Author: Colin Smith

The Panama Canal: What the Drought Means For You

The iconic Panama Canal, renowned for its engineering marvel that facilitates the movement of a significant portion of the world’s maritime trade, is currently facing an unprecedented challenge. The canal, which serves as a vital link between the Atlantic and Pacific oceans, is grappling with a severe drought that has compelled authorities to enforce restrictions on ship passage for the next year. This measure has triggered a maritime traffic jam, as ships queue up for entry into this crucial waterway.

Ilya Espino, the Deputy Administrator of the canal, has expressed the urgency of the situation, stressing that unless heavy rains arrive in the next three months, the canal will remain restricted for a full year. This timeline provides a window for canal clients, who predominantly hail from the United States, China, and Japan, to strategize and adapt their operations to the impending limitations.

The central issue lies in the enormous amount of freshwater required to facilitate the passage of each ship through the locks. With two artificial lakes fed by rainfall in the surrounding watershed, the canal is sustained by these lakes to ensure smooth operations. However, the ongoing drought exacerbated by the El Niño phenomenon has plunged Panama into a water scarcity crisis, pressuring canal administrators to impose draft limitations.

This restriction has led to a ripple effect on the maritime industry, causing a backlog of ships waiting to traverse the canal. The average number of daily transits has dipped from forty to thirty-two, as administrators work to conserve water. The waiting times have surged, stretching from the usual three to five days to around eleven days on average. Moreover, this constraint is projected to result in a substantial drop of around $200 million in earnings for 2024 compared to previous years.

The canal has employed a reservation system, allowing ships to book their passage slots in advance or compete in an auction process. However, the surge in waiting times and the ballooning queue have presented challenges for both canal operators and shipowners alike. President Laurentino Cortizo of Panama has reiterated that despite the difficulties, the canal remains open and operational.

In light of the current predicament, it is clear that adaptation is essential for the canal’s survival. The focus on freshwater, while advantageous for its lock system, has proven to be a vulnerability during times of drought. Canal administrators acknowledge the need to explore alternative solutions to remain a relevant and reliable route for international trade. For instance, some merchant container ships are compelled to offload their cargo, allowing lighter vessels to pass through the canal while goods traverse Panama via rail.

We at Future Forwarding are monitoring the situation for possible delays and disruption and rerouting where necessary. If you have any questions about how this could impact your cargo, reach out to us today. We’re here to keep you moving. 

Navigating Export Licensing: A Comprehensive Guide

In today’s interconnected global marketplace, businesses often engage in international trade to expand their customer base and maximize profits. However, engaging in international trade involves adherence to a range of regulations and policies, including export licensing. Export licenses serve as a crucial tool to control the export of goods, technologies, and services that could potentially pose risks to national security, foreign policy, and other strategic interests. 

Understanding the Need for Export Licenses

The process of obtaining an export license is vital because it ensures that goods and technologies are being transferred in a responsible and controlled manner. The U.S. government, through agencies like the Bureau of Industry and Security (BIS) and the Directorate of Defense Trade Controls, plays a pivotal role in overseeing the export of items that could have dual-use (both commercial and military applications) or proliferation concerns.

Do You Need a License?

One of the most common questions asked by businesses is whether they need an export license. Contrary to popular belief, not all goods require a license for export. In fact, approximately 95% of items exported from the United States do not require an export license. This is primarily because these goods do not have implications for national security, foreign policy, or other sensitive concerns. However, this doesn’t mean that these goods can be sold to anyone, anywhere. The responsibility falls on the exporter to conduct due diligence and determine whether an export license is necessary based on factors such as the end use and end user.

Determining the Right Licensing Agency

For items that do require an export license, it’s essential to determine the appropriate licensing agency. The Bureau of Industry and Security (BIS) and the Directorate of Defense Trade Controls are two primary licensing agencies for most U.S. exports. The agency with jurisdiction depends on the nature of the item being exported. The Export Administration Regulations (EAR), administered by BIS, cover a wide range of items, including dual-use products, purely commercial items, and certain munitions. The EAR takes into account factors like national security, foreign policy, and nonproliferation concerns.

Obtaining the Correct Export Control Classification Number (ECCN)

To determine whether an item requires an export license, businesses need to establish its Export Control Classification Number (ECCN). The ECCN categorizes items based on their technical specifications and potential risks. This number can be provided by the manufacturer, supplier, or determined through self-classification. The Commerce Control List (CCL) is a valuable resource for understanding the ECCN and whether an item falls under the jurisdiction of BIS. Items designated as EAR99 are generally exempt from licensing requirements, but exceptions may apply based on factors like destination and end use.

