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Personalize This Export Compliance Poster

Export Compliance Poster

Promote a pro-compliance culture at your company with this free poster, courtesy of the Bureau of Industry & Security.

The poster reminds staff of the need to be vigilant when dealing with export transactions, eluding to questions that should be asked as part of a red flags check.

We’ve added form fields to the poster so that you can enter details for your internal export compliance contact before printing.

Post the sign in several places throughout your office for the maximum benefit.

Export Compliance Poster [PDF]



CBP Announces US-Mexico Mutual Recognition Agreement

Mexican flag

Customs and Border Protection (CBP) recently announced the establishment of a mutual recognition agreement between Mexico and the United States, as of October 17, 2014.

A mutual recognition agreement between the U.S. C-TPAT program and another country—in this case Mexico’s Tax Administration Service (SAT)—certifies that the foreign customs program’s requirements and regulations are similar to those of C-TPAT, and produces benefits for companies operating in mutually recognized countries.

In particular, the US-Mexico mutual recognition agreement provides for increased cooperation between C-TPAT and SAT’s New Certified Companies Scheme (NEEC), the Mexican equivalent to C-TPAT.

Mutual recognition between the U.S. and Mexico allows processes pertaining to importing and exporting between the two countries to become more simplified. Imports and exports exchanged between the U.S. and Mexico are subject to the following benefits as a result of the mutual recognition agreement:

  • Faster validation process
  • Fewer exams of cargo
  • Common security standards
  • Higher levels of customs efficiency
  • Front-of-the-line processing
  • Marketability

Additionally, the U.S. has mutual recognition agreements with the following supply chain security programs: New Zealand, Canada, Japan, Korea, Jordan, the European Union, Taiwan, and Israel.

For information on how to allow C-TPAT to share company information with SAT, and to read CBP’s original publication regarding the US-Mexico Mutual Recognition Agreement, click here.

By Abby Frank, Consulting Coordinator


Canceled: Robert Stein to Speak in Watertown, NY on Nov 19

This event has been canceled and will be rescheduled for another date.

MGTA’s Robert Stein will speak on November 19 at a half-day seminar on import compliance at the Comfort Inn & Suites in Watertown, NY. The seminar is sponsored by Jefferson County Economic Development and Mohawk Global Trade Advisors.

Importing 101
November 19, 2014
9-11:30 AM
Comfort Inn & Suites, 110 Commerce Park Drive, Watertown, NY
Price: Free

Keeping up with importer rules and regulations is a lot like walking through a minefield. The wrong move can have dire consequences. Get in-the-know by getting a grip on the right way to handle import compliance during this half-day seminar.

This workshop will cover:

  • The role of classification and valuation
  • How to spot the most common invoice errors
  • Must-haves for any free trade agreement claims
  • The ins-and-outs of import marking

There will also be plenty of time for Q&A on issues of specific concern to your company.

About the Speaker

Robert Stein

Robert Stein
Vice President, Mohawk Global Trade Advisors
Click here to read more about Robert.


Duty Savings Achieved with TIB

TIB Container

By Jim Trubits

Astute importers and exporters can benefit from the numerous duty avoidance, deferral, and recovery programs offered by U.S. Customs & Border Protection (CBP).

Temporary Importation Bonds (TIB) are a great way to avoid paying thousands of dollars in duty. Here’s how it works: Under certain conditions, goods are imported into the U.S.—for a limited time—duty free. Instead of paying duties, the importer posts a bond for 110% or twice the amount of duties, taxes, etc. that would be due if the goods were entering without the TIB.

Most TIB goods must be re-exported or destroyed within one year. Two one year extensions may be granted. When using a TIB, it’s important to understand that the goods cannot be sold in the U.S. and must be re-exported within the allotted time frame. Many importers prefer using a TIB instead of setting up a duty drawback program, as they don’t have to wait months to recovery their duties.

When to use a TIB

TIBs are most useful for goods subject to high duties that will be imported for testing/repair before being re-exported. They are commonly used for medical devices that have yet to be approved by the FDA.

