Category: International Business

International Business, International Trade, MSK Blog

Trump’s Cuba Course Clarified

Trade Concept
Photo credit: iStock.com/XtockImages

By Susan Kohn Ross

“Trump cracks down on Cuba” or variations on that phrase have peppered the general press since Friday, when the President announced his policy towards Cuba.  When you read what was actually written, you come away with a more tempered reaction. Yes, there will be changes, and the most critical one is yet to come, but we focus here on what was actually written.

First, the format is not an Executive Order but rather a June 16, 2017 “National Security Presidential Memorandum on Strengthening the Policy of the United States Towards Cuba” accompanied by a Fact Sheet. The memo can be found here, and the Fact Sheet here. So, nothing changes right away.

Taken together, there are two points that could impact international traders. Continue reading “Trump’s Cuba Course Clarified”

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International Business, International Trade, MSK Blog

Romaine Calm: FSVP is Approaching

Photo credit: iStock.com/darksite

By Susan Kohn Ross

Does FSVP Apply to You?

Are you the importer, consignee, or agent for food imported into the United States?  If so, the Foreign Supplier Verification Program for Importers of Food for Humans and Animals (FSVP), a key element of the Food Safety Modernization Act (FSMA), likely applies to you.  Implementation of the FSVP will begin on May 30, 2017, but categories of companies or foods may be subject to later compliance deadlines.  Where do you fit?

The FSVP regulations aligns with key components of the FDA’s overall food safety plan for facilities that manufacture, process, pack or hold food which must now establish and follow the regulations regarding current good manufacturing practice (CGMP) and hazard analysis and risk-based preventive controls for human food and animal food (Preventive Controls or PC).

What Is FSVP? Continue reading “Romaine Calm: FSVP is Approaching”

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International Business, International Trade, MSK Blog

Due Your Duty

By Susan Kohn Ross

With the ever-increasing scrutiny being brought to compliance and the payment of duties on imported goods by Customs and Border Protection (CBP), it is worth commenting that any duties which are due when an entry liquidates may, in fact, end up having to be paid even if the related protest remains pending due to the legal and contractual relationship between the importer and his surety company.  Simply put, if a surety insists on receiving payment of any amounts demanded by CBP upon liquidation, the importer does not have any solid grounds to object.  Why would the surety do so if a protest is pending? Because the surety is looking to mitigate its risk. If the importer does not pay, the surety will have to do so, at least up to the face amount of any bonds it has written, and sureties try their best not to be put in that position. Continue reading “Due Your Duty”

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International Business, International Trade, MSK Blog

DOJ Defines Compliance

By Susan Kohn Ross

In the span of the last 18 months, the topic of corporate compliance programs has gotten considerable attention from the Department of Justice  (“DOJ”) and now finally, DOJ has published significant details about how it is likely to measure the sufficiency of any company’s compliance program.

First, some background.  In September 2015, the Yates memo was published, see DOJ Sets Its Sights on Officers and Directors for more details. In short, then Deputy Attorney General Yates reminded the DOJ offices nationwide, if a corporation has violated the law,  its level of cooperation will be measured, in large part, by whether it provides “all” the relevant details, which means did the company identify the individuals whose actions or inactions resulted in the violations under consideration, and provide supporting documentation to show what happened and how those individuals were involved. If the company did not do so, it does not get full credit under the Sentencing Guidelines. Continue reading “DOJ Defines Compliance”

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International Business, International Trade, MSK Blog, Trusts & Estates

Is the Border Tax Crossing the Line?

By Susan Kohn Ross and Jeffrey D. Davine

It is far too early to discern the extent of any change to the relationship between the U.S. and Mexico in the face of the oft-repeated insistence of the Trump campaign to “renegotiate” NAFTA, a promise that was reiterated once Mr. Trump was sworn into office. Following a prickly meeting last month between President Trump and Mexican President Enrique Peña Nieto, accounts from Mexico report the government as having started consultations with its business community, a process described as taking 90 days. The results of those consultations and how they might impact any further discussions with the U.S. remain to be seen. Similarly, President Trump and Canadian Prime Minister Justin Trudeau also met last month, but under somewhat more cordial circumstances. Again, next steps with Canada remain an open question. However, the overarching theme is the oft-repeated promise from the Trump Administration that a border tax will be imposed.  While nothing concrete has been proposed to date, how such a border tax might work has understandably caused varying levels of concern among American companies. Given there is nothing concrete to examine, in this Alert, we seek to provide a brief explanation of the concepts being bandied about. Continue reading “Is the Border Tax Crossing the Line?”

