A new report from ICC’s Business Action to Stop Counterfeiting and Piracy (BASCAP) calls for increased regulation and better management of Free Trade Zones (FTZs) to stop the alarming trend of the use of FTZs to facilitate the manufacture, distribution, and sale of counterfeit products. The report, Controlling the Zone: Balancing Facilitation and Control to [...]
A new report from ICC’s Business Action to Stop Counterfeiting and Piracy (BASCAP) calls for increased regulation and better management of Free Trade Zones (FTZs) to stop the alarming trend of the use of FTZs to facilitate the manufacture, distribution, and sale of counterfeit products.
The report, Controlling the Zone: Balancing Facilitation and Control to Combat Illicit Trade in the World’s Free Trade Zones, looks at the increasing vulnerability of FTZs to criminal activities that are facilitating the global trade of counterfeit and pirated products. It summarizes the circumstances that have enabled the exploitation of FTZs, including an examination of weaknesses in international agreements, national legislation and judicial enforcement.
National governments encourage the creation of FTZs to increase trade and attract investment by removing or reducing duties and tariffs, softening customs controls and largely decreasing oversight in FTZs. These incentives have simultaneously made it easier for criminals to set up illicit operations, with increasing evidence showing that FTZs are being exploited to facilitate the international trade in counterfeit and pirated goods.
“FTZs are intended to improve free movement of goods to facilitate legitimate international trade and development, but this does not mean that effective Intellectual Property Rights (IPR) enforcement in FTZs must be compromised to achieve these goals,” said Jeffrey Hardy, Director of BASCAP. “Establishing voluntary standards and improving current practices, along with the implementation of specific FTZ legislative and regulatory measures, can help address the global threat of counterfeiting and piracy in FTZs, without impeding their effectiveness.” Continue reading »
“Every organization at the border needs to follow certain success factors for seamless collaboration through an intelligence-led approach by using technology and analytics that can filter right data, as well as mobile real-time inspection processes that increase speed and value of information at the point of trade,” said Brian Moran, Global Managing Director, Public Services [...]
“Every organization at the border needs to follow certain success factors for seamless collaboration through an intelligence-led approach by using technology and analytics that can filter right data, as well as mobile real-time inspection processes that increase speed and value of information at the point of trade,” said Brian Moran, Global Managing Director, Public Services Operations and Management, Accenture, in his keynote speech on the second day of the 2013 WCO IT Conference and Exhibition.
Moran added: “One of the main issues with the customs procedures is not the lack of information, but the ability to access data.” In addition, he emphasized the need to implement digital technology in customs processes at a time when electronic is fast becoming the preferred mode of doing business.
Offering the opening comments at the first roundtable for the day, Des Vertannes, Global Head of Cargo, International Air Transport Association (IATA), said: “E-commerce, aviation security, trade management and sustainability are the collective factors that define efficiency in coordinated border management (CBM).”
Highlighting areas of collaboration with International Air Transport Association (IATA) for achieving global harmonization of border management procedures, Vertannes said: “We have been working with WCO and International Civil Aviation Organization (ICAO) to develop long-term solutions in air cargo and border-trade cargo management. With increasing volumes, programs such as the US CVP pilot edition that offers advanced screening options help to manage air cargo and reduce duplication of paper-based data management.”
Vertannes added: “Solutions such as the e-Freight program link the entire consortium of consigners and consignees with the customs department in a seamless, paperless process. This also allows stakeholders to identify data required by border agencies well in advance. e-Freight is currently available in 462 airports globally; our goal is to implement the program in 80 per cent of airports by 2015. We also have devised the consignment security declaration which can be used to electronically transmit information, such as who has supplied the cargo, when and how, making it ideal to ensure security during border-trade.”
A new ICC Commission on Customs and Trade Facilitation held its first meeting in Paris this week, establishing an agenda to expand the trade facilitation work undertaken by the former ICC Committee on Customs and Trade Regulations to include international multi-modal transport and logistics issues. Providing a global, cross-sector business forum, the consolidated commission seeks [...]
A new ICC Commission on Customs and Trade Facilitation held its first meeting in Paris this week, establishing an agenda to expand the trade facilitation work undertaken by the former ICC Committee on Customs and Trade Regulations to include international multi-modal transport and logistics issues.
