Restricted Party Screening and Restricted End Uses

Prior Videos:

What is an ECCN?

The Commerce Country Chart

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U.S. Customs and Border Protection Unveils SVACIS

By now, we are all familiar with the Vehicle and Cargo Inspection Systems (VACIS) used by U.S. Customs and Border Protection (CBP) to scan import cargo.  The machines use gamma ray imaging technology that allow inspectors to see through the walls of ocean containers to reveal what’s on the inside.

To speed up the Congressionally legislated 100% scanning of imported cargo, U.S. Customs experimenting with much larger a machine capable of scanning an entire ocean vessel as it arrives in 640px-Verrazano-Narrows_Bridge_Aerialport.  Called Stationary Vessel and Cargo Inspection System (SVACIS, wittingly referred to as SuperVACIS), the machines will be positioned at the entrances of major U.S. harbors.

Pictured here is the original test SVACIS situated between New York’s Long Island on the left and Staten Island on the right.  Another SVACIS is already located at the entrance to San Francisco Bay.

Environmentalists condemn the devices as being potentially harmful to marine species.  CBP officials respond that, “The fish can always opt for a pat down”.

Does this sound far-fetched?  Happy April Fool’s Day!

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Routed Exports: Dangers to the Exporter & USPPI

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Routed Exports: Dangers For Freight Forwarders

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Coffee, Conversation, and Comparative Advantage

David Ricardo’s Law of Comparative Advantage shows how global trade is good for us.

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Why You Might NOT Want a Customs Binding Ruling

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I just read an article about Customs Binding Rulings, the premise being that you always need one.  Always.  Regardless of circumstances.

Call me contrarian, but I don’t quite agree.

U.S. Customs and Border Protection (CBP) provides for importers, or their hired experts, to submit a request for Binding Ruling on HTS classification, valuation, country of origin, and other import matters, but they’re mostly done for classification. This can give importers a relative assurance of what they are getting into before they bring in a whole boatload of something. But it’s relative, because Binding Rulings are occasionally overturned.

The first problem I have with Binding Rulings is this. Shortcut the request, and CBP may issue a bad ruling with negative consequences, such as higher duty rates. As a consultant, I have worked to overturn bad rulings. It’s more trouble, and can take much longer, than getting a proper ruling in the first place.

Requesting a Binding Ruling properly requires providing technical documentation, doing considerable supporting research, including rulings previously issued to others in similar circumstances, and building a case for the end result sought. But I would argue that, having done all that, you have fulfilled your Reasonable Care requirement. Just file your work away, and pull it out if CBP should ever question things. If CBP disagrees with your work, only then, if it is worth pursuing, do you go for a Binding Ruling. In other words, it is a last resort, not a first.

The other problem I have with Binding Rulings are those issued specifically for HTS classification, which, as I said early, are the majority of them. CBP Regulation, 19 CFR 177.8(a)(2), requires that a HTS classification ruling be referenced on any and all customs entries of the subject merchandise. This can be a problem when new people at a customs brokerage company, or a completely different brokerage company, begins handling an importer’s business, and the existence of a ruling is not adequately conveyed.

In my work as a consultant, I have seen CBP nailing importers during a Focused Assessment (otherwise known as a Customs audit) for failing to mention a ruling on customs entries. And when I have worked managing customs brokerage operations, I always advised my staff, when taking on a new importer account, to search CBP’s Binding Rulings Database by that importer’s name to see what might be out there.

And that’s my ruling on Binding Rulings.  If you have any questions on this, or other matters related to import or export compliance, I would love to hear from you, and you can reach me via my Contact page.

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You know you’re in export compliance when …

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I show this attributable to Patrick Briscoe, so thank him when you see him.

You know you’re in export compliance when …

  • You worry about whether technical data is singular or whether they’re plural;

  • Your preschooler can count all the way to XXI;

  • You’ve ever had to explain that Puerto Rico isn’t a foreign country, but Canada is;

  • You celebrate your marriage’s validation date;

  • People think your best friends are named Stella and Ellie;

  • Everyone assumes that you’ve already seen the new Star Trek movie (which is true, but still …);

  • You wonder how much money there is in shipping horses by sea;

  • [Reserved];

  • You give your teenager the car keys, subject to provisos; and

  • VD means a trip to your lawyer instead of your doctor.

