U.S. Customs Issues Memo on Vehicle Export Requirements

On April 5/14, the U.S. Census Bureau implemented mandatory filing of export information (through the Automated Export System [AES]), 72 hours prior to export, for all USED SELF-PROPELLED vehicles regardless of destination or value.

If you are not familiar with these new requirements, full details (including the definition of self-propelled vehicle) can be found at:

http://www.cole.ca/news/new-requirements-for-vehicle-exports-from-usa/

http://www.cole.ca/news/update-to-new-requirements-for-vehicle-exports-from-usa/

Today’s New Information:  U.S. Customs and Border Protection issued AES PROGRAM CBP Memo on the above subject which contains the following information:

·        Re-cap of the new export requirements

·        Re-cap of the 180 day ‘informed compliance’ period announced on April 3/14

·        Penalty information for non-compliance ($10,000.00 maximum)

·        Types of non-compliance (failure to file export information in AES, delayed filing, filing of false or misleading information, and other violations of the Foreign Trade Regulations)

·        FAQ’s (Frequently Asked Questions)

·        Links to various U.S Government websites for additional information

For more information, please contact:

Debbie Jo Willard - Vehicle Imports – Calgary, AB  403-219-2289

Ken Campbell - Manager, Vehicle Imports – Calgary, AB  403-514-7438

Garry Reynolds - Branch Manager – Lacolle, QC  450-246-3950

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Will the Canada-Korea Free Trade Agreement Benefit Your Business?

Canada and the Republic of Korea announced in March that they had concluded negotiations for a bilateral trade agreement. This landmark agreement constitutes Canada’s first free trade agreement in the Asia-Pacific region and will provide new access for Canadian businesses and workers to the world’s 15th-largest economy and the fourth-largest in Asia. The Canada-Korea Free Trade Agreement (CKFTA) will benefit a wide range of industry sectors, including (but not limited to):

·        Industrial goods, chemicals & plastics, information and communications technology, aerospace, metals & minerals)

·        Agricultural and Agri-food products

·        Wine and spirits

·        Fish and seafood

·        Wood and forestry products

Will the CKFTA Benefit You?   If you currently import goods of Korean origin, directly from Korea, the CKFTA will benefit you.  Here is a brief summary of the how the duty on imported goods will be reduced or eliminated by the CKFTA:

·        Non-Agricultural Goods: Over 80% of non-agricultural goods will be duty-free as soon as the CKFTA comes into force.   Duty on the remaining 20% of non-agricultural goods will be reduced to 0% in stages from 1 to 12 years.

·        Agricultural Goods: Just over 50 % (50.7%) of agricultural goods will be provided immediate duty free status upon implementation of the CKFTA.  Duty on a further 36% of agricultural goods will be reduced to 0% over a 5 year period.  13% of agricultural items will be EXCLUDED from duty elimination (i.e. dairy, poultry, eggs, etc.).

Interesting Facts:

·        Korea is a key market for Canada – it is the world’s 15th-largest economy (GDP of $1.1 trillion), and the fourth-largest in Asia, with a population of 50 million people.

·        Korea is already Canada’s seventh-largest merchandise trading partner and its’ third-largest in Asia (after China and Japan). Total merchandise trade between the two countries reached approximately $10.1 billion in 2012.

·        Tariff elimination will be particularly advantageous for Canadian businesses, as average Korean tariffs are three times higher than Canada’s.

·        The U.S. and the EU already enjoy free trade agreements with Korea. The CKFTA will level the playing field for Canadian exporters and investors.

·        Korea’s economic growth in the last 30 years has been remarkable. Since 1980, Korea’s GDP has grown more than six-fold and experienced an average annual growth rate of 6.5 per cent.

What do you need to do?

  • If you are an existing Cole client, please contact your Cole Customer Service Representative.  They can refer you to the appropriate person within Cole’s Consulting team who will work with your firm to prepare a detailed impact analysis based on your past imports.
  • If you are not currently a Cole client, we’d appreciate any opportunity to discuss how we can be of service to you!

