OWIT-NY Export Event This Wed. Dec. 12th 6 PM NYC

Come join me and the NY Chapter of the Organization of Women in International Trade for it's next event entitled "Export Financing Programs with the Small Business Administration (SBA) and Toni Corsini"

ALL PROCEEDS WILL GO TO THE RED CROSS SUPPORTING HURRICANE SANDY EFFORTS!

Highlights of the program agenda include:

1)      Identifying the three SBA Export financing programs and how they can help US exporters

2)      A brief overview of the Credit Insurance programs available through "ExIm Bank" for US exporters

3)      The services available to US exporters from the US Dept. of Commerce (Commercial Service)

For directions and to register, go to www.owitny.org.

Hope to see you there!

ciao ciao!

Deana

Rising to “Official” Importer Status – Now What?

From essential oils to women’s jewelry, I’ve spoken with many small business owners whose enterprises are growing, so much so that the time has come from merely carrying back foreign articles for sale in their suitcases to actually becoming a commercial importer.

So who do you share the news with?  Well, with any good news you may want to share it with your loved ones, however you actually need to share it with US Customs and that is achieved through the submission of an "Importer ID Record," which is Customs Form 5106 (CF 5106) and may be found here.

Being an “official” first time importer, you would use this form to identify yourself to US Customs as such.  The form is also used if you are using an Importer Number for the first time, or if you have not engaged in any customs business within the past year.

The CF 5106 can also be used if there is already an importer number on file but there is a change in the name or address currently on file.

Importantly, this form has an extra box on the top of the first page to check if you also want your address updated at US Customs Fines, Penalties and Forfeitures Office.  I can’t tell you why it’s not automatically updated with that office, but I can tell you that a failure to do so via this form can leave an importer “on the hook” for the payment of a penalty for which no response had been made for mitigation or remission (i.e., “cancellation,” in everyday language) purposes.

In other words, saying that you never received a copy of the notice will not serve as a valid excuse for non-responsiveness if this form was not properly filed.  

One final note of importance is that where an importer has a continuous bond on file with US Customs, a rider must accompany the CF 5106 as well.  For more information on an importer’s bond requirements, see my article dated Sept. 16, 2009 here.

 Questions/comments?  Post below, email me at clark.deanna@gmail.com, or tweet/follow me on Twitter @fashcompliance

Eco-Friendly & Trade Agreement Beneficiary Gifts

With the holidays upon us, there is no shortage of vendors here in New York City offering gifts and stocking stuffers for sale. 

As I try to buy gifts made using either an eco-friendly production method or one which derives from a sustainable production environment – in terms of the workers involved – I was pleased to learn of Nakate Project’s high fashion necklaces and bracelets from Uganda that not only meet both of these standards but are also a gorgeous gift that I would be happy to give to any of my friends.
 
NOTE: As these goods come from the African continent, duty free treatment for these and thousands of other products is available under the GSP and AGOA programs.  Just another good reason to source from Africa!

Having been examining quite a bit of jewelry and accessories at my office lately, I wondered about the tariff classification of Nakate’s paper beaded necklace, an image of which can be found here. 

As this jewelry is not made of, nor contains, silver, gold or platinum, it would not be considered jewelry of a precious metal.   It likewise has no gemstones or semi-precious stones.  It further is not made of any base metal.

It therefore does not fall into these categories for classification purposes.  Rather, it falls into the classification for “Imitation Jewelry.”

Interestingly, jewelry of this kind is classified based upon a cost per quantity measurement.  (As an aside, if anyone reading this has any insight into the historical reason for this, it would be great if you could share it with the rest of us readers!)

The tariff specifically provides that if the jewelry is

… valued not over 20 cents per dozen pieces or parts, then classification will be 7117.90.5500 (HTSUS 2012) which provides for “Imitation jewelry: Other: Other: Valued not over 20 cents per dozen pieces or parts: Other.”  The rate of duty will be 7.2% ad valorem.

 OR

… valued over 20 cents per dozen pieces or parts, then classification will be 7117.90.9000 (HTSUS 2012) which provides for “Imitation jewelry: Other: Other: Valued over 20 cents per dozen pieces or parts: Other: Other.”  The rate of duty will be 11% ad valorem.