Creating an Effective Export Compliance Program (ECP)

To ensure compliance with export regulations and facilitate effective decision-making, businesses can establish an Export Compliance Program (ECP). An ECP systematically organizes information and decisions related to exports, helping businesses adhere to licensing requirements and maintain proper record-keeping. The BIS website offers guidance on establishing an effective ECP, emphasizing the importance of sufficient record-keeping to comply with EAR mandates.

Navigating Export Licensing Regulations

Export classification and license numbers should be accurately documented on export-related paperwork, such as the Commercial Invoice and Automated Export System filings. Depending on the type of export, carriers might require specific labels, such as “No License Required” (NLR), for certain EAR shipments. Maintaining a company-wide rule emphasizing the importance of EAR classification is a good practice, while adapting inventory management systems to flag potential licensing issues can prevent inadvertent violations.

Checking Compliance and Submitting License Applications

It’s essential to ensure compliance not only with the EAR but also with individuals and entities involved in the export transaction. The Consolidated Screening List (CSL) maintained by various U.S. government agencies provides information on parties subject to trade restrictions. When an export license is necessary, the SNAP-R online electronic licensing system facilitates the submission of applications to BIS. Registering and obtaining a Company Identification Number (CIN) is a prerequisite for using this system.

Additional Licensing Requirements

While most items subject to the EAR are covered by BIS, it’s important to note that other agencies may require licenses in specific scenarios. The International Traffic in Arms Regulations (ITAR) control defense items and services, while the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) administers financial sanctions. Certain nuclear materials and pharmaceutical products may also have specific export control requirements.

Export licenses serve as a critical regulatory tool to ensure that sensitive goods and technologies are transferred responsibly across borders. While the majority of items do not require an export license, it’s imperative for businesses engaged in international trade to have a clear understanding of the requirements and processes associated with obtaining an export license. By conducting thorough due diligence, following the guidance of relevant agencies, and maintaining compliance with regulations, businesses can successfully navigate the complex landscape of export licensing.

At Future Forwarding, we stand out as your dedicated partner for all your export needs. Our comprehensive suite of solutions offers both standard and tailored reporting, giving you an unmatched view of your shipments, from transit to customs clearance and final delivery. What truly sets us apart is our ability to provide personalized insights at the purchase order or SKU level, granting you unprecedented control over your supply chain. Our expertise in compliance areas like EAR, ITAR, ECCN classifications, Department of Defense and State Department license applications, CBP binding rulings, reconciliation entries, and FTZ is exceptional. We simplify intricate export processes, offering valuable services like commodity classification consulting, manifest confidentiality filing, C-TPAT consulting, and expert valuation guidance. Our proficiency even extends to hazardous materials shipments and letters of credit, ensuring a holistic approach to your international trade endeavors. Choose Future Forwarding as your trusted partner for seamless and compliant export solutions. Get in touch here: Airexports@usffcl.com or here: oceanexports@usffcl.com.

GPA Sees Second Busiest Year Despite Downturn

Amidst a challenging retail landscape, Georgia’s seaports have emerged triumphant, boasting their second-busiest year in fiscal 2023. Although consumer goods volumes experienced a decline, Georgia Ports Authority officials remain optimistic, highlighting the positive growth trajectory. 

A Record-Breaking Surge

The Port of Savannah, a key player among U.S. ports for container shipments, reported a handling of 5.4 million container units of imports and exports in the fiscal year that concluded on June 30. Despite a 6.7% decrease from the previous year due to reduced orders from retailers with full inventories, the port’s performance was still commendable, especially when considering the record-breaking cargo surge experienced in fiscal 2021 and 2022.

Retailer Inventory Woes

The surge in imports was fueled by pent-up consumer demand following pandemic-induced restrictions. This buying frenzy left retailers with excessive inventories, leading to a subsequent decrease in orders to replenish stockrooms over the past year. However, despite this dip, container volumes for the past year remained 20% higher than those in fiscal 2019, highlighting the ports’ overall positive growth trend.

