I N D U S T R Y   R O U N D U P

 C O M P A N Y   C O R N E R

Customs compliance update

Since the Administrative Monetary Penalty System (AMPS) was introduced in October 2002 to enforce importer and exporter compliance, penalties totaling more than $68 Million have been issued.

Now AMPS is about to undergo significant changes, including a major reduction in the number of contraventions, which will drop to 79 (currently there are 246). The CBSA is also reorganizing the penalties into logical groupings, based on risk assessment. For example, the number of infractions related to book keeping is being reduced to five (the current number is 32) and there will be only one infraction for “failure to correct” (the current number is 8).

Other proposed key changes include:

• Imposing penalties based on a percentage of the Value for Duty (VFD) to be eliminated
• A national review framework implemented to ensure consistency and quality
• A Regional Review Committee (RRC) to review all penalties prior to issuance in the post-release environment
• Superintendents to approve all border-related penalties prior to issuance

Importers and exporters need to pay special attention to the “profile” they have with Customs as it not only determines how you are currently assessed in the event of a potential penalty situation, but also whether or not you will be granted access to special programs (e.g. PIP, CSA, etc).

Clients of Universal Logistics have access to a wide range of technical expertise to guide you through all aspects of customs compliance. Specific services include:

• Centralized research on product classification and rates of duty under the Harmonized Tariff
• Expert guidance on tariff, valuation and origin issues
• Duty drawback and Duty Deferral application
• Voluntary adjustment submissions to ensure compliance with AMPS
• Systems walk-through to identify weaknesses and develop your Compliance Plan
• Voluntary Disclosure guidance
• Consultation on NAFTA origin eligibility; Certificate of Origin preparation and renewal management
• GST expertise, including registration, rebates and non-resident issues; excise duty and tax consultation; GST Direct Payment options
• National Customs Rulings on tariff, valuation and NAFTA; duty/GST relief and deferral requests; temporary importation eligibility
• Expertise in import permits, quota restraints and packaging and labeling requirements, established through ongoing relationships with other government departments
• Post-audit services, including entry review (SMART Customs Review) and vendor profiling
  

If you get an audit notification letter, get in touch with us immediately. These reviews are processed as fast as they are initiated and can leave a huge wake of damage. Also, remember the CBSA does not notify your broker when an audit has been initiated, so it’s up to you to get your broker involved right from the beginning notification letter. We can also help if you would like to develop a compliance plan, a prudent move as the faster, simpler desk audits will allow the CBSA to audit virtually all importers and exporters.

For more information, contact Brian Rowe, General Manager – Customs Consulting Services.

Importing from China made easy

With the peak season for importing from China beginning in September, now is a great time to give you some of our top tips on how to import from the Far East:

1. Capitalize on competitive rates to both U.S. and Canadian destinations.
2. Ship out of any of the main container ports and air hubs throughout China and Hong Kong.
3. Take advantage of weekly sailings from all main ports in China and Hong Kong.
4. Arrange both freight movement and customs clearance, enabling a seamless move from origin pickup to door delivery, if required.
5. Prevent your cargo from being held at the origin – and avoid miscommunication between Chinese exporters and Canadian and U.S. authorities – by leveraging Universal’s knowledge of Canadian ACI & US “10 +2” import rules.
6. Take advantage of rapid and consistent ocean times and lower carrier costs, a by-product of lower than normal shipping volumes.
7. Avoid minimum shipping costs by consolidating cargo to maximize load volume. By maximizing the volume in an FCL container, you can greatly reduce shipping costs per unit as FCL costs are fixed. The consolidation of cargo can be arranged at various terminals in China.
8. Find the most cost effective way to ship your cargo by asking about the air and ocean service options available from Universal Logistics.

More top tips for importing from China

Following these steps will help you avoid additional fees, non-compliance, misdirected cargo and other mishaps.

Control your freight – Avoid additional fees like the China Import Service Fee (CISF), which transfers the cost of the origin fees to the importer. (On FOB shipments, such fees should be paid for by the shipper.)

Follow New Wood Packaging Regulation – As of September 1, 2009, the Canadian Food Inspection Agency (CFIA) will no longer accept phytosanitary certificates from China for wood packaging material entering Canada. A valid International Plant Protection Convention (IPPC) mark will be the only accepted treatment certification method. Non-compliance will result in refusal of entry into Canada of any such packaging and the cargo associated with it.

Form A – Certificate of Origin – In order to claim preferential duty status under the Generalized System of Preferences a Certificate of Origin – Form A is required.

