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Agenda

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  1. Agenda Breaking News AES Compliance Review Program AES Compliance Best Practices Voluntary Self Disclosures Record Retention Export Control System Tiered-Diligence Model™ Critical Data Elements Electronic Auditing 10+2 Readiness Data: the 21st Century Link in the Supply Chain Using Data and technology to achieve new government requirements

  2. Breaking News

  3. Agenda Breaking News AES Compliance Review Program AES Compliance Best Practices Voluntary Self Disclosures Record Retention Export Control System Tiered-Diligence Model™ Critical Data Elements Electronic Auditing 10+2 Readiness Data: the 21st Century Link in the Supply Chain Using Data and technology to achieve new government requirements

  4. AES Compliance Review Program Compliance Review Program Goals • Identify and Develop Best Practices • Offer Assistance and Guidance with AES Filings • Help You Avoid Costly Encounters with Government Enforcement Agencies

  5. AES Compliance Review Program Why Performs AES Compliance Reviews • Identify “Best Business Practices” • Identify “Glitches” that cause reporting problems • Educate Foreign Trade Division Staff

  6. AES Compliance Review Program Which Companies Merit a Visit? • Compliant Companies • Companies with: • unresolved fatal errors • Excessive late filed shipments • Non-compliant Option 4 shipments

  7. AES Compliance Review Program Start of Compliance Reviews • Pre-Test with compliant/non-compliant companies began March 2007 • Non-compliant company visits began June 2007 • To date we have visited 46 companies • Compliance improvement: Late shipments – 2.9% in January 2007 1.3% in August 2007

  8. AES Compliance Review Program Compliance Review Process • Notification letter sent prior to meeting • Compliance Team will visit companies • Attendees: Managers, Compliance Officers, Forwarders, and/or staff with AES responsibilities • 90 days to achieve compliance • Referrals to OEE and/or CBP

  9. Agenda Breaking News AES Compliance Review Program AES Compliance Best Practices Voluntary Self Disclosures Record Retention Export Control System Tiered-Diligence Model™ Critical Data Elements Electronic Auditing 10+2 Readiness Data: the 21st Century Link in the Supply Chain Using Data and technology to achieve new government requirements

  10. AES Compliance Best Practices • Obtain good software • Generate an export checklist • Verify commodity classification • Use/Update references • Contacts

  11. AES Compliance Best Practices • Seminars/Workshops • Mentoring Program • Cross-training • Training Manual • Ask Somebody

  12. Agenda Breaking News AES Compliance Review Program AES Compliance Best Practices Voluntary Self Disclosures Record Retention Export Control System Tiered-Diligence Model™ Critical Data Elements Electronic Auditing 10+2 Readiness Data: the 21st Century Link in the Supply Chain Using Data and technology to achieve new government requirements

  13. Voluntary Self Disclosure • Reflects due diligence in preventing, detecting, and correcting violations. • Letter should include the following information: • Nature of the problem • Number and value of shipments affected • Mitigating Factors (i.e. training) • Corrective Actions Taken (Remedial steps taken by company to avoid reoccurrence of violation) • Exhibits/Attachments (i.e. ITNs, AES Records, SEDs) • Contact Information • A VSD should not be used to report a correction to a record.

  14. Voluntary Self Disclosure • Submit and address to: Mr. William G. Bostic, Jr. Chief, Foreign Trade Division U.S. Census Bureau 4600 Silver Hill Road, Room 6K032 Washington, DC 20233-6700 • http://www.census.gov/foreign-trade/www/index.html

  15. Agenda Breaking News AES Compliance Review Program AES Compliance Best Practices Voluntary Self Disclosures Record Retention Export Control System Tiered-Diligence Model™ Critical Data Elements Electronic Auditing 10+2 Readiness Data: the 21st Century Link in the Supply Chain Using Data and technology to achieve new government requirements