 Now I don’t know about you, but these types of figures beg the question…what type of jewelry (nevermind the parts) is valued at less than 20 cents (USD) per dozen pieces?  Or in other words, what type of jewelry (not including children’s or of plastic) is only 1.67 (i.e., $0.0167) cents/piece?  Umm…and what is the quality like?

 Questions/comments?  Post below or email me at clark.deanna@gmail.com

 

How to Classify a Composite Good - Key Chain Case Study

I was admiring key chains recently that were sold separately from their corresponding designer handbags.  Noting that the ring was of metal but the decorative part was of leather, I found myself wondering if it was considered a composite good under the tariff, i.e., the Harmonized Tariff Schedule of the U.S. (HTSUS).

A “composite good” is one composed of more than one material which can be either a mixture of materials in one (1) article, an article made up of different components (as in the case of this key chain), or even goods put up in a set for retail sale (which is a term of art by the way in customs-ease and may not mean what you might think it does – so ask someone if that question arises).

Since the key chain is a composite good, we look at the HTSUS’ General Rules of Interpretation (GRI) for guidance on how to classify it.  GRI 3(b) states that when goods are prima facie (i.e., appear to be) classifiable under two (2) or more tariff headings, classification shall be determined as if they consisted of the material or component that gives them their “essential character,” insofar as this criterion is applicable.

Endnote (IX) to GRI 3(b) explains that “a composite good made up of different components shall be taken to mean not only those in which the components are attached to each other to form a practically inseparable whole, but also those with separable components, provided these components are adapted to one another, are mutually complementary, and that together they form a whole which would not normally be offered for sale in separate parts.”

Customs has consistently held that, when a key chain has both a functional and non-functional component, it is the functional component which provides the article’s essential character.  (HRL 950636) Therefore, the ring component makes up the utilitarian part of the key chain with the leather portion deemed as being merely decorative.

Provided the metal key ring was of steel, the whole key chain would therefore be classifiable under HTSUS heading 7326.

Questions/comments?  Post below or email me at clark.deanna@gmail.com

FTC Proposed Updates to the Care Labeling Rule on Apparel – Only 2 More Weeks to Submit Your Comments

Only 2 more weeks remain for you to submit your comments related to the Federal Trade Commission’s (FTCs) proposed changes to the Care Labeling Rule.

This rule requires manufacturers and importers to attach labels with care instructions for garments and certain piece goods, so consumers have reliable instructions for washing, dry cleaning, bleaching, drying and ironing their clothing.

The Care Labeling Rule, officially called the Rule on Care Labeling of Textile Wearing Apparel and Certain Piece Goods, has been in effect since 1971.  It requires manufacturers and importers to attach care instructions to garments.

The FTC is seeking comments on potential updates to the Rule, including changes that would:

1. Allow manufacturers and importers, if they so choose, to include professional instructions for “wet cleaning” – an environmentally friendly alternative to dry cleaning – on labels if the garment can be professionally wet cleaned;

2. Permit manufacturers to use updated ASTM (American Society for Testing and Materials) or ISO (International Organization for Standardization) symbols on labels in lieu of written terms providing care instructions;

3. Clarify what constitutes a reasonable basis for care instructions; and

4. Update and expand the definition of "dry clean" to reflect current practices and account for the advent of new solvents.

Comments can be filed electronically by clicking here as are instructions on how to file.  They must be received by November 16, 2012.

All comments received will be posted online here. (FTC File No. R511915)  The staff contact is Robert M. Frisby, Bureau of Consumer Protection (202) 326-2098 and questions about contributing and submitting comments may be directed to him.

Make your voice heard!

Questions/comments?  Post below or email me at clark.deanna@gmail.com.

Building an Effective Internal Compliance Program

Whether it’s spelled out on a single page or makes up an entire manual, a basic compliance program is one where there are internal controls and procedures that implement compliance measures for those laws and regulations an entity must abide by in the day-to-day operation of the business.

Having an effective program is strengthened when there is a culture of accountability in which individuals understand the concept of compliance and their part within the compliance chain.

To be an effective compliance program internal controls and procedures need to be actively implemented and revised with key personnel updated on changes in practices.

 Not only is US Customs interested in seeing an importer’s compliance procedures when being audited or upon application to a voluntary program such as C-TPAT (Customs Trade Partnership Against Terrorism) or ISA (Importer Self Assessment), but it can also play a role in the mitigation of penalties when incidents occur that give rise to such assessments.

