CRCBFA.org

Export Report - 4-25-12

Brenda Barnes — Wed, 25 Apr 2012 23:31:00 GMT

Current Export Issues - 4-25-12

1. Option 4/ Post-departure AES Filing: Option 4 is still being hashed out between the US Census and US Customs on whether it will exist and how it will exist. I have received phone calls in the last week from US Customs in DC with inquiries on how exports work and how they would work in certain Option-4 scenarios. We are, of course, hopeful these discussions and phone calls do lead into a workable and efficient system similar to the one that existed prior to 2002.

2. GRI (General Rate Increases): Most carriers are sending out their 30-day notices of GRI’s which are scheduled to take effect on May 15. Interesting and at the same time aggravating, rates in Pacific South West are said to be taking on GRI’s valued at half those being predicted for Pacific North West ports. This does not seem fair to us here in Portland, Tacoma, and Seattle. Concerns have been voiced and the we’ll see how it all hashes out on May 15.

3. FTA – (Free Trade Agreement) with Colombia: It was announced the free trade agreement with Colombia will go into effect starting May 15.

4. FMC and Price Indexing: FMC has a grand idea to create price indexes for agricultural products. Currently there are several events where the FMC intends to make presentations on this idea. Personally, it might help the smaller shipper, but not the shipper with large volumes. There was an article written in the JOC on April 11, if you would like to read more about it.

5. FMC reforming NVOCC’s: The FMC has been proposing a number of ideas to “help” NVOCC’s, but never once mentions helping freight forwarders. The FMC has stated they want to cut off the “unnecessary” regulations that govern NVOCC’s, which cost them for doing business. Personally, I think the FMC should be looking at all OTI’s and not only NVOCC’s. Another concern that doesn’t seem to be addressed in FMC’s statements are the foreign NVOCC’s. Will these changes allow China to take over our freight forwarding business? It isn’t clear and should be concern to all of us. Please watch for more to come.

6. BIS (Bureau of Industry and Security): In the April 17, 2012 Federal Register there was a listing regarding proposal for VEU (Validated End-User) as a license exception. They are receiving comments through June 8, 2012 if you would like to make yours known. It is very detailed and I would recommend you read through it even if you don’t intend to make comment.

7. BIS has also been busy changing their numbering system to match OFAC (Office of Foreign Asset Controls) changes. Details of this numbering system are listed on OFAC’s web page.

Import Report - March 15, 2012

Chuck Willis — Thu, 15 Mar 2012 15:59:00 GMT

US-Korea FTA

Proclamation to amend the HTS to include KORUS was signed by President Obama on March 6, 2012 and goes into effect today, March 15, 2012. Unfortunately you will not be able to get any 7501 accepted with the SPI of KR until Customs completes their programming. Currently the projected time to completion is the end of March, but that’s not guaranteed. Until then, CBP has provided two options for filers, either file a non-ABI 7501 showing reduced duty for SPI of KR until ABI is ready OR file ABI 7501 with full duty and then file 520(3) request for administrative review and refund.

CBP guidance can be found here: http://www.cbp.gov/linkhandler/cgov/trade/trade_programs/international_agreements/free_trade/korea/korea_fta.ctt/korea_fta.pdf.

GSP Refunds

CBP has announced that importers who have not received a Generalized System of Preferences SPI “A” refund by March 31. 2012 should assume that the claim “fell through the cracks” and file a written refund request by the April 18, 2012 deadline to ensure those refunds are received.

Legislative Report / CRCBFA Lunch with Congressman Kurt Schrader 3/15/12

Nancy Zimmerman — Wed, 14 Mar 2012 21:48:00 GMT

1.) S. 1813 – (MAP 21 - Moving Ahead for Progress – 21^st century)

On 3/14, the Senate approved a two year plan for a $109 B transportation bill which essentially buys some time to find a longer term solution to a T&I funding problem. In brief, this bill proposes a reduction in the number of federal transportation programs from 90 to fewer than 30, provides states money for transportation projects, increase highway safety funding, cuts red tape, and provides loans for investment. It also sets federal safety standards for transit systems. Last Wednesday, Speaker Boehner failed to persuade House Republicans to support a 5 year transportation bill. It’s likely a T&I bill will come up again in two years, and within that time, the highway trust fund (federal gas tax) must be addressed. It hasn’t been increased since 1993.

