Safe & Compliant Jewelry Shipping: INTERNATIONAL TRADE SIMPLIFIED

1. Safe & Compliant Jewelry Shipping: INTERNATIONAL TRADE SIMPLIFIED

2. Presenters Cecilia Gardner, Esq. – Moderator CEO, President and General Counsel Jewelers Vigilance Committee Nuccio Fera – Imports Supervisory Import Specialist US Department of Homeland Security, Customs and Border Patrol, JFK Airport Omari Wooden – Exports Foreign Trade Ombudsman US Census Bureau

3. Presentation: Topics • Importing Basics • Exporting Basics • Country of Origin Markings

4. Foreign Trade RegulationsKimberley Process Overview Omari Wooden Trade Ombudsman Foreign Trade Division U.S. Census Bureau 4

5. Legal Requirements Census Bureau Foreign Trade Regulations (FTR) • 15 CFR, Part 30 Bureau of Industry and Security (BIS) Export Administration Regulations (EAR) • 15 CFR, Parts 700 - 799 Customs and Border Protection (CBP) Customs Regulations • Title 19 CFR, Parts 1 – 199 State Department International Traffic in Arms Regulations (ITAR) • Title 22 CFR, Parts 120 – 130 5

6. What is a Shipment?(FTR 30.1) 1 Tip: The ONE Rule • ONE USPPI shipping their merchandise, to • ONE Foreign consignee, on • ONE Carrier moving the product out of the U.S., on • ONE day, with • Valued over $2,500 per Schedule B number or license is required 6

7. U.S. Principal Party in Interest (FTR 30.3) The U.S. Principal Party in Interest is the: U.S. Person or Entity Primary Benefactor (Monetary, or Otherwise) Foreign Entity (if in the U.S. at time goods are purchased or obtained for export) Generally that Person can be the: U.S. Seller: (Wholesaler or Distributor) U.S. Manufacturer U.S. Order Party 7

8. Two Types of Transactions(FTR 30.3) Export Transaction (Standard): USPPI files the EEI or authorizes an agent to file the EEI Routed Export Transaction: Foreign Principal Party in Interest (FPPI) authorizes a U.S. agent to facilitate the export of items from the United States and to prepare and file the EEI 8

9. The Automated Export System is the electronic filing of: Export Information AES Filers are: U.S. Principal Parties in Interest U.S. Authorized Agents Automated Export System 9

10. AES Process Flow 10

11. AES Responses Verify Compliance Warning Informational Fatal Shipment Accepted ITN Issued Shipment Rejected No ITN Issued 11

12. Kimberley Process Overview Public Law 108-19 - Clean Diamond Act – implemented the Kimberley Process (KP) in the U.S. stating that rough diamonds must be controlled via the standards, practices, and procedures of the KP. U.S. Census Bureau designated as the export authority for controlling information on rough diamonds that are exported from the U.S. Census Bureau validates the KPC – ITN Must be reported in Automated Export System (Exports) Must be reported in Automated Broker Interface (Imports)

13. KPC Classifications KP shipments must be classified under the following Harmonized System Subheadings 7102.10 7102.21 7102.31 The KP Certificate – is a document that participating countries must prepare when exporting or reexporting rough diamonds

14. Kimberley Process (cont.) • Resources • KP Rough Diamond Statistics www.KimberleyProcessStatistics.org • State Department Conflict Diamonds www.state.gov/e/eeb/diamonds • Main Kimberley Processwww.KimberleyProcess.com • U.S. Kimberley Process Authoritywww.uskpa.org 14

15. For More Information FTD Call Center: 1-800-549-0595 Select 1 – AES Assistance Select 2 – Commodity Classification Assistance Select 3 – Regulations Assistance Fax: 301-763-6638 301-763-4670 Secure Fax: 301-763-8835 Email: ASKAES@census.gov ftdregs@census.gov 15

16. For More Information Census: AES http://www.census.gov/aes Regulations http://www.census.gov/foreign-trade/regulations/ Foreign Trade Blog http://blogs.census.gov/globalreach/ CBP: Appendix A – Commodity Filing Response Messages http://www.customs.gov/xp/cgov/trade/automated/aes/tech_docs/ 16

17. Country of Origin Markings: Topics • The Law • Marking Requirements • Exceptions • Penalties • Example

18. The Law: Country of Origin U.S Customs requires that every article of foreign origin entering the U.S. must be marked with the country of origin

19. The Law: Purpose of Markings To inform the ultimate purchaser in the U.S. of the country where the article was made

20. The Law: What is the Country of Origin? • The country of manufacture, production, or growth of the article • The last country in which a “substantial transformation” took place • Assembled Products: country in which the article was fully assembled

21. The Law: Who is the Ultimate Purchaser? • The last person in the U.S. who receives the article in the condition in which it was imported, e.g. • Manufacturer: if the article is destined for “substantial transformation” in a jewelry-making process in the U.S. • Consumer: if the article will go to market without first going under “substantial transformation” in the U.S.

22. The Law: What is a “Substantial Transformation?” • A manufacturing process that creates a new or different article with a different name, character and use. • This changes the country of origin • Ex: Polishing a rough diamond

23. Marking Requirements • Permanent • Deliberate act required to destroy, remove or alter • Legible • Adequate size • Clear enough to be read easily by a person with normal vision

24. Marking Requirements • Conspicuous • Visible with a casual handling of article • Will not be covered by subsequent attachments or additions • Visible without removing or changing positions of any parts of the article

25. Marking Requirements: Forms of Markings • The BEST form of marking is on the article itself • Branding • Stenciling • Stamping • Molding

26. Marking Requirements: Forms of Markings • Other formsacceptable if legible and conspicuous when item reaches the ultimate purchaser • Tags: attached in conspicuous place and must remain on article • Adhesive Labels: not recommended • Immediate containerokayif: • Article cannot be marked without damage • Marking article itself would be prohibitively costly

27. Exceptions: NO Marking Needed • If article will be processed in the US by the importer in manner that obliterates mark • But not for purpose of concealing origin • Article is readily identifiable • Clearly gives information about origin, e.g: “Tahitian Cultured Pearls”

28. Marking Requirements: Watches • There are special, more detailed marking requirements for watches and watch cases • Rules can be found in the U.S. Harmonized Tariff Schedule

29. Penalties for Non-Compliance Unmarked or improperly marked articles are subject to additional duties Alteration with intent to conceal country of origin marking: Fines up to $100,000; and/or Imprisonment for up to one year

30. Example • Finished rings imported from Thailand • In the U.S. rings will be boxed and shipped to retail stores • Who must be informed of country of origin? Ultimate Purchaser • Who is Ultimate Purchaser of rings in this case? Consumers • “Made in Thailand” marking required on rings at port of entry? Yes

31. Need Assistance? Have Questions? • The Jewelers Vigilance Committee can help • Contact Us: • 212-997-2002 • JVCLegal.org No part of the information in this presentation constitutes legal advice

32. 212-997-2002 jvclegal.org