Providing a global, cross-sector business forum, the consolidated commission seeks an integrated approach to trade facilitation, encouraging issue consolidation and coherence in ICC policy-making that is in line with ICC’s ultimate objective of facilitating global trade.
“Determining procedures to facilitate trade by combining the expertise of specialists in customs and transport is a tremendous contribution to world trade and therefore to job creation,” said ICC Secretary General Jean-Guy Carrier.
“ICC is enthusiastic about the potential of this new approach to attract new member companies to our work, as they see for themselves the advantage of working together,” he said.
Commission projects for 2013 include producing guidelines for traders and providing input on customs valuation and classification to the World Customs Organization’s private sector consultative group.
The commission will be led by Chair Anthony Barone, Director, Global Logistics Policy, Pfizer and reinforced by the inclusion of a Vice-Chair with expertise in transport and logistics issues.
Mr Barone said: “The objective of the new commission is to identify strategic issues that will have a material impact on trade. Ideally we would like to achieve significant modernization rather than incremental steps.”
The US Government is requesting that the World Customs Organization (WCO) establish an international BASE CODE set of intended use codes. Governments often need to understand the intended use of an imported product to effectively review products for admission at borders. Although there is the Harmonized Commodity Description and Coding System can be used to [...]
The US Government is requesting that the World Customs Organization (WCO) establish an international BASE CODE set of intended use codes. Governments often need to understand the intended use of an imported product to effectively review products for admission at borders. Although there is the Harmonized Commodity Description and Coding System can be used to denote the static characteristics of a product, there is no standardized global set of intended use codes.
The US has proposed just such a system based on a standardized list of codes developed by the ITDS Product Information Committee (PIC). These codes were developed for adoption in the US, and is coordinating with the Canadian Border Services Agencies on behalf of the Canadian Other Government Departments under the auspices of the US Beyond the Border Single Window Initiative the adoption of these intended use codes as a regional standard. This code set is offered as the starting point for the development of an international standard by WCO.
Description of code set
A standardized intended use code set must meet two objectives: 1) ensure that each consignment can be codified with a high-level intended use code that is globally applicable; and 2) allow relevant specific use cases to be identified in accordance with national regulations. To accomplish both purposes, a two-part intended use code value is proposed, similar in concept to the Harmonized Tariff Schedule. The first part of the intended use code would be a globally managed base code that denotes the high-level intended use for that imported product. The second part of the code would be a nationally managed sub code that uses a three-digit ISO country code prefix to identify the nation that defined the sub code. The use of sub codes by national governments would be optional.
Read the full article on the Harmonized System for Intended Use Codes.
Bryce Hanson is a Search Engine Marketing Administrator for CUSTOMS Info | Global Data Mining and is a frequent blogger on their International Trade Industry Blog. Please feel free to reach out to him on Twitter, Google+, or Linkedin.
At a recent meeting of the Border Commercial Consultative Committee (BCCC) Trusted Traders Programs Subcommittee at which the Canada Border Services Agency explained their involvement in the Authorized Economic Operator (AEO) Regional Strategy in the Americas and Caribbean Region. For details refer to the CBSA’s strategy document. Background: At the XV Regional Conference of Customs [...]
At a recent meeting of the Border Commercial Consultative Committee (BCCC) Trusted Traders Programs Subcommittee at which the Canada Border Services Agency explained their involvement in the Authorized Economic Operator (AEO) Regional Strategy in the Americas and Caribbean Region. For details refer to the CBSA’s strategy document.
Background:
At the XV Regional Conference of Customs Directors General (RCCDG) meeting held in April, 2012, the CBSA committed to participate in the AEO Regional Strategy Steering Committee Workshops via the Uruguay Resolution is an effort by the Americas and Caribbean region to develop a strategy, with the private sector, for the implementation of AEO programs based on the WCO SAFE Framework with a goal to pave the way to achieve Mutual Recognition Arrangements.
The Strategy seeks to:
• Encourage the implementation of AEO programs in the Region.
• Strengthen AEO programs already established in the Region.
• Increase the number of certified AEO operators in the Region.
• Establish and/or strengthen partnerships with the private sector and other government agencies and international organizations in the development of AEO programs.
• Promote MRA negotiations.
The AEO Regional Strategy is a step towards establishing a broader network of secure trade partners and managing risk away from the border.