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Re-Thinking Export Compliance

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Think your company is too small to worry about export compliance? Think again.

Being small and flying under the radar isn’t a get-out-of-jail-free card. Export fines can run into the hundreds of thousands millions of dollars. While a larger company might just brush that off, it could put a small company out of business. It’s also easier to become export compliant when you’re small and nimble, than later on when it’s hard to break old habits.

Think your company is too small to afford an export compliance professional? Think again.

It’s hard for a small company to justify a six figure salary. Pay less and, well, you really do get what you pay for. But maybe you don’t need that seasoned professional 40 hours per week. So how about 16 hours per week? Or even 8?

Export Compliance Managed Services

These days, more companies are outsourcing their non-core functions, be it their IT support or their photocopying needs, to managed services organizations. So why not your export compliance? Typical arrangements are on contract, so you don’t have to mess with benefits or tax withholdings. The work can be performed on-site or on call, generally with a minimum threshold of hours per week, accordingly.

Bottom line, it’s a good way to get a high level of expertise when you need it, and not pay for it when you don’t.  And it let’s YOU focus on what YOU do best.

Contact me if you would like to learn how you can export your export compliance to export compliance managed services.

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Same Destination Control Statement for Both ITAR and EAR Exports

Exporters, we all know about the Destination Control Statement that goes on our shipping documents for export of items that are controlled. We do know about this, don’t we? If not, we need to have a little chat.

The Export Administration Regulations (EAR), of the Department of Commerce, Bureau of Industry and Security (BIS), has long required in 15 CFR 758.6 a Destination Control Statement that reads:

These items are classified under Export Control Classification Number(s) (ECCN(s)) [fill-in the ECCNs for which CC 1 or 3 or RS 2 are listed as reasons for control] and destined to [destination country]. Authorization for reexport from India may be required from the U.S. Department of Commerce.

But for defense goods, the International Traffic in Arms Regulations (ITAR) of the Department of State, Directorate of Defense Trade Controls (DDTC) has required over in 22 CFR 123.9 their own statement that was different:

These commodities are authorized by the U.S. Government for export only to [country of ultimate destination] for use by [end-user] under [license or other approval number or exemption citation]. They may not be resold, diverted, transferred, or otherwise be disposed of, to any other country or to any person other than the authorized end-user or consignee(s), either in their original form or after being incorporated into other end-items, without first obtaining approval from the U.S. Department of State or use of an applicable exemption.

Effective 15 November 2016, there will be just one Destination Control Statement that can be used for exports of both defense goods and commercial goods:

These items are controlled by the U.S. Government and authorized for export only to the country of ultimate destination for use by the ultimate consignee or end-user(s) herein identified. They may not be resold, transferred, or otherwise disposed of, to any other country or to any person other than the authorized ultimate consignee or end-user(s), either in their original form or after being incorporated into other items, without first obtaining approval from the U.S. government or as otherwise authorized by U.S. law and regulations.

Yes, it’s a little longer, but no longer than including both when your export shipment contained both ITAR controlled goods and Commerce controlled goods. And it does a little better job of drawing, not only the exporter’s attention, but also the foreign consignee’s attention, to their obligations.

In addition, the new Destination Control Statement will only be required on the exporter’s commercial invoice, not on bills of lading, manifests, or other shipping documents. Freight forwarders are gonna love this.

For full details, or if you’re just suffering from a little insomnia, here are the Federal Register Documents:

EAR: https://www.federalregister.gov/articles/2016/08/17/2016-19551/revisions-to-the-export-administration-regulations-ear-harmonization-of-the-destination-control

ITAR: https://www.federalregister.gov/articles/2016/08/17/2016-19550/amendment-to-the-international-traffic-in-arms-regulations-procedures-for-obtaining-state-department

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The Commerce Country Chart

Prior video: What is an ECCN?

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