October 2002 - Issue #7
In This Issue:
U. S. Customs Launches Sea Cargo Targeting Initiative
FAST Program to be Implemented at the U.S. - Canadian Border
FDA's Center for Food Safety Posts Info on Imported Food and Cosmetic Compliance Programs
Port and Maritime Security Act - Proposed Port Security User Fee
Air Export Fuel Surcharges Increase
European Union May Assess 100% Tariffs on US Exports
Customs Posts Information on "Project Shield America" For Exports
Latest Fish & Wildlife Service Forms Now Available on the Internet
Reminder to Shapiro Internet Tracking Customers
Marine Cargo Insurance
Trade Industry News
U. S. Customs Launches Sea Cargo Targeting Initiative
The U.S. Customs Service has announced the "next step in a multi-tiered program to protect the international commerce from terrorist infiltration". The new automated program - Sea Cargo Targeting Initiative - was launched on August 19, 2002 to "better identify high-risk ocean cargo into U.S. ports of entry and to establish new policies for dealing with these shipments," according to a recent press release by the agency. "The initiative will better protect Americans and seaports [as well as] introduce greater uniformity, predictability and efficiency to global commerce," said Customs Commissioner Robert Bonner.
Major Components Include:
- Adding new criteria to the U.S. Customs database that stores the latest information concerning possible terrorist activities.
- Ensuring that all manifests are processed through the Automated Targeting System and reviewed by trained personnel.
- Standardizing U.S. Customs procedures when the system pinpoints a high-risk shipment.
U.S. Customs officials state that they anticipate more thorough examinations of high-risk cargo utilizing the new targeting system, which will include gamma-ray scanning and radiation detection.
The Sea Cargo Targeting Initiative, according to Customs, is designed to complement the ongoing efforts by the agency to enlist the support of the trade community. The Commissioner said, "The Container Security Initiative (CSI), the Customs-Trade Partnership Against Terrorism (C-TPAT), and the Automated Commercial Environment (ACE) now under development are designed to create a formidable triad in the war against terrorism."
Source: U.S. Customs press release dated 9/3/2002. Available at: http://www.customs.ustreas.gov/hot-new/pressrel/2002/0903-00.htm
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FAST Program to be Implemented at the U.S. - Canadian Border
The FAST Program is a joint security and safety initiative between the United State and Canada. It is scheduled to commence in December 2002, and will be available at the following major border crossings:
- Blain-Douglas
- Buffalo-Fort Erie
- Detroit-Windsor
- Lewiston-Queenston
- Port Huron-Sarnia
- Champlain-Lacolle
The program was designed to "promote free and secure trade using common risk-management principles, supply chain security, industry partnership, and advanced technology to improve the efficiency of screening and clearing" cargo at the U.S. - Canadian border.
FAST is a harmonized clearance process for known low-risk shipments. Any truck using FAST lane processing must be a FAST approved carrier, carrying qualifying goods from a U.S. Customs-Trade Partnership Against Terrorism (C-TPAT) approved importer, and the driver must be in possession of a valid FAST - Commercial Driver Card. Key components of risk-assessment and qualification include:
- Importer Registration
- Carrier Registration
- Commercial Driver Application
For more information regarding the program, including registration, see the U.S. Fact Sheet available at http://www.customs.ustreas.gov/enforcem/fast.pdf and the Canadian Fact Sheet available at http://www.ccra-adrc.gc.ca/newsroom/factsheets/2002/sep/fast-e.html.
Sources: "U.S. Fact Sheet on the FAST Program" is available at http://www.customs.ustreas.gov/enforcem/fast.pdf , "Canadian Fact Sheet on the FAST Program" available at http://www.ccra-adrc.gc.ca/newsroom/factsheets/2002/sep/fast-e.html. Additional Sources: "U.S. - Canada Expected to Soon Implement FAST Border Program", from International Trade Today- All News Addition, dated 09/20/2002.
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FDA's Center for Food Safety Posts Info on Imported Food and Cosmetic Compliance Programs
The Food and Drug Administration's (FDA) Center for Food and Safety and Applied Nutrition (CFSAN) has posted to its website a series of compliance program information sheets for imported and domestically produced food and cosmetic products.
The documents "provide guidance to the FDA's field offices in carrying out investigations, inspections, sample collections and analyses, and regulatory activities in defined program areas". The documents also include "field reporting requirements, background information on the program, implementation objectives, registration and process filing, regulatory and administrative strategy, [as well as] program contacts".
For more information please refer to the FDA website for the following programs:
Source: "FDA's Center for Food Safety Posts Information on Imported Food and Cosmetic Compliance Programs", from International Trade Today-All News Edition, dated 08/28/2002.