As a member of the Steering Committee, Canada has committed to consulting with industry on the text and concepts outlined in the AEO Regional Strategy. Although Canada already has a well-established AEO program, countries in the region are looking to Canada as leader in AEO development to help guide the way for those wishing to improve upon or develop AEO programs. It is the responsibility of the CBSA to ensure that Canada’s public and private sector interests are represented and that the strategy aligns with the CBSA’s Trusted Traders program objectives and requirements for entering into MRAs.
Following a recent meeting of heads of state in Washington, the U.S. and Japan issued a joint statement pledging closer cooperation on ensuring the security of global supply chains. Stating that “there is an urgent need to better address manmade and natural disruptions which could adversely impact our security, economic prosperity, and ways of life” [...]
Following a recent meeting of heads of state in Washington, the U.S. and Japan issued a joint statement pledging closer cooperation on ensuring the security of global supply chains. Stating that “there is an urgent need to better address manmade and natural disruptions which could adversely impact our security, economic prosperity, and ways of life” while also facilitating trade, the two countries said they intend to take the following bilateral actions.
• enhance the trade facilitation benefits provided to members of the Customs-Trade Partnership Against Terrorism and Japan’s authorized economic operator program
• accelerate discussions on an air cargo security mutual recognition arrangement
• coordinate capacity•building in the Asia•Pacific region to strengthen border, port, maritime and aviation security, within existing resources
• support the development and deployment of new technologies to enhance global supply chain security
• pursue joint counterproliferation investigations through relevant law enforcement agencies
• promote dialogue, information exchange and sharing of best practices between public and private sectors
The joint statement also commits the U.S. and Japan to multilateral efforts within the World Customs Organization, the International Civil Aviation Organization, the International Maritime Organization, the Universal Postal Union and the Asia-Pacific Economic Cooperation forum on global supply chain issues, including the following.
• supporting the development and maintenance of risk management guidelines
• assisting in the development of robust global pre•departure information requirements in alignment with the discussions on the WCO SAFE Framework of Standards
• developing common definitions, standards and recommended practices for high-risk air cargo
• actively reporting shipping information and intelligence through the WCO’s Global Shield program and facilitating the expansion of regional participation in this program
• advancing the development of AEO programs consistent with the WCO SAFE Framework of Standards
• guiding the establishment of international standards for trade recovery collaboration and information requirements
The Canadian Customs Tariff will undergo a major overall in 2012 as a result of international changes to the Harmonized System (HS) at the World Customs Organization (WCO), as well as simplification initiatives by both the Department of Finance and Statistics Canada. HS 2012 includes 220 sets of accepted amendments, divided as follows: • 98 [...]
The Canadian Customs Tariff will undergo a major overall in 2012 as a result of international changes to the Harmonized System (HS) at the World Customs Organization (WCO), as well as simplification initiatives by both the Department of Finance and Statistics Canada.
HS 2012 includes 220 sets of accepted amendments, divided as follows:
• 98 relate to the agricultural sector;
• 27 to the chemical sector;
• 9 to the paper sector;
• 14 to the textile sector;
• 5 to the base metal sector;
• 30 to the machinery sector; and
• an additional 37 that apply to a variety of other sectors.
Environmental and social issues of global concern are the major feature of these amendments, particularly the use of the HS as the standard for classifying and coding goods of specific importance to food security and the early warning data system of the Food and Agriculture Organization of the United Nations (FAO). HS 2012 amendments also feature new subheadings for specific chemicals controlled under the Rotterdam Convention and ozone-depleting substances controlled under the Montreal Protocol.
The Order Amending the Schedule to the Customs Tariff (Harmonized System Conversion, 2012), SOR/2011-191 is available in the October 12 edition of the Canada Gazette (refer to the Supplement at the end of the document).
Further changes to simplify the Customs Tariff, including the Schedule, were introduced into Parliament by the Minister of Finance on October 4th as Bill C-13. The proposed legislation upon approval will reduce the number of eight-digit tariff items by just over 1,100 and eliminate numerous end-use provisions. Details are available in Parts 3 and 4 as well as Schedules 1 to 3 of the Bill.
Statistics Canada has also been engaged in a simplification project that will remove approximately 7,000 ten-digit classification numbers from the Schedule to the Customs Tariff.
