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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.

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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

 

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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

 

 

 

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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

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Mohawk Global Trade Advisors, a division of Mohawk Global Logistics © 2016