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"Shap" Talk
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August 2003 - Issue #17
In This Issue:
Export AES Filing Changes
Homeland Security Appropriations Bill Approved
U.S.-Chile and U.S.-Singapore Free Trade Agreement Update
WCO Adopts Initiatives to Secure International Supply Chain
Firms Offering FDA Registration for Domestic and Foreign Food Facilities
New Seafarers' Identity Documents to Improve Security
Japan Requires Country of Origin Label for U.S. Beef
Deadline is Extended for GSP Petitions
July 2003 GSP Changes Take Effect
Transportation Update
Shapiro Begins Ocean LCL Consolidation Service
Shapiro Insurance Services
Trade Industry News
Export AES Filing Changes
The Final Rule for mandatory Automated Export System (AES) filing for items on the Department of Commerce’s Control List (CCL) and the State Department’s United States Munitions List (USML) has been posted to the Federal Register as of July 17, 2003. You can access the entire final rule and the proposed rule from October 9, 2002 on the Census website at: http://www.census.gov/foreign-trade/regulations/fedregnotices/index.html#fedreg-07172003. The Census Bureau will implement provisions of this rule on October 18, 2003. There is also a requirement that the paper Shipper’s Export Declaration (SED) be filed for a 90-day evaluation period at that time to ensure consistency and accuracy.
In addition to mandatory filing of export information utilizing the AES system for the CCL and USML lists, other significant changes are outlined in this rule. There are changes to the information required on the SED, or export information, as it is now being labeled. These changes pertain to the required address information concerning the location where the shipment actually begins its journey for export. If the shipment is from multiple locations, information pertaining to the highest value portion of the shipment will prevail. It is now a requirement that the exporter provide all of this information to AES or their forwarder.
Additional information for AES or the SED is now required. This information consists of:
• the forwarder's Exporter's Identification Number (EIN);
• the transportation reference number;
• instructions for filing the gross shipping weight for air, vessel, truck, and rail modes of transportation via paper and the AES system; and
• deleting any references to "marks and numbers."
Filing option 3, which gave the exporter the ability to file partial information prior to departure and the balance of the information post-departure, is now obsolete for AES. AES filing option 4, which allows only approved exporters to file post-departure export information in AES is also in jeopardy at this time. The State Department has advised that it would not authorize exporters of USML and CCL items to file post-departure export information. Option 4 is still available at the moment, but with procedures moving towards pre-departure information, there will most likely be changes to this option in the future.
These are just a few of the items highlighted in the Final Rule. For more specific information, please contact info@shapiro.com.
Source: AES 2003035 Broadcast held on 07/18/2003; Society for International Affairs Summer 2003 Conference, held in Washington, DC on July 14-15, 2003, Samuel Shapiro & Company, Inc. representative in attendance.
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Homeland Security Appropriations Bill Approved
The Senate Appropriations Committee has unanimously approved its version of the fiscal year 2004 Homeland Security Appropriations Bill, which grants $28.5 billion for the Department of Homeland Security. The press release by the Committee noted that the bill provides $1 billion more than the President’s original budget request.
The Senate Appropriations Committee’s version of the bill would provide $4.9 billion for the Bureau of Customs and Border Protection (CBP), which includes:
- $15.3 million for the Customs-Trade Partnership Against Terrorism (C-TPAT);
- $61.8 million for the Container Security Initiative (CSI);
- $119.3 million for inspection equipment and establishment of an explosive and chemical canine detection program; and
- $441.1 million for automation modernization.
The Committee’s version of the bill will also provide $5.4 billion to the Transportation Security Administration (TSA) with the purpose of further securing all modes of transportation, to include:
- $150 million for port security grants;
- $30 million for Operation Safe Commerce; and
- $60 million for cargo security screening, research, and development.
Sources: “Senate Appropriations Committee Approves FY 2004 Homeland Security Appropriations Bill” appearing in International Trade Today dated July 14, 2003.
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U.S.-Chile and U.S.-Singapore Free Trade Agreements Update
The U.S.-Chile and U.S.-Singapore Free Trade Agreements spearheaded through Congress last week, as the House Judiciary Committee, the House Ways and Means Committee, the Senate Judiciary Committee, and the Senate Finance Committee approved legislation to implement the agreements.
