1 naep 2009 annual meeting sarah reynolds american river intl. import / export compliance workshop
TRANSCRIPT
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NAEP 2009 Annual MeetingNAEP 2009 Annual Meeting
Sarah ReynoldsAmerican River Intl.
Import / Export Compliance Workshop
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Post 9/11 InitiativesPost 9/11 Initiatives
1. CSI 1. CSI
2. CTPAT2. CTPAT
3. Importer Security Filing3. Importer Security Filing
4. Transportation Security Admin.4. Transportation Security Admin.
04/19/23 2
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Container Security InitiativeContainer Security Initiative
CSI is a program intended to help increase
security for containerized cargo shipped to
the United States from around the world.
CSI addresses the threat to border security
and global trade posed by the potential for
terrorist use of a maritime container to
deliver a weapon
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Container Security InitiativeContainer Security Initiative
January 17, 2002 U.S. Customs Service’s Commissioner Bonner announces CSI.
January 17, 2003 – 18 ports are committed to participate in CSI.
Currently 58 ports and 35 countries participate March 1, 2003 – US Customs Service becomes
US Customs & Border Protection
Container Security Initiative Container Security Initiative
Three Core Elements of CSI are:Identify high risk containers based on advance information and strategic intelligencePre-screen containers at the earliest possible pointUse technology to quickly pre-screen containers that may pose a risk for terrorism
Container Security InitiativeContainer Security Initiative
Key Benefits of CSI:
Increases the security of the global trading systemSignificantly increases the ability to intercept containers that may pose a risk for terrorismEnhances safety and security for all
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Importer Security FilingImporter Security Filing
Formally known as 10 + 2 Effects Ocean Shipments Only 10 Data Elements to be Provided by the Importer 2 Data Elements to be Provided by the Carrier Electronically transmitted data Advance shipment data will produce more effective
and more vigorous cargo risk assessment Interim Final Rule was announced by DHS on
Nov.24th 2008
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Importer Security FilingImporter Security Filing
Became effective January 26th 2009 The Interim Final Rule includes a delayed
compliance date of 12 months after the interim final rule takes effect.
During this time Customs will show restraint in enforcing the rule.
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C-TPATC-TPAT
Customs Trade Partnership against Terrorism
Joint government business initiative to build cooperative relationships that strengthen overall supply chain and border security
Raises level of global security Decreased delays in the import process
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C-TPATC-TPAT
Every importer, exporter, manufacturer, customs broker, NVOCC and warehouse proprietor should join this partnership in a proactive effort to raise the bar on security standards in the U.S
Provides a competitive edge in the Industry Decreased delays in the import process Expedited customs clearance Mitigating factor in determining penalty amount
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C-TPATC-TPAT
Tier I – Certification
Tier II - Validation
Tier III - Exceeding Minimum Security Practices
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C-TPATC-TPAT
ISA – Self Importer Assessment
Is one of the privileges offered to C-TPAT
members. The program give the importer an
opportunity to perform a self analysis of their
compliance standards and provide their findings
to CBP for review
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TSA-Transportation Security AdministrationTSA-Transportation Security Administration
• Sensitive Security Information
• Increased inspections in the field
• 50% screening of all cargo on passenger planes by Feb 2009
• 100% screening by August 2010
• STA (Security Threat Assessment)
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The Customs Modernization Act of 1993The Customs Modernization Act of 1993
The Mod Act was a congressional act that
outlined and redefined Customs regulations
and introduced new legislation in reference
to the importers responsibilities. The Mod
Act also introduced a warning prior to audit
enforcement as to the future Customs
towards increasing compliance levels.
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ImportImport
Reasonable Care
• Defined as that degree of care that a person of
ordinary prudence would exercise in the same
manner or similar circumstances
• Legal responsibility of importer and his agent
(Customs Broker)
• Mandated by the Customs Modernization Act
and passed into law December 8th 1993
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Fines and PenaltiesFines and Penalties
Reasonable Care
Penalty for importers failure to meet Reasonable Care Standards
Domestic value or twice the duty, whichever is less
If duty free the penalty is calculated at 20% of the value
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Import – Recordkeeping Import – Recordkeeping
All records which pertain to the merchandise and are maintained in the normal course of business..