Be sure to put together a compliance program that fits your organization, implement it and update it regularly throughout the year.

Top compliance risks should be identified with resources allocated to address them accordingly. A common area of risk for an importer is that within its supply chain. Mitigation of risk can occur by an importer actually knowing where it’s cargo is coming from, who the actual supplier is and where the imported merchandise is going to.

Sounds simple (I know…) but these transactions are not always as clear cut as they would seem at face value.

 Some factors that can make a compliance program appear to be a failure include

·         A failure to tailor and update the program

·         Insufficient training and follow through of personnel

·         Inconsistent enforcement of internal procedures, and

·         An inadequate compliance culture

Questions/comments? Post below or email me at clark.deanna@gmail.com

 

New US Customs “Centers for Excellence and Expertise” (CEE)

I attended a US Customs webinar yesterday that explained how the agency is in the process of setting up new “Centers for Excellence and Expertise” (CEE).  These centers – which are virtual – are intended to bring existing expertise together in order to facilitate trade on the part of US Customs and to align its procedures with modern business practices.

Of greater significance however, is that US Customs intends to assign each importer with an account at a CEE to route entry summaries through and to use these virtual environments to move non-revenue collection activity to a CEE for handling protests, the review of prior disclosures and other activities.  Revenue collection however, will continue to be done at the port of entry.

The creation of CEEs are part of US Customs’ “trade transformation efforts,” which also includes an overhaul of 19 CFR Part 111, which are the customs brokers regulations.

CEEs are meant to serve as an information resource for the importing community, be it a large or small importer or broker, US Customs itself, or another government agency.  Customs stated that it has created CEEs by industry in order to focus on industry-specific issues so it can better meet the challenges for that industry.  Unfortunately, with such few and broad categories (listed below) in relation to the thousands of types of imported merchandise, it is questionable as to how well this intention will be met.

The goals of the CEE are:

1)      To facilitate legitimate trade through effective risk management and to “segment” risk so as to get the “good actors” out of the way in order to focus on the riskier participants,

2)      To increase industry-based knowledge within Customs and to better understand the unique practices within an industry, and

3)      To enhance enforcement efforts and to partner with industry stakeholders in order to understand and address industry risks.

As it stands, nine (9) industry groups were identified by Customs for which nine (9) CEEs are to be created.  Four (4) of them have already opened, listed as the first four (4) in the list below, and importers are already welcome to solicit participation in one of them.

Open CEEs:

1)      Electronics (Long Beach, CA)

2)      Pharmaceutical Health and Chemicals (New York)

3)      Automotive and Aerospace (Detroit, MI)

4)      Petroleum, Natural Gas and Minerals (Houston, TX)

Unopened Centers:

5)      Apparel, Footwear and Textiles

6)      Base Metal and Machinery

7)      Consumer Products and Mass Merchandising

8)      Industrial and Manufacturing Materials

9)      Agriculture and Prepared Products

For more information, you can check out this Federal Register Notice at 77 FR 52048 dated August 28, 2012, access a .pdf version here), or email US Customs directly at cee@cbp.dhs.gov.

Questions/comments?  Post below or email me at clark.deanna@gmail.com

Join Me Tomorrow Oct. 9th at F.I.T. for a FREE Event on Trade, Africa and Fashion!

Time: 6:30 - 8:30 pm
Location: Fashion Institute of Technology, Seventh Avenue at 27th Street, John E Reeves Great Hall

A panel will discuss Africa's emergence as a source of creativity in the fashion industry and the role the industry and other non-traditional players have in leading the sustainable development of the continent to significant business growth.

Moderator:
Ms. Tanya Cole, Foreign Service Officer of the U.S. Commercial Service USEAC

Panelists:

- Ms. Roberta Annan, Project Developer for L'Uomo Vogue's Rebranding of Africa issue, Chair of the Government Liaison Committee of Fashion 4 Development (F4D)

- Ms. Adiat Disu, President of Adiree Public Relations and Founder & Director of Africa Fashion Week

- Mr. Lexy Mojo-Eyes, President and CEO of Legendary Gold Limited, Founder of Nigeria Fashion Week

- Ms. Janice Sullivan, Chief Executive Officer, Edun

This event is presented in collaboration with the Global Trade and Technology Center and Ms. Janiece Greene, Consultant.

Hope to see you there!

