Orders
  5. Packing list
  6. Other documents relevant to the specific transaction

The record retention policies for Census (15 CFR 30.10), the Bureau of Industry and Security (15 CFR 762.6(a)) and the State Department (22 CFR 122.5) all require keeping documentation for five years. Census notes that its record retention requirements do not relieve filers from adhering to other government agencies’ record retention policies.

Amber Road invites you to attend the final complimentary webinar in their three-part series, which addresses the key steps of building an effective Export Compliance Program.

This webinar will review Shipment Screening & Documentation.  Once centralized data management and RPS programs have been established, Export On-Demand allows exporters to easily process an order, create pre-mapped shipping documents, and file with the U.S. Census Bureau’s Automated Export System (AES).  Users are also able to screen shipments to manage and react to changes in the supply chain in a timely manner.

During this webinar, you will learn how Export On-Demand can help your company manage the entire export compliance process, and how it easy it is to deploy across your organization.

Presenters:  Scott Byrnes, VP of Marketing, Amber Road &  Scott Parker, Solutions Consultant, Amber Road

Date: Tuesday, November 5, 2013

Time: 2:00 – 3:00 PM EDT

Click here to register.

The ongoing federal government shutdown could complicate the expected October 15 implementation of the first regulatory revisions being made under the Export Control Reform Initiative. The two final rules issued last spring by the Bureau of Industry and Security and the Directorate of Defense Trade Controls are intended to improve national security, improve interoperability with foreign partners and bolster the U.S. defense industrial base.

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Regulatory agencies are bearing down on exporters, both at origin and destination, while there’s a growing need to align compliance and logistics operations functions in the export process. All this means export teams need to be involved early and significantly in discussions about new products, new markets, or new acquisitions.

These issues are explained in American Shipper’s fourth annual benchmark study covering U.S. export operations and compliance, which is produced in partnership with BPE Global and the International Compliance Professionals Association (ICPA). The theme this year is gauging the extent to which export teams have a place at a strategic table. The report also sheds light on the broader regulatory issues exporters are wrestling with and the value of technology solutions designed to support them.

Export Concerns Chart

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Key issues addressed in the study include:

  • The role of compliance and operations personnel in strategic export decisions
  • Organizational structures and responsibilities
  • Operational best practices
  • Productivity metrics
  • The role of GTM technology

Click here to download the report.

 

Amber Road invites you to attend the second complimentary webinar in their three-part Export Compliance Webinar Series, which addresses the key steps of building an effective Export Compliance Program.

This webinar will focus on product classification. Companies must keep classifications of products for every country in which they operate. This is required for both export and import purposes, as different information about the product is required on each shipment.

During this webinar, you will learn how Export On-Demand can help your company maintain its own product classification database, and how easy it is to deploy across your organization.

Presenters:  Scott Byrnes, VP of Marketing, Amber Road &  Scott Parker, Solutions Consultant, Amber Road

Date: Wednesday, October 16, 2013

Time: 2:00 – 3:00 PM EDT

Click here to register.