Must be maintained in the United States Must be kept for five years from the date of
entry All records must be maintained as outlined in
CFR163 (a)1(a) listing. Customs forms 7501, 3461, 4333
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Import Recordkeeping Import Recordkeeping
Penalties for failure to keep records:
$100,000 or 75% of dutiable value for each release for willful failure
$10,000 or 40% of the dutiable value for each release for negligence
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Export Export
U.S. Principal Party in Interest: the person in the United States that receives the primary benefit, monetary or otherwise, of the export transaction.
U.S. manufacturer , U.S. seller, U.S. order party
Foreign company CANNOT be the USPPI unless they are in the U.S. at the time the goods are obtained/purchased for export.
A freight forwarder may not be the USPPI!!
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ExportExport
• Automated Export System/Electronic Export Information
• Canada (30.36)– NO EEI 30.36
• $2500 and under (30.37a)– NO EEI 30.37a
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Two Types of ExportsTwo Types of Exports
Export Transaction:
USPPI files the Electronic Export Information (EEI)record or authorizes a U.S. Forwarder, or other agentto file the EEI via AES (Automated Export System)
Routed Export Transaction:
Foreign principal party in interest (FPPI) authorizesa U.S. Forwarder, other agent or USPPI to file theElectronic Export Information (EEI)
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ExportExportUSPPI Responsibilities:
Files or authorizes U.S. forwarder, or other agent to file the EEI
Provides Power of Attorney / written authorization
Responsible for schedule B and license determination
Obtain copy of the EEI filed by forwarder
USPPI may obtain POA from FFPI to complete & file the EEI record
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ExportExportForwarder Responsibilities:
File export information via the AES
Upon request provide USPPI with copy of the filed EEI
Provide ITN to the carrier
Obtain a POA or written authorization from the FFPI to file the EEI
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ExportExport
AES pre-departure filing time frames
Vessel: 24 hours prior to loadingAir: no later than 2 hours prior to departureTruck: no later than 1 hour prior to arrival at the
borderRail: no later than 2 hours prior to arrival at the
borderMail: no later than 2 hours prior to export
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ExportExport
• USPPI or authorized agent who knowingly:Fails to fileFiles false and misleading informationContinues to participate in illegal activities
• Fines:Up to $10,000 per violationImprisonment for not more than five yearsBoth
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ExportExport
USPPI or authorized agent or carrier:
• Late filingsUp to $1,100 per each day delinquency or up to a
maximum
of $10,000 per violation• Other violations:
Up to $10,000 per violation
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Export RegulationsExport Regulations Export Administration Regulations / Dept of Commerce
BIS / Bureau of Industry & Security / Export Administration Regulations
FTSR / Foreign Trade Regulations / Bureau of Census / Dept of Commerce
OFAC / Office of Foreign Assets Control
ITAR /Intl Traffic in Arms Regulations / Dept of State
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Export Compliance ManagementExport Compliance Management
Scope of Export Administration Regulations (EAR)• Denied Parties• Know Your Customer• Red Flags• Restrictive Trade Practices (Anti-boycott
Compliance)• Export Commodity Control Numbers (ECCN)• Commerce Control List (CCL)• Recordkeeping Requirements• Penalties for Violations
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Scope of the Export Administration RegulationsBureau of Industry & Security
Scope of the Export Administration RegulationsBureau of Industry & Security
Reexports Transfer of Technology (Deemed Exports) Foreign Subsidiaries All U.S. origins items wherever located U.S. origin parts, components, materials or other
commodities integrated abroad into foreign-made products.
Certain foreign-made direct products of U.S. origin technology or software
U.S. persons abroad
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Deemed Exports / Transfer of Technology Deemed Exports / Transfer of Technology
Deemed Export RuleAn export of technology is “deemed” to take place when it is
released to a foreign national within the United States.
Release of TechnologyTechnology is “released” for export when it is available to
foreign nationals for visual inspection ( such as reading technical
specifications, plans, blueprints, etc.) when technology is
exchanged orally; or when technology is made available by
practice pr application under the guidance of persons with
knowledge of the technology.