Canada no longer requires Form A to be stamped and signed by an authority designated by the beneficiary country. Therefore, the Form A no longer needs to be an original and Field No. 11 may be left blank.

A consignee in Canada must be identified in Field No. 2 of the Form A to ensure that the exporter in the beneficiary or least developed country certified the origin of the goods according to Canadian rules of origin. The consignee is the person or company (importer, agent, or other party) in Canada to which goods are shipped under a Through Bill of Lading (TBL) and is so named in the bill. The only exception to this condition may be considered when 100% of the value of the goods originates in the beneficiary or least developed country in question, in which case no consignee is required.

Take care with documentation – In many cases, payment terms are open, but Original Bills of Lading are still issued. As the presentation of original documents is required to release cargo, if lost or delayed, this results in shipment delays. Relying on your shipper to prepare shipping documents could result in misdirected cargo and extra costs such as storage or demurrage. It is also very common to see cargo from China booked to Vancouver (when it was intended to be sent to Toronto as a final destination), because the shipper assumed that booking cargo to the first point of arrival was sufficient. Avoid this scenario by having us coordinate your shipments.

For more information, contact David Lychek – Manager, Ocean & Air Services.

Further improvements in airfreight traffic,
demand foreseen throughout the summer

Air traffic has stabilized after steadily declining throughout the past year. Air cargo demand in the month of May was down by 17.4%, compared to May 2008. This is a relative improvement over the 21.7% drop from the month of April in 2008 versus 2009.

Surveys of purchasing managers indicate that a further improvement in air freight demand could be experienced throughout the summer months. However, a significant recovery is not expected in the short term – the International Air Transport Association (IATA) maintains that inventories remain 10-15% higher than normal in relation to sales levels.

For more information, contact Islay Fairholm, Supervisor – Air Services.

Airfreight Sale

Take advantage of export rates as low as $0.50 cents/kg to European, Middle East and Far East destinations. Ask about spot rates on imports from the UK, China, Taiwan and Europe.

To request a spot quote or hear more, call 905-882-4880 or email solutions@universallogistics.ca.

Your tour of China and Hong Kong’s main ports

Map of China - Click map for a larger view

Don’t know the difference between the Ningbo Port and the Tianjian Port? Read on for valuable information on the main ports in China and Hong Kong, listed below in order of size and starting with the largest port, Shanghai:

Shanghai – The largest port in China, situated in the largest city in China. It is the focal point of China’s coastal traffic. Shanghai is a water-rail intermodal hub as well as a multi purpose port and one of China’s main foreign trade ports. Only Singapore handles more container traffic than this port, making it the second largest port in the world in terms of volume.

Hong Kong – One of the busiest ports in the world, in all three categories – shipping movements, cargo handled & passengers carried. It is an economic gateway to mainland China, dominated by trade in containerized manufactured products. The third largest port in the world, behind Singapore & Shanghai, in terms of container volume.

Shenzhen – One of the busiest and fastest growing ports in southern mainland China. Located in the southern region of Guangdong province, which is the economic epicenter for Hong Kong trade with the mainland. Shenzhen is also one of China’s most important international trade ports.

Qingdao – Largest commercial port in Shandong Province. A high technology industrial park & Economic/Technical Development Zone have been created near the port, which is expected to increase container movement through the port.

Guangzhou – This port serves as the important economic and transport center for the Pearl River Delta region and Guangdong province. It is also a vital transport hub for industries located in neighboring provinces such as Guangxi, Yunnan, Guizhou, Sichuan, Hunan, Hubei and Jiangxi.

Ningbo – The largest commercial port in the Zhejiang Province. It is a shipping transshipment port, linking ports in northern China to those in Southern China. It also handles large volumes of bulk cargo for transshipment to the Shanghai Economic Area.

Tianjan – An important transport hub as well as an industrial centre. Tianjin’s proximity to Beijing (170 km) makes this an important link to China’s capital city and second largest city.

Xiamen – One of the top ten ports in China. It is a huge, deepwater, ice-free port that never silts up. Xiamen Port is located on Xiamen Island which is at the mouth of the Jiulong River. It has an excellent natural harbor and is well connected to the mainland.

Dalian – An important water-rail intermodal port, largest commercial port in Northeastern China, engaged in passenger and multi-cargo transport. Foreign investment in manufacturing facilities is creating a demand for more efficient cargo handling facilities which are being built.

For more information, contact David Lychek – Manager, Ocean & Air Services.

