 |
The Case for an Integrated Trade Compliance Strategy
|  | Reynold Martens, GHY's Executive Vice President will be conducting a seminar on the above-noted topic at IE Canada's 79th Annual Conference & Trade Show in Toronto on October 19th.
Canadian importers and exporters are rapidly diversifying their global supply chains and markets in search of a competitive edge and increased margins. The new trade reality is a complex mix of origins, production locations, and destinations for finished goods. A pro-active and diligent approach to managing regulatory obligations is necessary to ensure the enterprise is compliant at all stages of the sourcing, production, and sales cycles. This session will unpack the case for involvement and visibility of trade activities across the operations, finance, business development, executive, and board levels, and provide ideas on how to make such an integrated approach a reality.
For more information on the program or to register for the conference, please click here.
|
| Lithium Battery Curbs Likely After UPS Crash |  | |
Federal officials in the United States are poised to substantially tighten restrictions on transporting lithium batteries in U.S. cargo planes, according to people familiar with the details, after an apparent cargo fire resulted in the crash of a United Parcel Service (UPS) jet in Dubai, reported Dow Jones Newswires.
The move, which would affect nearly all U.S. cargo carriers, could also force manufacturers and distributors of consumer electronics to alter their packaging and documentation procedures. Lithium batteries are used in a wide array of electronic devices, such as cell phones and laptop computers.
The urgency of the new restrictions, which people familiar with the matter expect to be announced shortly, appear to be a response to signs that lithium batteries may have stoked the intense fire and dense smoke that filled the cockpit of the UPS Boeing 747 jumbo jet before it went down on September 3, while trying to return to Dubai International Airport.
|
Grace Period Extended for ACI Reporting of U.S. Loaded FROB Cargo
|  | The CBSA has reached a final resolution with regard to the grace period for Advance Commercial
Information (ACI) transmission requirements for US-loaded Freight Remaining on Board (FROB) cargo.
Based on its review, the CBSA has extended the exemption for ACI notification of US-loaded FROB cargo that would otherwise have expired on September 13th until December 31, 2010. During this time, carriers will not be required to provide cargo information on these goods.
Once the extended grace period expires however, the CBSA will require ACI transmissions for US-loaded FROB cargo as per CBSA current policy. Until the implementation date, marine carriers are encouraged to transit US-loaded FROB cargo information to the CBSA in order to achieve compliance upon the implementation date (January 1, 2011).
|
| Stay Connected with GHY International | 
|
ITC Report on Eliminating Duties on 735 More Drug Products
|  | The International Trade Commission released last week results of its investigation into the potential elimination of duties on an additional 735 pharmaceutical products and chemical intermediates that are used primarily for the production of pharmaceuticals.
The ITC's report provides a summary description of the products contained in the existing Pharmaceutical Appendix as well as the proposed modifications, an explanation of the relationship between the various elements in the Appendix and the HTSUS, and an estimate of current U.S. imports and, where possible, exports of the products included in the existing Pharmaceutical Appendix and the proposed additions.
|
| EDC Looking for Exporters to be Part of Its Research Panel |  | In this rapidly changing business environment, Export Development Canada (EDC) continues to strive to meet the needs of Canadian businesses. To do this, the export credit agency needs to better understand your evolving business challenges and what's driving your international success. To that end, the EDC is inviting companies to join their online community.
What do you get?
Access to research results shared through the EDC's member-only portal, and other trade-related intelligence such as white papers, publications and invitations to business events.
How much time will it take?
You will receive a short online survey approximately once a month, which should take no more than five minutes of your time.
How to join?
Complete a short online survey as a qualification step for membership.
|
Automation Key to Easing the ISF Compliance Pain
|  | As reported in a current article in DC Velocity magazine, automation is the critical factor for U.S. importers looking to avoid some of the common obstacles associated with the CBP's Importer Security Filing (ISF, aka "10+2") rule intended to screen incoming ocean containers for security risks prior to arrival.
At least that's the message from vendors of global trade management (GTM) software, says the magazine.
