In many small and medium sized companies export compliance programs are inadequate or non-existent. The reasons for this can be cost, staffing shortages, no “in house” expertise, or lack of management commitment. A written Export Compliance Program is the ideal way to keep compliant and is a good investment for any company to make. An ECP establishes clear accountability, written procedures, and reduces risk of non-compliance. However, an ECP is costly and time consuming, requiring a significant commitment on the part of management. If the exporter has not experienced problems or incurred any fines it is easy to make compliance a “back burner” issue. But doing nothing does not mitigate the risk!

Here are 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 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@52.91.45.227 for immediate assistance.

Mario Viegas – DG Certified• 2ndLogistics Manager – Imports – Exports l Global Logistics – SME Trade Compliance Specialist US Customs and FDA, USDA, FCC, TSCA, OGA’s I DG Certified2h • 2 hours agoFollowDifference between Logistics and Trade Compliance:

It is not readily apparent that managing global logistics and global trade compliance are 2 sides of the same coin – but they are.
Both global logistics and trade compliance rely on the same, or similar, information regarding a shipment but use that information in different ways and for different purposes.

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

Well stated. Thanks for an informative post.

My September 2021 post on this topic generated quite a bit of interest. As “quick questions” are a fact of life for consultants here is an update.

Consultants often receive “Just a quick question?” queries from clients or others and everyone responds differently. Most likely the questioner believes that their question is an easy one and may be looking for pro bono service. In fact, while it is easy to ask a quick question, an accurate response is not always quick.

I have been offered lunch or dinner as compensation for quick questions. Others have assumed that, since their question is quick, there will be no charge for the answer. As a solo practitioner I know that I need to remain flexible and avoid rigid procedures while making sure that I am compensated for my time and expertise. Based on trial and error, here is how I handle “quick questions”.

Active clients– I truly value my long-term clients who are the foundation of my business. It is easier to keep clients than to gain new ones. So, if I can help a client on the spot I will do so as a part of my service. This usually involves something simple like identifying a resource for them. If time and/or research is required I let the client know how I will handle the request and what I will charge. Most clients understand this approach because I have added value for them in the past. If they have frequent quick questions I may suggest my retainer service which allows them to prepay for brief consultations by choosing a set number of hours.

Prospective clients– This is a little trickier because of situations such as the ones I have described, so I am more selective in my responses. I do try to be helpful as I want them to remember me when they have a real project. If time and research is required I will propose the retainer option or quote a minimum charge. I will always try to learn about the potential client’s business so that I can determine their real needs and follow up at a later date.

Former colleagues– One of the benefits of being a FedEx alum is having contacts with excellent colleagues all over the world. A number of active clients have been the result of referrals by former colleagues. Any questions they have are on behalf of their clients which can potentially become mine. Their referrals are my compensation. If they have a project requiring time and research I may ask them to connect me to the client if possible. I’m always happy to hear from former colleagues so FedExers don’t hesitate to reach out.

Friends and family- This is rare as I try not to mix personal with professional and I don’t want to charge friends or family. I will accommodate a minor request and give them a referral for anything more complex.

This method is not perfect but works well enough for me in my growing practice. I would be interested in hearing how other consultants handle “quick questions”

Contact mitch@52.91.45.227

From the CBP website:

The April 27, 2022 CBLE (Customs Broker License Exam) resulted in a 39.6% pass rate prior to appeal decisions.

This is the highest pass rate that I can recall. Congratulations to all who passed. You are now eligible to go through the application process, background check, and fingerprinting to obtain your license.

The April 2022 CBLE and Exam key are posted on the CBP website.

Economic and human rights sanctions have recently been imposed on Russia and Belarus by the US, UK, EU and others. Clients and colleagues in the logistics field know that trade to these nations is restricted so there is not much need for discussion or advice. My knowledge of sanctions is basic, however, so I thought I would do some reading on the topic.