Automobiles and Heavy Machinery Buck the Trend

Interestingly, while container volumes dipped, Georgia’s seaports experienced an 18% increase in handling automobile and heavy machinery units. This surge can be attributed to high U.S. demand for new cars after automakers faced production slowdowns due to a global shortage of computer chips. Additionally, Nissan’s decision to begin importing vehicles through Brunswick last fall further contributed to this growth. With expectations of shipping around 60,000 automobiles annually to Georgia, Nissan’s presence in the region is set to stimulate even more growth.

Long-Term Growth Projections

The Georgia Ports Authority’s governing board is focused on anticipating and accommodating long-term growth. To enable larger cargo-carrying ships without relying on higher tides, the port completed a seven-year, $973 million deepening project for Savannah’s shipping channel. This expansion project will facilitate smoother operations and increased capacity for future growth.

Additionally, Hyundai’s $5.5 billion electric car plant being built west of Savannah will likely result in an influx of parts and supplies being handled by the port. Furthermore, the ports have allocated $1.9 billion for expansion projects, aiming to enhance their ability to handle additional business and buffer against unexpected surges, as witnessed during the pandemic.

Expansion Initiatives

Savannah’s main container terminal recently reopened its renovated berth with added upgrades, including larger cranes, enabling the handling of larger ships. This expansion has increased the berth’s annual cargo capacity by an impressive 25%. Furthermore, the 200-acre Ocean Terminal, which previously dealt primarily with breakbulk cargo, is being converted to handle cargo containers exclusively. These strategic moves aim to optimize port operations and bolster overall efficiency.

Georgia’s seaports have displayed resilience and adaptability in the face of challenging market dynamics. Despite a decline in consumer goods volume, the ports have showcased impressive growth rates, thanks to burgeoning automobile and heavy machinery shipments. With long-term expansion projects and strategic measures in place, they are poised to handle future growth with ease. By staying committed to maintaining a buffer against unexpected surges, the Georgia Ports Authority is laying a solid foundation for a prosperous future as a prominent player in the global maritime industry.

 

If you’re seeking a reliable and forward-thinking logistics partner to navigate the ever-changing waters of international trade, look no further than Future Forwarding. With our proven track record of excellence, cutting-edge solutions, and commitment to anticipating and meeting your evolving needs, we stand out as a trusted ally in the logistics industry. We have the expertise and resources to ensure smooth and efficient transportation of your goods. Embrace the future of logistics with confidence and partner with Future Forwarding today – your gateway to seamless global commerce.

European Union and New Zealand Sign Trade Agreement

In a significant development for international trade, the European Union (EU) and New Zealand recently finalized a comprehensive free trade agreement. The agreement, signed on Monday, is expected to foster economic growth and strengthen bilateral ties between the two regions. Both parties anticipate a substantial boost in trade volume, with projections suggesting an increase of up to 30% within the next ten years. This article delves into the details of the agreement, highlighting its potential benefits for New Zealand and the EU.

 

Increased Export Opportunities for New Zealand

 

New Zealand stands to gain significantly from this historic trade agreement, with projected annual exports to the EU estimated to reach 1.8 billion New Zealand dollars (approximately $1.1 billion or €1 billion). The deal, which took five years to negotiate, is set to eliminate duties amounting to NZ$248 million ($153 million or €140 million) per year, according to a statement released by the European Commission. This removal of trade barriers will create favorable conditions for New Zealand businesses, allowing them to expand their presence in the lucrative European market.

 

Tariff Reduction and Market Access

 

A key aspect of the agreement is the gradual reduction of tariffs on New Zealand’s goods exported to the EU. Initially, duties will be removed on 91% of New Zealand’s exports, and this figure is expected to rise to 97% within seven years. The phased elimination of tariffs will significantly enhance market access for New Zealand products, enabling a wider range of industries to benefit from the trade agreement. This is particularly promising for sectors such as agriculture, dairy, wine, and forestry, which are vital to New Zealand’s economy.

 

EU’s Indo-Pacific Partnership

 

Highlighting the strategic importance of New Zealand as a partner in the Indo-Pacific region, European Commission President Ursula von der Leyen emphasized the significance of this free trade agreement. With the aim of bringing the two regions closer together, President von der Leyen hailed the agreement as a crucial step towards fostering stronger ties and capitalizing on shared economic opportunities. The EU’s commitment to deepening partnerships in the Indo-Pacific reflects the region’s increasing economic significance and potential for growth.