Keep in mind that CBP has strict requirements for goods that qualify for TIB. If your goods fail to meet these conditions, you could face a penalty of 110% or double the duties and user fees due, depending on which TIB provision was used.

Are you TIB ready?

Before ever making entry under a TIB, make sure

  • your goods qualify under one of the 14 TIB provisions
  • you’ve carefully reviewed the Customs requirements for TIBs
  • you’ve consulted with an expert or obtained a binding ruling, if necessary
  • your Customs documentation indicates that it’s a TIB shipment
  • you’ll be able to supply the necessary supporting documentation and records to account for the imported goods, including the required proof of export/destruction

Come learn more about TIB and other duty savings programs during one of our seminars on Duty Deferral & Recovery Strategies this November.


Chicago, IL – 11/4/14
[Register/more info]

Rochester, NY – 11/12/14
[Register/more info]

Syracuse, NY – 11/13/14
[Register/more info]

Albany, NY – 11/20/14
[Register/more info]

Jim Trubits is Vice President for Mohawk Global Trade Advisors. Click here to read more about Jim.



Sanctions Against Russia Put Squeeze on U.S. Exporters

By Mike Frail, Senior Advisor

As if export control reforms weren’t enough of a burden, U.S. exporters now have their plates pretty full with various sanctions imposed against Russia. U.S.-Russia relations have been strained since the annexation (or occupation) of Crimea, rebel fighting in eastern Ukraine, and the tragic downing of Malaysian Flight MH17. These circumstances have led the U.S. to ratchet up sanctions against Russia.

The first wave of sanctions came in March with the annexation of Crimea. In response, President Obama issued the first of three Executive Orders, blocking property interests and authorizing economic sanctions against any persons undermining the democratic processes in the Ukraine. That was quickly followed by a second executive order, which was aimed at Russian government officials and people providing them material support. It also began addressing the amount of ownership in companies that certain individuals and entities had (7 total). The Office of Foreign Assets Control (OFAC) then followed suit by sanctioning additional entities.

With all these sanctions coming out the woodwork, U.S. exporters were no doubt becoming all the more wary of business partners in Russia. Of course, since every U.S. exporter dutifully complies with denied party screening requirements, I would contend that there was no need to worry, right? To which my exporting readers would respond, “Yes, Mike!” (Good answer).

It didn’t take long for the situation to escalate with Russia. In late April, the Bureau of Industry & Security (BIS) imposed limits on exports and re-exports of high technology that had the potential to enhance Russia’s military capabilities. Any licenses to export or re-export said items were denied and already issued licenses meeting those criteria were revoked. 13 companies were also added to the Entity List. Can you see the pattern developing here?

As the crisis in eastern Ukraine continued to worsen, the Treasury Department in mid-July instituted additional sanctions, which were imposed on Russia’s financial and arms-related sectors. Then, on July 17, Flight MH17 was tragically shot down by what is believed to have been a Russian-made surface-to-air missile launched from rebel territory in eastern Ukraine. There were no survivors and it’s been argued that Russia continues to arm the rebels and may have stationed soldiers in the field with them. The shooting down of Flight MH17 led to additional Treasury Department actions against three of Russia’s largest banks, and the blocking of assets owned by United Shipbuilding Corporation, which is involved in both military and civilian ship construction.

The latest round of export restrictions by the BIS limits energy sector exports to Russia, specifically those related to exploration, production from deep-water (greater than 500 feet), arctic offshore, and shale projects that have the potential to produce oil. There also was one addition to the Entity List, United Shipbuilding.

With the tightening of these sanctions, exporters must now be concerned with specific commodities and ECCNs. Click here to read the ruling. Companies who have subsidiaries overseas, specifically in the EU, should bear in mind the EU has Russia sanctions as well, which address many of the same export concerns as the U.S. government. i.e. OFAC, BIS, etc.

