With a nod of thanks to our Washington, DC, legislative counsel, a summary of the 111th Congress

Full props for this belong to Jon Kent of the firm Kent & O'Connor.  They are the Washington, DC, representatives of the NCBFAA (of which we are members) and as the year draws to a close, put together a very eloquent summary of the legislative accomplishments and failings of the 111th Congress.  When things resume in January, there will be a lot of politics played and we can only hope that while the noise is made on issues that are of greatest philosophical differences between the parties, that the real work of governing the country can still transpire.

Happy New Year to all, be safe and we look forward to great opportunities in 2011.

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What the 111th Congress Did and Didn’t Do

        The 111th Congress ended with a long list of unfinished business -- particularly trade-related matters. Following is an overview of the final outcome on key issues:

•    GSP Renewal: Congress did not renew the Generalized System of Preferences (GSP) program due to objections from Senator Jeff Sessions (R-AL) over sleeping bags from Bangladesh, which compete with a company in his state. Last-ditch negotiations to resolve the concerns were unsuccessful, resulting in a lapse in the program after its December 31 expiration date. Efforts to renew GSP will resume when the new Congress convenes in January.

•    Andean Trade Promotion Act: Congress did approve a temporary extension of the ATPA for Colombia and Ecuador -- but only until February 15, 2011. It is hoped that the short time frame will place added pressure on Congress to address both ATPA and GSP early in the new session.

•    Miscellaneous Tariff Bill: The House moved quickly in the lame duck session to approve a noncontroversial package containing hundreds of new duty suspensions for imported products. The duty suspensions fell by the wayside along with the GSP extension in the Senate. It is unclear how the duty suspensions will be handled in the new Congress, since the House Republicans' ban on "earmarks" may impact action on miscellaneous tariff bills.

•    China Currency: Sometimes Congressional inaction can be a good thing, as in the case of legislation to address the undervaluation of China's currency. There was strong interest in the Senate in voting on House-passed legislation to give the Commerce Department authority to impose sanctions on products from countries that manipulate their currencies. Several attempts were made to add China currency amendments to other legislative vehicles, as well as to bring a Schumer-Graham China currency bill to the Senate floor for a vote under the expedited unanimous consent procedures. Time ran out, however, before obstacles could be cleared away for a vote. China currency and other China issues are expected to resurface in 2011.

•    Food Safety: Just when nearly everyone had given up on Food Safety legislation, the Senate and House cleared away procedural hurdles to pass comprehensive legislation giving broad new authority to the Food and Drug Administration (FDA) to regulate food imports. The less onerous Senate measure was the version that was ultimately adopted, though it too will give the FDA a much strengthened role in the importation of food products. Missing from this expansion of authority is sufficient funding -- a cost which some in the Congress have objected to. Additional resources for the FDA will wait until an FY '11 appropriations bill is passed in the early part of the new Congress.

•    Customs Reauthorization: For the past two years, staff at the Senate Finance and House Ways and Means Committees has worked diligently to craft a Customs reauthorization bill, to strengthen CBP's enforcement of intellectual property and import safety. Amid the chaos of mid-term elections and the press of other legislative priorities, the Customs reauthorization bills ultimately stalled in committee.

•    Nominations: The Senate failed to act on the pending nominations of Rebecca Dye and Mario Cordero to be commissioners of the Federal Maritime Commission. The nominations were returned to the President, who will need to resubmit them in the new Congress.

•    Tax on Foreign Procurement By Federal Government: In passing the 9/11 Responders Health bill in the final days of the lame duck session, Congress included an excise tax on any foreign person (from a country who has not signed the WTO Government Procurement Agreement) that receives payment from the federal government under a federal procurement contract for foreign manufactured goods or foreign-provided services. The tax will equal 2% of the amount of the payment received by the foreign person. According to the language of the provision (in Title III of H.R. 847), the tax will be imposed on the payment to the foreign person, rather than on the products themselves. Therefore, it should not directly impact customs brokers.

More accolades from a customer

We have a very nice customer who sells to lots of stores who are household names.  Their product is private label, so while our client is the importer, it is the retailers' logos on the items.