Links / Contact Information:http://international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/korea-coree/overview-apercu.aspx?lang=eng#appendix

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Update to “New Requirements for Vehicle Exports From USA”

As previously reported, effective April 5, 2014, the U.S. Census Bureau is implementing mandatory filing of export information through the Automated Export System (AES) for ALL shipments of USED SELF-PROPELLED Vehicles to Canada. Failure to comply with this mandatory AES filing could result in very severe penalties, enforced by CBP, on behalf of the Census Bureau.  See full story at: http://www.cole.ca/news/new-requirements-for-vehicle-exports-from-usa/ 

The purpose of this posting is to advise you of an update on the issue as follows:

The U.S. Census Bureau, in concurrence with U.S. Customs & Border Protection (CBP) has agreed to provide an additional 180 days for exporters to come into compliance with the new requirements.  During this 180 day period the Census Bureau and CBP will use “informed compliance” to educate the trade community on the new requirements. During this time, no penalties will be issued for failure to comply with the new requirements.

Informed Compliance means that rather than issuing penalties, they are going to coach and counsel exporters on how to become compliant.   Exporters should still file AES information and try to be compliant as delays may still occur  as a result of non-compliance.

For more information, please contact:

Debbie Jo Willard - Vehicle Imports – Calgary, AB  403-219-2289

Ken Campbell - Manager, Vehicle Imports – Calgary, AB  403-514-7438

Garry Reynolds - Branch Manager – Lacolle, QC  450-246-3950

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Globalization has local challenges too!

The recent trucking disruption at Port Metro Vancouver is another reminder of the importance of risk management practices for supply chain managers. Granted, it would have been difficult to see this one coming as it was initiated by mostly non-union drivers who are members of the United Truckers Association (UTA). The dispute was between those drivers and their employers, the companies that carry cargo to and from the Port on behalf of importers and exporters. Drivers had been complaining about compensation related to waiting-time at the Port, specifically time spent waiting to pick up, or discharge, containers. Makes sense when you consider that drivers who are paid by the trip, rather than by the hour, can spend the better part of a day waiting around without compensation.

According to various news reports on the disruption, approximately 1,000 UTA drivers withdrew services (i.e. walked off the job), on February 26th. That drew lots of attention to a rapid slowdown in operations, leaving Port Metro Vancouver to declare they were caught in the middle. That also makes sense when you consider that the Port does not employ, or contract directly, with drivers. The dispute was between the UTA drivers and the trucking companies they work for. Port Metro Vancouver just happened to be the place where drivers stopped going to work in order to make their point.

And they certainly made their point. Port Metro Vancouver is Canada’s busiest Port, whose operations extend over 600 km of coastline and include four separate container terminals. Last year Port Metro Vancouver handled more than 135 million tonnes of cargo, including almost 3 million containers, the conveyance of choice for consumer goods. In other words, it’s a busy place, and getting busier every year, which makes Port congestion an ongoing challenge for everyone involved. And that meant a lot of importers and exporters were also caught in the middle.

Things ramped up considerably on March 12th when the UTA drivers were joined by about 400 unionized drivers who were members of Unifor. On its website, Unifor describes itself as Canada’s largest private sector union, representing more than 300,000 members working in telecommunications, transportation, resources, manufacturing and service industries. In other words, lots of potential clout.

A lot of players were at the table trying to find a speedy resolution, including drivers, their employers, the Port Authority and the provincial government. The federal government also played a role as mandated by the Canada Marine Act, which requires federal oversight of 18 Port Authorities across the country designated with strategic importance. Everyone had a vested interest in resolving the issue, and to everyone’s credit, it was resolved relatively quickly, with Port Metro Vancouver announcing on March 27th that the 28-day labour disruption had ended.

But there’s a lesson here for importers and exporters. Many companies have embraced globalization, depending on a much greater number of suppliers to mitigate the effects of extended supply chains. The labour disruption in Port Metro Vancouver reminds us that some of these challenges can occur close to home. And let’s not forget there are a number of other large Ports across the country, including Prince Rupert, Montreal, Halifax, Belledune and Halifax to name just a few, that importers and exporters depend on daily.

How do you prepare for a situation like this in future? If Port operations play a role in your company’s ability to achieve competitive advantage, risk management best-practices would imply that it makes sense to try and identify the potential bottlenecks at a particular Port. In the case of Port Metro Vancouver for example, users can look for information on a number of websites, including the BC Federation of Labour and the BC Bargaining Database. Transport Canada’s website provides an excellent overview of the Port programs in Canada, as do many individual Port Authorities, and the Association of Canadian Port Authorities. Better yet, talk to your suppliers. Sharing information is a large part of supplier relationships. Every once in a while you have to stand back, take a look at the bigger picture, and make sure you can identify all the players in your supply chain.

Posted by: Laurie Turnbull, CITT, P.MM – Supply Chain Consultant, Cole International

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