In all, the latest sanctions affect several sections of the Export Administration Regulations (15 CFR Parts 732, 738, 740, 742, 744, 746 and 774). That’s a lot of material! Now some cargo carriers are asking for exporters to confirm that they are abiding by European Union sanctions on Russia.

So, what does all this mean? Simply put, it’s going to get progressively more difficult to export to Russia. Exporters need to be aware of the sanctions against Russia and understand how they apply to American business operations. Sanctions aren’t to be taken lightly, as one could easily find an export violation hidden in the weeds. Recent action taken by U.S. Customs & Border Protection finds the agency carefully scrutinizing cargo bound for Russia, including increased container examinations.

Exporters should continue their due diligence:

  • know the client
  • screen all parties to the transaction
  • review product classifications
  • maintain export records as required

U.S.-Russia relations certainly don’t appear to be moving in the most positive direction. Unless Crimea is returned to the Ukraine or the pro-Russian rebels in eastern Ukraine are defeated, it’s possible this frigid spell between the U.S. and Russia could turn into a second cold war.

Ukraine & Russia Sanctions (U.S. Department of State)

Mike Frail is Senior Advisor for Mohawk Global Trade Advisors. Click here to read more about Mike Frail.





Ew, Bugs! Preventing Pests When Importing Goods

Due to a recent increase in the number of sea carriers found transporting wood packing material (WPM) that violates WPM standards—primarily while crossing the Mediterranean Sea—Customs & Border Protection has released a bulletin reminding importers to work to ensure that any WPM used has been effectively treated to prevent the introduction of invasive pests into the United States.

To learn more about the threat from pests and proper WPM handling, please read, Let’s Get Serious About Wood Packaging Materials, written by Jim Trubits.

Additionally, click here to read CBP’s bulletin.

By Abby Frank, Consulting Coordinator


Understanding Incoterms: When Lightning Strikes


By Jim Trubits

Many international buyers and sellers fail to recognize the positive financial outcomes that can be gained from a well thought out Incoterms strategy.

Your methodology need not be complicated. It can be as simple as having a solid understanding of the role that risk plays in each Incoterms rule. Before expanding of how this strategy works, let’s clarify what “risk” means in the context of Incoterms. Risk refers to who is responsible for paying for damage to the goods that occurs while the shipment is in transit. This responsibility shifts from the seller to the buyer at different points in the transit process, depending on the Incoterms rule that is used.

For example, FOB, CFR, and CIF all assign this responsibility (i.e., risk) to the seller from the time the containerized goods are at the seller’s premises, until the container is placed on board a vessel. Should lightning strike and damage the goods at any time between these two points, the seller is obligated to reimburse the buyer for the damaged goods. Once placed on board the vessel, that responsibility falls solely on the buyer, up to and including when delivery occurs at the final destination.

International sellers can use this understanding of risk to their advantage when discussing Incoterms during sales contract negotiations.

If a seller wanted to minimize their liability for paying for damages (i.e., minimize their risk), they may choose FCA, CPT, or CIP. These three Incoterms rules transfer risk from seller to buyer when the goods are tendered to the first carrier, usually a trucking carrier. This shortens the seller’s exposure to risk, as it normally occurs far earlier in the transit process than when the goods are place on board a vessel.

Jim Trubits is Vice President for Mohawk Global Trade Advisors. Click here to read more about Jim.


Join Jim Trubits and Robert Stein for Country of Origin and Marking Webinar (1.5 CCS Credits)

NCBFAA Webinar: Country of Origin and Marking Requirements
August 5, 2014
12 to 1:30 pm EDT
1.5 CCS Credits
NCBFAA member: $50, Non-member: $75
Register here

You can’t mark goods without knowing the correct country of origin (where they were made). This webinar steps through the process of determining a product’s country of origin and uses visual examples to explain marking methods and requirements. Includes a review of “Best Practices” for meeting reasonable care requirements.

Join Jim Trubits and Robert Stein of Mohawk Global Trade Advisors for this informative webinar!

Webinar hosted by the National Customs Brokers & Forwarders Association of America (NCBFAA). Register here.