 

Legislative Ratification and Future Prospects

Although the free trade agreement has been signed, it is yet to be ratified by the parliaments of both New Zealand and the EU. Once ratified, the agreement will come into effect, marking the beginning of a new era of trade cooperation. This landmark agreement between New Zealand and the EU demonstrates a commitment to open markets, economic integration, and the benefits of globalization.

The free trade agreement between the European Union and New Zealand represents a significant milestone in strengthening economic ties between the two regions. By eliminating tariffs and facilitating market access, the agreement opens up new avenues for trade and commerce. New Zealand’s exporters stand to benefit from expanded opportunities in the EU, while the European market gains access to high-quality New Zealand goods. As both parties move forward with the ratification process, the agreement sets a positive precedent for future trade agreements and reinforces the importance of international cooperation in fostering economic growth and prosperity.

 

When it comes to navigating the ever-evolving landscape of international trade, having a reliable and experienced partner by your side is crucial. Future Forwarding is your trusted ally in the world of shipping, offering a wide range of services tailored to meet your specific needs. With our expertise, global network, and commitment to exceptional customer service, we ensure that your goods are transported efficiently and securely to their destination. Reach out to us today to find out more.

Impractical Cargo Meets Future Forwarding

Cargo screening plays a crucial role in ensuring the safety and security of air transportation. In the United States, the Transportation Security Administration (TSA) has implemented regulations mandating 100% screening of air cargo originating in the U.S. and destined for non-U.S. locations. While most cargo can be screened efficiently, certain types of cargo present unique challenges that make them impractical to screen using conventional methods. 

Impractical to Screen (ITS) Cargo and the CCSP

The TSA has recognized that some types of cargo present difficulties undergoing standard screening procedures due to their size, nature, or packaging. To address this, the TSA approved amendments for Impractical to Screen (ITS) cargo to assist the industry in meeting the regulatory requirements. ITS cargo needs to be accepted into the air cargo supply chain in accordance with the Certified Cargo Screening Program (CCSP) or screened by the air carrier.

The CCSP enables Certified Cargo Screening Facilities (CCSF) to screen cargo prior to acceptance by an Indirect Air Carrier (IAC) or Aircraft Operator. CCSFs must adhere to stringent security requirements set by a TSA security program, screen cargo at the piece level, maintain the integrity of cargo through chain of custody measures, and allow onsite validations and periodic TSA inspections.

Eligibility and Benefits of CCSP

Various entities involved in the air cargo supply chain, such as Third-Party Logistics Providers (3PLs), manufacturing facilities, shippers, warehouses, and distribution centers, may apply to become CCSFs if their facility tenders cargo to a freight forwarder or air carrier. Additionally, Indirect Air Carriers (IACs) are also eligible to apply for CCSF certification.

Becoming a certified CCSF brings several benefits for shippers and other entities involved in cargo transportation:

  • Expedited Cargo Movement: Cargo accepted from a CCSF does not require additional screening and can be transported by either a passenger or all-cargo aircraft. This streamlines the supply chain and ensures faster movement of cargo.
  • Cost and Time Savings: Manufacturers can package and ship air cargo without the need for potentially invasive screening and additional fees that may arise later in the supply chain.
  • Enhanced Security: CCSFs must adhere to rigorous security requirements, ensuring that cargo is handled and screened with the utmost care, minimizing the risk of security breaches.

Becoming a Certified Cargo Screener

To become a CCSF, interested parties must submit an application to the TSA at least ninety days prior to the planned beginning of scheduled operations. The application process involves demonstrating compliance with the security criteria and performance-based standards set by the TSA. Upon approval, a designated security coordinator is appointed, and the facility undergoes an onsite security threat assessment.

It is important to note that while CCSFs are not required to purchase screening equipment, they may need to invest in specific equipment if they choose not to perform a physical search of cargo for explosives.

The screening of air cargo is a critical aspect of maintaining the safety and security of the aviation industry. Impractical to Screen (ITS) cargo presents unique challenges that require alternative screening approaches. The Certified Cargo Screening Program (CCSP) provides a solution for entities involved in the air cargo supply chain by enabling them to become Certified Cargo Screening Facilities (CCSF). By adhering to stringent security requirements and screening cargo at the piece level, CCSFs contribute to the efficient and secure movement of cargo. Shippers and other entities can benefit from becoming certified screeners, enjoying expedited cargo movement, cost savings, and enhanced security measures.