"Although they have an obvious interest in promoting automated solutions, they do have a valid point, especially in regard to ISF filings. With so many parties now involved in providing data and with tighter deadlines to meet, using software to standardize data collection and formatting is a huge time saver. It can also promote accuracy, minimize errors, and avoid duplication of effort. On top of that, the software can identify information gaps, provide greater visibility into overseas activities and costs, create a compliance audit trail, and improve data integrity throughout the supply chain."
Click here to read the other five tips offered by DC Velocity that may make your path to "10+2" compliance a little smoother.
To find out more about GHY's SmartBorder ISF automated solution go here.
|
FUN TRADE FACTS
Top 10 Items Seized by Customs at US Ports
|  | Counterfeit goods generate hundreds of billions of dollars in sales each year, making up about 7 percent of all global trade. At US ports alone, counterfeit products seized in 2009 had an estimated street value of more than $260 million.
So which counterfeit goods are seized most often? Based on USCPB figures, here are the top 10 most seized items with their domestic seizure value and percentage of total seizures:
10. Toys/Electronic Games
Value: $5.50 million (2%)
9. Jewelry
Value: $10.50 million (4%)
8. Pharmaceuticals
Value: $11.06 million (4%)
7. Media
Value: $11.09 million (4%)
6. Computers/Hardware
Value: $12.54 million (5%)
5. Watches/Parts
Value: $15.53 million (6%)
4. Apparel
Value: $21.46 million (8%)
3. Handbags/Wallets/Backpacks
Value: $21.50 million (8%)
2. Consumer Electronics
Value: $31.77 million (12%)
1. Footwear
Value: $99.78 million (38%)
|
|
|
| GHY E-Newsletter Issue #11 September · 2010 |
|
ACI eManifest Roll-Out Temporarily Delayed
Implementation postponed by one month to Oct. 31
The Canada Border Services Agency (CBSA) recently announced that it is again delaying the implementation of the ACI eManifest program for the highway mode, this time by one month from September 30th to October 31st, 2010. ACI eManifest was initially slated to roll out in June of this year, but was pushed to September to allow CBSA to ensure the integrity of the program given the volumes of data being transmitted by highway carriers. According to CBSA the reason for the most recent delay is related to the software of other commercial programs, not ACI.
According to Jason Proceviat, CBSA's eManifest Director, "While ACI is ready to go, we bundle some commercial programs together, and there are a few delays from other areas that need to be addressed before we can go live."
Canadian Trucking Alliance (CTA) CEO David Bradley said "the trucking industry understands the challenges involved in implementing such a complex program, but we are frustrated by the latest delay." He said he hopes CBSA will meet the new implementation date. "Carriers are seeking improved efficiencies at the border," he said. "This includes electronic transmission of data through ACI, and we are looking forward to implementation sooner rather than later. We want to avoid the stop-start pattern that characterized implementation of the ACE eManifest program in the US."
There is a keen interest from the trucking industry in getting the program rolled out. Carriers have been preparing for ACI eManifest for a number of years now. In fact, close to a hundred carriers approached CBSA just to participate in the early testing of ACI. CTA has been working closely on the development of the program and believes it will have a beneficial impact on cross-border efficiency.
Important Reminder
GHY International is partnering with I.E.Canada, the Canadian Trucking Alliance and provincial trucking associations to provide you with the most up to date information through another hands-on ACI eManifest workshop in Winnipeg on September 27th.
Led by Oryst Dydynsky of The Descartes Systems Group Inc., an industry leader and Co-Chair of I.E.Canada's Customs and Legislation Committee, and Jason Proceviat of CBSA, each workshop will include an overview of the eManifest highway initiative and the new requirements, as well as an interactive walk-through exercise to highlight the process changes that will be required of carriers, freight forwarders, importers and their brokers.
Please visit our website for additional information. |
|
Balancing Security and Trade at the US-Canada Border
Study cites need for new strategies of preclearance
The thickening of the Canada-US border in response to post 9/11 security challenges has created new obstacles to cross-border trade and investment. However, preclearance of people and goods before they arrive at the physical border offers one of the best ways to address cross-border obstacles while ensuring public safety, according to a new study released by the C.D. Howe Institute at Carleton University in Ottawa, Canada.
The study titled In A Matter of Trust: Expanding the Preclearance of Commerce between Canada and the United States, written by Michael Hart, Professor and Simon Reisman Chair in Trade Policy Norman Paterson School of International Affairs at Carleton argues that preclearance of people and goods before they arrive at the Canada-US border is the best way to fix border problems while ensuring public safety.