Jim Trubits

Jim Trubits
Vice President

Robert Stein

Robert Stein
Vice President


What Do You Mean That’s Not How You NAFTA?

If my product is made in U.S., doesn’t it automatically qualify for NAFTA/other free trade agreements?

It is not a given that your product will meet one of the rules of origin that would allow it to qualify under a free trade agreement (FTA).

Each FTA is designed to offer importer benefits for products that meet a particular qualifying rule of origin. For example, Customs will allow a producer to use non-originating materials if they satisfy a tariff shift transformation or meet a regional value content requirement under that FTA’s origin rule.

You must also be able to provide this qualifying information to Customs in the event of an FTA verification. Failure to do so may result in denial of preferential tariff treatment, requiring full payment of duties plus interest.

Come learn more at Benefiting from NAFTA & Other Free Trade Agreements on August 12 in Middleburg Heights, OH. Registration for this event is open until 8/5. Click here  to learn more and register. Discounts available for groups of 2 or more.

By Jim Trubits

Jim Trubits is Vice President for Mohawk Global Trade Advisors. Click here to read more about Jim.


CBP Announces U.S.-Israel Mutual Recognition Agreement

Customs and Border Protection (CBP) recently announced a mutual recognition agreement has been enacted between Israel and the United States as of June 27th, 2014.

A mutual recognition agreement between the United States’ C-TPAT program and another country—in this case Israel’s Authorized Economic Operator (AEO) program—certifies that the foreign customs program’s requirements and regulations are similar to those of C-TPAT, and produces benefits for companies operating in mutually recognized countries.

The establishment of a mutual recognition program between the U.S. and Israel allows processes pertaining to importing and exporting between the two countries to become more simplified. Imports and exports exchanged between the U.S. and Israel are subject to the following benefits as a result of each country acknowledging the similarities between its own customs program and that of its partner country:

  • Faster validation process
  • Fewer exams on cargo
  • Common security standards
  • Higher level of customs efficiency
  • Front-of-the-line processing
  • Marketability

Additionally, the U.S. has mutual recognition agreements with the following Supply Chain Security programs: New Zealand, Canada, Japan, Korea, Jordan, the European Union, and Taiwan.

Read CBP’s original publication regarding the U.S.—Israel Mutual Recognition Agreement, here.

By Abby Frank, Consulting Coordinator



U.S. Customs Announces C-TPAT Exporter Eligibility Requirements

Since its implementation in 2001, C-TPAT has historically been open to U.S importers. Customs & Border Protection has now released exporter eligibility requirements, meaning that U.S. exporters will have the opportunity to become C-TPAT certified.

In order to become C-TPAT certified and start receiving C-TPAT benefits, exporters must do the following:

  • Actively export out of the United States
  • Staff a business office in the United States
  • Have an Employee Identification Number (EIN) or Dun & Bradstreet (DUNS) number
  • Designate an individual within the company to be the main contact for the C-TPAT program, as well as an alternative in place to take over for that individual if need be
  • Uphold agreement to maintain C-TPAT minimum security criteria
  • Create a C-TPAT supply chain security program detailing how the exporter’s internal policy will meet and maintain minimum security criteria
  • Demonstrate compliance with export reporting for a 12-month period leading up to the time of application
  • Be in good standing with government agencies such as the Department of Commerce, the Department of State, the Department of Treasury, the Nuclear Regulatory Commission, the DEA, and the Department of Defense

Processes must also be in place for C-TPAT applicants to screen and select potential business partners, so that all aspects of the applicant’s supply chain are secure. For business partners within the supply chain that are eligible for C-TPAT, the applicant must provide proper documentation. If business partners within the supply chain are not eligible for C-TPAT, then the applicant must prepared to show that the business partner is at least meeting C-TPAT security requirements.