The Bush Administration presented the trade agreements to Congress on July 15, 2003. The House committees approved legislation on July 16th and the Senate committees approved legislation on July 17th, in what is considered the "fast-track" procedure. The procedure gives Congress 90 days to approve the legislation without an opportunity to make amendments.
Both the House and Senate are expected to bring the free trade bills to their respective floors for a full vote during the week of July 21st, before the August recess. Once Congress passes the agreements, President Bush would be expected to issue a proclamation implementing the agreements.
Sources: "House and Senate Expected to Soon Vote on Implementing Legislation for the U.S.-Chile & U.S.-Singapore Free Trade Agreements" appearing in International Trade Today, dated July 21, 2003; "Chile and Singapore Agreements Sail Smoothly Through Congress", appearing in NCBFAA Monday Morning Briefing, dated July 21, 2003.
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WCO Adopts Initiatives to Secure International Supply Chain
The World Customs Organization (WCO) has adopted procedures intended to secure the international trade supply chain while facilitating trade flow. These measures provide a solid outline of international best practices, which mainly focus on the mutual cooperation between customs administrations and the management of information.
As the initial step of a two part series of measures, the WCO has adopted the basic principles in the Customs Guidelines on Advance Cargo Information (ACI Guidelines), which has not yet been fully completed. The WCO emphasizes that these procedures will only be successful when implemented at a national level and when customs administrators have established standards on customs control, risk assessment, and authorized supply chain. The ACI Guidelines encourage mutual recognition, integrated customs controls, and management of international transactions. It also contains pertinent definitions and information on integrated customs control procedures, data privacy and protection, information technology systems related to customs control activity, global supply chain, and data required for risk assessment.
The WCO has also approved guidelines for cooperation between WCO members and private industry. The WCO accepted measures that focus on establishing cooperative programs that surpass legal requirements in order to reach equally beneficial objectives and attain supply chain security. The WCO claims that these guidelines should affect all business functions and modes of transportation; they will also be further developed for each business sector and transportation mode of the supply chain.
The WCO notes that the following guidelines are the foundation for the development of cooperative agreements between customs and the trade community:
- an international system of mutual recognition within the supply chain;
- a unique consignment reference (UCR) -- the concept that security should be enforced upon the entire supply chain; and
- existing national initiatives such as the Business Anti-Smuggling Coalition (BASC) and the Customs-Trade Partnership Against Terrorism (C-TPAT).
Our Consulting Team can provide you with assistance in becoming a certified C-TPAT partner. For more information on how we can help you, please contact our Consulting Team at consulting@shapiro.com.
Sources: “WCO Adopts Several Initiatives to Secure International Supply Chain, Harmonize Data, Etc. (Part I)” appearing in International Trade Today dated July 14, 2003.
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Firms Offering FDA Registration for Domestic and Foreign Food Facilities
The Food and Drug Administration (FDA) issued a proposed rule on February 3, 2003, that will require the registration of domestic and foreign facilities that manufacture, process, pack, or hold food for human or animal consumption in the United States by December 12, 2003.
FDA has announced that various firms may be offering their services to assist domestic and/or foreign facilities to register with the FDA, but states that these firms are not affiliated with FDA. Additionally, FDA has not contracted with any firms to register domestic or foreign facilities.
As a reminder, domestic and foreign food facilities cannot register until official publication of the final rule. While domestic and foreign food facilities are required to register by December 12, 2003, there is no requirement to register now, as the FDA has not yet issued the final rule containing the registration requirements, nor has it issued a final registration form.
FDA anticipates that registration over the Internet will be an uncomplicated process, and advises that there will be no registration fee. The proposed rule states that registrations will not be accepted before the publication date of the final rule, which is expected to be October 10, 2003.
Sources: "Protecting the Food Supply - FDA Notice Regarding Firms Offering Registration Services" http://www.cfsan.fda.gov/~dms/fsbtnote.html appearing on the FDA website, dated June 30, 2003; “FDA Notice on Various Firms Offering Bioterrorism Registration Services for Food Facilities” appearing in International Trade Today dated July 9, 2003.
