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New
Canadian import regulations require 10-digit HS code
Effective
May 1, 2002, Canada Customs began requiring exporters to Canada to
include the complete 10-digit HS Code on their commercial invoices for
all shipments valued at CAN$1,600 or more.
The
HS Code must be placed on the invoice line of the commodity that shows
either the highest value or a reasonable representation of the goods
within the shipment.
If
a multi-page invoice is presented, the HS code must be shown on the
first page with a note indicating the corresponding page and line of
the commodity for which this HS code applies, if it is not listed on
the first page.
Shipping
Solutions users can adjust the number of HS digits that appear on the
commercial invoice from the program's Utility Menu. The software
allows users to choose six, eight or 10 digits.
Rick
Dale of the Canada Customs and Revenue Agency urges exporters to Canada
to get the correct 10-digit HS code from the Canadian importer, since
the importer is ultimately responsible for ensuring that the correct
code appears on the invoice.
For
more information about this new regulation, visit the Canada
Customs and Revenue Agency website or call Rick Dale at (613)
954-7077.
Bureau
of Export Administration (BXA) has a new name
The Commerce
Department has renamed the Bureau of Export Administration to the
"Bureau of Industry and Security" (BIS) to more accurately
reflect the broad scope of the agency's responsibilities.
Commerce Under Secretary Kenneth I. Juster, who heads the Bureau,
explained: "The Bureau of Industry and Security serves the public
in many ways where industry and national security intersect, including
not just export licensing and enforcement, but also defense trade
advocacy and critical infrastructure protection."
"The new name better reflects the breadth of the Bureau's
activities in the spheres of national, homeland, economic, and cyber
security," Juster said.
The Bureau of Industry and Security, which includes the Critical
Infrastructure Assurance Office, (CIAO) is headquartered in Washington,
D.C. and has 10 field offices nationwide. The change in name does not
substantively affect its activities, nor those of its sister
organization, the International Trade Administration, which remains
responsible for the Department's trade promotion and policy activities.
View
a live online demo of Shipping Solutions
InterMart now offers an easy way
to learn more about Shipping Solutions 2000, America's #1 selling
export documentation software.
Exporters can register
to watch a free one-hour demonstration of the software online. The
live demos will take you on a guided tour of Shipping Solutions
software, answering any questions you may have about the program.
Using your web
browser, you will see the software in action on your desktop, all run
by a Shipping Solution representative. At the same time you can ask
questions about any aspect of our software.
The free online
demo is available almost every Tuesday at 1 p.m. Central Time. In
addition, companies can arrange a private demo by sending an email to info@intermart-inc.com.
In addition, the
Shipping Solutions Flash presentation walks
you through the entire documentation process using the software. You
can view the Flash demo at the Shipping
Solutions website.
And, of course, you can get a
free demo version of
Shipping Solutions 2000 from
our website or by calling InterMart toll-free
1-888-890-SHIP.
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Double invoicing can cost
your company money and much more!
By Catherine
J. Petersen
Whenever you work on an
international transaction, there are dozens of steps you must follow
to successfully complete the process. One of these steps is issuing a
commercial invoice. That is true whether your firm sells hundreds,
thousands or millions of dollars worth of merchandise.
On occasion, you may have a
customer who requests that you alter the invoice value to allow them
to save money on import duties. For example, your customer may ask:
- Please don’t show the
down payment that I made to you on your invoice to us. It causes
problems with customs clearance here.
- Could you send us two
invoices, one for the actual value and one for a lower value?
- We always end up paying
duty on the samples that you send us. Can you declare the value of
the samples $4 or $5?
These are just three real
examples of comments and suggestions I’ve heard a buyer make to a
seller to get a lower than actual value on the commercial invoice.
Sometimes the value “adjustment” is minor—a few dollars; in
other cases the “adjusted” value is major—a few thousand
dollars.
If you adjust the value of
your invoice by a “few” dollars to help out the customer, you may
wonder who, if anyone, really cares. Well, there are at least five
agencies that do:
- U. S. Customs Service
- U. S. Department of
Commerce
- U. S. Census Bureau (see
the Correct Way to Fill out the SED)
- U. S. Justice Department
- Customs in the buyer’s
country
No matter what the value
“adjustment” is, don’t be customer friendly in this case and
comply. At best, your compliance can cost you and your company your
reputation. At worst, your “adjustment” can lead to fines and
penalties.
The U.S. Attorney's Office
has posted a case
study on “double invoicing” at its website. If you or your
company is asked to adjust the value of your invoice, you should
download and discuss the consequences within your company.
Here is an excerpt from the
case that was prosecuted in California:
Advanced Computer Link, Inc.
("ACL"), a San Jose exporter of computer components, was
sentenced and ordered to pay a fine by United States District Judge
Ronald M. Whyte in San Jose, following entry of its guilty plea to
wire fraud, a violation of Title 18, United States Code, Section 1343.
ACL also agreed not to contest the forfeiture of seized funds.
In entering the guilty plea,
ACL admitted its involvement in a "double invoicing scheme"
in which it would prepare invoices for computer equipment exported to
companies in the United Kingdom and Ireland listing a fraudulently low
price. This invoice was presented by British and Irish purchasing
companies to Customs officials in those countries to be used to
compute Value Added Tax ("VAT") owed on the importation of
those products, thereby allowing the purchasing companies to defraud
the British and Irish governments of tax due and owing on merchandise
imported from ACL.
Once VAT had been assessed,
ACL would send a second invoice to the purchasing British and Irish
companies reflecting the true value of the goods, and thereby receive
payment for the full market price of the merchandise sold. ACL
admitted today that its involvement in the scheme continued for
approximately one year, from January 1998 to January 1999.
In entering its guilty plea,
ACL specifically admitted preparing and transmitting by facsimile
machine an invoice that fraudulently represented the price of computer
components exported to "ZTR," an Irish company, as $892.50
for use in assessment of VAT tax owed on those components. That same
day, ACL admitted to faxing a second invoice to ZTR reflecting the
true value of the components sold as $89,250.
Immediately following entry
of its guilty plea, Judge Whyte imposed a sentence requiring ACL to
pay a fine of $140,000. Judge Whyte also ordered compliance with the
terms of the Plea Agreement entered into by ACL and the government,
which require ACL to abandon all claims to $1,100,000 of a total of
approximately $2,246,830 seized in April of 1999 from accounts held by
ACL as a result of the execution of seizure warrants obtained by the
United States during the investigation of alleged criminal conduct by
ACL, and leading to today's guilty plea. In addition, ACL represented
to the court that it intended to cease all business operations
following this plea and sentencing.
Ms.
Petersen's bio.
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