Additionally, exporters applying for C-TPAT need to have security plans in place for the following areas:

  • Container security
  • Conveyance tracking and monitoring
  • Physical access controls
  • IT security
  • Personnel and procedural security

Although these eligibility requirements for exporters have been released, there is currently no word on when C-TPAT will officially be open to exporters who wish to apply.

C-TPAT Exporter Eligibility Requirements (U.S. Customs & Border Protection)

By Abby Frank, Consulting Coordinator





C-TPAT Holiday Safety Alert

Holidays present logistics companies, manufacturers, and facilities with a difficult challenge: the closing of facilities for holiday vacations leave them highly vulnerable to theft. When facilities are shut down during this time, the risk of thieves accessing and stealing cargo increases greatly since facilities are left unattended. In order to prevent cargo loss and theft, Customs recommends the following:

At Facilities:

  • Examine all surveillance equipment to make sure it is functioning properly.
  • Make sure all battery-powered doors and phones are in working order.
  • Secure all facility perimeters, including any fencing and barriers.
  • All perimeter lighting should be inspected and any non-working fixtures replaced.
  • Set any time/sensor lights so that they switch on while the facility is closed.
  • Update alarm call list and ensure that anyone responsible responds to all alarm calls while the facility is closed.
  • If desired, set up extra patrols in the facility area with local authorities.
  • All keys should be removed from warehouse equipment.

Freight In-Transit on Long Distance Runs:

  • Tractors and trailers should not be left unattended.
  • Park all vehicles in areas that have adequate surveillance and lighting.
  • Utilize kingpin locks, glad-hand locks, and/or steering wheel locks when vehicles are parked.
  • Secure trailer doors with industrial strength padlocks.
  • Remove all keys from vehicles.
  • Make periodic checks on vehicles when parked.
  • Inform dispatch when and where vehicles have been dropped, as well as estimated time of arrival.

Read Customs & Border Protection’s bulletin regarding this holiday alert.

By Abby Frank, Consulting Coordinator


BIN: A C-TPAT Best Practice at the Port of Antwerp

In February 2014 C-TPAT announced its recognition of a best practice implemented at the Port of Antwerp in Belgium, the second largest port in Europe.

In order to close security gaps and increase port security, the Port of Antwerp instituted the Neighborhood Information Network (BIN). This program allows the anonymous reporting of information regarding suspicious activity at the port to local police and the companies participating in BIN, thus opening lines of communication between these companies and law enforcement and allowing the two to work together to increase security and prevent crime at the port.

BIN was implemented in response to an increase in the number of criminal acts perpetrated at the port as a result of a lack of appropriate security. For example, previous to the development of BIN, criminals were able to gain access to port computers and track containers loaded with narcotics. In other cases, criminals stole various companies’ information as a means to arrange the import of narcotics under a legitimate company’s name. Since the initiation of BIN, the number of cases such as these has decreased.

Security, for ports of all sizes, is of utmost importance as it is a means to protect incoming and outgoing cargo from becoming a vehicle for crime and terrorism. C-TPAT works to secure supply chains across the globe and improve security, and as such, recognizes BIN as a best practice.

Read Custom & Border Protection’s bulletin regarding this requirement.

By Abby Frank, Consulting Coordinator


Jim Trubits to Speak at 2014 Upstate NY Trade Conference

Jim TrubitsJim Trubits, Vice President, will be speaking about export controls at the 2014 Upstate NY Trade Conference & Expo in Rochester, NY on June 19.

Trubits will present A Beginner’s Guide to Export Compliance, which will touch on basic compliance issues for all exporters, including how to determine which export regulations (ITAR or EAR) apply to products. Jim will also be a panelist at the ITAR/EAR Roundtable, where he will be answering questions on recent export control reforms and sharing his insights gained from working with exporters as a freight forwarder.

Jim Trubits is Certified Global Business Professional, licensed Customs broker, and certified Customs specialist. Read more about Jim.

2014 Upstate NY Trade Conference & Expo




How Do You Prove Transaction Value?