AGOA Renewal Recommendations Sought by USTR

Submit Your Comments By October 11, 2012

For 2012, there are 40 Sub-Saharan African countries which have been designated as beneficiary countries under the African Growth and Opportunity Act (AGOA).  This means that articles, including certain textile and apparel products, made in these countries are eligible upon importation to the US for duty-free treatment.

The US Trade Representative’s Office (USTR) has requested comments in order to develop recommendations on AGOA country eligibility for the 2013 calendar year.

In order to qualify as an AGOA beneficiary country is, among other things, the establishment (or progress towards) a market based economy, governance by the rule of law, the right to due process, and political pluralism.  In addition, economic policies to reduce poverty, a system to combat corruption and bribery, and the protection of internationally recognized worker’s rights are also required.

USTR is also interested in identifying countries and the extent to which child labor is used.

Where the US President determines that a beneficiary country is not making continual progress in meeting the eligibility requirements, he must terminate the designation of the country as a beneficiary of AGOA.

Countries under consideration for 2013 are the State of Eritrea, Democratic Republic of Congo, the Republics of South Sudan, Madagascar, Zimbabwe, Equatorial Guinea and Sudan, Somalia, and the Central African Republic which are not currently beneficiaries under the AGOA.

Public comments in connection with the annual review regarding country eligibility in relation to the above criteria, and also with respect to child labor, are requested for submission online at www.regulations.gov .  Enter the “docket number” USTR-2012-0026 on the home page (and click “search”) so that the case can be pulled up. 

You can thereafter find a reference to this notice by clicking “Notice” under the header “Document Type” on the search-results page and click on the link entitled “Submit a Comment.”

If you are unable to make a submission, or have a question related to an attachment or a confidential submission, you may contact Don Eiss, Trade Policy Staff Committee at (202) 395-3475.

All other non-technical or procedural questions should be directed to Constance Hamilton, Deputy Assistant U.S. Trade Representative for Africa, Office of the USTR at (202) 395-9514.

Questions/comments? Post below or email me at clark.deanna@gmail.com

Labeling Products as Being Made or Assembled in the USA

Both the Federal Trade Commission (FTC) and US Customs have distinct rules governing country of origin marking and qualifying claims of US origin.

The FTC’s focus is with regards to the labeling and advertising of products making claims of US origin.  This is because the FTC is charged with preventing deception and unfairness in the marketplace.  It therefore has the power to bring law enforcement actions against false or misleading claims that a product is of U.S. origin.  Naturally, where a product is being imported and it’s labeled “Made in USA,” it is likely going to raise some eyebrows without further explanation.

Traditionally, the FTC has required that a product labeled or advertised as Made in USA be "all or virtually all" made in the U.S.  While this is not clearly defined, the thrust of this rule is that the product itself is comprised of components that are of US origin, or virtually all of US origin.

US Customs interest in marking however, has to do with consumer preferences.  According to the case, United States v. Friedlaender & Co., 27 C.C.P.A. 297 at 302 (1940), the intention behind the marking law (19 U.S.C. 1304) was "that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product.  The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will."

US Customs, on the other hand, does not require any marking of Made in the USA when a product is of US origin.  Where this issue typically arises however, is in the case of an article whose components are of US origin but for which the final product is “assembled” in another country.

Customs has held that where the word “assembled” is used in conjunction with the origin statement to supply additional information, it has been found acceptable provided the additional information about where the watch was assembled was (1) not false or misleading, (2) appeared in close proximity to, and (3) was in a comparable font size to, the country of origin marking.

One point to note is that the FTCs rules tend to be more prohibitive than that of US Customs, so when in doubt, consult with the agency itself, such as at the FTC webpage entitled “Complying With the Made in USA Standard” http://business.ftc.gov/documents/bus03-complying-made-usa-standard or your attorney.

Questions/comments?  Post below or email me at clark.deanna@gmail.com

OWIT New York Networking Event - 6 PM Thurs. 9/13

Come join me this Thursday for the Fall networking event of the Organization of Women in International Trade - New York Chapter!

When: September 13, 2012, 6:00 PM - 8:00 PM

Location:  Forum Bar at 127 4th Avenue (btw. 12th and 13th streets) - conveniently located one block from Union Square

Cost: Members, Students, Government - $10.00 (USD)

Non-Members - $15.00 (USD)

To register, go to www.owitny.org and click on the “Events” tab or click here.

Hope to see you there!