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New Seafarers’ Identity Documents to Improve Security
The international maritime industry has moved to establish an official identification system for the world's 1.2 million seafarers with the ultimate intention of reducing global terrorism threats. The policy, known as The Convention on Seafarers’ Identity Documents, was adopted by the International Labour Organization (ILO) at its 91st annual conference held in Geneva, Switzerland in June 2003.
The new convention establishes an arduous, internationally recognized identification process based on biometrics. The biometric template, which might be in place by next year, will include fingerprints, digital or original photographs, as well as unique document numbers. Program officials stress the need for a “global interoperable standard” so that the information is available, translatable, and understandable to various organizations – in particular the International Civil Aviation Organization.
The identification convention, negotiated by governments, ship-owners, and labor unions, requires members to maintain proper databases and to provide adequate oversight so as to reduce the risk of issuing an ID to the wrong party. The U.S. State Department supports the Seafarers’ Identity Documents, but also notes that ID alone cannot be a substitute for a U.S. visa. If seafarers go ashore they must have U.S. visas as well as ID’s.
Sources: "Seafarers Worldwide to Get ID Cards" appearing in American Journal of Transportation, dated June 30, 2003; "ILO Adopts Convention on Seafarers' Identity To Improve Security from Terrorism" appearing in International Trade Today, dated June 26, 2003; Article appearing in The Wall Street Journal, dated June 20, 2003.
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Japan Requires Country of Origin Label for U.S. Beef
Beginning September 1, 2003, the Japanese Government is requiring that all U.S. exported beef imported into Japan be clearly marked with a country of origin label. Japan will require that U.S. beef exports be entirely of U.S. origin: raised, fed, and slaughtered exclusively in the United States.
The Japanese import requirements of U.S. exported beef stems from the discovery of a cow in Canada infected with Bovine Spongiform Encephalopathy (BSE) or “Mad Cow Disease.” The U.S. Department of Agriculture's Agricultural Marketing Service officials say that they will be able to develop a system that will guarantee 100 percent U.S.-origin beef to Japan.
Sources: International Trade Alert (AAEI) Volume 103 Number 29, dated July 21, 2003
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Deadline is Extended for GSP Petitions
The Office of the U.S. Trade Representative (USTR) has announced that it is extending the deadline for interested parties to submit petitions for the 2003 Annual Generalized System of Preferences (GSP) product and country eligibility review to September 2, 2003. Interested parties may submit petitions requesting designation of articles and may also petition for a review of any Designated Beneficiary Developing Country. You may submit petitions by electronic mail to FR0081@ustr.gov or contact the GSP Subcommittee, Office of the United States Trade Representative (USTR), 1724 F Street, N.W., Room F-220, Washington, DC 20508, at (202) 395-6971. The facsimile number is (202) 395-9481.
Complete instructions for submission can be viewed at: http://a257.g.akamaitech.net/7/257/2422/14mar20010800/edocket.access.gpo.gov/2003/pdf/03-17995.pdf
Sources: "Docket #01-17965" appearing in The Federal Register, Volume 68, Number 136, dated July 16, 2003; “USTR Extends Deadline for Petitions for 2003 Annual GSP Product/Country Eligibility Practices Review”, appearing in International Trade Today dated July 18, 2003.
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July 2003 GSP Changes Take Effect
President Bush signed Proclamation 7689 on June 30, 2003, which modified the country and Harmonized Tariff Schedule (HTS) number combinations eligible for duty-free benefits under the Generalized System of Preferences (GSP) program.
The GSP changes contained in Annex I are effective for goods entered, or withdrawn from warehouse, for consumption on or after July 1, 2003. The modifications contained in Annex II are effective on July 1, 2003. The actions taken in Annex III to the proclamation are effective on July 2, 2003, which is the same date the proclamation was published in the Federal Register. Proclamation 7689 can be viewed at: http://www.ustr.gov/gsp/2003-07-02-presidential.pdf.
Sources: "Presidential Proclamation 7689 of June 30, 2003" appearing in The Federal Register, Volume 68, Number 127, dated July 2, 2003; “President Makes Numerous Country/HTS Number GSP Changes that Take Effect July 1st, etc.” appearing in International Trade Today, dated July 3, 2003.