Determining the price actually paid or payable for your Customs entry can be quite tricky. Transaction Value rules, pursuant to 19 USC 1401a(b), place responsibility on the importer to exercise reasonable care and accurately provide Customs and Border Protection (CBP) with the proper declared value.

It’s important to assure that all lawfully mandated payments (additions) and allowable deductions (subtractions) are accounted for in the total entered value on the Entry Summary.

If you are an importer that purchases goods under an INCOTERMS® rule starting with C or D (CIF, CFR, CPT, CIP, DAP, or DDP), you may deduct the freight transportation and other costs (insurance, etc.), provided they are included in the price payable and you have supporting documentation. To help guide importers, CBP has published the Informed Compliance Publication, Proper Deductions of Freight and Other Costs from Customs Value.

Keep in mind that Customs doesn’t consider amounts shown on the commercial invoice as proof of freight transportation paid by the shipper.

What is CBP’s position?
Customs requires transportation and insurance to be deducted as actual—not estimated—costs paid to the international carrier, freight forwarder, insurance company, or other appropriate provider of such services. Again, declaring these amounts without the proper backup may result in CBP disallowing the deductions during an audit or review of the Customs entry.

So what does CBP consider proof?
To prove actual price paid, CBP requires evidence, such as a rated bill of lading, from the service provider showing the actual freight/insurance charges. CBP may allow other types of substantiation as well.

Finally, it’s important for importers to be able to produce the required Customs entry documentation and the supplementary information showing the actual costs to support the entered value. This should be part of every importer’s recordkeeping program.

By Jim Trubits, Vice President, of Mohawk Global Trade Advisors. Jim is a licensed Customs broker. Read more about Jim here.


C-TPAT Employee Screening Requirements

In order to ensure that Partners are compliant with U.S immigration law, C-TPAT requires the use of E-Verify to certify all employees’ eligibility status to work in the United States.

Read Customs & Border Protection’s bulletin regarding this requirement here: http://www.cbp.gov/sites/default/files/documents/bullentin_feb14.pdf

This system compares completed Form I-9s with data from the U.S. Department of Homeland Security and the Social Security Administration in order to confirm that an individual is eligible for hire. In order to meet this requirement and use E-Verify, Partners must complete the Form I-9, Employment Eligibility Verification, for every employee.

U.S. employers face very specific requirements when hiring new employees, so it is crucial that C-TPAT Partners examine and verify potential employees’ eligibility no matter their immigration status through the completion of the Form I-9 and the subsequent use of E-Verify.

If an I-9 violation is discovered by C-TPAT, the Supply Chain Security Specialist will guide the Partner in coming up with an appropriate solution, but will not issue a fine or penalty. If another agency (non-voluntary, unlike C-TPAT) discovers an I-9 violation during review of the Partner, employers may be fined.

Additional Information

Form I-9

Information on E-Verify


By Abby Frank, Consulting Coordinator



C-TPAT-To Join or Not to Join

Is your company still on the fence about participating in Customs-Trade Partnership Against Terrorism (C-TPAT)?

Are the benefits of 3.5 to 5 times fewer inspections, access to FAST lanes, securing your supply chain (and hence, your reputation), plus the opportunity to participate in other U.S. Customs & Border Protection programs not enough of an enticement?

Here’s an incentive that may sway your company’s mind: the loss of business opportunities.

U.S. Customs strongly advises all C-TPAT partners to encourage their business partners to participate in C-TPAT. Many importers have taken this message to heart, and are requiring importers they purchase from domestically to also be C-TPAT certified in order to do business with them. A well recognized company does not want to be linked with a supplier who experienced a security breach within their supply chain, no matter how small the supplier.

As U.S. Customs continues to mutually recognize the supply chain security programs of other countries*, we are seeing more foreign participants requiring their international trade partners to participate in their own country’s supply chain security program. Foreign manufacturers understand inspection of their cargo is minimal when their entire supply chain is certified in mutually recognized supply chain programs, resulting in quicker processing time of their cargo and availability of their product in the market.

