Shipping Solutions Newsletter

If you’re an exporter, you may be interested in a new book published by the Bureau of Industry and Security (BIS) intended to deter violations of U.S. export control laws and promote best export compliance practices.

Don’t Let This Happen To You! details your company’s responsibilities as an exporter and the penalties you and your company can incur for ignoring those responsibilities. You can download this book for free from the BIS website.

Export Administration Regulations

While a number of different U.S. agencies have responsibilities for regulating exports from the United States, BIS controls the widest range of goods and technology through the Export Administration Regulations (EAR). Even if your company is exporting goods or technology that was designed for strictly commercial applications, you need to check the EAR to make sure your products don’t also present foreign policy or national security concerns.

At the very least, you must make sure that your products don’t require export licenses, and that you aren’t exporting to parties or countries that are known to present a risk to the security of the United States.

Violate the EAR and you and your company may be subject to both criminal and administrative penalties. Fines for export violations can reach up to $1 million per violation in criminal cases, $11,000 per violation in most administrative cases, and $120,000 per violation in certain administrative cases involving national security issues. In addition, criminal violators may be sentenced to prison time, and administrative penalties could include denial of export privileges.

Among the export violations outlined in the new BIS book:

Failure to apply for an export license and/or exporting a good or technology without an export license.
Releasing or demonstrating licensable technology to a foreign national in the United States. This is known as a deemed export.
Exporting goods or technology to embargoed countries (found on the U.S. Treasury’s OFAC list) even if the goods or technology don’t normally require an export license.
Attempting to bypass the EAR by shipping products to a third country and then re-exporting or diverting the goods to an embargoed country.
Assuming the EAR requirements are being met by another party in the export transaction. Both the exporter and the exporter’s agent are responsible for each entry made on an export document.
Exporting goods to certain end users on one of the government’s restricted party lists. This violation applies even if your products don’t normally require an export license.
Making false statements on your export documents. The most common type of false statements appear on the Shipper’s Export Declaration (SED) that an export doesn’t require a license (i.e., that it is “NLR”).

If you read the BIS book, you'll see these violations can result in substantial penalties against companies and, in the case of willful violations, their employees.

Shipping Solutions Export Compliance Module

While U.S. export regulations can seem a bit overwhelming, the right tools can make all the difference. Shipping Solutions software has helped thousands of U.S. exporters create their export documents faster and easier than ever before. Now Shipping Solutions can help you ensure that your company’s export shipments comply with the EAR.

Shipping Solutions Professional gives you easy access to our Export Compliance Module. With access to the Export Compliance Module, you can:

Quickly determine what documents you need to prepare to export your goods to a particular country.
Screen each export shipment to determine whether or not you need to apply for an export license for any of your products.
Screen all the parties in your export shipments to see if any of them appear on any of the government’s “bad guy” lists including the Denied Persons List, the Entity List, the Debarred Parties List, the OFAC List, and more than a dozen others.

You’ll find more detailed information about Shipping Solutions Professional’s Export Compliance Module at the Shipping Solutions website, where you can also download a free demo version of the software, view a PowerPoint presentation, and sign up for a free online demo of the software. In addition, you can call Shipping Solutions at 1-888-890-7447 for more information and to request a free demo version on CD-ROM.

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U.S. Harmonized Tariff Schedule Updated for July 2005

The U.S. Census Bureau recently announced changes to the U.S. Harmonized Tariff Schedule (HTS) Codes that went into effect at the beginning of this month. At the same time, the Census Bureau said that no changes were made to the 2005 Schedule B Codes.

The Census Bureau's website also includes a list of the HTS Codes that are now invalid for use when filing your export information through the Automated Export System (AES).

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Free Trade with Singapore

By Sue Senger email | bio

On December 30, 2003, President Bush issued a proclamation regarding implementation of the U.S.-Singapore Free Trade Agreement, which entered into force on January 1, 2004. The proclamation authorized changes in the U.S. Harmonized Tariff Schedule and Rules of Origin.

This trade agreement makes qualifying products from the United States to Singapore duty free. U.S. importers of certain products from Singapore no longer have to pay duty or enjoy a reducing duty rate over a 10 year period.

The U.S.-Singapore Trade Agreement has strict and often complex eligibility requirements for U.S. imports. Importers may certify that their goods qualify for this reduced duty rate on a shipment-by-shipment basis or make a blanket claim good for a period of up to 12 months.

