Foreign Supplier Verification Program Frequently Asked Questions


FSVP Produce


What is the Foreign Supplier Verification Program (FSVP)?

FSVP is a program set in place by the Food and Drug Administration (FDA). This requires U.S. buyers to make sure they are importing from foreign producers that are manufacturing under the same standards as domestically made foods. It consists of various information retained by the U.S. importer such as hazard analysis of the producers, controls, monitors programs, and specific record keeping requirements.

What is the FSVP compliance date for importers subject to the Produce Rule?

All Importers whose large foreign suppliers are required to be compliant with the Produce Rule will also be required to be compliant with FSVP on July 26th, 2018.

Who is subject to the Produce Rule?

Growers and Manufacturers of vegetables and fruits that are normally consumed raw and that are fresh or minimally processes, such as cut and washed, are subject to the produce rule, such as tomatoes, cucumbers, and blueberries. This does not include frozen fruit or vegetables or items that need to undergo further processing (such as a process to minimize contamination or cooking). This would include squash, coffee beans, and navy beans.

What new information must I include on my invoices?

For your Customs Broker to clear your entry with the FDA, they will now need to know who the FSVP Importer is, the FSVP importer’s DUNS number, and the FSVP importers IRS number. Without this information, the entry will be held.

Who is the FSVP Importer?

The FSVP Importer must be a U.S. Company. When items have been sold this is usually the U.S. buyer of the goods. If there is not buyer, then it is the receiver of the goods in the U.S. If there is no final receiver, such as items going to a fulfillment facility, you can have a U.S. FSVP Agent indicated on the documents, who agrees to take on the responsibilities of the FSVP Importer.

How does this affect Foreign suppliers?

Although the FSVP Importer is technically the U.S. company, there is a large amount of information that the FSVP Importer is required to have on file and verified regarding your manufacturing facility. These can range from lab results, your food safety plans, and other information. If you do not have these available, but they are a requirement for the U.S. company to buy your goods and bring them into the state, they may move on to purchasing from someone who has provided them the required information.

Also, as the foreign supplier, if you are the Importer of Record as well, you will need to make sure you speak with your buyers to confirm with them that they are aware of the FSVP rule, are working to be in accordance with it before July 26th, and that they have provided you their DUNS number and email address.

What does the FDA consider a Large Foreign Supplier?

FDA considered a large facility a facility that is neither a small or very small supplier. This would be a business (including any subsidiaries and affiliates) employing 500 full-time equivalent employees or more.

FDA also lists the definition of full-time equivalent as: “a term used to represent the number of employees of a business entity for the purpose of determining whether the business qualifies for the small business exemption. The number of full-time equivalent employees is determined by dividing the total number of hours of salary or wages paid directly to employees of the business entity and of all of its affiliates and subsidiaries by the number of hours of work in 1 year, 2,080 hours (i.e., 40 hours × 52 weeks). If the result is not a whole number, round down to the next lowest whole number.”

Where can I ask more questions regarding the Foreign Supplier Verification Program?

You can call us anytime to find out more information on importing produce into the U.S. and all the subsequent regulations and governing authorities such as the FDA.

You can stay informed by signing up to our email newsletter. These emails consist of general trade information, regulatory updates and event notifications. Click the button below to stay informed on the latest trade information, regulatory updates and Pacific Customs Brokers events.

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Importing Trailers | Crossing The Border


Importing Trailers

A pain point for any carrier, dispatcher or driver is not feeling prepared for arrival at customs. Without the proper documentation and pre-arrival preparation, clearances can take hours, and in the worst cases, days. No carrier, dispatcher or driver wants to spend hours at the border, and no importer wants to wait longer for their goods.

Pacific Customs Brokers has put together a how to guide on how the arrival and Customs clearance process works for the carrier when importing trailers.

The main problem carriers, dispatchers and drivers run into, is that trailers often require a hard copy paper Transport Canada Form 1 to be submitted with the declaration of the goods. With most declarations being submitted to Customs electronically, the inclusion of a paper document requiring a paper declaration submission does change the dynamics of the entry.

Importing Trailers Under The Transport Canada Pre-Clearance Program

When notified in advance, the paper declaration is submitted to Canada Border Service Agency before the goods and the driver arrive at the border. This action is often performed by the importer/agent physically located at the port.

To find out if the paper package has been delivered to Customs you are welcome to call us and we can inform you. Unlike electronic submissions, our online PARS check will not be able to advise the status beyond being received in our office.