Here is a good starting place:

https://home.treasury.gov/policy-issues/financial-sanctions/faqs

I’m always interested in hearing from those who have taken the CBLE (Customs Broker License Exam). If you took the exam on April 27th you will be anxiously awaiting your results. You also know how difficult the exam is. Many brokers have needed more than one try, so don’t be discouraged if you come up short. If you want to challenge any of the questions here is the link explaining how to appeal.

Contact mitch@52.91.45.227

https://www.cbp.gov/trade/programs-administration/customs-brokers/how-appeal

Interesting post from Daniel Penn Associates

What does baseball have to do with operational excellence?

http://ow.ly/KvMZ50IMshf

 

Mitch Kostoulakos, LCB 

Ad Hoc Logistics LLC, Licensed Customs Broker, International Logistics Consultant

As I have noted in my post about baseball and logistics:
We play every day, there are lots of statistics, managers get criticized, and errors can have a big impact.

CBP has posted the Trade and Travel Report for FY21

https://www.cbp.gov/sites/default/files/assets/documents/2022-Apr/FINAL%20FY2021_%20Trade%20and%20Travel%20Report%20%28508%20Compliant%29%20%28April%202022%29_0.pdf

Astronomical ocean rates, containers in the wrong locations, tight capacity in both trucking and air freight, and shortages of critical components. These are among the issues logistics managers have been dealing with for a couple of years now. It is often noted that supply chain is strategic while logistics is tactical. Day to day logistics consists of planning, execution, and problem solving. Right now it seems that the job is mostly problem solving. This certainly leads to frustration for all parties.

Changing forwarders or other LSPs (Logistics Service Providers) as a solution may be tempting but futile. LSPs are struggling to serve existing clients as best they can. Sales departments are always looking to grow their customer base and, at the same time, maintain existing accounts. Relationships are still the key ingredient and every LSP that I know is working diligently to manage their business.

Freight forwarders are intermediaries and have relationships of their own with ocean and air carriers. The strength of these relationships gives them the bandwidth to provide service to importers and exporters. They work with but don’t control overall capacity and rates.

Many of my posts are about compliance. While responsibility for compliance remains with the USPPI, LSPs can be a valuable resource. Expertise in compliance and documentation is certainly important but first they need to be able to move the freight.

Need help? Contact mitch@52.91.45.227

The term boilerplate refers to standardized text, copy, documents, methods, or procedures that may be used over again without making major changes to the original. A boilerplate is commonly used for efficiency and to increase standardization in the structure and language of written or digital documents.

Traders when was the last time you reviewed your Commercial Invoice for accuracy or updates? Chances are it has been quite a while, given the more immediate challenges in logistics today. The same question applies to documents produced by your freight forwarder. Checking your CIs for accuracy is a best practice and can help reduce customs delays. Reviewers with “fresh eyes” are an even better idea.

While there is no universal standard format for commercial invoices, including the following key elements will help reduce customs delays and entry mistakes:

Description of goods – Vague or incomplete descriptions are the most common cause of customs delays. Avoid trade names, brand names, jargon. What is it? What is it made of? What is it used for?

Recipient or Importer of Record contact info- customs delays are often prolonged by slow communication between CBP and importers or between exporters and customs agencies in other countries. Make sure phone and e mail info is spelled out on the CI.

Invoice Number, Page Numbers – Avoids confusion for entries with multiple CIs or CIs with multiple pages.

Country of Origin– Best to use ISO country codes.

Related/Not Related parties

Incoterms and currency- these are elements of the sales contract. Indicate version of Incoterms (2010, 2020) as all parties may not be aware of updates.

Harmonized tariff code to the 6 digit level– if unsure best not to include this info.

Summary of Value- must include IV Invoice Value. Can also include NDC Non Dutiable Charge (subtractions), AMMV Add to Make Market Value (additions), NEV Net Entered Value (bottom line- dutiable).

For immediate assistance contact mitch@52.91.45.227