Preclearance already has a track record of success where it has been applied. It has proven to be a cost-effective way to provide air travelers with an economically efficient way to clear customs and immigration before entering the United States from Canada. EU members are satisfied that they have succeeded in guarding their security while promoting an integrated single market by relying on a perimeter approach to preclearance. Canada and the United States are relying on preclearance as the basis of trusted traveler and shipper programs.
Building on these successful models, Canada and the United States should now proceed to designing and implementing more ambitious programs that rely on preclearance as a cost-effective way to ensure both a secure and an economically efficient border for most travelers and shippers crossing by land.
Getting there, however, will require a determined effort to get beyond conventional wisdom and bureaucratic silos. The current division of administrative and political responsibilities makes it very difficult for the two governments to get beyond current practice. To overcome this problem, the two governments should each appoint a special envoy reporting directly to the President or the Prime Minister through the Secretary of Homeland Security or the Minister of Public Safety, respectively, with a mandate to develop a coherent, joint program of land preclearance. The paper further argues for the creation of a joint, independent commission to provide the two governments with advice on implementation and other issues related to preclearance.
"Preclearance," the report says, "will work best on the basis of integrated, standardized data, shared by agencies on both sides of the border, but will require a commitment to much enhanced interagency cooperation to reduce the silo effect and make the land-border preclearance programs fully effective."
Among ways this can be accomplished, it says, are "providing 24-hour service for all requirements at ports of entry that offer FAST-approved transit, a service that may be more easily extended at medium-sized points of entry through shared facilities, co-location, and cross-designation."
The complete study can be downloaded from our website here.
|
Canadian Ambassador Seeks "Alternative Means" to Avoid Effects of the Foreign Manufacturers Legal Accountability
Bill could result in unintended consequences that would unduly burden bilateral trade, says Doer
Canada's
Ambassador to the United States, Gary Doer, has written to the leadership of the
U.S. House opposing the proposed Foreign
Manufacturers Legal Accountability Act (FMLAA).
In his letter Ambassador Doer states that while Canada is sympathetic to the goals of the bill,
Canadians are concerned that it will have unintended consequences and a
disproportionately negative impact on intertwined U.S.-Canada supply chains and
on jobs in both countries.
Doer goes on to say that "[i]n our view, it will adversely interfere with the flow of trade across the border by adding yet another logistical and administrative requirement. This would be especially unfortunate in light of our ongoing joint efforts to restore our economies."
The letter has also been distributed to the various Congressional committees with jurisdiction over the proposed legislation in addition to groups such as the Northern Border State Caucus and the Congressional Friends of Canada Caucus.
Please visit our website for more detailed information on the FMLAA. |
|
New Energy Efficiency Regulations Applicable to Certain Electric Motors
Importers of certain general purpose, three-phase AC industrial motors should be aware of updated standards mandated by legislation in both the Unites States and Canada governing the efficiency of electric motors incorporated into all machinery that will soon be taking effect.
In the U.S., the Energy Independence and Security Act (EISA) of 2007, comes into effect on 19th December this year. The legislation adopted by Canada (NRCan's Energy Efficiency Regulations) will go into effect on the 1st January 2011.
The act will replace the current EPAct legislation which has been in force since 1997 and covers low voltage, "General Purpose" 3-phase electric motors from 1-200HP (0.75 - 150 kW). It will enforce a rise in the minimum efficiency of these machines from NEMA Energy Efficient to NEMA Premium Efficient. The new law will go further as it also encompasses motors not previously within the EPAct scope. The result is that almost all low voltage, 3-phase electrical induction motors will be covered by this new legislation. It can be summarized as follows:
* 1-200 HP General Purpose motors currently covered by EPAct will change from NEMA Energy Efficient to NEMA Premium Efficient.
* 1-200 HP motors not covered above will comply with NEMA Energy Efficient.
* 201-500 HP motors will comply with NEMA Energy Efficient.
The new EISA legislation is very broad in its coverage, encompassing virtually all types of low voltage, 3 phase motor such as Explosion proof; Severe Duty; Vertical duty; 2, 4, 6 and 8 pole; Brake motors; all mounting types and any frame type, NEMA or IEC metric.
