Challenges Dealing with Customs on Import Issues

1. Challenges Dealing with Customs on Import Issues Presented By: Robin Grove

2. Parties presenting today • Presenters: • Robin Grove- Licensed Customs broker/Freight Forwarder • Importation 101 • Examinations: Cause and Effect • CBP- Naveeda Merza /CBP Agriculture • Customs exam process • Wood Packaging • Hitch hiker Pests • Western Maritime- Carlos Ramirez- • Availability process • Driver Challenges • Trouble shooting

3. Importation 101 • What is a Customs Broker, and how do they facilitate the process? • What is a International freight forwarder? • The Maritime Lego set and It’s parts • Incoterms and shipping language • Common Terms and Acronyms • Examinations- Cause and effect

4. What Do Customs Brokers Do?Customs Broker: The import Specialist • Highly-trained import professional • Licensed by the U.S. Department of the Treasury and Homeland Security, • Possess thorough knowledge of tariff schedules and Customs regulations • Monitors the many changes in the law and administrative regulations. • Evaluates every shipment entering the United States to ensure its: • Reviews the documentation for classification and valuation. • Advises if OGA (Other governmental agencies) documentation will be required. (there are aprox 40 agencies) • Complies with 500 pages of Customs regulations, explainitary notes, binding rulings, port processes , mandates and bulletins. • Serves as the Importers’ facilitating agent • Directly online with CBP/DHS for data transmission. ACS/ACE • Traffic coordinator and logistic advisors. • Documentation/Information conduit between the Steamship lines, airlines, ports, truckers and other entities. • Facilitates payments to various parties during the transaction and transportation. • Arranges customs exams and other governmental communications, CF2899 • Sends one invoice regrouping all transactions w/ backup for record keeping. • Maintains records for 5 years.

5. What Do Freight Forwarders Do?Freight Forwarder: Transportation Architect • Transportation Architect- The international freight forwarder is your guide for cargo movement. Forwarders must be licensed by the Federal Maritime Commission (FMC) to transact business. International air cargo agents are accredited by the International Air Transportation Association (IATA). • Rates- The freight forwarding professional advises clients of the best rates, routings and modes of transporting goods to or from any area in the world.. The large volume of freight handled by forwarders gives them advantages not always available to either individual shippers and can be more flexible than integrated carriers. • Foreign Regulations Expert- The professional forwarder is also aware of the ever-changing regulations affecting cargo movements, such as foreign documentation requirements, hazardous materials rules, U.S. government regulations, special packaging or handling restrictions, and any applicable licensing provisions. • Overseas partner - A Freight forwarder is like having a partner on the ground to verify if shipments are available or advising if a booking / shipment is being booked in your behalf. They make the necessary arrangements with the carriers/ truckers and foreign governments to facilitate the documentation and transfer to your US Customs broker, as well as ISF information conduit.

6. The Maritime Lego Set

7. The Maritime Lego set and Its parts. • Basic Parts- • Steamship Lines- • Owns equipment • Documents cargo loaded on vessels to both foreign and domestic governments. • Responsible to confirm all releases have been obtained. • Governmental • Financial • Shipper mandated holds. • Vessel Loading • Pays the ports and ILWU or managing agencies. • Ports- Local tariffs, city income, and legislative responsibility • Terminal Operators- organize union labor, and work for the steamship line to check in/release cargo as above obligations, and are subcontracted by the lines. • Labor-ILWU, ILA, • Intermodal Transportation- Railroads, motor carriers, barges. • Government- Cbp/DHS, agriculture, coastguard. City, state and federal mandates.

8. Vessel at birth discharging containers

9. On Dock facility

10. Container stacks waiting for chassis or export loads

11. BASIC INCOTERMS- EXW - Ex-Works, named place where shipment is available to the buyer, not loaded.The seller will not contract for any transportation.FCA - Free Carrier, unloaded at the seller's dock OR a named place where shipment is available to the international carrier or agent, not loaded.This term can be used for any mode of transport. International Carriage NOT Paid by SellerFAS - Free Alongside Ship, named ocean port of shipment.Ocean shipments that are NOT containerized.FOB - Free On Board vessel, named ocean port of shipment.This term is used for ocean shipments only where it is important that the goods pass the ship's rail.

12. International Carriage Paid by the SellerCFR - Cost and Freight, Named ocean port of destination.This term is used for ocean shipments that are not containerized.CIF - Cost, Insurance and Freight, named ocean port of destination.CPT - Carriage Paid To, named place or port of destination.This term is used for air or ocean containerized and roll-on roll-off shipments.CIP - Carriage and Insurance Paid To, named place or port of destination.This term is used for air or ocean containerized and roll-on roll-off shipments.Arrival At Stated Destination • DDU - Delivered Duty Unpaid, named place of destination, not unloaded, not cleared.This term is used for any mode of transportation.DDP - Delivered Duty Paid, named place of destination, not unloaded, cleared.This term is used for any mode of transportation.