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International Business, International Trade

It’s All About Compliance

Part 2 – Import Classification 

By Susan Kohn Ross

This Alert is one in an occasional series of articles providing tips about various topics which come up routinely with import and export transactions. These articles/tips are published with the intention to provide suggestions to aid international traders in their on-going efforts to get their declarations right the first time, and are based on situations we commonly see arising. Whether it is reasonable care on the import side or not self-blinding on the export side, compliance is a key for many different reasons, including protecting your bottom line.

Part 1 of this series addressed how to value goods correctly, and can be read here. This edition provides import classification tips.

Under U.S. law, imported goods are classified for duty assessment and statistical reporting using the Harmonized Commodity Description and Coding System. This compilation of 97 Chapters and approximately 5,000 product descriptions, known in the U.S. as the Harmonized Tariff Schedule of the United States (HTSUS), provides a single modern structure for product classification and is used by more than 200 countries as a basis for their customs tariff and collection of international trade statistics. The first six digits and their corresponding product descriptions are enacted by the countries World Trade Organization member countries. The remaining digits in any tariff number (which total 10 in the U.S.) and their corresponding duty rates are set individually by each country. The HTSUS in the U.S. has 99 chapters, with the two unique ones intended to cover product specific provisions, such as American goods returned, products assembled abroad, special rules imposed on given products (for example, temporary quotas), and so on.

Tariff classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRIs) which are analyzed in order until one applies. In so doing, don’t forget to also check the additional U.S. rules of interpretation. Continue reading “It’s All About Compliance”

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International Business, International Trade

It’s All About Compliance

By Susan Kohn Ross

Part 1 – Value

This Alert is one in an occasional series of articles providing tips about various topics which arise routinely with import and export transactions. These tips are published with the intention to aid international traders in their ongoing efforts to get their declarations right the first time, and are based on situations we commonly see occurring. Whether it is reasonable care on the import side or not self-blinding on the export side, compliance is a key for many different reasons, including protecting your bottom line.

Given the ever increasing attention being paid by the U.S. government to compliance by companies of all sizes, and especially in light of the recent informed compliance letter sent out by CBP’s Regulatory Audit in Houston, TX, now is the time to review how to value goods correctly.

The same basic value code is used throughout the world, at least among all the World Customs Organization member countries, although most assess duty on the C.I.F. value of the imported goods, whereas the U.S. assesses duty on the F.O.B. cost of goods. While admittedly each country has its own interpretation and they vary a tad, the basics are: Continue reading “It’s All About Compliance”

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International Business, International Trade

Hanjin Shipping Sinks in Korea

By Susan Kohn Ross

With the bankruptcy filing of Hanjin Shipping having just occurred on the 31st, many of their shipping customers are only now beginning to feel the disruption to their supply chains and are trying to sort out how to get their goods moving. It would be reasonable to expect similar bankruptcy filings in some major countries such as the U.S. and at least one in Europe, but until that happens, here are some tips for getting your goods moving. Continue reading “Hanjin Shipping Sinks in Korea”

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International Business, International Trade

ACE Allows for Stricter Customs Enforcement

By Susan Kohn Ross

First published by Journal of Commerce, August 2016

In the face of its recent reorganization and enhanced computer system, it was really only a matter of time before the trade community started to see Customs and Border Protection (“CBP”) better organize its enforcement efforts, and now the first tangible step has been publicly disclosed.

When the concept for the Centers for Excellence and Expertise was rolled out, it was logical to expect that CBP would combine the enhanced computer capabilities of the Automated Commercial Environment with information developed from the industry focused CEEs. That meant, we would eventually see CBP relying on computer analytics and internal expertise to help the agency pinpoint where to focus its enforcement efforts. Over the years, we had seen those with the most experience retire. CBP and Immigration and Customs Enforcement seemed to lose their ability to make serious fraud cases. Yes, criminal cases for trade fraud, involving for example for antidumping and export license violations, continued to be brought, but it has been a long time since we have heard about a really significant civil penalty. Sure, some smaller fish got caught, and many of them did some really dumb things. Others who got caught just plain cheated. Now, however, CBP has launched a round of “informed compliance” letters, which are really warning letters to the trade community. Continue reading “ACE Allows for Stricter Customs Enforcement”

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International Business, International Trade

The Art of Self Defense

By Susan Kohn Ross

Corporate compliance programs come in all shapes and sizes and apply whether your company is privately owned or publicly traded. These internal controls take the form of accounting and audit procedures, import-export/regulatory policies, employment guidelines, ethics/anti-corruption initiatives and so on. The intent of any compliance program is to ensure that employees know what is expected of them and that their behavior complies with and is consistent with the “rules of the road” for your business or industry. Continue reading “The Art of Self Defense”

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