An Importer’s Requirement to Retain Records

Sure, you know that it is important to keep business records, but did you know that it is against the law not to?

Importers are mandated under the law, and specifically under 19 U.S.C. 1509(a)(1)(A) and 19 CFR Part 163, to keep records for 5 years from the date of entry, and to make them readily available in the event Customs requests to review a transaction.

A primary issue as it relates to Customs and Recordkeeping is the ability to locate those records tracing backwards from the Customs Transaction.

 Luckily, most of the records that are required to be kept for Customs purposes are the same as those normally kept for business and tax purposes. 

Those that need to be kept include the

-        - Commercial Invoice

-        - Packing List

-        - Bill of Lading or Waybill (e.g., Air, Rail)

-        - Entry Summary

      As good practice, proofs of payment not only for the merchandise itself, but for the freight and customs broker fees, along with their invoices, together with any other declarations filed, such as a US Dept. of Fish and Wildlife Declaration form, a Statement of Non-Reimbursement form for an anti-dumping duty, or an Interim Footwear Invoice.

Every effort should be made to maintain records on-site going back at least 1 year, or such longer period as storage will permit.  In addition, when records are sent off-site for storage, a log should be kept identifying the records, where they are archived, and how to retrieve them.

Remember, the proper preparation and maintenance of complete and accurate transaction documentation is essential to both good commercial operations as well as Customs compliance.

Questions/comments?  Post below or email me at clark.deanna@gmail.com

Translating Numbers – Converting a “Compound Duty Rate” to an Equivalent “Ad Valorem” Duty Rate

Every type of imported product has a tariff classification number to identify it and a corresponding numerical figure that represents its duty rate.

The duty rate for most products is represented as a percentage value such as 19.7%.  When it is a percentage, a duty rate is referred to as an “Ad Valorem” rate of duty.

The concept of a duty rate is relatively simple except for when a product has a “compound rate” of duty, such as a watch.  Under the tariff, an example of a watch’s rate of duty is broken out into multiple components, four (4) in fact, in the following example (HTSUS* 9102.11.10):

Movement – 0.44¢ (cents)

Band/strap or bracelet – 14.0%

Case – 6.0%

Battery – 5.3%

On certain occasions however, there is a need to convert a compound rate of duty to a percentage, or Ad Valorem one, such as in the case of dinnerware sets classifiable under HTSUS Heading 8215.

As described by US Customs**, to convert a compound rate to an equivalent Ad Valorem rate, one.

(i)                  obtains the unit value of each article,

(ii)                applies the article’s listed compound rate of duty, and

(iii)               calculates the “equivalent Ad Valorem rate” by computing the percentage of the article’s value that the compound rate of duty amounts to. 

For example, suppose that a set classified in subheading 8215.20.0000, includes a knife that is separately classifiable in subheading 8211.91.5000.  The applicable rate of duty for the knife is “0.7¢ + 3.7%,” a compound duty rate.

Suppose that there are four knives included in the set and their total value is 32¢.  To obtain the unit value of a knife (i.e., the value of one knife), we divide 32¢ by 4 which equals 8¢.

Now, we apply the knife’s listed compound duty rate.  Plugging 8¢ into the duty rate, we get 0.7¢ + 3.7%(8¢).  This equals .996¢ per knife, which amounts to 12.45% of the knife’s value (i.e., .996 is 12.45% of 8¢). 

Therefore, 12.45% is the knife’s equivalent Ad Valorem rate. 

Sounds simple?  I didn’t say it would be, though it doesn’t have to be complicated either.  Give it a try!

Questions/comments?  Post below or email me at clark.deanna@gmail.com

* HTSUS stands for the "Harmonized Tariff Schedule of the United States" which can be found at the US International Trade Commission's website at www.usitc.gov

**Reference is made to HQ967248 (12/22/04)

Gift Sets and Other “Sets For Retail Sale”

Ever find yourself at the shopping mall debating over whether or not to buy a single product or to go ahead and splurge on the gift set instead?

After all, the gift set comes with all of these extra articles that you may be interested in using, but simply don’t know yet (because you haven't tried it) right?!

When it comes to a “set” for US Customs classification and valuation purposes, a set as the average consumer knows it, is not necessarily the same definition as that of US Customs.

 For one, in order to be considered a set, the products all need to work “in concert” together if you will.