When the carrier arrives at the border they approach the Customs booth, and present their PARS barcode to the officer. The Customs officer will process the clearance into Canada, complete any inspections necessary, and advise the release status of the shipment.

The processed Form 1 will be returned to the importer or their agent for record keeping.

Importing Trailers Under Standard Transport Canada Regulations

Although notified in advance, the paper declaration is submitted to Canada Border Service Agency at the time the carrier arrives at the border.  

Upon arrival, the driver should advise the CBSA officer at the booth that they are required to see a Customs Broker. CBSA will allow the driver to pull over and report to Pacific Customs Brokers or their agent and allow them to walk over to the Pacific Customs Brokers office to pick up the paper declaration package.

Once they pick up the paper package, the driver will return to Customs commercial building and present the package to the Customs officer. The Customs officer will process the clearance into Canada, complete any inspections necessary, and advise the release status of the shipment.

The processed Form 1 will be returned to the importer or their agent for record keeping. If the importer requires a copy of the Form 1 to be delivered with the goods, we can request that CBSA release the document to the driver rather than returned to the broker.

How Does The Carrier Know If The Goods Are Pre-Clearance Or Standard?

Please contact the importer to confirm if their goods are part of the Transport Canada Pre-Clearance program. If not, goods would be subject to standard Transport Canada regulations.

What If Pacific Customs Brokers Is Closed?

Our office at Pacific Highway is open 24/7.

The hours of our Huntingdon office is 8:00am – 4:30pm. The best practice is to cross during business hours. If advance notification is provided, you will find the paper package in a yellow envelope with the PARS number and name of the carrier in the afterhours bin located in the main Customs building.

For all other ports please contact us 24/7 for agent information.

Pacific Customs Brokers

Feel free to contact Pacific Customs Brokers 24/7/365 for all of your customs brokerage and freight forwarding needs. The knowledge and trade expertise we provide can save you time at the border and keep you compliant with customs to avoid costly administrative penalties.

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How To Become A Trusted Trader To Improve Your Customs Clearances


Trusted Trader Program


What Is A Trusted Trader Program?

Trusted trader programs, otherwise known as, Authorized Economic Operator (AEO) programs create Customs-to-business partnerships with the goal of securing the supply chain and facilitating legitimate low risk trade. Trusted companies are considered low risk by Customs administrations and are examined or held up significantly less than regular companies when importing or exporting goods.

Customs Goal: Secure International Trade

The growth of global trade and increasing security threats to the movement of goods internationally, forces Customs administrations to focus on securing international trade. The World Customs Organization (WCO) developed the Framework of Standards to Secure and Facilitate global trade (SAFE). The framework sets a harmonized set of standards that Customs administrations can follow in developing their trusted trade programs.

SAFE’s Four Core Elements:

  • Harmonization of advance electronic cargo information.
  • Each country that commits to SAFE commits to employing a consistent risk management approach to address security threats.
  • On the request of the Customs administration of the receiving nation, the Customs administration of the sending nation will perform an outbound inspection of high-risk containers and cargo.
  • Definition of benefits that Customs will provide to businesses that meet minimal supply chain security standards and best practices.

How Can My Company Create A Trusted Relationship With Customs?

You can become a trusted trader when you prove to Customs you have high quality internal processes that will prevent goods in international transport to be tampered with.

To do this your company will have to:

  • Ensure the integrity of your information (i.e. what you say is in the container is actually in the container)
  • Ensure the integrity of your companies employees since they have access to your goods and information about the goods you have in your containers.
  • Secure access to your companies premises to prevent unauthorized persons to put unwanted goods in your containers.

If you successful meet these criteria then Customs will have greater trust in your company and perform less or no examinations on the goods you import and export. There are currently about 35-40 WCO countries internationally who have introduced trusted trader programs.

PIP, C-TPAT & Trusted Trade

North America trusted trade programs are as follows; in Canada the program operates under the name Partners in Protection (PIP), in the United States it is known as Customs Trade Partnership Against Terrorism (C-TPAT) and in Mexico the program is simply called the Authorized Economic Operator.

Partnerships are also in place between various countries’ Customs administrations to extend trusted trader benefits. These partnerships are known as Mutual Recognition Arrangements (MRAs) and allow trusted trade companies to receive border facilitation benefits in other countries.  Trusted trade members who wish to receive MRA benefits must grant their respective program the consent to share the agreed upon information.