As the TSA continues to refine and adapt its cargo screening processes, it is crucial for shippers and industry participants to stay informed and comply with the evolving regulations to ensure the safe and efficient transport of goods by air.

While Future Forwarding is not a CCSF, we do have relationships at major gateways. However, we encourage our clients to consider becoming CCSF to streamline their processes and save time and money.

For additional information, questions, or to apply to become a CCSF, interested parties can reach out to the TSA’s aircargoprograms@tsa.dhs.gov email address or visit the TSA website for more details.

If you’d like assistance with this, reach out to our team of expert professionals today.

Understanding MoCRA: A Guide to the Modernized Cosmetics Regulation Act of 2022

In the ever-evolving world of cosmetics, ensuring consumer safety and regulatory compliance is of paramount importance. Recognizing the need for modernization, the Modernization of Cosmetics Regulation Act of 2022 (MoCRA) has ushered in significant changes to the regulatory landscape governing cosmetic products in the United States. Aimed at enhancing safety, transparency, and oversight, MoCRA replaces outdated regulations from 1938 and introduces a range of new requirements that impact manufacturers and importers alike. In this blog, we will delve into the key updates brought about by MoCRA, providing valuable insights to beauty manufacturers and importers regarding compliance and industry best practices.

 

Under MoCRA, cosmetic facilities must register with the US Food and Drug Administration (FDA) and renew their registrations every two years. The registration requirement applies to establishments involved in manufacturing or processing cosmetic products distributed in the United States. Existing facilities have until December 29, 2023, to complete their registrations, while new facilities must register within 60 days of commencing manufacturing operations. It is crucial for facilities to initiate the registration process early to account for any unforeseen issues or potential delays from the FDA.

 

The FDA holds the authority to suspend a facility’s registration if it determines that a product manufactured or processed by the facility poses a reasonable probability of causing severe adverse health consequences or death. Moreover, if the agency believes that other products in the facility may be similarly affected due to an inability to isolate the failure or a pervasive failure concern, registration suspension is also applicable. In such cases, the facility is prohibited from selling or distributing cosmetics products in the United States.

Additionally, responsible persons, such as manufacturers, distributors, or packers whose names appear on the label, are required to list each cosmetic product with the FDA. This step promotes transparency and facilitates efficient monitoring of products in the market.

 

The Voluntary Cosmetic Regulations Program (VRCP), which allowed voluntary submission of product information to the FDA, is no longer accepting submissions. MoCRA mandates a more extensive volume of submissions, necessitating the development of a new program by the FDA to handle facility registrations and product listings. This change enables the FDA to manage regulatory oversight effectively, ensuring greater transparency and safety within the industry.

 

MoCRA places a strong emphasis on consumer safety by mandating cosmetic manufacturers to submit safety information about their products to the FDA. This includes reporting any adverse reactions experienced by consumers and disclosing information regarding potentially harmful ingredients used in the products. The FDA utilizes this data to evaluate product safety and take appropriate actions to protect consumers.

 

Furthermore, manufacturers must adhere to Good Manufacturing Practices (GMPs), which encompass guidelines ensuring the quality and safety of cosmetic products. Compliance with GMPs involves using clean equipment, proper handling and storage of ingredients, and implementing robust quality control measures.

 

Another crucial aspect of MoCRA is the requirement for cosmetic manufacturers to disclose the full list of ingredients used in their products on the product label. This shift from previous regulations, which allowed vague terms like “fragrance,” provides consumers with enhanced transparency, enabling them to make informed decisions about the products they use.

Under MoCRA, certain exemptions are granted to cosmetic/drug and cosmetic/device combination products, relieving them from specific requirements including compliance with Good Manufacturing Practices (GMPs), adverse event reporting, registration and listing obligations, safety substantiation, and recordkeeping. These exemptions do not extend to facilities involved in the manufacturing of both combination products and cosmetics.

 

Small businesses are exempt from GMP and registration and listing requirements. A small business is defined as having average gross annual sales in the U.S. for the previous three-year period of less than $1,000,000, adjusted for inflation. It is important to note that the small business exemption does not apply if the business manufactures products that come into contact with the eyes, are injected, are intended for internal use, or alter appearance for more than twenty-four hours.

 

The Modernization of Cosmetics Regulation Act (MoCRA) represents a crucial leap forward in the regulation of cosmetics in the United States. With its emphasis on safety, transparency, and compliance, MoCRA ensures that the beauty industry aligns with evolving consumer expectations. Manufacturers and importers must familiarize themselves with the updated requirements to ensure they meet the standards set forth by MoCRA.