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Transportation Update
Import:
The previously predicted general rate increases (GRI) from Italy did not transpire; carriers were under intense pressure from forwarders and shippers to maintain current rates. Mediterranean Shipping was the sole Italian steamship line to raise rates, but that increase was offset by the reduction in the bunker surcharge. The GRI from Spain did not increase as much as originally announced. Carriers raised rates between $50.00-$100.00 per TEU. The bunker surcharge from Mediterranean ports was reduced in July from $170.00 per TEU to $128.00 per TEU. Volume from Asian ports remained strong through June and July, with vessels sailing at close to 100% capacity. SARS has had some effect in mainland China; space is not as precious as it would normally be this time of year.
Export:
Airfreight carriers have maintained low rates due to space availability to most European and Asian markets. Rates are especially competitive on passenger aircraft moving from Atlanta and Dulles International Airports. Ocean freight rates have remained stable, but carriers are discussing a rate hike for the fall.
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Shapiro Begins Ocean LCL Consolidation Service
In early June 2003, Samuel Shapiro & Company, Inc. and its partner in Hong Kong, Hong Kong Data Express, began a direct less-than-container-load (LCL) consolidation service from Hong Kong to Baltimore. This service will help accelerate the arrival of LCL cargo into the Mid-Atlantic region. Normally, LCL cargo into Baltimore arrives in bond from New York. Due to congestion and customs delays in New York, cargo can take one week or more to arrive in Baltimore. Our present program utilizes Hyundai service via Long Beach, with a transit time from Hong Kong to Baltimore of 22 days. The cut-off day is Wednesday and vessels sail on Sunday. All cargo, once it arrives in Baltimore, is available at Superior Transfer. Cargo is usually available at the warehouse within one to two days after arrival.
In mid-July 2003, Shapiro began an LCL consolidation service from Italy to Baltimore with its partner in Italy, M.P. International. All cargo is received in Milan and sails weekly from La Spezia to Baltimore on Mediterranean Shipping Company vessels. Service is direct with a transit time of 16 days. This is the only direct LCL service into Baltimore from Italy. (Most consolidations from Italy arrive in New York and containers are broken down there and then moved in bond to Baltimore, Philadelphia, and Boston. Cargo can take from 7 to 14 days to travel from New York to Baltimore.) Our consolidation is a great way to serve clients in the Mid-Atlantic region.
For more information on our consolidation services, please contact our Transportation Team at Marketing@shapiro.com.
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Shapiro Products & Services
Shapiro Insurance Services
How familiar are you with the risks associated with transporting cargo? Why not test your knowledge? Ask yourself these important questions:
- Do you know that insurance is not provided in standard transportation costs?
- Do you know where your obligations begin in relation to insurance coverage?
- Do you know that if an overseas party provides insurance, you may only be receiving limited or minimal coverage?
- Do you know that carriers limit their liability in the event of a loss? In most instances, the limited liability amounts will not cover the value of the cargo. They will only pay $500 per package or customary freight unit if shipping via ocean. They will only pay $20 per kilo (actual weight) if shipping via air.
If you answered NO to one or more of these questions, you are in danger of taking a financial loss.
Why put yourself in this position? Samuel Shapiro & Company, Inc. is available to assist with all of your insurance needs. We stress the importance of acquiring appropriate insurance coverage for your merchandise because we understand the risks involved in transporting cargo.
We can assess your needs and assure that you are purchasing the proper amount of coverage in order to alleviate these kinds of risks. We offer competitive, door-to-door, all-risk coverage throughout the world. We pride ourselves on outstanding customer service; we also offer “value-added” services to save our customers time and money.
Based on the Incoterm/Terms of Sale utilized for your transaction, we will advise where your risks and/or obligations begin. We purchase large volumes of insurance, allowing us to offer competitive rates. We work with a transportation insurance broker; therefore we are often able to insure high-risk commodities. If there were to be a claim, it would be filed and processed in the United States. It is much easier to communicate claim information within the U.S. than it is to report to and negotiate with an overseas party.
For more information on the insurance services that we provide, please contact us at info@shapiro.com or call 1-800-695-9465, extension 221.
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