Doing business with companies certified in mutually recognized supply chain programs lessens the burden of work when assessing your supply chain. You don’t have to assess a business partner that is already certified in a supply chain program–they’ve already done that for you, and their Customs agency has confirmed that they’ve done their due diligence by certifying and validating them.

Instead of thinking about whether or not your company should participate in C-TPAT, ask yourself this: can we afford to lose business opportunities because we aren’t certified?

*U.S. Customs & Border Protection mutually recognizes the following foreign supply chain programs: Canada, EU, Japan, Jordan, Korea, New Zealand, and Taiwan.

Beverley Seif is Vice President & General Manager of Mohawk Global Trade Advisors. Read more about Beverley.


New ISO 17712 Standards for High Security Seals

New standards for high security seals will go into effect on May 15, 2014. C-TPAT requires high security seals to meet or exceed PAS ISO 17712:13 standards, although C-TPAT certified partners can continue to use container seals that meet PAS ISO 17712:10 standards until their stock is depleted.

C-TPAT certified partners must advise their business associates of the new container seal requirements to ensure they continue to meet the C-TPAT criteria for seal standards.

All parties who purchase container seals should request conformance certificates provided by an accredited independent lab prior to purchase, as proof that the seals meet PAS ISO 17712:13 standards.

Additional Information

C-TPAT Bulletin – Compliance with ISO’s 17712 Standards for High Security Seals (U.S. Customs & Border Protection)


Bev Seif is Vice President & General Manager for Mohawk Global Trade Advisors.


If My Cargo Is Not Adequately Insured, What Is My Exposure?

Insuring cargo for international transport is very different from other forms of property insurance. There is an entire body of law, known as Admiralty Law, that has evolved around marine transportation. The coverage found in a marine cargo policy (which also covers international shipments by air) is written to insure against the many perils that may be faced during international transport. These include perils specific to case law that has been developed and tested throughout history. Most marine policies therefore add clauses to cover concepts unique to Admiralty law. Many of these risks are not contemplated by riders attached to property covers that attempt to protect goods in transit. As such, these riders fall short of the mark.

De Facto Self-Insurance
Self-insurance is a common fallback position for companies that move international cargo without the benefit of a marine policy. Whether mindfully done or not, moving cargo without adequate insurance coverage is de facto self-insurance; or at the very least, co-insurance—in cases where minimal insurance is in place but not written on the broad-form needed to provide truly adequate coverage. Even when using Incoterms correctly, where the responsibility to insure is with the other party, there may be exposure regarding difference in coverage for perils not specifically named in the transactional policy. Importers and exporters are cautioned to assess the risks and evaluate for adequate marine coverage.

General Average
A good example of an arcane concept fully covered by only a marine policy is General Average. It commonly occurs in cases where something happens to the conveyance, necessitating sacrifice of some of the cargo in order for the voyage to successfully continue. This might happen if a vessel is grounded or if a fire breaks out onboard. In either case, tugboats may need to be employed or the vessel may need to be taken to another port for repairs and inspection. Under such circumstances, the carrier would declare General Average as a mechanism to attach risk-sharing to all cargo interests aboard the vessel. After declaring General Average, a vessel operator would typically ask each cargo owner for a deposit based on their cargo’s prorated value to the venture, with the goal of covering the cost of any other cargo damaged or extraordinary expenses incurred by the operator while saving the voyage. The self-insured cargo owner and the vessel operator would then continue correspondence on this issue for an average of about ten years, until all expenditures have been discharged. Based on this scenario, General Average could prove very costly and time consuming for the self-insured. Not so for the shipper covered by a broad-form policy, who would have their insurer attend to these matters on their behalf.

Other Types of Coverage
Other types of marine coverage include:

  • Institute Cargo Clauses A, B, and C; with A being the broadest coverage and C being the most restrictive.
  • Free of Particular Average, which is bare-bones insurance, covering total loss only. Without the benefit of a broad-form marine policy, such ex tensions or limitations might not be adequately addressed or defined, leaving the cargo owner with substantial exposure.

