Archive for the ‘US Customs’ Category


 

Attention Seafood Importers | New SIMP Regulations Effective January 2019

Seafood Importers

On January 1st, 2019, the Seafood Import Monitoring Program (SIMP) will change.

Do your Seafood Imports fall under the new SIMP regulations?

Your import will be regulated by SIMP if you import any of the following products:

  • Atlantic Cod
  • Blue Crab (Atlantic Crab)
  • Dolphinfish (Mahi Mahi)
  • Grouper
  • King Crab (Red Crab)
  • Pacific Cod
  • Red Snapper
  • Sea Cucumber
  • Sharks
  • Shrimp*
  • Swordfish and Tunas (Albacore, Bigeye, Skipjack, Yellowfin, and Bluefin)
  • Abalone*

*Abalone and Shrimp will now be required to report as of January 1st, 2019.

When does SIMP reporting become mandatory?

The effective date for SIMP is Monday January 1st, 2018. The effective date for SIMP regarding Abalone and Shrimp is January 1st, 2019.

Are U.S. goods that are exported and returned exempt from SIMP?

U.S. goods are NOT exempt from SIMP. It is a safe precaution to obtain required information for even your U.S. goods, as it is hard to foresee if they will leave the country and then be re-entered.  

Is there an official form to be completed for SIMP?

No, there is no official form to be completed for your imports under SIMP. There is a model catch certificate that, when completed, will provide all of the necessary information required to file your entry. We strongly suggest using this template to avoid shipment delays.

Who must obtain the International Fisheries Trade Permit (IFTP) required to file SIMP?

Under the rules and regulations of SIMP, to apply for the IFTP you must be a U.S. Resident. This does not mean that a foreign importer cannot clear goods regulated under SIMP, it simply means they will require to have a company or individual in the U.S. obtain a permit on their behalf and act as their permittee. The permittee must be listed as such on the U.S. Customs invoice, and under SIMP will be considered to be the Importer of Record (IOR). The IFTP holder is responsible for obtaining and retaining all required documents and information required under SIMP at the time of import.

The IOR under SIMP is not the same as the IOR for U.S. Customs purposes. The non-resident company can still act as the IOR with U.S. Customs, clearing the entry under their name and bond. However, the SIMP information and permit (held by the SIMP IOR) must be a U.S. Company. You can apply for your permit on the IFTP website.

Who is legally responsible for goods imported under SIMP?

The entity responsible for retaining and providing the required documentation is the permit holder, also referred to as the Importer of Record under SIMP.  The party that holds the International Fisheries Trade Permit is responsible for having all information required under SIMP readily available upon request at the time of import into the U.S.

What additional information am I required to report on my shipments to the U.S.?

  1. Three letter Alpha Code that represents the Genus and Species of your product must be listed on the catch certificate. The spreadsheet to obtain the appropriate Alpha Code can be accessed here
  2. Name and Flag State in which the vessel is registered. The Flag State is the country the vessel is registered under and must be listed on the catch certificate
  3. Evidence of authorization to fish – For example, your License to Fish or Business Number
  4. Vessel Identifier – IMO number (International Marine Organization)
  5. Fishing Gear Used. For example Longline, Handline pole etc…
  6. Landing Date
  7. Product form, quantity and weight at time of landing
  8. Area of harvest or capture
  9. Point of first landing
  10. The Receiver at time of landing

Can I start sending the information on my Shrimp and Abalone shipments now?

Yes, you are encouraged to start complying with the regulation on shrimp and abalone now so the transition into mandatory reporting will be seamless.

If my goods are subject to NOAA Form 370 reporting am I still required to report under the SIMP regulations?

Yes, goods subject under NOAA Form 370 will also be subject to SIMP reporting starting January 1st, 2018. Some of the information on the NOAA Form 370, will apply to SIMP as well. It is a good idea to cross reference the catch certificate with your NOAA Form 370 to make sure all of the information is completed and you are compliant with both program requirements.

If my goods qualify as a Section 321, do I still have to file an entry?

Due to limitations with U.S. Customs software, all goods that require SIMP reporting will require a formal entry, Section 321’s will not be allowed.

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Canadian Steel And Aluminum Importers Can Receive U.S. Surtax Relief At Time Of Import

Steel Railroad

You learned in Are You Eligible To Request Remission Of Canada’s New U.S. Surtaxes? how an importer can receive a refund on surtax paid in special circumstances of steel and aluminum imports. But as an importer of steel or aluminum, what if you could avoid paying the surtax at the time of import?