They approached us early this fall because we handle a part of their business along with two steamship lines with whom they have direct contracts.  They had some heavy traffic coming for their clients and needed some assurances that somebody could move it.

Courtesy of the partner carrier we are working with, we were able to provide them all the space they needed and also were in a position to price the product more competitively than their other carriers.  These two elements combined to give us the opportunity to move a high volume of cargo on their behalf.

I am proud to say that their Camelot team of Gloria, Ellie and Marianna have done yeoman's work in making sure the goods are cleared and delivered.  Our carrier partner has been of great assistance as well and we wouldn't have been able to do it without the Hong Kong partner who handles these shipments and vendor communications.

Today we received the following unsolicited e-mail of thanks, and we're especially grateful to have been a part of their success.  We firmly believe that our clients fight hard to stay on their customers' shelves and in their catalogs and it is our goal to complement and enhance that effort.

Scott,

We don’t always hear the good stuff, so I wanted to let you know just how great this *** service is.

**** takes care of our largest customer, ordering and managing this account. She mentioned  today that our Out of Stocks would have been very high if it wasn’t for these SPEEDY trains with ***. Honestly, I look at the website on Monday and the ship is not at port, but when I review it on Tuesday, our containers are in IDAHO!!!

Unbelievable

Also, please give a pat on the back to Ellie and Gloria with the way they handled the container situation yesterday.

We had 2 hot containers which had an unexpected delay and with their help, we were able to have these delivered today.

Again, we were able to fill our orders.

It is a pleasure working with your team!

Your chance to see me wave my arms for as low as $65.

I have been fortunate to be able to annually do a seminar for the International Trade Club of Chicago about what I like to call "VH-1's Behind the Broker".  That's not the official title, mind you, it's some fancy-schmancy thing about Import 101 or some nonesuch.

Heck, you can read about it on our website here.

The point is, that while I do this in the large-group setting on an annual basis for them (or for other organizations around the Midwest), it is something that can be tailored for delivery to companies if you're interested.  The content runs about three hours or so in a lecture style, but the speed varies in a smaller group setting because we can be a bit more intimate and the Q&A doesn't need to be held for the ends of sections.

It's a great way to spend the morning and you can have the benefit of talking to other importers and compare best practices

Unsolicited compliments from customers are the best kind

When somebody raves about your service, you want to share it with the world.  However, it's usually best to make sure they don't mind the world knowing about it first.  Not that we get a million hits on this blog, but nonetheless it's important to keep it proper.

We have a great client who makes a rather unique product, inflatable slides.  They work hard with their factory to meet shipping deadlines for these things.  Over the summer we arranged to get one from China to Europe to meet up with a yacht that was cruising the Med.  It required a bit of work, but it was worth it.

So their factory gave us one to move last week, without telling us the deadline in advance.  It left us scrambling a bit to change the destination, bump up the arrival time and do some work in a place we didn't plan.

But at the end of the day, THIS bad boy was put on display and will hopefully garner a host of orders for our client:



And after arriving in Hong Kong on Wednesday morning, we got it on a Friday evening flight to Miami where it was cleared, available for pickup by the client on Saturday morning and on display at a show on Saturday evening.

We couldn't have done it without the great partnership from Link Force Cargo Ltd. in Hong Kong who help us out greatly with shipments like this.  Thanks to their team for getting it rebooked and out smoothly and for making the possibility to move more of these in the future a reality.

Which takes us to the comments from the customer.  Here, in there unedited glory, are their words to us:

GREAT JOB ON THE MIAMI SHIPMENT!!!!!!! WE RECD. IT IN TIME FOR THE PARTY WITH 6,000 ATTENDEES. WE HAVE ALREADY RECD. SOME GREAT RESPONSE ON IT!!!! WE WOULD HAVE NEVER BEEN ABLE TO PULL IT OFF WITHOUT THE HELP OF LINK FORCE AND CAMELOT!!! I WILL BE FOREVER GRATEFUL!!!! YOU REALLY SAVED ME ON THIS ONE!!!! THANK YOU THANK YOU THANK YOU!!! (PLEASE PASS THIS ON TO EVERYONE WHO HELPED GET IT THERE IN TIME)

You're so welcome, Donna.  Anytime.