2.) Senate Finance hearing on trade policy – On March 7, the SF Committee held a hearing on 2012 trade agenda. Senator Baucus and USTR Kirk praised the Obama Admin for enacting the Korea, Panama and Colombia FTAs, renewal of the Trade Adjustment Assistance program, the reinstatement of GSP and the Andean Trade Preferences Act. They also encouraged several trade goals for this year:

a. Approving Permanent Normal Trade Relations (PNTR) with Russia

b. Concluding Trans-Pacific Partnership (TPP)

c. Renewal of trade promotion authority (TPA) – which allows the President to negotiate trade agreements that Congress can approve or reject but not amend. TPA expired in 2004.

d. Trade related challenges China – The establishment of ITEC (Interagency Trade Enforcement Center) – per Kirk, will “significantly enhance the administration’s ability to prioritize and aggressively challenge unfair trade practices around the world, including China.” ITEC will be spearheaded by a USTR official.

3.) China:

a.) CVD/NME – On March 13, 2012, President Obama signed H.R. 4105 into law, amending 19 USC 1671 so that the countervailing duties on non-market economy (NME) countries, such as China and Vietnam, can continue to apply and adjustments of antidumping margins for double counting can be made. These changes were needed due to certain court and WTO rulings. The new bill amends 19 USC 1671 to add a subsection that explicitly and retroactively allows the imposition of countervailing duties on NMEs back to 2006, except when subsidies cannot be identified or measured.

b.) Rare earths – the rare earth issue is back. USTR Kirk has requested consultations with China at the WTO, concerning export restraints on rare earths as well as many minerals that are used in manufacturing of hybrid car batteries, wind turbines, electronics, chemicals, autos, and petroleum. The EU and Japan has also requested consultations with China.

Mission to DC 2012 - Position Papers

Nancy Zimmerman — Mon, 27 Feb 2012 16:07:00 GMT

Dear CRCBFA membership,

Each year, our association travels to Washington DC for our trade mission in late winter/early spring - depending on the Congressional calendar. It is hosted by the Pacific Coast Council (PCC), and is a top notch, incredibly interesting, and action packed event. It typically begins on a Sunday with the PCC board meeting, in which everyone is welcome. This meeting provides a good overview of what each of the five West coast associations are doing, and what the main issues are. On Monday, we meet with top HQ officials with Customs and Border Protection, the Food & Drug Administration and the Federal Maritime Commission where we get the opportunity to voice and receive feedback. It's a small setting, which allows for relatively open discussion, which sets the stage for later dialogue throughout the year. On Tuesday, we meet with our Congressional members on the Hill, to discuss trade issues that are pertinent to our region. Historically, this has been very effective, and extremely interesting as it exemplifies the process by which policy takes shape. Attached are our position papers for this year. We encourage members to become a part of the PCC trip to Washington DC. If you're not able to travel during that time, we always encourage assistance in researching and writing position papers. I've learned that writing about a topic is the best way to learn about it, and really "get into the weeds."

Thanks for reading, and let me know if you have any questions or comments.

All the best,

Nancy / Legislative Chair

Legislative Report 2/24/12

Nancy Zimmerman — Mon, 27 Feb 2012 16:03:00 GMT

Since Congress has been recessed this week, nothing new to report, so I’ll recap some of our issues for the Mission next week.

1.) HMT / RAMP Act H.R. 104 – We support the allocation of all designated funds to go to the Harbor Maintenance Tax Fund (HMTF) which maintains dredging in our channels, ports and harbors. Congress established this in 1986 and it seems the misallocation of funds is an increasing issue. Currently, there is a surplus of approx. $5.65 billion. In FY 2011, approx. $700M was diverted.