At Future Forwarding, our expertise in supply chain management and deep understanding of regulatory compliance can help you stay on top of these complex requirements. By leveraging our industry knowledge and network, we ensure that you can effectively navigate the regulatory landscape, maintain compliance, and streamline your operations. With our reliable support, shippers can focus on core business while confidently meeting the obligations imposed by MoCRA. To find out more, reach out to Future Forwarding today.

Staying Compliant With CPSC

The U.S. Consumer Product Safety Commission (CPSC) is an independent agency of the federal government that was created in 1972 through the Consumer Product Safety Act. It’s responsible for protecting consumers from unreasonable risks of injury or death from thousands of types of consumer products. The Commission’s work to ensure the safety of consumer products is central to its mission.

The CPSC’s role in trade compliance is significant. It works closely with U.S. Customs and Border Protection (CBP) to identify and examine imported products that may not comply with U.S. safety standards. This collaboration is crucial to prevent non-compliant products from entering the U.S. market.

The CPSC’s role in trade compliance includes:

  1. Product Regulation: The CPSC has jurisdiction over about 15,000 types of consumer products, from toys to toasters. They establish safety standards for these products, and it’s illegal to import products that do not meet these standards.

  2. Enforcement: The CPSC enforces compliance with these standards. They can take various enforcement actions, including issuing recalls for products already on the market and stopping non-compliant products at the border before they enter the U.S. market.

  3. Inspection: The CPSC inspects products at ports of entry into the U.S. If inspectors suspect a product may be non-compliant, they can detain it for further inspection and testing.

  4. Recalls: If a product is found to be unsafe after it has entered the market, the CPSC has the power to issue recalls. They can also negotiate voluntary recalls with companies.

  5. Penalties: Companies that fail to comply with CPSC regulations can face significant penalties. This includes civil penalties, criminal penalties, and even imprisonment in some cases.

  6. Education: The CPSC also works to educate businesses about U.S. safety standards and their responsibilities under the law. They provide guidance and support to help businesses comply.

  7. International Cooperation: The CPSC cooperates with product safety agencies in other countries to promote worldwide consumer product safety.

For businesses involved in manufacturing, importing, or selling consumer products, understanding the CPSC’s role and regulations is essential for trade compliance. Failure to comply with these regulations can result in significant penalties and damage to a company’s reputation. 

 

Importers have specific responsibilities to ensure that the products they bring into the United States comply with CPSC regulations. Here are the main steps an importer should take:

 

  1. Understand CPSC Regulations: The first step is understanding which CPSC regulations apply to your products. The CPSC regulates about 15,000 types of consumer products, and each may have specific safety standards that it must meet.

 

  1. Product Testing and Certification: Most products under the jurisdiction of CPSC must be tested by a CPSC-accepted laboratory to certify compliance with applicable safety regulations. Once tested, a written certificate of compliance, also known as a Children’s Product Certificate (CPC) for children’s products or a General Certificate of Conformity (GCC) for non-children’s products, must accompany the product from the manufacturer to the distributor or retailer.

 

  1. Labeling and Tracking Information: Certain products must include specific labeling information. For example, children’s products must have permanent, distinguishing marks (tracking label) that provide information like the manufacturer’s name, the location and date of production, and detailed information on the manufacturing process.

 

  1. Report Potential Safety Issues: If you learn of a potential safety defect or hazard related to your product, you are legally obligated to report this to the CPSC. This includes situations where the product has been recalled in another country.

 

  1. Cooperate with Recalls: If a product you import is subject to a recall, you must cooperate with the CPSC and take steps to notify consumers, remove the product from store shelves, and provide remedies to consumers, which can include a repair, replacement, or refund.

 

  1. Stay Updated: The CPSC regularly updates its regulations and standards. It’s important to stay up-to-date with these changes to ensure continued compliance.

 

These are general guidelines, and the specific steps may vary depending on the type of product and the applicable regulations. The CPSC has a regulatory robot that can help with simple questions. However, compliance can be complex, so it’s best to have an expert on your side. Future Forwarding is proud to have a team of experts ready to keep your cargo moving and compliant. We’re also on the forefront of new technologies and innovative thinking to improve efficiency.

In that vein, CPSC is launching an e-filing pilot program. If you’d like to participate, contact Corporate Compliance Manager Shannon Whitt at 404-608-0060 ext 127.