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Port and Maritime Security Act - Proposed Port Security User Fee
The conference committee for the House and Senate passed versions of Bill S.1214 - Port and Maritime Security Act is continuing to work to resolve the differences between its two versions, as stated in International Trade Today - All News Edition, dated 09/18/2002. The committee's co-chairman, Senator Hollings, is pressing for the implementation of a series of port security fees in order to foot the cost of the bill, which would provide port security services as well as a secure system of international maritime trade.
The proposed schedule of fees would be assessed against cargo shipments, vehicles and passengers as follows:
|
Cargo Group
|
Unit of Measure
|
Fee
|
|
Container (non-HAZMAT)
|
TEU
|
$15.00
|
|
Container (HAZMAT)
|
TEU
|
$20.00
|
|
Passengers
|
Passenger
|
$3.00
|
|
Vehicles
|
Number
|
$3.00
|
|
Dry Bulk Cargo
|
Metric Tons
|
$0.01
|
|
Crude Oil
|
Metric Tons
|
$0.30
|
|
Petroleum Products
|
Metric Tons
|
$0.45
|
|
Chemical Products
|
Metric Tons
|
$0.50
|
|
Liquid Gases
|
Metric Tons
|
$0.60
|
|
Break Bulk Cargo
|
Metric Tons
|
$0.75
|
|
The article states that the "proposed port security service fee would be imposed on each cargo shipment or vehicle imported into or exported from the United States, and on each passenger when entering or leaving the U.S." Further, the article states that no fee shall be assessed more than once per voyage and that no fee shall be assessed for international ferry voyages.
The same rates would apply to Transshipment Security Fees that, as proposed, would be assessed on shipments of containerized cargo, passengers, and vehicles entering the United States through Canadian or Mexican ports.
According to the article, the amounts collected would only be used by the Department of Transportation and U.S. Customs to provide security services at ports and borders. The Transportation Secretary will review the program and will consider recommendations from the National Port Security Advisory Committee. The intent is to determine if a revised schedule of fees is necessary, to ensure that a surplus does not accumulate, and to implement corrective action against Coast Guard security vulnerabilities.
Source: "Update on the Port Security User Fees Proposed for the Conference Version of S.1214", from International Trade Today - All News Addition, dated 09/18/2002 and "Additional Details on the Port Security User Fees Proposed for the Conference Version S.1214", from International Trade Today-All News Edition, dated 09/19/2002.
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Air Export Fuel Surcharges Increase
Airlines worldwide have announced that they will increase their fuel surcharge from the present rate of five cents per kilo to ten cents per kilo or the equivalent amount in local currency for international shipments.
Airlines also increased the surcharge for domestic shipments from two cents per pound to four cents per pound. Both increases took effect September 23, 2002.
The Airlines have stated that surcharges are based on increases in spot prices for jet fuel in five centers around the world - New York, the U.S. Gulf Coast, Los Angeles, Rotterdam and Singapore.
This comes at a time when global air cargo is recovering from the post-September 11 slump faster than passenger traffic.
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European Union May Assess 100% Tariffs on US Exports
The European Union may be responding in kind to the ongoing trade dispute with the United States. On September 13, 2002, the EU published in its Official Journal an extensive draft list of US products that may be subject to 100% tariffs in the EU; resolution is pending a final decision later this fall.
The list of products that could face the prohibitive duties spans virtually every sector, including agricultural products, textile and apparel products, footwear, glassware, jewelry, electronics, toys and leather goods. For a draft listing of the Harmonized Tariff Schedule (HTS) numbers that may be affected, please refer to http://www.strtrade.com/pdf/draft_list.pdf
Actual imposition of the increased duties against US exports does not appear to be imminent, since the EU has stated that it will delay retaliation while the US revisits the law in question. It is unlikely that Congress will take action on the issue until at least early next year; it is unclear how long the EU will be patient.
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Customs Posts Information on "Project Shield America" For Exports
Customs has posted to its Web site a wealth of information regarding Project Shield America, a program launched on December 10, 2001, which is designed to prevent international terrorist organizations from obtaining sensitive U.S. technology, weapons, and other equipment that could help them carry out attacks on America and its people.
According to Customs, Project Shield America is an integral part of its strategy of preventing illegal exporters, targeted foreign countries, terrorist groups, and international criminal organizations from:
- Trafficking Weapons of Mass Destruction (WMD) and their components
- Obtaining and illegally exporting licensable commodities, technologies, conventional munitions, and firearms
- Exporting stolen property
- Engaging in financial and other transactions which support these activities or which violate U.S. sanctions and embargoes
Customs has previously stated that Project Shield America has two operational components:
- Customs will reach out and form partnerships with U.S. manufacturers and distributors of sensitive technology, weapons, and equipment sought by terrorists.