  16. Record Retention • FTSR – 30.66 • Retain for at least 5 years • Your Forwarder is your Partner

  17. Agenda Breaking News AES Compliance Review Program AES Compliance Best Practices Voluntary Self Disclosures Record Retention Export Control System Tiered-Diligence Model™ Critical Data Elements Electronic Auditing 10+2 Readiness Data: the 21st Century Link in the Supply Chain Using Data and technology to achieve new government requirements

  18. Export Controls You can’t automate classification Increased diligence equals Increased costs Not all items carry the same risks Use a tiered-diligence model to achieve business goals Principles

  19. Export Controls High-risk Global Data Mining © Low-risk Tiered-diligence model™ 8471.41.0095 6109.10.0004

  20. Export Controls Low-risk High-risk Tiered-diligence model™ A relatively small percentage of total U.S. exports and re-exports require a license from BIS… Excerpt from Exporting Control Basics (Exporting 101) 6109.10.0004 8471.41.0095

  21. Export Controls Human Rating Tiered-diligence model™ 8471.41.0095 6109.10.0004 High-risk! Low-risk! Combine human judgment, data analysis, and business rules to optimize your export control policy

  22. Export Controls Critical Data Elements Design the database… • Business decisions: • What data elements are you trying to control? • In what format do you require the data for use in your automated systems?

  23. Export Controls Human Rating Classification Research You can’t automate judgment… But you can use technology to make it faster…

  24. Export Controls Human Rating Classification Research You can’t automate judgment… But you can use technology to make it faster…

  25. Export Controls Hyperlink Classification Research Automated document retrieval and retention

  26. Export Controls Hyperlink Create information once… Make sure it’s right… Automatically apply it everywhere it’s needed… Classification Research Classification Results store in database… Automated document retrieval and retention

  27. Export Controls ECCN Historical Database License Determination Tiered-diligence model™ You can’t automate judgment… But you can use technology to make it faster…

  28. Export Controls 900510 Historical Filings ECCN Historical Database License Determination Human Rating You can’t automate judgment… But you can use technology to make it faster…

  29. Export Controls 852691 Historical Filings ECCN Historical Database License Determination Human Rating You can’t automate judgment… But you can use technology to make it faster…

  30. Export Controls License Determination Tiered-diligence model™ • Business decision: • What level of diligences is required for products with various risk ratings? hyperlink

  31. Export Controls ‘Actual’ ‘Audit’ Electronic Audit Output File Company ETRAC Data Electronic SED Audit Whether you have oversight for one business unit… Export Database 1. Link in ECCN “Should Be” 3. Comprehensive Electronic Audit of ‘Export Transactions’

  32. Export Controls ‘Actual’ ‘Audit’ Company ETRAC Company 1 Company ETRAC Company 1 Electronic Audit Output File Master ETRAC by Business Unit Company ETRAC Company Company ETRAC Company 1 Company ETRAC Company 1 Company ETRAC Company 1 Company ETRAC Company 1 Company ETRAC Company 1 Company ETRAC Company 1 Company ETRAC Company Company ETRAC Company 1 Company ETRAC Company 1 Company ETRAC Company 1 Company ETRAC Company 1 Company ETRAC Company 1 Company ETRAC Company 1 Company ETRAC Company 1 Company ETRAC Company 1 Company ETRAC Company 1 Company ETRAC Company 1 Company ETRAC Company 1 Company ETRAC Company 1 Company ETRAC Company 1 Company ETRAC Company Electronic SED Audit ‘Actual’ Whether you have oversight for one business unit or hundreds… Export Database 1. Link in ECCN “Should Be” 3. Comprehensive Electronic Audit of ‘Export Transactions’

  33. Export Controls Electronic SED Audit Automatically identify errors across all business units… Monitor Control Audit

  34. Export Controls Electronic SED Audit Automatically identify errors at the Filer level… Using data to “drill down” Monitor Control Audit

  35. Export Controls Electronic SED Audit Automatically identify errors at the business unit level… Using data to “drill down” Monitor Control Audit