Enhancing Canada’s marine security

Marine security is a key component of Canada's National Security Policy. A new initiative, to develop an enhanced partnership between the RCMP and the Canadian Coast Guard (CCG), involves the deployment of four new permanent patrol vessels on the Great Lakes and St. Lawrence River, beginning in 2009.

The vessels, staffed by the RCMP, Coast Guard and local law enforcement, will further enhance national security by providing a fast operating platform for both domestic and international operations launched in response to terrorist incidents and other threats.

For more information, contact Brian Rowe, General Manager – Customs Consulting Services.

Mexico – Crackdown on corruption

A Mexican newspaper, The Reforma, has reported that all 1,100 Mexican customs agents were let go in August as part of a plan to modernize and clean up Mexico’s customs service.

Some of the fired customs workers will be permitted to reapply for their jobs. Those with alleged criminal ties are being turned over to federal prosecutors.

A new force of 1,470 agents is being sworn in to replace the fired workers. The new agents have undergone months of training and background checks to ensure they had no criminal records.

For more information, contact Brian Rowe, General Manager – Customs Consulting Services.

As of July 1, 2009, all U.S. manufactured pet food, pet treats, and compound pet chews containing animal products must be covered by a valid import permit. To obtain a permit, the U.S. manufacturing facilities must be inspected and certified by the U.S. Animal and Plant Health Inspection Service (APHIS).

There are two kinds of permits: one for pet food containing bovinae ingredients and one for pet foods containing non-bovinae ingredients. Each shipment containing bovinae ingredients must be accompanied by an original Health Certificate.

Import permits are obtained directly by the importer and are valid for one year. They are not obtained on a shipment-by-shipment basis.

Import invoices that do not match import permit descriptions will be rejected. This means that abbreviations on invoices are not permitted.

Additional regulations will be released in Fall 2009, covering pet food exported from the U.S. but manufactured in other countries.

The procedures and documentation process for pet food containing bovinae ingredients is available at: www.cscb.ca/listinfo/Import_bovinae_PF_USA.pdf.

The procedures and documentation process for pet food containing non-bovinae ingredients is available at: www.cscb.ca/listinfo/Import_non_bovinae_PF_USA.pdf.

For more information, contact Brian Rowe, General Manager – Customs Consulting Services.

2010 NAFTA Blanket Certificate Reminder

The deadline for 2009 NAFTA Certificates (December 31, 2009) is coming up fast. If you miss it and make a claim for preferential treatment without a valid NAFTA Certificate, you will be subject to an AMPS (Administrative Monetary Penalty System) transactional penalty of:

1st infraction - $1,000.00
2nd infraction - $5,000.00
3rd infraction - $10,000.00
Subsequent infractions - $25,000.00

You also need to remember that a 2009 Blanket Certificate is not valid for 2010 shipments.

For more information on NAFTA please also refer to www.naftanow.org.

We can handle the entire process for you with our convenient – and increasingly popular – NAFTA Management Service. For more information, please call (905) 882-4880 and ask to speak with Darren Lair, Customs Consulting Services.

New Wood Packaging Regulations for
imports from China and exports to Australia

Phytosanitary certificates from China for wood packaging material will no longer be accepted in Canada, effective September 1, 2009. The problem is that there is a high rate of non-compliance from China. A valid International Plan Protection Convention (IPPC) mark will be the only accepted treatment certification method.

      

Beginning June 1, 2009, importers were granted a three-month grace period whereby wood packaging material accompanied by a Chinese phytosanitary certificate in lieu of an IPPC mark was allowed to enter Canada, subject to a verification of the certificate’s authenticity by the CFIA and China’s General Administration of Quality Supervision, Inspection and Quarantine.

Note the above changes only affect shipments originating from the People’s Republic of China. They do not affect shipments from Hong Kong, Macau and Taiwan.

Wood packaging changes have also been implemented for Canadian exports to Australia, effective August 1, 2009. The new requirements specify that Canadian wood packaging:

• If constructed from wood, is bark free (without any bark) is treated and marked in accordance with ISPM No. 15 (i.e. as per the conditions of directive D-01-05, Canadian Wood Packaging Certification) or
• If constructed from plywood or veneer, is produced within three months of export; and,
• All Wood packaging must be accompanied by a written declaration verifying that the wood packaging complies with the import requirements

For more information, contact David Lychek, Manager – Ocean & Air Services.

China becomes world’s largest exporter

During the first half of 2009, China overtook Germany as the world’s biggest exporter. It is unclear whether China, traditionally the world’s number two exporter, will maintain its position in the second half of 2009.