On October 11th, 2018, Canada Border Services Agency published the United States Surtax Remission Order. The Order notes that certain commodities can be relieved of paying the surtax at the time of import. To be relieved of surtaxes the items must be classified under the tariffs and be of the same description listed in Schedule 1 and Schedule 2 of the remission order. A description of the conditions these products must meet are listed below:

What Steel and Aluminum Commodities are Relieved of U.S. Surtax?

In this Notice, CBSA states “Remission is granted for those goods described in Schedule 1 and Schedule 2 attached to the remission order under the following conditions:

  • (a) the good listed in the schedule was imported into Canada on or after July 1, 2018 and subject to surtaxes;
  • (b) no other claim for relief of the surtax has been granted under the Customs Tariff in respect of the good;
  • (c) the importer makes a claim for remission to the Minister of Public Safety and Emergency Preparedness within two years after the date of importation.
  • (d) the importer files, on request, the evidence or information that the Canada Border Services Agency requires to determine eligibility for remission;
  • (e) the importer agrees that it is subject, at any time, including after the remission, to review by the Canada Border Services Agency for the purpose of determining whether the information supplied by the importer under paragraph (c) or (d) is accurate and complete and whether the facts on which the Canada Border Services Agency relied or intends to rely to determine the eligibility for remission remain unchanged in all material respects; and
  • (f) at the time when the Canada Border Services Agency conducts the review referred to in paragraph (e), the Canada Border Services Agency must be able to conclude that the information supplied remains accurate and complete and that the facts remain unchanged in all material respects.
  • (g) goods described in Schedule 2 must be imported into Canada no later than December 31, 2018.” Canada border Services Customs Notice 18-16, october 11, 2018.

Proof in meeting these criteria must be provided.

What Other Commodities are Relieved of the U.S. Surtax?

Remission is granted for goods classified under tariff item No. 8903.10.00, 8903.91.00, 8903.92.00 or 8903.99.90 in the List of Tariff Provisions set out in the schedule to the Customs Tariff, excluding those that have been exported from Canada and then subsequently re-imported into Canada. Remission for these goods is granted under the following conditions as stated in the Notice:

  • (a) the good was imported into Canada on or after July 1, 2018 and subject to surtaxes;
  • (b) the good was both purchased under contract and sold under contract prior to May 31, 2018;
  • (c) no other claim for relief of the surtax has been granted under the Customs Tariff in respect of the good;
  • (d) the importer makes a claim for remission to the Minister of Public Safety and Emergency Preparedness within two years after the date of importation;
  • (e) the importer files, on request, the evidence or information that the Canada Border Services Agency requires to determine eligibility for remission;
  • (f) the importer agrees that it is subject, at any time, including after the remission, to review by the Canada Border Services Agency for the purpose of determining whether the information supplied by the importer under paragraph (d) or (e) is accurate and complete and whether the facts on which the Canada Border Services Agency relied or intends to rely to determine the eligibility for remission remain unchanged in all material respects; and
  • (g) at the time when the Canada Border Services Agency conducts the review referred to in paragraph (f), the Canada Border Services Agency must be able to conclude that the information supplied remains accurate and complete and that the facts remain unchanged in all material respects.” Canada border Services Customs Notice 18-16, october 11, 2018.

CBSA further states that the remittance will only be granted if they were correctly classified under tariff item No. 8903.10.00, 8903.91.00, 8903.92.00 or 8903.99.90. The item could not have been exported from Canada and then re-imported, unless temporarily imported for repair, alteration or storage. Proof of meeting all criteria must be provided.

Are Goods Temporarily Imported Into Canada Relieved of U.S. Surtax?

Yes, if they were imported for repair, alteration, or storage and the following criteria are met as outlined by the Notice.

  • (a) the goods are exported immediately after having been repaired, altered or removed from storage, whichever occurs last, but no later than twelve months after the date on which the imported goods were released; and
  • (b) no other claim for relief of the surtax has been granted under the Customs Tariff in respect of the goods.
  • (c) the importer makes a claim for remission to the Minister of Public Safety and Emergency Preparedness within two years after the date of importation;
  • (d) the importer files, on request, the evidence or information that the Canada Border Services Agency requires to determine eligibility for remission;
  • (e) the importer agrees that it is subject, at any time, including after the remission, to review by the Canada Border Services Agency for the purpose of determining whether the information supplied by the importer under paragraph (c) or (d) is true, accurate and complete and whether the facts on which the Canada Border Services Agency relied or intends to rely to determine the eligibility for remission remain unchanged in all material respects; and
  • (f) at the time when the Canada Border Services Agency conducts the review referred to in paragraph (e), the Canada Border Services Agency must be able to conclude that the information supplied remains true, accurate and complete and that the facts remain unchanged in all material respects.” Canada border Services Customs Notice 18-16, october 11, 2018.