As changes are made at the eight-digit tariff item level by the Department of Finance, Statistics Canada must make the corresponding changes at the ten-digit classification number level. Statistics Canada has already undertaken this exercise with respect to the WCO-related changes to the HS. However, it is still working on the changes resulting from the proposed amendments contained in Bill C-13. The Canada Border Services Agency anticipates publishing all of the changes to the Schedule to the Customs Tariff with concordance tables by December 1, 2011 at the latest.
Depending on the types of products you export and import, you may need to change their classifications. Re-classification could potentially affect any associated licenses, authorizations and inspections. It may also affect how those products are treated under any preferential trade agreements, since reclassification may involve rules of origin.
India’s Central Board of Excise and Customs (CBEC) last month announced a new ‘Authorised Economic Operator’ (AEO) program, with a view to give AEO-certified operators preferential treatment in terms of less Customs examination, relaxed procedural requirements, etc, subject to the operators maintaining prescribed security standards and compliance requirements. The voluntary scheme is available to importers, [...]
India’s Central Board of Excise and Customs (CBEC) last month announced a new ‘Authorised Economic Operator’ (AEO) program, with a view to give AEO-certified operators preferential treatment in terms of less Customs examination, relaxed procedural requirements, etc, subject to the operators maintaining prescribed security standards and compliance requirements.
The voluntary scheme is available to importers, exporters, warehouse owners, custom house agents, cargo forwarders, carriers, port operators and couriers, among others in the trade community. Companies can obtain an internationally recognized quality mark, which will indicate their secure role in the international supply chain and that their Customs procedures are efficient and compliant. Thereafter, they will be considered ‘secure’ traders and reliable trading partners.
The AEO program has been developed pursuant to guidelines of the World Customs Organization’s (WCO) adoption of SAFE FoS (Framework of Standard) in 2005. The objective was ensuring security in the global supply chain from the point of origin i.e., the point of export to the point of import in the receiving country, keeping in view national requirements of respective administrations. SAFE seeks to establish standards that provide supply chain security and facilitation at a global level to promote certainty and predictability, enable integrated supply chain management for all modes of transport, enhance the role, functions and capabilities of Customs to meet the challenges and opportunities of the 21st century, strengthen cooperation between Customs administrations to improve their capability to detect high-risk consignments, strengthen Customs/Business cooperation and promote the seamless movement of goods through secure international trade supply chains. Continue reading »
This example of complexity is at the heart of trade compliance, what are you doing to stay on top of the developments in this difficult space?
Trade Compliance Complexity is in the Details
The purpose of this piece is not to educate you on classification of furniture sets, but make you aware of the hidden detail and make you think about how you are setup to keep current with the ever changing world of international trade compliance.
In this specific case the detail comes from the WCO which has over 150 signatory countries to it, so these “rules” apply to apply and this specific case relates to imports to Canada.
Classification of Furniture Sets
In 2010 a new D-Memorandum, 10-14-58, was released by CBSA. The topic of that memo is Tariff Classification of Furniture Sets. In simple terms, this D-memo indicates that the WCO has classified a bistro patio set, consisting of a square (76 x 76 cm) solid hardwood table and two matching wooden chairs, presented unassembled and put up in a single box for retail sale, under heading 94.03. This heading reads “Other furniture and parts thereof”.
However, the WCO also determined that the same goods, if packaged in two or more boxes, would not qualify as “goods put up in sets for retail sale” and the components would have to be classified separately.
The WCO’s reasoning was based on the General Interpretive Rules (GIRs). The WCO applied GIRs 1, 2(a), 3(c) and 6, as follows:
GIR 1 does not offer assistance in classifying these goods.
GIR 2(a) allowed the unassembled [bistro set] components to be classified as if they were the finished good.
GIR 3(a) did not apply as the headings applicable to the hardwood table [94.03] and the wooden chairs [94.01] described only part of the furniture set and did not provide the most specific description.
GIR 3(b) did not apply because neither component gives the set its essential character. [In CBSA’s words, the number of boxes is a factor in how a furniture set is classified. When the set is packaged in more than one box it cannot be considered as “goods put up in sets for retail sale” under GIR 3(b), and each piece in the set must be classified separately.]
GIR 3(c) then directed that the goods be classified under heading 94.03, as it is the latter of two possible headings that equally warranted consideration (Chairs – 94.01, Tables – 94.03).
GIR 6 allowed for classification at the subheading level.