From January to June 2009, China’s total export volume was $521.7 billion, slightly higher than Germany’s exports, which totaled $521.6 billion.

For more information, contact David Lychek, Manager – Ocean & Air Services.

Canadian International Freight Forwarders Association (CIFFA)

Paul Glionna, Vice-President - Operations for Universal Logistics, has been named to the 2009-2010 Executive Committee of the Canadian International Freight Forwarders Association. “This is a real honour,” Paul says. “Serving on the executive also gives us unique insights into what is happening in the freight forwarding industry and we can use that knowledge to assist our clients.”

Paul currently also serves as Chair of the CIFFA Central Region Education Committee.

Certified Transportation Network (CTN) Annual Conference in Istanbul, Turkey

The Certified Transportation Network’s (CTN) Annual Conference 2009 is being held in Istanbul, Turkey in September.

Mark Glionna, Vice President – Client Relations and Paul Glionna, Vice President – Operations will represent Universal Logistics, the Canadian member of the worldwide network of international logistics companies.

CSCB Ontario and Toronto Regions Joint
Annual Conference

Mark Glionna, Vice President – Client Relations and Director of the Canadian Society of Customs Brokers (CSCB), delivered a speech entitled "Compliance and Risk Management" at the CSCB Ontario and Toronto Regions Joint Annual Conference. The conference was held on Friday, June 17, 2009 at the Woodbine Racetrack in Toronto, Ontario.

“Now, more than ever, companies cannot afford to pay penalties for non-compliance” says Mark Glionna. “Investing in compliance and sharing best practices is the prudent way to manage risk and avoid the high cost of non-compliance.”

Michael Glionna, President of Universal Logistics, and Mark Glionna attended the CSCB National AGM in Halifax in September 2009.

"Can’t miss" seminars for importers and exporters

Have you ever heard of a “desk audit”? Are you paying too much duty? Could you cut your freight costs by simply taking control of your freight? All this and more is addressed in the following two seminars, available exclusively from Universal Logistics. Customized training is also available, on request.

Freight Management Made Easy

This 90-minute seminar is packed with proven tips, tools and techniques you can use to move your freight more efficiently and optimize transit times. The potential savings can quickly add up to thousands of dollars – or more. Available at a group rate of $199 (add $50/person for groups of more than three) or at the offices of Universal Logistics for just $99 (add $30/person for groups of more than three).

Customs Compliance Made Easy

Recently enacted changes in the Administrative Monetary Penalty System (AMPS) will allow the Canada Border Service Agency to review/monitor more importers than was ever possible with the old process. Will you be ready? Get the answers in this informative 90-minute seminar that also addresses how to identify and report errors, the importance of self correction and the vital role of a Compliance Coordinator.

Available at a group rate of $199 (add $50/person for groups of more than three) or at the offices of Universal Logistics for just $99 (add $30/person for groups of more than three.

For more information or to book a seminar, please contact John Leis, Education Coordinator.

Not a client of Universal Logistics?
Try our free SMART Reviews

Paying too much duty? At risk of AMPS penalties?
Get the answers with a SMART Customs Review

Getting a second opinion on your current customs broker could save you time and money. That’s why we are now offering a free SMART Customs Review, available exclusively from Universal Logistics. There is no cost or obligation for this proven service, which has helped companies just like yours avoid AMPS (Administrative Monetary Penalty System) penalties ranging from $100 to $1,000 – or more.

To order your free SMART Customs Review, contact us today or call our office
(905-882-4880).

Discover new ways to save on transportation
costs with a free SMART Freight Review

Get an expert second opinion on your freight spending by ordering a free SMART Freight Review, available exclusively from Universal Logistics. There is no cost or obligation for this proven service, which has helped companies just like yours save thousands of dollars – or more.

To order your free SMART Freight Review, contact us today or call our office
(905-882-4880).

	Debbie McGuire – Transportation Consulting Services

AT YOUR SERVICE

Over 15 years of service with Universal Logistics, Debbie McGuire has demonstrated an unending commitment to improving her skills and training. She earned her diploma in International Trade from Sir Sanford Fleming and subsequently got her start in ocean exports.

She then moved on to ocean imports, truck and air cargo – a diversified approach that’s proven to be of value to the clients she serves in her current role as freight consultant. Debbie’s education credits include completion of the Certified Customs Specialist (CCS) course and Module 1 of the Canadian International Freight Forwarders Association (CIFFA) course.