Importers should review the treaty’s table of contents prior to purchasing goods. The entire treaty can be viewed at the U.S. Trade Compliance Center.

Here are some basic definitions under the Singapore-US Trade Agreement:

Article 3.1: Rules for determining eligibility.
CBP: The U.S. Customs and Border Protection Agency.
Exporter (seller): The person or company supplying the good for export. This may or may not be the producer.
Good (or product): The item being considered for eligibility.
Harmonized System: The six-digit classification system used by Customs authorities worldwide.
Material: A tangible item from which something else is made.
Non-originating: A material or good that does not qualify as eligible.
Originating: A material or good that qualifies as eligible under the rules of origin set out in Chapter 3 of the treaty.
Party: Either the U.S. or Singapore company or individual involved in the transaction.
Producer: The person or company that manufactures the good within Singapore or the U.S.
Regional Value Content Formula: When specified in annex 3.A, eligibility test considering value of non-originating materials. There are two types, build-down and build-up methods.
Split-subheading: Specific products that are a subset of a subheading. This is done in the U.S.-Singapore Free Trade Agreement to provide a greater degree of precision than is available at the six-digit level.
Tariff Shift: The difference in the Harmonized System classification between the good and its non-originating materials.
Vendor: The person or company that supplies materials to the producer.

The duty-phase out schedule is listed in Annex 2-B. This schedule applies only to U.S. imports since Singapore imports are duty free. The phase-out duty schedule provides immediate duty free status to some goods and a reduction of duty to other goods over a period of 10 years. The phase-out schedule is product specific.

The preference criterion is similar to NAFTA. This can be found in Article 3.1 of the Singapore-US Trade Agreement.

Criterion A: The good is wholly obtained or produced entirely in the territory of one or both parties. Examples: Mineral goods extracted there; vegetable goods harvested there; live animals born and raised.
Criterion B: The good has satisfied the requirements specified in Annex 3-A. Examples: each non-originating material undergoes an applicable change in tariff classification. There are exceptions for agricultural and horticultural products. (Note: Unlike NAFTA, there are no uniform pass/fail percentages for the regional value content. Applicable commodity-specific percentages are found wherever regional value content is permitted or required. This can be found in Annex 3.A.)
Criterion C: Otherwise provided as originating under Chapter 3.
Certification: Claims for preferential duty treatment are made by the U.S. importers based on information received from Singapore suppliers. Singapore importers do not claim preference as Singapore imposes no import duty.
Record Keeping: Importers should keep records for five years from date of importation. These must include records and supporting documentation related to the origin of the goods. This would include purchase, cost, value of, and payment for the good.
Verification: U.S. Customs and Border Protection may take the following actions when verifying a claim:
1. A Customs Form 28 should be issued to the importer first. If the requested information is not in the importer’s possession, the importer may have the exporter or producer provide it directly to Customs.
2. If the importer is unsuccessful either in obtaining documentation from the exporter or producer or in obtaining cooperation in providing Customs with the documentation, Customs may issue a Form 28 directly to the exporter or producer in Singapore.
3. Customs may conduct a joint visit with Singapore Customs, if consent is given, to the exporter’s or producer’s premises in Singapore for textiles and apparel only.

Other Free Trade News

As of July 2005, the United States is negotiating free trade agreements with Morocco and the CAFTA countries: Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua. These agreements are expected to pass sometime this year.

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Thousands of successful exporters are using Shipping Solutions to complete their export documents faster, easier and less expensively than ever before. Why aren't you?

If you're too busy trying to complete your export documents by hand to spend some time reviewing the Shipping Solutions Professional export documentation and compliance software yourself, let us do it for you! Sign up for one of our free online demos and let us give you a one-hour overview of the software.

We'll take you step-by-step through the process of completing your export forms, filing your SEDs electronically through AES, and checking your exports against the various government restricted parties lists and export regulations to make sure your shipments are in compliance, and you—and your company—stay out of trouble.

These free online demos are available on Tuesday's at 1:00 Central Time. All you need is an Internet connection to watch the demo and a phone to listen in and ask questions about the software. It's the perfect opportunity to get your first view of Shipping Solutions or to convince your coworkers and your boss that Shipping Solutions is the perfect solution for your company.

See why Shipping Solutions is America's #1 export software. Sign up for the free online demo today!

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