13. Incoterms 2000 Chart of responsibility

14. Freight Common Terms and Acronyms • O/F- Ocean Freight • Baf- bunker adjustment factor • Caf- currentcy adjustment factor • Thc- Terminal handling charge • AMS- Automated manifest system • CUC- Chassis usage surcharge • GRI- General rate increase • PSS- Peak season surcharge • ISF-Importer security filing • o/w- Overweight surcharge • ETD- Estimated time of departure • ETA- Estimated time of arrival • MLB- Mini Land Bridge • TEU- Twenty foot equivalent unit • FEU- Forty foot equivalent unite • ACE- Automated customs Environment • PMS- Periodic monthly statement • C-TPAT- Customs Trade Partnership against Terrorism • Twic-Transportation worker Identification credential • Flip- Crane movement to transfer an overweight container from one chassis to another. • Vacis- Vehicle and cargo inspection team (movable x-ray machine)

15. Suggestions to the Exporter/ Importer for Faster Clearance of Your Merchandise • Include all information required on your commercial /customs invoices. Piece count and container # should be declared and match the bill of lading. • Prepare your invoices carefully. Type them clearly in English. Allow sufficient space between lines. Keep the data within each column. • Make sure your invoices contain the information that would be shown on a well-prepared packing list. • Show a detailed description on your invoice of each item of merchandise contained in your shipment with country of origin (manufacture). • Comply with the provisions of any special laws of the United States that may apply to your goods. Ie- Lacy Act, Solid wood packaging material, Country of origin marking etc. • Mark your goods legibly and conspicuously with the country of origin. • Fumigate containers if possible, especially during the winter months. • Establish sound security procedures at your facility and while transporting your goods for shipment. Do not give narcotic smugglers the opportunity to introduce narcotics into your shipment.

16. C-TPAT- Customs Trade Partnership Against Terrorism-Record Keeping and Compliance C-TPAT is a voluntary government-business initiative to build cooperative relationships that strengthen and improve overall international supply chain and U.S Border security. • A reduced number of CBP inspections- x-ray/Compliance. • Priority processing for CBP inspections. • Assignment of a C-TPAT Supply Chain security Specialist (SCSS) who will work with the company to validate and enhance security throughout the company’s international supply chain. • Eligibility to attend C-TPAT supply chain security training seminars. Record Keeping and Compliance- Record Keeping-As a general rule, any record required to be made, kept and rendered for examination or inspection under Part 163 must be keep to 5 year from the date of entry. Compliance- On Dec 8. 1993 Title VI of the North American Free Trade Agreement Implementation Act, also known as the Customs Modernization or “Mod Act” became effective. Two new concepts that emerged from this act are “ informed compliance” and “shared responsibility” which are premised on the idea that in order to maximize voluntary compliance with laws and regulations of CBP, the trade community needs to be completely and clearly informed of it’s legal obligations. In addition the Mod Act imposes a greater obligation on CBO to provide the public with outreach and information.

18. Enforcement Examinations: CBP plays a critical role in securing the nation's borders by assessing the risk of all imported and exported shipments. In order to accomplish this, CBP employs a RISK MANAGEMENT STRATEGY through a layered enforcement approach. This strategy is comprised of five interrelated initiative.   • Advanced Information under 24-hour rule (Trade Act of2002) Complete and timely manifest data including the Importer Security Filing (ISF) must be transmitted 24 hours prior to lading at the foreign port. Failure to adhere to this requirement will increase the possibility of the shipment being held and/or targeted for examination. • Targeting and Analysis- National Targeting Center and Advanced Targeting System (ATS) ATS is a sophisticated rule-based system that interfaces with various law enforcement and trade databases incorporating specific intelligence threats and trends allowing CBP to determine the risk of import shipments. The focus is to examine shipments where the perceived risk is unknown or high based on the transaction data. • Use of Non-Intrusive Inspection (Nil) Technology and mandatory exams for high-risk shipments; • Container Security Initiative (CSI) I Secure Freight Initiative (SFI); • C-TPAT- For additional information go to http://www.cbp.gov/xp/cgov/trade/cargo_security/ctpat/. To maintain the security of the merchandise, a trucking firm contracted by CBP will move cargo the CES for all enforcement exams 

19. Factors Affecting the Time required to Release a Shipment: • Size of Vessel • Consolidated shipments (lcl cargo) • Terminal operator staging of the container (union labor) • In an anomaly is found during an NII, a CES operator MUST move the container and all shipments within it to the CES for a full physical examination. • C-TPAT member-owned shipments subject to trade-related examinations will be examined before non C-TPAT member-owned shipments.

20. Importation Made Simple • As you can see. Importing foreign goods can be simple with the right partners. Make sure to contact us prior to purchase of your foreign goods. This will enable you to properly navigate the waters with professional guidance. • Thank you Robin Grove DBA Loa Office 310-330-7641 Cell 310-872-0000