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Deemed Exports / Transfer of Technology Deemed Exports / Transfer of Technology
Technology
Technology is specific information necessary for the development, production or use of a product
If the technology does not qualify for treatment under EAR 99and no license exception is available, U.S. entities must apply foran export license under the “deemed export” rule when both of the following conditions are met:• They intend to transfer controlled technologies to foreign
nationals in the U.S.• Transfer of the same technology to the foreign national’s
country
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Deemed Exports / Transfer of Technology Deemed Exports / Transfer of Technology
Any foreign national is subject to the “deemed export”
rule except a foreign national who is:
• Granted permanent residence as demonstrated by the issuance of a permanent residence visa ( Green Card)
• Granted U.S. citizenship • Granted status as a “protected person” ( political
refugees and political asylum holders)
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ExportExport
• EAR 99
Items subject to the EAR, but not specified on the Commerce Control List.
NLR – No license required.
Must check General Prohibitions 4 –10.
• NLR
When an item is not listed on the Commerce Control List (CCL), but is under the scope of the EAR. When an item is listed on the CCL but does not require a license to the destination AND no General Prohibitions apply to the export.
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Export Export
• Commerce Control List
(dual use items // Dept. of Commerce// BIS)
• Export Commodity Control Number
• Reason for Control
• Country Chart
• License Exceptions
• Example : 4A994 / Computers
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Commerce Control List Commerce Control List
• Categories 0 – Nuclear Materials,
Facilities & Equipment 1 – Materials, Chemicals,
Microorganisms & Toxins
2 – Material Processing 3 – Electronics 4 – Computers 5 – Telecommunications &
Info Security 6 – Lasers & Sensors 7 – Navigation & Avionics 8 – Marine 9 – Propulsion Systems,
Space Vehicles & Related equip.
• Groups
A – Equipment, Assemblies & Components
B – Test, Inspection & Production Equipment
C – Materials
D – Software
E - Technology
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Sanctioned and Embargoed CountriesSanctioned and Embargoed Countries
Cuba, No Korea,
Iran, Rwanda, Syria, Sudan
Need to check the BIS and OFAC websites
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Destination Control StatementDestination Control Statement
Destination Control Statement (DCS) must be entered on
the invoice and on the bill of lading, air waybill, or other
export control document that accompanies the shipment
from its point of origin in the U.S. to the ultimate consignee
or end use abroad. The DCS is required for all exports from
the U.S. of items on the Commerce Control List that are
not classified as EAR99. At a minimum, the DCS must
state:
“These commodities, technology or software were exported from the United States in accordance with the Export Administration
Regulations. Diversion contrary to U.S. law is prohibited”
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Know Your Customer / Red FlagsKnow Your Customer / Red Flags
Red Flag Indicators – a check list to discover possible violations
of the Export Administration Regulations:
• Customer is reluctant to offer information about the end use
• Product’s capabilities do not fit the buyer’s line of business
• Technical incompatibility in the country of import
• Paying cash where terms of sale would normally require financing
• Freight Forwarder is listed as delivery site
• Abnormal shipping route
• Routine installation, training or maintenance services are declined
• Packaging is inconsistent with the stated method of shipment or destination
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Know Your Customer/Five Basic QuestionsKnow Your Customer/Five Basic Questions
In Order to be Compliant BIS asks Five Basic Questions • 1. What is Being Shipped• 2. What is the Value / Quantity• 3. Where is it Going? • 4. Who is it Going to?• 5. What Will it be Used for?
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Denied Parties ListingsDenied Parties Listings
• Department of Commerce
*Denied Parties List
*Unverified List
*Entities List• Department of Treasury – Office of Foreign Asset
Controls (OFAC)
*Designated Nationals List• Department of State
*Debarred Nationals List
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Export Recordkeeping Export Recordkeeping
All records must be maintained for a period of 5
years from the expiration date of the export license
or other approval or from the date of export. All
export docs, A-Z from request for quotation order
to commercial invoices to license applications to
receivable records to airbills to AES/ EEI copies.
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Fines and PenaltiesFines and Penalties
Violations of the EAR may be subject to both criminal and administrative penalties.
Criminal penalties can reach up to 20 years imprisonment & $1 million per violation
Administrative penalties can reach the greater $250,000 per violation or twice the amount of the transaction that is the basis of the violation
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Best PracticesBest Practices
• Senior Management
• Designate a point person
• Standard Operating Procedures
• Technology
• Training and Education
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