  36. Agenda Breaking News AES Compliance Review Program AES Compliance Best Practices Voluntary Self Disclosures Record Retention Export Control System Tiered-Diligence Model™ Critical Data Elements Electronic Auditing 10+2 Readiness Data: the 21st Century Link in the Supply Chain Using Data and technology to achieve new government requirements

  37. 10 + 2 Readiness 1. The purpose of the advance security filing requirement is to improve CBP’s risk assessment and targeting capabilities to help prevent terrorist weapons from entering the U.S. 2. The Office of Management and Budget (OMB) has determined that the rule will cost industry from $390 million to $630 million per year. 3. “If the principal fails to comply with the proposed Importer Security Filing requirements, the principal and surety (jointly and severally) would pay liquidated damages equal to the value of the merchandise involved in the default”. Why is this Important to Forwarders? SECURITY FEES FINES The Supply Chain will STOP!!

  38. 10 + 2 Readiness U U Database Design Typical Customs Parts Master Database Best in Class Customs Database b) Identify Existing Data Sources Parts Master Merchandising ERP PO ERP CN Broker .PDF Files HTS tables a) Identify Data Requirements Material Group Product Hierarchy Item Number Item Description Specifications US HTS # US HTS Description Ruling # Ruling Date

  39. 10 + 2 Readiness U U Database Design Customs Parts Master Database plus 10+2 Requirements 10 + 2 Database b) Identify Existing Data Sources Parts Master Merchandising ERP PO ERP CN Broker .PDF Files HTS tables Work with your clients to create a plan now!! a) Identify Data Requirements Material Group Product Hierarchy Item Number Item Description Specifications US HTS # US HTS Description Ruling # Ruling Date Manufacturer name Manufacturer address Seller name Seller address Country of origin Buyer name Buyer address Ship to name Ship to address IOR Number Consignee Number(s) Container stuffing location Consolidator name Consolidator address This is very complex and will take some time for your clients to create

  40. 10 + 2 Readiness Building the Database Suggest your client’s modify the standard Vendor Profile data to include all 10 + 2 data elements

  41. 10 + 2 Readiness Building the Database This data should already exists… May need to be verified and formatted…

  42. 10 + 2 Readiness Building the Database This data should already exists… May need to be verified and formatted…

  43. 10 + 2 Readiness Building the Database This data should already exists… However, it will need to be linked to the PO ERP system…

  44. 10 + 2 Readiness Building the Database If this data doesn’t already exists, it will require a research project to build it for every item in the Item Master File…

  45. 10 + 2 Readiness Building the Database It’s very unlikely that this data already exists, it will require a research project to build it for every item in the Item Master File…

  46. 10 + 2 Readiness Bringing the Data Together Link by Item Number 10+2 data elements should be created at time of PO and forwarded to the Importer Security Filing system PO ERP Parts Master Merchandising ERP New Data Link by Item Number Link by Item Number With this data, now the Broker can transmit the Importer Security Filing no later than 24 hours before cargo is laden aboard a vessel destined to the US

  47. 10 + 2 Readiness Create a Plan Now Avoid Delays Improve Compliance Create a 10+2 Readiness Strategy now… This is a very complex challenge for importers… You can provide leadership… expand your service offering… and participate in the $390 to $630 million estimated annual costs of implementing the Importer Security Filing program Reduce Expenses Create a plan now… This is going to take some time… Q1-08 Q2-08 Q3-08 Q4-08

  48. Foreign Trade Division Contact Information Jerome Greenwell Trade Ombudsman • Phone: 301-763-6975 • Fax: 301-763-6638 • Email:Jerome.M.Greenwell@census.gov

  49. Foreign Trade Division Contact Information Dale C. Kelly Chief, Regulations, Outreach, & Education, Branch • Phone: 301-763-6975 • Fax: 301-763-4610 • Email:Dale.C.Kelly@census.gov