Specifically, to be a “set for retail sale,” the set must

ü  Consist of at least 2 different articles classifiable in different headings,

ü  Consist of products put up together to meet a particular need or carry out a specific activity, and

ü  Be put up in a manner suitable for sale directly to users without repacking

An example of this would be a tube of a skin exfoliant that comes packaged with a loofah sponge.  These two articles are sold together to carry out the specific activity of skin softening or other skin care.

When a set is does not meet the above standard, that is, where an item is imported with another article and packaged together but are NOT intended to meet a particular need or carry out a common specific activity, such as in the case of a facial cream and a finger nail file being imported together, then each item should be classified separately.

Questions/comments?  Post below or email me at clark.deanna@gmail.com.

AGOA Third Country Fabric Provision Extended to 2015

With the AGOA’s Favorable Duty Rates, Apparel Importers Can Find Greater Savings When Sourcing From African Countries

The cost of an imported product can vary tremendously when the amount of duty to be paid is factored into the equation, and in the case of apparel, it can run anywhere from an average of $16 to $32 extra for every $100 imported into the US, when made in a foreign country such as China.

The African Growth and Opportunity Act (AGOA) has a provision for imports of apparel when sourced from certain Sub-Saharan African countries, where such clothing originates from either African or US components.  It provides for the duty-free treatment of these products which means rather than paying the additional $16-$32 in duties for every $100 of imported apparel, $0 in duties is instead owed.

Within the AGOA is a “Third Country Fabric” provision which allows fabrics from other countries to be used in the manufacturing process and still qualify for the benefit of “AGOA treatment,” i.e., duty free treatment, of the product.

Last Friday, August 10, 2012, President Obama signed the bill (H.R. 5986) which had been passed on August 2, 2012 by the House and Senate to amend the African Growth and Opportunity Act’s (AGOA) “Third Country Fabric Program” as well as to add South Sudan to the list of countries eligible for designation under the AGOA.

With this passage, apparel importers can now continue to place orders with African manufacturers with the knowledge that these duty savings will continue for the next few years, saving them money, and perhaps saving us consumers some as well.

Questions/comments?  Post below or email me at clark.deanna@gmail.com

Africa Sourcing and the AGOA Extension

"AGOA Provision Related to the Third Country Fabric Provision Anticipated to Pass Congress Next Week"

    

     --  Staff Member, U.S. Senator Menendez' office in DC

This week I attended TEXWORLD in NYC, which is a textiles and apparel trade show open to those of us in the industry and the public at large. 

While Chinese suppliers made up a large majority, I was pleased to see others hailing from S. Korea, Turkey, and of course, India, among others, as well as a corridor for African sourcing, with a number of vendors from Mauritius, and Origin Africa (http://originafrica.org).

Together at the convention were a series of public seminars, one of which focused on trade and Africa, and particularly on sourcing from Africa. Many companies are interested in sourcing from Africa, and this interest has been steadily growing since the AGOA agreement came into effect.

Currently, we are awaiting the (hoped for and) anticipated passage of a special provision of the African Growth and Opportunity Act (AGOA) which allows fabrics from other countries to be used in the manufacturing process and still qualify for the benefit of “AGOA treatment, ” i.e., duty free treatment, of the product.  For more information on AGOA, check out my other articles here:

The African Fashion Industry – Can in Benefit From AGOA?

The African Fashion Industry and AGOA

I spoke with Senator Menendez’ (NJ state senator) staff in Washington DC yesterday, who assured me that there is a lot of bi-partisan support for the passage of the AGOA provision awaiting passage by the Senate, which involves the continued permission for imports into the US to qualify for the duty-free treatment accorded by the AGOA agreement when fabrics from non-African/non-US countries had been used in the construction of the garment.

I expressed to the staff member that these types of delays make it difficult for businesses to accurately make financial projections in the uncertain commercial environment created when company’s do not know if their cost of importation is going to rise, on average, from anywhere between 10% to 35%.  It therefore, could serve as a deterrent from sourcing from Africa which defeats the whole purpose of a program like the AGOA that is intended to promote increased sourcing from Sub-Saharan Africa.

He assured me that this was known but explained that the AGOA passage was tied up with other trade bills that likewise needed support and which, in their current forms, were not fully supported.

Many people are calling there to express their support for the passage and I encourage you to do the same.  The telephone nos. for Senator Menendez’ office is (202) 224-4744 and the general switchboard in order to be connected to any U.S. Senator’s office is (202) 224-3121.