The last two places you ever want your name to appear.

Companies who import or export are governed by regulatory regimes which grow more complex by the day.  Because many companies do not open their doors as an importer or an exporter specifically, they make the transition there.  Perhaps they were purchasing domestically and pricing pressure caused them to look overseas.  Perhaps they looked at the National Export Initiative as a means to find new business and expand their client base beyond the US shores.

But what happens when something goes wrong?  With the passage of the CPSIA in 2008, the Consumer Product Safety Commission has grown more forceful in regulating imports as well as the mechanism of initiating a product recall.  This is the first of our two "places you never want your name to appear."  A product recall is something that requires a two-pronged strategy of damage control and positive spin.  The most recent recall belongs to Graco, who have the expense and publicity of dealing with two million problematic strollers.

The lesson is that while there's no way to one hundred percent insulate from such a thing, the question becomes what can a company do concurrently with the recall to insure that their brand isn't irreparably damaged.

The second place to avoid appearing is on the list of companies who have pleaded guilty to an export violation and paid some sort of criminal or civil penalty for it. The Bureau of Industry and Security is rather proud of the people they get to pay up and loves to issue press releases about them all.  


Staying off the radar screen of these agencies requires advanced planning, due diligence, written compliance instructions and the buy-in from top management.  It is everyone's responsibility to understand that much like weighing the risks of when to disclosure on a Customs matter, hard questions must be asked about when is it appropriate to come forward in advance or be dragged reluctantly and belatedly in front of the public at the risk of reputation and brand.

Immigration & Customs Enforcement News

There are people who look at Express Couriers (you know them by their colors, for liability reasons we probably shouldn't name them here) as a means to get all manner of goods into the country without having to undergo Customs scrutiny.

While these facilities and the arrangements they have made with CBP do in some ways seem to be less targeted than standard methods of cargo movement, individuals and companies who think they have carte blanche to move things without fear of reprisal or accountability should take a look at the press release from ICE.

They do look for counterfeit drugs, CD's, DVD's and other items because of their belief that it both infringes on the copyright holder and also could do the recipient harm (in the case of illegal or counterfeit drugs or medicines).

ICE is most associated with the "Immigration" part of their name responsible for deportations and other more public faces of CBP, but they still play a role in trade nonetheless.

Insurers revising coverage to sanctioned countries

We received the following today from the World Cargo Alliance, the forwarders group to which we belong:

Sanctions Beginning to Affect Insurance Coverage

In response to growing pressure from various countries and political organizations around the world, insurers (including Lloyds of London), are amending their policies to exclude coverage where providing such may violate imposed economic sanctions. This exclusion is already in place in new commercial insurance policies and will be added to existing policies via endorsement by the end of 2010.

The new “Sanction Limitation and Exclusion Clause” reads as follows:

NO (RE)INSURER SHALL BE DEEMED TO PROVIDE COVER AND NO (RE)INSURER SHALL BE LIABLE
TO PAY ANY CLAIM OR PROVIDE ANY BENEFIT HEREUNDER TO THE EXTENT THAT THE PROVISION
OF SUCH COVER, PAYMENT OF SUCH CLAIM OR PROVISION OF SUCH BENEFIT WOULD EXPOSE
THAT (RE)INSURER TO ANY SANCTION, PROHIBITION OR RESTRICTION UNDER UNITED NATIONS
RESOLUTIONS OR THE TRADE OR ECONOMIC SANCTIONS, LAWS OR REGULATIONS OF THE EUROPEAN UNION, UNITED KINGDOM OR UNITED STATES OF AMERICA.

The severity of the punishment for violating sanctions coupled with the broad nature of this new insurance clause places extra emphasis on the insured to verify that none of their operations are in violation. The responsibility to ensure compliance lies solely with the insured and all precautions should be taken to do so.