No doubt you stay in close contact with your customers. Perhaps you even perform due diligence on prospective customers. In any case, exporters are required to screen all exports using the various watch lists or the Consolidated Screening List. Export software is a valuable tool for this purpose.

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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Congratulations to all who passed the May 2024 Customs Broker License Exam! You are now eligible to go through the application process, background check, and fingerprinting to obtain your license.

It may come as a surprise that it can take up to a year before your license is issued. In addition to a passing grade on the CBLE, eligibility to become a customs broker requires applicants to be a US citizen at least 21 years of age, not be a current Federal Government employee, and possess good moral character.

Character is determined by an extensive background investigation. From the CBP website:

“Each Broker license applicant must undergo a background investigation that includes a fingerprint analysis and review of character references, credit reports, and arrest records.  Arrests and convictions do not necessarily preclude the issuance of a license.  In partnership, association, or corporation applications, individuals identified as principals with controlling interest, officers, partners, or members will also undergo a background investigation.”

Licensed Customs Brokers, via their entry filings, are responsible for the assessment of revenue for the United States in the form of duties and taxes. They must also ensure that they, and their clients, comply with the laws and regulations in all transactions. So the background check is more than a mere formality. Be patient applicants!

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Read my latest Passages post

https://www.shippingsolutions.com/blog/export-compliance-needs-c-level-leadership

I recently posted about CBLE (Customs Broker License Exam) results including a link for appealing specific questions.

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

From the CBP website: The applicant must submit a compelling argument why his or her answer is correct or why the appealed question has no possible correct answer.

We are well within the 60 day period for first appeals, but let me suggest a different strategy. If you are considering an appeal you are most likely very close to a passing grade and hoping to gain a reversal on a small number of incorrect answers.

In fact it is very difficult to gain additional points upon appeal, and preparing a compelling argument is time consuming. I know many brokers who have passed the exam on a second attempt. So, since you came close to passing the exam on May 1st, a better use of your time would be to begin preparing to pass the October exam instead of appealing your recent score.

I’m happy to discuss exam strategies. Contact mitch@adhoclogistics.com.

If you are a Canadian importer or NRI (Non-Resident Importer) you will want to keep up to date on CARM . Many US exporters act as Non-Resident Importers in Canada. A Non-Resident Importer is a business located outside of Canada that ships goods to customers in Canada and assumes responsibility for customs clearance and other import-related requirements.

The launch date for CARM has been pushed back to October 21, 2024. To register contact your Canadian Customs Broker or access the Client Portal on the CBSA website.

https://ccp-pcc.cbsa-asfc.cloud-nuage.canada.ca/en/auth/login

As a reminder, the Canada Border Services Agency (CBSA) Assessment and Revenue Management (CARM) project is a multi-year digital initiative that will change how CBSA collects duties and taxes for goods imported into Canada. Through CARM, the CBSA will modernize and streamline the process of importing commercial goods.

The Government of Canada has amended the Order that brings into force the final legislative changes for the Canada Border Services Agency (CBSA) Assessment and Revenue Management (CARM) digital initiative. These legislative amendments, and associated regulations, will now come into force on October 21, 2024. On this day, CARM will be made available to trade chain partners as it will become the official system for the collection of duties and taxes for goods imported into Canada.

Geek: “a person who has excessive enthusiasm for and some expertise about a specialized subject or activity”. Many compliance folks proudly refer to themselves as Geeks.

Demand for compliance professionals has never been higher, as LinkedIn users can readily see. Companies of all sizes and in all industries realize that being in compliance means fewer supply chain disruptions. At the very least compliance is good risk management. Think of it as insurance.

You may be looking to add a logistics or compliance pro to your staff and, understandably, want to make a good selection. In the meantime, let me suggest training your shippers in some export compliance basics. I have always warned that compliance should not be left to a busy shipping department; the factors are complex and need to begin early in the order cycle. However, a few hours of training is a good investment, enabling shippers to spot possible export violations before shipments leave your dock. It will also allow your new professional to focus on more strategic matters and hit the ground running.

Our copyrighted presentation “Exporting for Smart People” will provide your staff with upgraded skills and knowledge.

Contact mitch@adhoclogistics.com for more info.

In January I posted about the BIS website re-design and noted the difficulty in reading and interpreting the CCL.
https://lnkd.in/eZYtirAa

This month I am updating parts lists for a couple of clients and finding that the new interactive EAR does make it easier to navigate the CCL. The links to ECCN categories in the CCL and CCL Index are a time saver. The paragraph format for each ECCN is an improvement over the old chart style.

The EAR, like all regulations, will never be interesting reading. However, I see the new format as an improvement. BIS has a button on the lower right of their homepage asking what can be improved. Don’t be shy!

The May 1, 2024 CBLE (Customs Broker License Exam) resulted in a 13% pass rate prior to appeal decisions. Previous pass rate information is listed below. The exam and answer key are posted on the CBP website.

Congratulations to all who passed! You are now eligible to go through the application process, background check, and fingerprinting to obtain your license. The process can be lengthy, so be patient.

Many brokers have needed more than one try, so don’t be discouraged if you came up short. If you want to challenge any of the questions here is the link explaining how to appeal.

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

Pass Rate Information

The May 1, 2024 CBLE resulted in a 13% pass rate prior to appeal decisions.

The October 25, 2023 CBLE resulted in a 34% pass rate prior to appeal decisions.

The April 26, 2023 CBLE resulted in a 5.5% pass rate prior to appeal decisions. 

The October 26, 2022 CBLE resulted in a 11.1% pass rate prior to appeal decisions.