By the end of this year, almost all low voltage, 3-phase electric motors imported into the US and Canada will be subject to new legislation. Therefore, it would be wise to be prepared for this and review any machinery designs that incorporate such motors as soon as possible and ensure these products are in compliance with the new regulations.
A detailed FAQ regarding EISA as it applies to imported electric motors can be found on our website.
|
|
Canada Should Go Big in Trade Negotiations With EU: Conference Board of Canada
New report examines Canada's "Missing Trade" with the European Union
The stakes are higher than commonly assumed in Canada's trade negotiations with the European Union (EU), the Conference Board
argues in a ground-breaking report that assesses a fuller range of Canada-EU trade than do conventional analyses.
"Canadian and European Union negotiators have made rapid progress towards a trade and investment agreement in just a year and
a half. But conventional trade analysis paints a narrow picture of our trade relationship, and a defensive stance dominates public discussion about the deal. The entire agreement could fall apart if this narrow approach prevails, costing us better access to a broad range of long-term economic opportunities," said Danielle Goldfarb, Associate Director, International Trade and Investment Centre.
"Canada can frame its position more constructively in light of global business realities. We have much to gain from two-way investment, two way services trade, two-way digital trade, two-way value chain activity, and other partnerships with the EU over the long term."
Research in Motion (RIM) -- maker of the BlackBerry, one of Canada's few global brands -- illustrates the reality of highly-integrated global trade. Developed in Canada, the components in the Blackberry come from suppliers all over the world.
RIM manufactures its new models in Canada, then outsources the manufacturing to lower-cost countries, such as Hungary. Moreover, the BlackBerry's value goes beyond its components and manufacturing-the data and voice services customers buy in the
EU and worldwide represent a substantial proportion of company revenues. This broader range of activities that enable RIM to compete globally is excluded from typical trade analysis and measures.
The Conference Board's analysis, published in Canada's "Missing" Trade with the European Union, goes beyond the traditional trade analyses, which focuses primarily on exports of goods. The integrative trade" concept includes services trade, global and regional value chains including imported parts, investment and sales by foreign affiliates, digital or virtual trade, and linkages between goods and services. These forms of trade are undercounted in traditional measures.
When traded services, imported parts, and sales by Canadian affiliates in the EU are included, Canada sells at least $150 billion goods and services to the EU every year -- more than four times the size of the $35 billion in reported goods product exports. EU sales of goods and services to Canada were even more substantial -- $440 billion in 2008, compared to $70 billion in conventionally measured imports.
In fact, the primary mode of Canada-EU trade is not cross-border exports, but sales by foreign affiliates. And, contrary to assumptions, Canada-EU services trade is central and substantial, not marginal.
The study finds that companies in the EU and Canada not only sell each other final products, they also make important contributions to each others' supply chains, maintaining competitiveness through the exchange of raw materials, parts, and services. In contrast to Canada-US supply chains, there is greater growth potential in the Canada-EU supply chain relationship.
Ottawa and the provinces (who are also at the EU negotiating table) must therefore give Canada's negotiators a broad mandate that goes beyond obtaining greater access for Canadian products in the EU. This includes prioritizing the removal of barriers to two-way Canada-EU services trade (such as facilitating temporary work visas), increasing access to two-way investment, and removing barriers to inputs that help Canada and the EU improve their supply chain competitiveness.
The report is produced for The Conference Board of Canada's International Trade and Investment Centre, which is intended to help Canadian leaders better understand what global economic dynamics could mean for public policies and business strategies.
You can download the complete report from our website.
|
|
Canadian Farmers Challenge U.S. COOL Requirements at WTO
Canada's long-running trade dispute with the U.S. over its country-of-origin labelling (COOL) requirements for beef and pork has finally made its way before the World Trade Organization's Dispute Settlements Body (DSB) at hearings that took place Geneva, Switzerland on Sept 14-16.
The Canadian government, backed by several business groups (including some from the U.S.), claims that the implementation of COOL requirements is immensely costly forcing Canadian businesses to seek less money for their beef so as to absorb the cost of implementing the requirement. They maintain that COOL is a technical barrier to trade (TBT) and as such illegal under WTO law.