Canada Border Services Agency (CBSA) has MRAs with the following foreign trusted trade programs:

  • U.S. Customs and Border Protection and C-TPAT
  • Japan Customs and its AEO
  • Korea Customs and its AEO
  • Singapore Customs and its AEO program
  • Mexico and its AEO program
  • Australia Customs and its Australian Trusted Trader Program (ATT)

United States Customs and Border Protection (CBP) has MRAs with the same countries CBSA has and in addition to those:

  • New Zealand and its Secure Export Scheme program
  • Jordan and its Golden List program
  • European Union and AEO program
  • Taiwan and its AEO program
  • Dominican Republic and its AEO program

The Benefits Of Trusted Trade Programs

  • Facilitates trade for approved importer, exporters, carriers and others in the supply chain as they are recognized as low risk.
  • Approved companies have enhanced marketability and global competitiveness.
  • By being considered low risk trusted trade companies are less likely to experience border delays due to examinations.
  • Trusted trade companies can also enjoy faster access to the border and business resumption benefits in the event of border disruptions. This results in time savings, less risk for perishable goods and a more predictable border clearance.
  • Trusted trade companies also reduce their risk of potential tampering with their shipments as they have had to meet various security measures to qualify for a trusted trade program.
  • Trusted trade companies generally have direct contacts with specific Customs Authorities should issues arise.
  • Use of logos and materials identifying trusted trade status.

How To Become A Trusted Trader

The process for accreditation as a trusted trader in any specific country generally involves completing a long and detailed assessment whereby the company must demonstrate the following:

  1. Compliance history with Customs
  2. Financial viability
  3. Cargo and premise security
  4. Trading partner security
  5. Secure record keeping
  6. On going on site validations and audits.
  7. Possible administrative fee.

You Can Have An Expert On Your Side

You have access to trusted and experienced brokers at Pacific Customs Brokers, who are active members in CBSA’s PIP and CBP’s C-TPAT programs. If you are interested in PIP or C-TPAT membership please contact us directly. You can be stepped through the application process by one of our trade advisory experts.

 


Jan Brock | Author

 

 

 

 

 

 


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The Push For A NAFTA Agreement | April 20 2018


NAFTA flags

 

 

 

 

 

 

 

 

 

 

 

The last formal round of NAFTA talks was scheduled to take place April 8, 2018, but instead was replaced by a series of “high-level” political meetings in Washington D.C. These meetings have been taking place since the last round of formal negotiations took place in March. It is rumored that these talks could lead to a “symbolic agreement-in-principle”. In fact, Canada’s foreign affairs minister Chrystia Freeland was in Washington D.C., April 18, 2018, for meetings, and is likely to attend more meetings next week.

Why The Push For A NAFTA Agreement?

It appears the U.S. wants to get NAFTA negotiations out of the way while a trade battle looms with China. China has already fired back at the U.S. with punitive measures for imports into China.

Another looming threat is the Mexican elections on July 1, 2018, which could elect a potential President who has already criticized the U.S. administration’s views on Mexico. Additionally, the U.S. would like to have an agreement in place prior to the November 2018 Congressional midterms. For the U.S. the optimal date to reach an agreement will be May 1, 2018, to meet all the necessary deadlines for the revised NAFTA agreement to be approved by the current Congress.

Automobiles Is Currently NAFTA’s Most Contentious Issue

At the moment, the most contentious issue in the NAFTA talks is the provision regarding automobiles. Initially the U.S. was demanding half the value of an automobile be made solely in the U.S. to qualify for NAFTA’s zero tariffs. Now the Americans are asking for an unspecified percentage of each vehicle to be made by workers earning at least an average wage rate for the North American auto industry. This wage is to be recalculated each year. According to today’s calculations the wage would be approximately $16 to $17 an hour. This would likely not be an issue for Canada but a big issue for Mexico.

The U.S. has not changed its original proposal in many respects and has added rules, which further complicates reaching an agreement. As an example; there is still the proposal for a tiered system for auto parts where 85% of engines and advanced batteries must be made in the U.S. and 70% of monitors, wiring sets and autonomous vehicle parts, and 50% of brake pads and spark plugs. In addition the U.S. is demanding that certain auto parts made of steel or aluminum be made in North America which lines up with the U.S. Administration’s protection of the steel and aluminum industry.

The U.S. is further demanding that the bulk of the new rules would have to be in place within 3 years of the new agreement. Canada and Mexico are not in agreement with a number of the content proposals and timelines.

