AEB - 5 th Annual Export Controls and Compliance Seminar

Transcription

1 AEB - 5 th Annual Export Controls and Compliance Seminar Understanding your Business Trade & Risk profile AEB 8th October, 2014 Trade Compliance Advisory Charles Barber

2 International Trade Compliance Import/Export control requirements Apply in many jurisdictions, to tangible shipments and intangibles (including technology, drawings) US extra-territorial rules apply to US individuals and companies; to Non-US persons while physically present in US and to US origin items/technologies, including reexports Import/Export rules apply to all parties, including seller, agents, brokers, freight forwarders, carriers, suppliers, customers, distributors/resellers Classification of Items Required to determine admissibility, duty rate, preference program eligibility and licensing requirements Import items must be classified according to the Harmonized Tariff System (HTS or HS) Export classification applies in numerous jurisdictions to military and dual use items Valuation Required to determine customs duty and tax Value based on price paid or payable Determination of intra-company transfer price is required Each country chooses whether to include international freight and insurance, e.g., included by EU and China, excluded by US Country of Origin Required with exit and entry declaration Each duty preference /FTA regime has its own rules that must be strictly followed Some countries require origin marking Screening All transactions must be screened against Restricted/Denied Party(s) and matches/hits must be reviewed before the transaction can proceed. Outside Counsel advice may be needed Sanctioned countries Transactions involving: Cuba, Iran, N. Korea, N. Sudan, Syria, are generally subject to strong restrictions/not permitted. Anti-boycott rules Restrict participation in Arab boycott of Israel Most restrictions must be negotiated out Even if removed from contract/financing documents, request must be reported International supply chain security EU: Authorized Economic Operator (AEO) program imposes specific requirements for imports, exports and cargo security. US: the Customs-Trade Partnership Against Terrorism (C- TPAT) imposes specific cargo security requirements for imports. Many jurisdictions have, or are developing cargo security programs. Trade Compliance 2

3 A few thoughts How much diligence do you need Is a Trade Compliance Program sufficient Demonstrable due diligence by location Resources are they competent in the subject area What do you actually need, to do what, where, how Centralized or where the rubber hits the road Opportunity Let s just do that bit Paying for your trade compliance A key piece of your risk assessment 3

4 Risk Score Actual 84% Potential 60% Ex Co., UK Duty Saved $? K $256k Duty Spend Transactions 65% Routed 38% Re Exported Exports Bi-lateral FTA GSP imports Imports Import from Export to Restricted Party Screening Completed / When / Who End Use / End User Verified / Contractual Protection Desk-Level Procedures Trade Program Policy, Assessment, Training Sales $55,440,772 Export 69% EU 15% Domestic 16% Purchases $23,888,169 Domestic 74% Qatar Kuwait Import 25% Hong Kong EU 1% 10% Time Spent No 1 <1% ERP IBS Related Role Additional resources Exp Cont d items HTS ECCN Origin 32 ERP items growth per week

5 Awareness Perhaps the Program needs to understand Operations by location within supply chain(s) Before we test program take up / implementation Risk & opportunity requires competency (so consider both) Export Control Usually more visible / often a higher pitch in noise terms Is significant but only part of the risk Consider Demonstrate compliance visibly if possible Show progress in achieving a compliant position Location, Location, Location ; typically where the issues arise 5

6 AEB - 5 th Annual Export Controls and Compliance Seminar Understanding your Business Trade & Risk profile Q&A AEB 8th October, 2014 Trade Compliance Advisory Charles Barber