"The COOL measure is not intended to address health or safety concerns," Canada said in its opening statement. "The objective of the COOL measure was to distort the conditions of competition in the U.S. market to favour U.S. cattle and hogs compared to imported livestock."
The COOL act requires that consumers be informed of the country of origin of meat by a label on the sales package. To receive an "A" label, cattle must be born, raised, and slaughtered in the United States. Meat from cattle with a mixed life - for example, born and raised in Canada but slaughtered in the U.S. - must have a label indicating the mix.
Attending the first round of oral hearings, the Canadian Cattlemen's Association said Canada's team at the WTO DSB was solid in its preparations and professional in refuting the U.S. team's "creative suggestions." "We correctly anticipated the arguments the U.S. would use to defend COOL and while there were no surprises, it is clear that the U.S. intends to defend this trade barrier vigorously," CCA president Travis Toews said in a press release.
The U.S. government hasn't challenged Canada's "economic evidence" of the harm caused by mandatory country-of-origin labelling (COOL), but blames "market participants" rather than COOL itself, Canada's cattle agency reports.
According to the CCA, Washington's defense of COOL was to claim that COOL is designed to inform consumers, not restrict trade, and that it hasn't directly caused any segregation or other negative impact on Canadian cattle. Canada retorted that the market reaction to COOL was "not only predictable but in fact the intended outcome of COOL's proponents," the CCA said.
Although the present hearings are an important step in the dispute resolution process, they will not produce an immediate decision. There will be a period in October and November for further written information and rebuttals to the panel and a second oral hearing in early December. A report with the panel's decision is scheduled for July 2011.
|
|
DHS Audit Recommends Clear Goals for Importer Self-Assessments
Self-policing program lacks performance measures, says Inspector General
Customs and Border Protection has not clearly defined the purpose of its Importer Self Assessment (ISA) program, the Department of Homeland Security's Inspector General (OIG), Richard L. Skinner said last week.
The report of the inspector general's audit showed that Customs had not established performance measures or operating procedures for employees managing the ISA. Nor had it verified the effectiveness of applicants' internal controls before admitting them to the program by which U.S. Customs and Border Protection permits importers to conduct self-assessments to verify their compliance with federal trade requirements in exchange for decreased agency oversight and other benefits.
Accordingly, the DHS OIG has made four recommendations to CBP to improve the effectiveness of the Importer Self-Assessment program.
#1: Establish policy and procedures that document the management controls needed for ISA program operations, including:
* The purpose, goals, and objectives of the ISA program;
* The performance metrics to measure the effectiveness of the program in meeting the established purpose, goals, and objectives; and
* The formal procedural guidance necessary to support consistent and effective implementation of the program.
#2: Assess the risks to trade compliance associated with the current policies and procedures for accepting importers into the ISA program, and establish internal controls to ensure that risks identified are mitigated to provide reasonable assurance of ISA participants' compliance with trade laws and regulations.
#3: Require Port Account Managers to follow the same policy and procedures for oversight of ISA importers as National Account Managers, or remove ISA program oversight responsibilities from Port Account Managers.
#4: Establish policy and procedures to ensure that ISA importers' annual self-testing results are requested and reviewed for compliance with program requirements. Management Comments and OIG Analysis
U.S. CBP concurred with all four recommendations and has initiated actions to implement them.
The complete audit report (including OIG analysis and descriptions of the CBP's proposed corrective actions) can be downloaded from our website.
|
|
Finding time to follow the latest international trade
developments and programs of Customs agencies on both sides of the border
relevant to your business can be challenging, so we hope you find this
issue of our Tradelines e-newsletter to be a helpful resource in this respect. As
always, we'd greatly appreciate any opinions, comments and suggestions you may
have to help us improve this information resource, so please don't hesitate to
let us know what you think.
If you haven't already, we'd like to take this opportunity to invite you to
check out our Tradelines E-News weblog where you can
find current stories updated daily about business events and developments that
are important to Canadian importers and exporters. Sign up for our RSS feed and
get automatic updates to your favourite reader as soon as they're posted. As well, you can now follow GHY on Twitter for the latest information, updates and links to articles of interest.
|
|
|