Why The Auto Industry Is Unhappy With The Current NAFTA Proposal

The auto industry is not happy with some of the rules proposed by the U.S. side, stating the new proposals seem just as unworkable as the original rules. As well, the tiered system proposed by the U.S. is excessively complicated and could drive up administrative costs as companies try to comply with the rules.

As it stands today many car components, such as electronic systems, are made in Asia. Building a viable manufacturing base in North America in only three years places a lot of pressure on the North American auto industry.

In addition to this, the U.S. have only a 2.5% tariff on imported cars. Tougher NAFTA rules could push the auto industry to automate their production facilities, taking jobs away from North Americans, or making the cars overseas where they would have to import them back to North America.

Where The NAFTA Agreement Stands Today

While it appears there is a push to have an agreement in principle by May 1, this does not rule out the possibility of months and years to finalize an agreement.  So where are we today with the NAFTA negotiations? To quote the trade negotiators “Nothing is agreed until everything is agreed”.

How Can I Stay Informed On Everything Trade?

You can stay informed on everything NAFTA and the ongoing negotiations between Canada, the U.S. and Mexico by subscribing to Pacific Customs Brokers email publications. You also have access to experienced trade advisory experts who can allow you to stay agile and act fast when a final decision is made on NAFTA.

Jan Brock | Author

 

 

 

 

 

 

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Canada Customs Focus: Improve Tariff Rate Quota Enforcement


Grapes and Cheese

The Office of the Auditor General of Canada (OAG) reported on the mismanagement of tariff rate quotas. Both Canada Border Services Agency (CBSA) and Global Affairs Canada were provided feedback to improve. This was included in the Spring Report to Parliament – Report 2 – Customs Duties, in May of 2017.

Limits on Tariff Rate Quota Exceeded

The OAG reported that “the Canada Border Services Agency and Global Affairs Canada did not work together to adequately manage the limits on quota-controlled goods coming into Canada.” The OAG estimated in 2015 the government should have assessed approximately $168 million of customs duties on imports of quota-controlled goods. Simply, the quota limits were exceeded. The goods included in this loss of revenue were dairy, chicken, turkey, beef and eggs.

Tariff Rate Quotas Protect Canadian Industry

This is important since quotas and Customs duties protect Canadian markets. By limiting the import of certain products, the Canadian government can assist Canadian businesses which compete with products that face fierce competition from export markets.

Certain goods imported into Canada are quota-controlled. Canada applies tariff rate quotas on these goods, which is a two-tier level of Customs duty rates. This is done to control the volume of goods coming into Canada. Examples of quota-controlled goods are dairy products, chicken, turkey, beef and egg products. A tariff rate quota sets a volume of a good which can be imported into Canada at a lower rate of duty and once the quota has been reached duties on subsequent imports are applied a higher rate of duty.

What Goods are Subject to Tariff Rate Quotas?

Goods subject to tariff quotas are listed in the Import Control List of the Export and Import Permits Act. Importers must obtain a permit from Global Affairs Canada either directly or through a Customs broker to bring these goods into Canada. If the importer does not have a permit to import a quota-controlled good at the time of the import, the CBSA allows the importer five days to get a permit from Global Affairs Canada.

Failure to Enforce Tariff Rate Quotas

The OAG report found that CBSA was negligent by failing to enforce the permit for quota-controlled goods in 2015. CBSA recorded the permit information in one system and the duties and taxes paid and owed in another. This meant the permitted amount and the actual amount imported on quota-controlled goods were rarely compared.

Global Affairs Canada were responsible for issuing the authorizations, certificates and permits for items on the Import Control List. However, the volumes imported did not match the volumes authorized at a lower rate of duty. The OAG found importers likely imported a significant volume of controlled goods into Canada without a permit and without paying the appropriate amount of duty.

Focus to Improve Tariff Rate Quota Enforcement

Both Global Affairs Canada and CBSA agreed they need to work more closely together to better enforce tariff rate quotas. Both parties agreed tighter enforcement would commence by September 2017.

It is important to note that regardless of whether a permit, a certificate or other authorization is issued or granted under the Export and Import Permits Act (EIPA) by Global Affairs Canada, it is the Importers and Exporters responsibility to ensure ALL requirements are met with respect to their importation of tariff rate quota goods.  Ensure all of your imports have been properly declared and duty paid before an audit determines otherwise.

You can contact a Pacific Customs Brokers Trade Advisor to assist you with reviewing your processes and help you obtain a permit or authorization from Global Affairs Canada.

Jan Brock | Author

 

 

 

 

 

 

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