2.) CBP Reauthorization bill – including our efforts to establish an OFO here – The overall goal of this bill is trade facilitation and partnership with CBP. The last version is from the 111^th Congress, S. 1631.

a.) Portland has had an unfilled, but legislatively mandated OFO – Office of Field Ops. Position. We are requesting to certain members of Congress that this be filled. Currently our OFO is San Francisco, and while we greatly appreciate their support, we feel that local policy guidance, budget oversight and administrative support is needed. The CBP Reauthorization bill may be the best vehicle to establish an OFO, but we’re still awaiting a final version to be presented from the Senate Finance committee.

b.) Other issues under this bill include to cancel a broker’s license if that broker had been convicted of terrorism. This implies that there is due process in the court system. Unfortunately, as the conversation now stands, we think CBP wishes to cancel a license within ten days for more vague reasons of “national security.” We need a strict definition of “national security” here and a reasonable time frame for a broker to be able to defend him or herself. Ten days is clearly not sufficient to defend a license before DHS or a court of law.

c.) Another issue is continuing education for brokers and tying this to retaining a permit. While we favor the requirement for brokers to receive continuing education as a condition of retaining their individual license, we feel having this tied to retaining a permit may cause many capable and earnest brokers to have their licenses rendered inactive and thus lose their permits to operate their businesses. There needs to be a sufficient rollover period to the next year to allow brokers to obtain all their credits before December of a given year.

3.) Option 4 – We’re hopeful this will someday be resolved and that Option 4 will be reinstated. On June 2, 2008, the revised regulations were released giving Option-4 status was given a new name – Post-Departure Filing. However, there was a hold put on Post-Departure Filing portion of these revisions by U.S. Customs, meaning no one who had not been grandfathered into the Option-4 program could apply to participate at this time and hasn’t been able to do apply since 2002. Benefits of Option 4:

a.) The ease for for exporters to handle the paperwork, insuring their cargo is loaded onto the vessel, airplane, truck, or rail;

b.) Assist the exporter to remain competitive in the global market place, due to not having to be forced to process paperwork twice and insure the quality goods will make it to the overseas market without delay;

c.) Assist Department of Homeland Security in knowing these responsible exporters who are shipping innocuous cargoes, mainly agricultural in nature, with no threat to the U.S. citizens.

4.) H.R. 7 – The American Energy and Infrastructure Jobs Act – This is a monster of a bill, and it was tabled prior to Congress going to recess this week. It’s likely this will be broken up and considered in pieces, as it’s become a contentious bill in its entirety. Historically, transportation and infrastructure has been a bi-partisan issue, but not with this Congress. The bottom line is funding in general and tying funding to oil drilling. There is concern that a portion of this bill would bankrupt the Highway Trust Fund and destroys 550,000 American jobs. This highway trust fund has not been expanded since 1993 and the U.S. is 23^rd in the world for investing in port infrastructure. There are numerous examples of why Congress should consider sufficient investment for infrastructure and many question whether this bill is the best vehicle.

Finally, in the bill’s analysis, Section 6208 is titled: “Unlawful Brokerage Activities”. While this is alarming at first, as it mentions Customs brokers and freight forwarders, it appears we are exempt because for the most part, we arrange transportation through an international shipment. For parties who handle domestic transactions, they would have to register as a “broker” (truck broker) and meet certain financial obligations.

Thanks for reading!! See you soon-

-Nancy

Export Blog

Brenda Barnes — Wed, 01 Feb 2012 17:24:00 GMT

2/1/12 -

If you are at the lunch meeting today, you may hear me reference some of these items, but I thought it would be easy for everyone if I posted them here.

Export Reform Control: There is a government website (www.export.gov/ecr/index.asp) that is excellent source in tracking this project at any given time. It also shows when public comments close, if you were to want to add some.