In order to be eligible for any of these above noted exemptions, the products must both be of a tariff item and description listed in the Department of Finance notice found here: List of Goods Subject to Remission of Countermeasures on Certain Steel and Aluminum Goods from the U.S.

You must also provide proof of meeting these criteria to CBSA. If working with a Customs Broker, you will need to provide supporting documentation to them in order to receive these exemptions.

What If You Already Paid the U.S. Surtax?

If you have already paid surtax on items listed in this post, and would like for us to submit a claim for remission of the surtaxes paid, please provide documentation and/or product literature which proves your product is one of those listed in the linked document above for each import transaction. The CBSA will require this proof in order to review and process the claim for refund of the surtaxes paid. Note: Additional charges will apply for preparing and submitting the request for the refund.

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USMCA Details | United States Mexico Canada Agreement | NAFTA 2.0

USMCA Details

The United States Mexico Canada Agreement (USMCA)

The U.S., Mexico and Canada reached a revamped NAFTA deal in the 11th hour on Sunday September 30th, 2018. NAFTA 2.0 has been renamed the United States Mexico Canada Agreement.

After more than a year of intense negotiations, the U.S., Mexico and Canada reached an agreement to update NAFTA. NAFTA dates back to 1994 when the pact was originally signed by all three countries to govern the $1.2 trillion worth of trade between the countries.

In August, the U.S. and Mexico resolved an issue over auto manufacturing but Canada and the U.S. still had some contentious points to resolve. The U.S. wanted Canada to open its dairy market to U.S. farmers and Canada wanted to preserve a mechanism for resolving disputes. These goals were eventually achieved which resulted in the new USMCA.

Auto Industry

Starting in 2020, to qualify for zero tariffs, a car or truck must have 75% of its components manufactured in the U.S., Mexico, or Canada, a boost from the current 62.5% requirement. In addition, also starting in 2020, cars and trucks should have at least 30% of the work on the vehicle done by workers earning at least $16 an hour, which will gradually move to 40% for cars by 2023.

Supply Management Agriculture Sector

Canada agreed to set new quotas for dairy imports from the U.S. Canada will still put tariffs on dairy products that exceed quotas. The new quotas will give the U.S. access to 3.6% of Canada’s market. U.S. farmers will now be able to export 120 million eggs into Canada the first year. This will grow 1% per year for the next 10 years. The chicken concession will allow 57,000 metric tons phased in over six years and in year 7 will increase 1% per year for the next 10 years.

Chapter 19

Canada wanted to keep Chapter 19 in place and in the end Chapter 19 remained intact. Chapter 19 allows the U.S., Mexico and Canada to challenge anti-dumping and countervailing duties in front of a panel of representatives from each country. In the past, Canada has successfully used Chapter 19 to challenge the U.S. on its softwood lumber restrictions.

Intellectual Properties Protections

The USMCA has a new IP chapter, which is 63 pages long and contains stricter protections for patents and trademarks, including biotech, financial services and even domain names. Copyright terms in Canada now extend for 70 years beyond the year the creator of the work dies, bringing Canada in line with those of the U.S. and Europe. The IP chapter also includes an extension of the length of time new biological drugs will be protected from generic drug competition, up 2 years from Canada’s previously agreed upon 8 years to 10 years of exclusivity. This was necessary for all sides to update this field as the original agreement was over 25 years old.

De Minimis Threshold

The de minimis threshold or the duty-free amount Canadians can buy in the U.S. and import into Canada without having to pay a duty has increased from $20 to $150. Mexico agreed to raise their de minimis from $50 to $100.

The tax portion of the de minimis threshold has been separated. The new rules will see the tax threshold rise to $40.

For example, when someone in Canada buys something online in the U.S. for $149 they will be spared the duty but they will pay anywhere from $17 to $22 in taxes depending on the province and the tax rate for that province.