Export Control Classification Numbers

Export Control Classification Numbers (ECCN) are important in international trade as they determine the level of control that the US government places on the export of certain goods and technologies. ECCNs are codes used to classify products and technologies based on their level of sensitivity and potential for military or terrorist use. 

 

This classification system helps to regulate the export of certain goods to foreign countries and ensures that national security interests are protected.

 

Finding ECCN numbers for your products is essential if you intend to export them. The first step is to determine if your product or technology is subject to export control regulations. This can be done by reviewing the US Commerce Control List (CCL), which identifies controlled items and their corresponding ECCNs.

 

Once you have identified the product or technology, the next step is to determine its ECCN. This can be done using several methods, including:

 

  1. Self-Classification: Review the ECCN list and determine which category your product falls under. This method requires a good understanding of the ECCN classification system and may require consultation with an export compliance professional.
  2. Online ECCN Search Tools: The US government provides several online resources for finding ECCNs. The Bureau of Industry and Security (BIS) website has a searchable database that provides ECCN information for controlled items.
  3. Consultation with the Manufacturer: The manufacturer of the product or technology can provide the ECCN number. They should have already classified the product or technology and can provide the necessary information.

 

It is essential to ensure that the correct ECCN is assigned to your product or technology before exporting it. Failure to comply with export regulations can result in significant penalties, including fines and imprisonment. Additionally, incorrect classification can lead to delays in the export process, which can impact your business’s bottom line and customer satisfaction.

 

Finding ECCN numbers is an important step in exporting controlled products and technologies. The US government has a regulatory system in place to control the export of sensitive goods and technologies. It is the responsibility of the exporter to ensure that their products are properly classified before being exported. By utilizing the available resources and tools, exporters can ensure that their products comply with regulations and are shipped smoothly and efficiently. At Future Forwarding, we are dedicated to helping our customers navigate the complex world of international trade and customs regulations. Our team of experts has the knowledge and expertise to help you determine the correct ECCN for your products and technologies, ensuring that your exports are compliant with all relevant regulations. Reach out and see how we can help you keep your cargo compliant and moving. 

 

Understanding SLI, EEI, and AES: Key Export Documents and Their Significance

The Shipper’s Letter of Instruction (SLI) is a document issued by an exporter to their agents or freight forwarders that contains details about the shipping terms, including instructions on how to handle, store, load, and unload the shipment without causing damage to the products. It also allows the transport company to issue an air waybill or Bill of Lading (BOL) on behalf of the exporter. In addition, the SLI facilitates export control and reporting by enabling the agent to file Electronic Export Information (EEI) and send it to the Automated Export System (AES).

It is the responsibility of the exporter or shipper to complete the Shipper’s Letter of Instruction with all relevant information and detailed instructions on how to process the order. This letter serves as a guide for the freight forwarder/agent to process the order according to the agreed-upon terms and conditions of the shipping term, which ensures the smooth movement of goods.

While the Shipper’s Letter of Instruction is not a legally binding requirement, it is necessary for all export shipments as it formalizes how and where to handle the export shipment. Additionally, it authorizes the forwarder to act as an authorized forwarding agent for export control and customs-related processes. The need for an SLI may vary by country and depend on country-specific rules and foreign trade regulations. Exporters must complete this document before sending out the goods.

Completing a Shipper’s Letter of Instruction is considered one of the most secure methods for sharing shipping information with freight forwarders, minimizing the chances of miscommunication between the exporter and agent. It helps ensure an efficient export process.

 

Next, what is an EEI?

Per Trade.gov: The Electronic Export Information (EEI) is a necessary document when exporting a commodity with a value over $2,500 or when an export license is required for the commodity. The exporter is responsible for preparing the EEI and the carrier will submit it to the U.S. Customs and Border Protection (CBP) through the Automated Commercial Environment (ACE), specifically AES Direct.

To prepare for exporting, the exporter should obtain the Schedule B number for their commodity, which must be included in the AES. The Census Bureau can provide this number at 1-800-549-0595, Option 2.

If the exporter is sending baggage or containers containing personal or household goods worth over $2,500 to a foreign destination, excluding Canada, they must file the EEI and provide the International Transaction Number (ITN) to the carrier according to the required timeline.