Mission to DC: As you are probably aware, every year a group of CRCBFA people go to Washington DC to represent our group within the PCC and the west coast. We will be in DC from February 27 to 29 this year. Some of the issues that we are focusing on with regards to exports are as follows:

1. Option-4 : AES Option 4 has been closed since 2002 to new applicants. If it were to be re-opened, it could lessen the burden on exporters, reducing time and money.

2. Infrastructure: Waterways, roads, rail, and air are all modes we deal with on a daily basis. Keeping and enhancing the system we have to help exports get to market faster and cheaper, would help the exporter and the deficit.

3. National Export Initiative: (NEI) Of course we support Obama's NEI and will keep identifying bottlenecks in the the daily processes that could be enhanced to increase potential exports.

4. Harbor Maintenance Fees: (HMT) There is a pool of money that has been collected, but it is not being spent for the sole purpose the HMT lives, to maintain our ports. This money is being left in the funds to help "balance the nation's budget". Portland alone has a great need for maintaining its port, which demands much dredging of the Columbia River.

FMC (Federal Maritime Commission) - The FMC has an open public comment period through March 26, 2012, asking the public for its input on what the FMC can do to enhance NVOCC's businesses.

EGT Terminal in Longview- Looks like it will be opening soon for business.

GRI's (General Rate Increases) : Many GRI's came in January and then now in February, with many more proposed for March. Who knows what will stick and what won't, but please be aware of the details that are out there from the individual carriers.

That's all I will post for now. I hope if ever there is something that you want this group (CRCBFA) to pursue that is Export related, you will contact me: email (brenda@allports.com) or phone (503 242 1201).

Thank you,

Brenda Barnes, Export Chair

Role of the Broker - Regulatory Revision

Chuck Willis — Wed, 28 Sep 2011 18:23:00 GMT

Welcome to the CRCBFA websites first blog. We thought that this would be a great opportunity for those in the international trade community, specifically customs brokers, to voice their opinions on the proposed 19 CFR Part 111 re-write that has been in discussion between CBP and NCBFAA since January 2011 in what is called “The Role of the Broker-Broker Regulatory Revision Workgroup”.

This group was created to develop solutions to meet the challenges of 21^st century commerce as it relates to our trade. There are five major topics that have been the focus of this group.

- Expanded Broker Role

- Broker Responsibility

- Professionalism

- Regulatory Modernization

- Penalty Regime / Disciplinary Actions

In this blog, our intention is to put the issues out there as the facts that are known and let the community discuss the points as there are many different opinions on each topic. The changes to these five topics have already been discussed at length between CBP and the NCBFAA and proposals have been made. We may begin to see official requests for comments from CBP on C-TPAT and ISA changes as soon as the 1^st fiscal quarter of next year.

1.) EXPANDED BROKER ROLE

There are two key issues that are on the table, pre-certification of applicants for C-TPAT and pre-application support for ISA applicants. During a recent webinar by CBP, not much time was spent on this issue.

The key considerations concerning C-TPAT were to fast-track the importer’s applications, allow CBP resources to be redeployed, expand business potential and reduce cost to CBP. The key challenges were that the pre-certification has a lack of benefits for the applicant, push back from existing service providers, cost resistance and the SAFE Ports Act.

The key considerations for ISA were to leverage existing relationships with clients, ongoing assistance with importers in meeting program requirements and to help reduce the “haystack”. The challenges here would also be that there is a lack of tangible benefits for the applicant, cost resistance, visibility into importers compliance may result in a possible conflict (client vs. government) and it would also be a direct competition with CBP services already provided.

2.) BROKER RESPONSIBILITY

The key issues on the table are importer validation, customs business and power of attorney. These are industry changing topics that should not be ignored.

The enhanced importer validation would establish requirements for importers to present bona fides. In turn the broker would be required to obtain evidence of bona fides. This would be a shared responsibility between importer and broker to validate the importers’ identity. This helps to reduce incidents of identity theft as well as confirm legitimacy of importers. The challenges would be an increased requirement on the importers as well as resistance to the shared responsibility.

The customs business issue is basically stating that customs business is to be conducted within the U.S. Customs Territory, although this will have a direct impact with off-shore operations.

