International Trade Compliance Overview

Transcription

1 International Trade Compliance Overview 11st March 2014 in Shanghai, China Anna Peng International Trade Administration GE Power & Water T: E:

2 What is Compliance? In general, compliance means conforming to a rule, such as a specification, policy, standard or law. Regulatory compliance describes the goal that corporations or public agencies aspire to achieve in their efforts to ensure that personnel are aware of and take steps to comply with relevant laws and regulations.

3 Import / Export Compliance / Define our terms Import Compliance: Compliance with the rules of the destination country. How do I get my goods here from there? Export Compliance: Compliance with the laws of the exporting country in order to get goods out. What must I do to get my goods there from here? What are the restrictions and prohibitions on exporting goods, services, and information?

4 Why do we care? Risks of Noncompliance Higher transaction cost Fines, penalties Delays at the border Seizures Loss of import/export privileges Damage to reputation Criminal liability (+ inadvertently abetting customer wrongdoing) Increased government scrutiny Aggravating factor for future violations Death!

5 Scope of Government Control Imports/exports include : Raw materials,factory inputs Finished goods Sample, demos, R&D items Capital equipment, furniture Gifts, promotional items Hand carried items Repairs and returns Temporary imports/exports Intracompany shipments

6 Major Enterprise Standard Elements Customs Valuation Tariff Classification Origin determination / marking Duty preference programs

7 Major Enterprise Standard Elements Customs Valuation Tariff Classification Origin determination / marking Duty preference programs

8 Transaction Value China joined 1983 China joined 2001

9 Transaction Value Price actually paid or payable for the merchandise when sold for exportation, plus certain additions. Price A tually Paid or Paya le Total payment (whether direct or indirect) for the imported merchandise from the buyer to the seller. Presumption that all payments from the buyer to the seller are dutiable. Often the invoice price, but certain upward and downward adjustments may be made. If transaction value is unavailable, the remaining valuation methods will be applied in order.

10 Freight and Insurance EU, China, Korea and India Freight and insurance IS included in dutiable alue, i.e., CIF pri e. Does t matter who pays. INCOTERMS may shift cost between parties, but does t affe t usto s de lared alue.

11 Warning signals Does customer want lower price to avoid duty/tax? Was pri i g ar s le gth egotiatio? -0- is not a permissible value for commercial goods. Everything has a customs value.

12 Major Enterprise Standard Elements Customs Valuation Tariff Classification Origin determination / marking Duty preference programs

13 All tangible goods are classifiable

14 Product Descriptions Invoice description is essential. Example: Chips & Wafers Potatoes and Cookies or Semiconductors?

15 Major Enterprise Standard Elements Customs Valuation Tariff Classification Origin determination / marking Duty preference programs

16 Why Country of Origin is Important Country of origin can have a bearing on: Admissibility Duty rates Trade program eligibility Applicability of quotas or antidumping duties

17 Major Enterprise Standard Elements Customs Valuation Tariff Classification Origin determination / marking Duty preference programs

18 Duty Preference Programs Negotiated political agreement on trade between countries Specific rules in place to determine if a product is eligible for the preference Application of the rules to benefit from the duty reduction requires affirmative action and a system of internal controls. May also require additional supporting declarations at the time of entry.

19 Duty Preference Programs - 2 Common compliance issues Failure to meet rule specification Lack of documentation

20 Current U.S. Country Restrictions (Economic Sanctions See GGAP Website) Cuba Iran N. Korea Syria Proposed transactions subject to legal review to determine whether or not proposed transaction is prohibited. Sudan

21 If you remember nothing else, know: Customs operations in China is complicated (duty/tax computations). The rules are our guide; the government gets the final say every time they intervene. Customers o t al ays k o the rules; so e may try to skirt them. We want to stay on the administrative side of settling, not the criminal / court side in any disagreement with government.

22 Thank you! GENERAL ELECTRIC COMPANY Power&Water Anna Peng Commercial Administrator TEL: MOBILE:

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