- Customs will investigate and halt those attempting to acquire and illegally export weapons and components to groups intent on harming America.
Implementation of Project Shield America
According to the information posted to Customs' Web site, Project Shield America has been designed to work in concert with the three-pronged effort of Customs' Export Enforcement Program:
- The inspection and interdiction effort utilizes specially trained Customs Inspectors stationed at high threat ports, to selectively inspect suspect export shipments.
- The investigations effort involves Customs Special Agents deployed throughout the country, who proactively initiate and pursue high quality cases against offenders of the Export Administration Act, Arms Export Control Act, Trading With the Enemy Act, International Emergency Economic Powers Act, and other related statutes.
- The international cooperation effort focuses on the use of Customs Attaches stationed in foreign countries, enlisting the support of their host governments in an effort to initiate new investigative leads.
Implementation of Export Management Systems
According to Customs, to achieve success with Project Shield America, the cooperation of the exporting community with Customs is essential. Customs recommends that its industry partners implement an optional Export Management System (EMS) which assists exporters in complying with the Export Administration Regulations.
Customs states that an effective EMS consists of the following elements:
- A policy statement demonstrating senior management's commitment to export control;
- Identification of positions within the company responsible for export control;
- An up-to-date training program for employees with export responsibilities;
- A program for maintaining records in compliance with export regulations;
- Periodic internal review of the EMS;
- A procedure for dealing with violations or non-compliance of export regulations; and
- A strict policy of reporting suspicious orders or inquiries to Customs.
Critical Technology Most Urgently Sought by Proscribed Countries
According to the information on Customs' Web site, some of the critical technology most urgently sought after by certain proscribed countries includes:
- Modern manufacturing technology for the production of microelectronics, computers, digital electronic components, and signal processing systems;
- Technology necessary for the development of aircraft, missile, and other tactical weapons delivery systems;
- All types of advanced signal and weapons detection, tracking, and monitoring systems;
- Technology and equipment used in the construction of nuclear weapons and materials; and
- Biological and chemical warfare agents and precursors, and associated manufacturing equipment.
Indicators of Potential Illegal Exports
Customs has also included on its Web site a list of possible indicators ("red flags") of illegal exports or diversions. A partial list of "red flags" includes:
- The customer is willing to pay cash for a high value order rather than use a standard method of payment, which usually involves a letter of credit
- The purchaser is reluctant to provide information about the end-use or end-user
- The final consignee is a trading company, freight forwarder, export company, or other entity with no apparent connection to the purchaser
- The packaging requirements are inconsistent with the shipping mode or destination
- The order is being or required to be shipped via circuitous or economically illogical routing
For more information on Project Shield America refer to the U.S. Customs website at http://www.customs.ustreas.gov/enforcem/exp.html
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Latest Fish & Wildlife Service Forms Now Available on the Internet
The Fish & Wildlife Service (FWS) has posted the most recent FWS forms on the Internet. These forms can be found on their website at http://forms.fws.gov. Click on 3-200 for FWS applications. The Import / Export license application can be found under 3-200-3. The Designated Port Exception Permit application can be found under 3-200-2. The Declaration for Importation or Exportation of Fish or Wildlife is also available by clicking on the 3-100 series. The FWS forms page is also available by accessing the Law Enforcement link at the FWS website at the following address: http://www.le.fws.gov/faqs.html.
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Shapiro Products & Services
Reminder to Shapiro Internet Tracking Customers
As a reminder to our customers who utilize our Internet Tracking Products , for security reasons, please be sure to notify us whenever an employee with access to the system leaves your company. We will arrange to supply you with a new password.
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Marine Cargo Insurance
As your complete transportation and logistics provider, we want to ensure that you receive the best possible service in all aspects of the movement of your freight. One of the basic components of our service is to make certain that you are aware of the importance of properly insuring your cargo during transit.
There are problems inherent in the transportation process that may cause losses beyond your or our control. Lloyds of London recently reported that, on average, one ship sinks every day. In addition, some goods are prone to loss simply by their nature. Should something unforeseen happen to your cargo while in-transit, we want you to to have the best protection available to help you recover after the loss.
Samuel Shapiro & Company, Inc., will provide you with a competitive and comprehensive Marine Cargo Insurance package. Let us make sure your cargo and your investment is protected. We encourage you to contact our expert staff at info@shapiro.com for additional information.
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