The power of attorney topic would change the way POAs are handled within the industry. It would no longer allow a broker to obtain a POA from a 3^rd party via sub-POAs but would require the POA to be received directly from the importer to conduct customs business on behalf of the importer. This would increase the broker visibility to the importer as well as give the broker direct contact with the importer of record.

3.) PROFESSIONALISM

This topic deals solely with the licensing requirements for customs brokers. It would enhance the licensing criteria as well as add value to the license. The proposals on the table are broker apprenticeship, continued education and examination requirements.

The introduction of an apprenticeship prerequisite for customs broker licensing is thought to give a better knowledge base and experience to newly licensed brokers. It would require an apprentice to work in a customs brokerage environment for an undetermined amount of time before being able to take the broker exam.

The exam itself has also been revisited with discussions of changing from multiple-choice to a more “entry process and regulations” focused written exam that provides for more real working knowledge of the industry.

The NCBFAA/NEI has proposed a new continued education regulation that would be required to keep a customs broker license active. This would keep customs broker licenses consistent with other federal/state licensed professions. It would enhance the professionalism in the industry while keeping the knowledge of the customs broker industry up to date. Although, there are a number of concerns that have been raised on what entity would be responsible for implementation and oversight of the program. The NCBFAA/NEI currently has the CCS program that requires 20 continuing education points per year to keep CCS designation active. Although many of the CCS point courses have enrollment fees, CBP has made a point of saying that there should be sufficient free opportunities as well.

4.) REGULATORY MODERNIZATION

There are a few changes proposed that would move from manually submitted to automated processes through the ACE portal. One major change would be to discontinue the current tri-annual reporting method to an automated annual report through ACE. The hope is that this would keep the reporting current and efficient. CBP thinks that a yearly automated reporting system through ACE would also help save money due to not having to send as many reminders out to the licensed brokers that may not have remembered to file the tri-annual report.

The ACE portal would also be used to upload employee data directly to CBP rather than in writing which would minimize the administrative burden on brokers. CBP also proposes to eliminate the requirement for the date and place of birth of employees. There is also discussion about the clarification of what an “employee” as it pertains to customs business. A possible change in language to the definition as noted in 19 CFR Part 111 would read as:

“Employee” means a person who meets common law definition of

employee and is in the service of a customs broker whose regular or

ancillary duties performed in the course of such employments fall

within the definition of customs business as set out in this part.

There is also discussion about adding a new license status of in-active. This would be for brokers that are not currently conducting customs business but would like to keep the license from being revoked due to not participating in the proposed continued education requirement, although they would still be required to file the proposed annual status report.

The current permit system is being looked at to modernize it to allow for alternative qualification for permits. There are a few different models being looked at but it seems to be leaning towards consolidating the current permit districts into larger permit regions. This is said to help reduce the reliance on the waiver process and annual renewal requests. There is also discussion concerning a new contract system. This would entail the customs broker presenting a contract to CBP outlining the supervision and control processes used. These contracts would not require an annual renewal request. The contracts would also be published as public record so that others could follow and give greater flexibility to brokers.

5.) PENALTY REGIME

CBP is considering changes to 19 USC 1641 language to provide for “swift action by CBP” for the immediate suspension of customs broker licenses of willful violators (threats to national security). NCBFFA has made it clear to CBP that they must be aware of broker’s rights and also provide a due process provision.

CBP is also looking at focusing on a “bad actor’s” license revocation rather than filer code remediation.

Possible changes to 19 CFR 142.3a(d) would be to exclude the word “broker”.

“(d) Misuse of the Entry Filer code. The Asst. Commissioner…may

refuse to allow use of an assigned entry filer code if it is misused

by the importer or broker.”

Possible changes to 19 CFR 111.37 would include the “filer code”.

“Misuse of license or permit. A broker must not allow his license,

permit, filer code or name to be used by or for any unlicensed

person (including a broker whose license or permit is under

suspension)…”

It is very important that we make our voices heard as our input is going to shape the future of our industry.