Here's a quick reference guide to the tsunami of new regulations that are besieging exporters and importers:
The Lacey Act Amendment - effective approximately April 1st, 2009
Automated Export System Filings - effective June 2nd, 2008
10+2 - Security Filing - pending final ruling
Consumer Product Safety - Effective November 12th, 2008
First Sale Valuation - effective August 20th, 2008
Kudos to Jennifer Baxter, Gail Coad and Christopher Chan at Industrial Economics for digging deep to research what 10+2 is going to cost SMEs. They were retained last year by CBP to do an economic impact analysis of 10+2. On Mike Laden's recommendation, we had a lively, in-depth discussion today as they further researched how 10+2 might impact SMEs. It breaks down into these categories of cost: IT, research, changes in terms of sale, transmitting the security filing. And these costs depend upon the complexity of the supply chain, the level of automation, business style, degree of business process change and the costs charged by the broker or ABI service provider. I'll be putting all this information together into a presentation for the American Association of Importers and Exporters on June 3. Look for my upcoming SME importer survey results and the subsequent detailed analysis on the Trade Bridge web site as well.
To help importers prepare for 10+2 I found a great document online. Prepare for 10+2 by understanding how importers need to design and build their databases to accomodate CBP's Security Filing. Global Data Mining presented the step-by-step process at the recent National Customs Brokers and Forwarders Association of America (NCBFAA) convention. The best thing about this document is that it gives you enough direction to work with your IT Department or consultant to estimate this part of the cost of complying with the new rule.
Jerry Greenwell, Ombudsman for the Census Foreign Trade Division, delivered an informative and entertaining session at the ICPA annual gathering recently. A few key points...
Jerry knows his stuff and is available for trainings for the cost of travel and a per diem. If you want to contact him directly call 301-763-6975 or e-mail him.
Next week Trade Bridge makes its debut at the WCO in Brussels. I'll be presenting an update on C-TPAT from the perspective of SMEs. Thanks to all of you who completed the survey. Your views will be made known at the WCO SAFE Framework of Standards conference on December 11th. Check www.TradeBridgeInternational.com for the results of the C-TPAT Survey.
Trade Bridge members met with CBP this month courtesy of TBI, to hear about CBP's Security Filing (10+2). Members met in the San Francisco Bay area with John Jurgutis, a Management and Program Analyst for the Secure Freight Initiative. The seminar was simultaneously broadcast to a TBI SME webinar audience. Over 200 SME participants were engaged in finding out what CBP's latest Security Filing (10+2) means for them and their business operations. (The WCO also addressed the audience from Brussels but I'll discuss that topic in a later post.) This effort by CBP to talk directly to SMEs is part of their response to demands from the trade that "CBP needs to reach out and get our feedback." If you're interested in seeing the program materials check out this TBI page. Feedback to CBP can be sent to John Jurgutis.
According to one of the senior members of the Private Sector Consultative Group of the WCO, that's the cost per keystroke to multinational international traders every time a government agency or regulatory body imposes new guidelines or requirements on them. I have no idea how accurate this estimate is but even if it costs $10,000 per keystroke, that's enough to put some SME international traders out of business. And it's enough reason for TBI members to be concerned about the impact that 10+2 and the SAFE framework will have on their businesses. TBI addressed the CBP 10+2 issue with members recently. Now it's on to the WCO and the SAFE Framework.
On June 10, 2007 Trade Bridge International 6000 SME importer and exporters began whispering to Michael Schmitz, Director of Facilitation and Compliance for the WCO. Today, July 18th, 2007, that whispering grew to a harmonized dialogue between TBI and the WCO. Director Schmitz, Mr. Simon Royals of the WCO - Facilitation Sub-Directorate (Procedures) and yours truly had the first of, what I hope are, numerous conversations about the interests of SMEs and the impact of WCO initiatives on their operations.
As the sponsors of TBI accurately perceived before TBIs formation, there were no national or international organizations speaking exclusive on behalf of SME importers and exporters. Thus, not only is CBP anxious to reach our members as demonstrated by TBI's recent seminar-webinar on 10+2, the WCO is eager to hear from our SME members as well. The exchange between the WCO and TBI today confirmed that perception.
Director Schmitz tentatively invited me to speak on behalf of the Trade Bridge SME members at the World Customs Forum scheduled for February of 2008 in Brussels. This would be the first formal introduction of TBI to the WCO and it would be an opportunity for SME importers and exporters to be heard directly at the international level. While these are all preliminary plans, the tone and content of the conversations were very positive for TBI members.
Director Schmitz has also offered to speak to an audience of TBI members in the U.S. on the topic of the SAFE Framework of standards to secure and facilitate global trade. Coincidentally Richard DiNucci, Program Director for CBPs Security Filing (10+2) has offered to speak to TBI members again to update them on the progress of the Security Filing. (Mr. DiNucci spoke to TBI members on June 7, 2007.) Note that 10+2 and the SAFE framework are not the same and an opportunity for SMEs to hear from both CBP and the WCO could be both timely and eye-opening for SMEs, CBP and the WCO.
We'll keep you posted on how, when and where you can learn more about the impact of the tightening security environment on your business operations. And, as we suggested with direct-filing of customs entries, we are committed to finding solutions that mitigate the negative impact of the changing security and regulatory environment. To learn more about securing your supply chain contact the guys at Trade Innovations. Not only can they help secure your supply chain, they can find ways to reduce your costs of importing.
Trade Bridge's sponsor, TRG Direct/TBI Brokers, Inc., recently introduced a direct-filing service for SME importers (AKA self-filing). However, for most SME importers, direct-filing still exists in that dreamland of "what might be." This situation, I hope, is poised for change.
This morning I received a Research Brief by Aberdeen Group: Download aberdeen_group_on_tradecompliancevalue_2007.pdf . In a few pages they illustrate 5 compliance-related savings opportunities including "potential self-filing savings." This is the result of research conducted by Aberdeen, "the leading provider of fact-based research focused on the global technology-driven value chain."
It's obvious that Aberdeen is researching larger companies but, in this case, that doesn't make the conclusions they arrive at less relevant to SMEs. Usually, the solutions are not realistic for SMEs or there are no solutions designed for SMEs. In the example of direct-filing this is not true.
TRG Direct is the only direct-filing service designed specifically for use by SME importers. The cost of entry is low, there are no long-term contracts, the transition can be phased in and support from licensed customs brokers is included in the service. To date the ROI, return on investment, for TRG Direct clients ranges from 261% to 1148%. It makes sense for SME importers to take Aberdeen's advice and "assess the feasibility of using a self-filing service."