If the U.S. Principal Party in Interest (USPPI) is using the U.S. Postal Service to send goods, they must file the EEI only if the shipment is valued over $2,500 per Schedule B or requires an export license. In this case, the exporter should provide the ITN or exemption citation to the post office.

However, some instances do not require the EEI, such as shipments with an ultimate destination of Canada, shipments to U.S. possessions, or if the shipment contains rough or uncut diamonds. But if the shipment is bound for the U.S. Virgin Islands or Puerto Rico, the EEI must be filed. Additional exemptions can be found in the FTR Sections 30.36-30.40.

 

We learned above that AES stands for Automated Export System. This is the system where U.S. exporters electronically declare their international exports, to the Census Bureau to help compile U.S. export and trade statistics, as well as for trade enforcement. 

If you don’t file the above information, or file false information, that can lead to hefty fines, up to $10,000 and/or jail time. Check out CBP’s Quick Reference Guide for more information.

 

While you should be informed, your best bet to make sure it’s right is having an experienced logistics partner like Future Forwarding on your side. Reach out to us today to see how we can take the freight off your shoulders. 

Records Management and Requirements

Recordkeeping plays a vital role in any business, but especially when it comes to imports and exports. Records management is key not only to determine revenue, stay in legal compliance, and keep your goods moving, but because this information helps determine trade policy and how we gauge the success of trade agreements, programs, and the impact these things have on our economy and our citizens. 

 

For these purposes, CBP defines records as:

 

  • any importation, declaration or entry;
  • the transportation or storage of merchandise carried or held under bond into
    or from the customs territory of the United States;
  • the filing of a drawback claim;
  • the collection and payment of fees and taxes to CBP; and
  • any other activity required to be undertaken pursuant to laws or regulations administered by CBP.

 

The term “records” includes any information required for the entry of merchandise and other information pertaining to, or from which is derived, any information element set forth in a collection of information required by the Tariff Act of 1930, as amended, in connection with an activity described above. The term includes, but is not limited to:

 

  • statements, declarations, documents;
  • electronically generated or machine readable data;
  • electronically stored or transmitted information or data;
  • books, papers, correspondence;
  • accounts, financial accounting data;
  • technical data; and
  • computer programs necessary to retrieve information in a usable form

 

That’s a lot of information. Who is required to keep these records? CBP says:

 

  • an owner, importer, consignee, importer of record, entry filer or other person who:
  • imports merchandise into the customs territory of the United States;
  • files a drawback claim;
  • transports or stores merchandise carried or held under bond; or
  • knowingly cause the importation or transportation or storage of merchandise
    carried or held under bond into or from the customs territory of the United
    States;
  • an agent of any person described above; or
  • a person whose activities require the filing of a declaration or entry, or both.

 

How long must records be kept? CBP says:

 

Five years from the date of entry (which includes a reconciliation), if the record relates to an entry, or five years from the date of the activity which required creation of the record. 

There are some exceptions to this general rule, however:

  • records relating to drawback claim must be retained until the third anniversary of the date of payment of the claim;
  • packing lists must be retained for a period of sixty calendar days from the end of the release or conditional release period, whichever is later, or, if demand for return to CBP custody (“redelivery”) has been issued, for a period of sixty calendar days either from the date the goods are redelivered or from the date specified in the demand as the latest redelivery date if redelivery has not taken place;
  • a consignee who is not the owner or purchaser and who appoints a customs broker shall keep records pertaining to merchandise covered by an informal entry for 2 years from the date of the informal entry;
  • records pertaining to articles that are admitted free of duty and tax pursuant to 19 U.S.C. §1321(a)(2) and 19 CFR 10.151-10.153 and carriers’ records pertaining to manifested cargo that is exempt from entry under the provisions of 19 CFR shall be kept for 2 years from the date of entry or other activity which required creation of the record; or
  • if another provision of the CBP Regulations sets forth a different retention period for a specific type of record, the other provision controls. For example:
  • 10.137 sets forth a retention period of three years from liquidation for records of use or disposition for certain goods whose rate of duty is dependent upon actual use; and
  • 181.12 requires that all supporting records relating to NAFTA Certificates of Origin for exports be maintained for five years from the date the certificate was signed.

 

You can check out CBP’s complete guide to recordkeeping requirements here.

Or you can contact your Future Forwarding representative. Put your cargo needs, including questions on recordkeeping and developing a records management system in our experienced hands and our knowledgeable, expert team will make sure you have the resources to keep your cargo moving and compliant.  

 

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