Labor & Environmental Rights

Significant upgrades to environmental and labor regulations were made, especially in Mexico. Mexican trucks crossing the border must meet higher safety regulations and Mexican workers must have the ability to organize and form unions.

Chapter 11

Chapter 11 provided companies and investors a special process to resolve disputes with one of the governments of the agreement. The premise being that if an investor put money into a project and then the government changed the rules, there is a dispute process outside the court system where the investor could get their problem resolved. Chapter 11 is essentially gone with the exception of few industries such as energy and telecommunications.

USMCA Timeline

The USMCA will not go into effect right away. Most of the key provisions will not start until 2020. The leader of each country still has to sign the agreement, and then congress in the U.S. and the legislatures in Canada and Mexico have to approve it. This process is expected to take months.

How Will The USMCA Affect You?

You have the opportunity to get an early edge on your competitors with the advantage of a trade advisor. Pacific Customs Brokers has you covered with expert trade advisors who are able to help you navigate the changes that will affect you with the new United States Mexico Canada Agreement.

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Jan Brock | Author

U.S. Customs To Pilot Test Blockchain Viability

blockchain

In September 2018, U.S. Customs and Border Protection (CBP) will start pilot testing the viability of blockchain technology in international trade. One of the first tests will be to see if they can successfully receive Certifications of Origin to identify if a product can qualify for preferential treatment under the North American Free Trade Agreement (NAFTA).

What is Blockchain?

Blockchain allows for digital information to be shared but not copied. It was originally created for financial transactions however, tech communities are starting to get more creative on what it can be used for. This includes smart contracts, transparent voting for elections, file storage, and in the world of trade, supply chain auditing.

Blockchain acts as a large database spread over a network of many, many computers. By not storing the data in any one location decentralizes the data. By decentralizing the data, it makes it difficult for a “hacker” to corrupt, thus making it a safe way for many people to access the data simultaneously.

Another interesting fact about blockchain is it can be setup to share with the entire public, or only shared with a few selected individuals. This allows for it to be used on massive scales, such as an election, or small scales, such as a one-on-one contract between you and a supplier.

History is another important factor. Blockchain has the ability to collect and maintain all transactions and previous data. In the trade industry this could be vital since records are required to be kept by Customs for multiple years in case of an audit. With a clear history that is accessible at any time, it can make it easier on Customs and the individual or business being audited.

What is Your Commodities Origin?

The goal is to certify the backstories of commodities are genuine. Is your sweater really made in Canada? Is every part from your laptop obtained or produced entirely in Canada, the U.S. or Mexico? Probably not, however with the assistance of blockchain technology and supply chain auditing, the answer could be quick and easy for CBP to discover.

Why This Potentially Helps U.S. Customs?

The reason CBP is excited for the viability of blockchain technology is because it can permanently verify transaction records in a fast and secure way. Being able to work fast and safe is any businesses dream, and CBP wants to start testing the technology in the early stages to make sure they are ready to handle the demand for blockchain technology once more companies adopt the relatively new idea.

How Supply Chain Auditing Can Help You?

It is easy to drown in the science behind blockchain technology, but what matters most to you is blockchain can allow you to do business easier and safer than before. The introduction of Electronic Data Interchange (EDI) has eliminated the need for faxing, mailing or hand delivering paper documents. By having a safe way to transport the same “paper documents” digitally in only a way where you, the sender, and CBP, the receiver, can access it, than business will become better for you.

If You Need An Expert

With pilot testing to begin in September it will be interesting to see what the findings are from CBP. This might be the first step U.S. Customs takes to adopting blockchain technology and electronic supply chain auditing. For the latest in trade news and expert advice feel free to contact an experienced trade advisor to help you navigate the world of trade.

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7 Reasons to Invest in Customs Compliance

PCB helpWith today’s fast paced business climate time is limited and precious. There is always a long list of tasks to accomplish so why would you take valuable time out of your busy schedule to attend an educational course?

Like any good business person worth his or her salt, let’s examine the Return on Investment (ROI). Obviously the course topic has to have some relevance to your business. Here are some questions a potential attendee may ponder on as they contemplate the decision to attend or not:

  • Is there a way my company can save money?
  • Will it improve a process?
  • Will it provide potential insight to solve a problem?
  • Will it provide valuable knowledge to move a project along?
  • Is the topic one that cannot easily be ignored? (e.g. compliance issues)

What is Customs Compliance?