A good risk management program will usually uncover these idiosyncrasies of international transport and protect against them. Many companies employ the services of a marine insurance broker to set up the right program. Other companies may rely on the services and expertise of their freight forwarder or Customs broker to secure adequate coverage.

Mohawk Global Trade Advisors can help you identify the many risks involved in international cargo transportation, the extent of liability that might be incurred, and the possible solutions available to minimize that risk. Click here to learn more about our risk management services.

By Rich Roche, Vice President. Click here to read more about Rich.

©2014 Mohawk Global Trade Advisors

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Chuck Miller Retires, Bev Seif to Head MGTA Team

Beverley Seif will lead the Mohawk Global Trade Advisors’ team following the retirement of Chuck Miller, Vice President, at the end of March.

Bev Seif

Seif, a licensed Customs broker, will head Mohawk’s consulting division as Vice President and General Manager. She previously worked as Senior Advisor for MGTA and from 2004-2013 operated a highly successful C-TPAT consulting firm.

Jim Trubits

Joining Seif will be MGTA’s new head of business development, Jim Trubits, Vice President. Trubits is a licensed broker and previously worked as a Senior Advisor for MGTA.


5 Tips to Remember the Next Time You Classify Using CROSS

CROSS is a search engine of U.S. Customs rulings on tariff classification, country of origin, marking, and trade programs/agreements. See it in action here.

CROSS can be an invaluable compliance tool for U.S. importers—if they know how to use it correctly. In this article, we will focus on search tips for classification rulings.

You may be wondering what all the fuss is about. It’s just like a Google search, right? WRONG. If you’re not careful with how you complete a classification search in CROSS, key rulings could be left out of your search results, making it all the more likely that you will misclassify your product.

How do I effectively search CROSS?

1. Start by searching with as many keywords as possible.

2. Don’t include article words (such as like, with, the, etc.) or you won’t get any search results. For example, searching with the phrase, gun rifle cleaning kit with brushes, returns 0 search results because the word with is ignored by CROSS.

Omitting the word with and searching with the phrase, gun rifle cleaning kit brushes, returns 1 result, N206317.

3. Complete a second search using less keywords. This will usually return results not included in your first search. In our previous example, we searched using the phrase, gun rifle cleaning kit brushes, which returned only one result (Ruling N206317, classification 9603.90.8050). However, if we perform a secondary search with less keywords, using the phrase, gun cleaning kit, we find another ruling not listed in the previous search results, Ruling K88087.


This second ruling confirms the classification of the gun/rifle cleaning kits as 9603.90.8050. So, based on our CROSS search, the cleaning kits would be best described on the commercial invoice as, gun/rifle cleaning kits including brushes and mops, with the HTS classification 9603.90.8050.

4. Use the most recent binding ruling to support your tariff classification decision. Make sure it describes your product closely. The same applies to any discrepancies between a relevant Informed Compliance Publication for your product and past rulings. The importer should defer to the rulings if they were written after the Informed Compliance Publication.

5. When in doubt, seek a binding ruling from U.S. Customs.

Managing your reasonable care

In Informed Compliance Publication: Reasonable Care,U.S. Customs & Border Protection recommends that importers have procedures in place to use CROSS for fulfilling two important components of reasonable care. They are:

  1. Using CROSS to assist in correct tariff classification of imported products.
  2. Using verbiage from CROSS rulings to more accurately describe goods on Customs documentation and to meet importer invoice requirements pursuant to 19 CFR 141.86 and 141.89.


By Jim Trubits, Senior Advisor. Jim is a licensed Customs broker and certified Customs specialist.




3/18, Watertown: How to Do Business in Canada

Senior Advisor Jim Trubits will be speaking about key NAFTA issues at How to Do Business in Canada on 3/18 at the Ramada Inn on Arsenal Street in Watertown, NY.

The event is presented by Jefferson County Local Development Corporation in collaboration with Congressman Bill Owens.

Congressman Owens will also be speaking at the event.

Click here for more event info, including how to register.

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