Customs compliance refers to importers and exporters meeting all of the requirements governing the movement of their commercial goods across the border. To be trade compliant is to ensure that the tariff classification, origin and valuation of goods are all accurately declared in accordance with legislative requirements and that the appropriate duties and taxes are paid. There is a clear obligation under the Customs Act to provide true, accurate and complete trade information including a proper description of the goods, as well as correcting erroneous information regardless of dutiable status. Furthermore, an essential part of customs compliance is to ensure that all import requirements are met such as having the appropriate import permit. Failure to meet all import requirements violates the control measures that are in place to protect the economy, the environment and the health of citizens.

 

The Importance of Customs Compliance:

In recent years, the Canada Border Services Agency (CBSA) and U.S. Customs and Border Protection (CBP) have shifted much of their emphasis from import inspections to post-audit verifications. The responsibilities put upon Importers of Record (IOR) have steadily increased as all members of the supply chain endure higher scrutiny from customs officials. Now more than ever it is imperative that the IOR maintain a high level of sophistication, demonstrate due diligence, ensure they understand their responsibilities, implement internal sets of controls and procedures for best practices as well as understand the consequences of non-compliance.

International trade no longer stands on the sidelines of corporate awareness. It is being transformed from an operational function into an evolving eco-system that helps mitigate organizational risks and strategically drives value. In order to do business efficiently, smart businesses need to strike a balance between ensuring timely movement of cross-border goods and complying with complex regulatory systems designed to ensure safe, verifiable cross-border transactions. Effective global customs planning can help improve a company’s bottom line.

 

Benefits of Attending a Customs Compliance Course:

1. Gain Insight on Key Trade Topics

A well designed course will help you gain a better understanding of key trade topics, teach you how to manage customs compliance and utilize free trade agreements to your benefit. The substantial knowledge you receive will aid in completing accurate documentation, understanding logistics and getting a feel for how transactions move through the regulatory process.

2. Stay Current on Customs Regulations

In our industry, where we deal with customs and other government agencies, regulations are ever-changing. A customs compliance course can be a convenient way for trade professionals to stay ahead of new regulations with international trade.

3. Avoid Possible Penalties and Risks By Being Informed

Customs agencies and other government departments emphasize the importance of compliance. This is monitored through increased enforcement and could result in monetary penalties to the importer. One of the most important reasons to attend a course is the knowledge and guidance you will receive from the presenters with regards to the steps your organization will need to take to become more compliant with government agencies.

4. Cost-effective Training and Knowledge Refreshment Tool for Logistics Professionals

Courses make for excellent training for someone in a new role, a new employee, or training for yourself. Quite often we have repeat attendees who regularly register on an annual or bi-annual basis. Part of our education program (PCB Learning Center) covers general overviews of importing or exporting, but we also offer training on specific subjects (e.g. North American Free Trade Agreement, H.S. Tariff Classification, Customs Valuation, etc.), thus providing an excellent opportunity for companies to utilize them as a cost-effective training tool.

5. Access to Customs Compliance Experts

A well designed course should include adequate time for audience participation or a valid opportunity at the conclusion to get answers to your questions. A live seminar gives you the chance to personally speak to the presenter(s) or other subject matter experts. We all agree that sometimes the best experiences occur when there are excellent inquiries that promote further ideas and discussion, particularly when you thought you were the only one with that challenge.

6. Reasonable Time Commitment

The ability to obtain some specific knowledge in a short period of time is an added benefit. Night school courses are requisite for more in-depth subject learning but often you need something that is less intensive but still provides substantial knowledge.  Half or full-day seminars or on-demand videos are an excellent way to get a quick update.

7. Networking – Make Valuable Professional Connections

A live course allows you to network and learn alongside other like-minded professionals, coming away with increased knowledge and understanding. Perhaps you will encounter a person who had a similar business problem to yours, or people who can share their own experience on a certain issue and provide you with valuable insight.

Here is a quote from an attendee at one of our recent Customs Compliance Seminars  “… it’s always interesting to have an informal conversation with compliance people from other industries,” which brings up another great point – where else would you have a chance to rub shoulders with people of similar business interests?

Hopefully this has inspired you to take the next step in your customs compliance education. Check out our PCB Learning Center to find a perfect resource today!

We hope you’ll join us and encourage you to share this with colleagues and business partners who might find it useful.

Do you have questions about PCB Learning Center’s education program? Leave us a comment in the section below!