Feel free to call over there and when connected to a Senator’s office, tell them you would like to speak to someone regarding the “Africa trade bill,” – they’re more likely to understand this comment than stating the "AGOA agreement" - and then express why continued legislative AGOA support is important to you.

Exercise your voice.  Isn’t this what a democracy is all about?

Questions/comments?  Post below or email me at clark.deanna@gmail.com

New Importers and Federal Agency Requirements

I met a woman recently who showed me the cutest dresses for babies, so cute in fact, that I was “gushing” over how cute one sample dress was!

Aesthetics aside, I quickly realized that like most new importers, this aspiring one of babies wear had much to learn about lawfully importing into the US.  All consumer products are subject to compliance with the rules laid out by US federal agencies, whether it is related to food (for which the Food and Drug Administration (FDA) or US Dept. of Agriculture (USDA) has oversight), clothing (which has multiple agencies overseeing the product, and for which the requirements may change depending upon the nature of the product), or any other product.

It is important to note that any article being imported into the US must also comply with US Customs own guidelines.  Additional agency rules on apparel come into play thereafter, such as the Federal Trade Commission’s (FTC) rule on the disclosure of fiber content, or the Consumer Product Safety Commission’s (CPSC) tracking label requirement on children’s products.

As US Customs is the “watchdog” for compliance with other federal agency requirements at the border, products that are not compliant with it’s product specific rules run the risk of being held up at the border, directed to be re-exported, or even worse, seized by the US government.

All of these rules are not only applicable at importation but in the case of clothing, they should also be known by those interested in manufacturing, distributing, selling, and for certain products, even offering to sell these articles. 

So for those of you interested in buying a business or even just buying products from distributors here in the USA, remember, the goods you sell must be compliant too with federal and state regulations or you can be at risk of fines and penalties from the different federal and state agencies.

Questions/comments?  Post below or email me at clark.deanna@gmail.com

Africa Fashion Panel and International Trade

Yesterday I had the opportunity to attend a panel discussion on Africa Fashion that was hosted by my department at F.I.T., the International Trade and Marketing Dept., and produced by Adiree for Africa Fashion Week New York, which is going on this week. 

The questions were thought provoking and covered questions that “inquiring minds wanted to know.”  The responses from the panelists were a combination of experience, inspiration, and the reality of the business, such as comments from a gentleman regarding designing with the fabrics and the color palettes “du jour” in order to be a little more mainstream (which I translated to mean larger consumer base, or in other words, more buyers).

Earlier in the day I had been showing my bright and enthusiastic law clerk the trend forecasts for 2011 during a discussion on importing samples not for resale.  Sure enough, she was amazed at how the colors and fabric blends we see people on the street still wearing this year were those forecasted (for industry purposes) back in 2009, for 2011.  His comment therefore, really resonated with me, as designers and many other industries use these books in order to know the “trend” ahead of time, and use colors and fabrics accordingly in their season’s collections.

The social enterprise aspect of the African Fashion Industry was compelling as well, as not only did the many panelists share the component of their operation that was giving back to a community, whether it was creating libraries or internships overseas, another pointed out how merely sourcing from an African country and thereby, creating jobs and teaching skills, was very much a social enterprise in and of itself.

Talking with the designers about infrastructure issues in African countries, and one designer in particular about her production in Zimbabwe where goods need to be transported to South Africa for export, brought to light the costs involved in doing international trade when selling to foreign markets.  It also brought to light corruption issues involved in transportation and reminded me of the insurance and accountability issues that are realities in all foreign transactions, not just Africa.

Questions/comments?  Post below or email me at clark.deanna@gmail.com

Africa Fashion and International Trade Panel - TODAY 2 - 4 PM

Hope you can join me this afternoon for this free Africa Fashion Week New York/Fashion Institute of Technology (FIT) Event in NYC!


Topic: Africa As An Emerging Market for  Luxury | Sustainable | Eco-Friendly Fashion(s)

• Date: Wednesday, July 11, 2012
• Time: 2 PM to 4 PM

Location: Katie Murphy Amphitheater at FIT
                7th Ave W 27th St
                New York, NY 10001 – 59

International Trade and Human Rights

PBS aired a news piece recently that spoke to the human rights abuses in textiles factories in Cambodia. 

How do human rights abuses affect international trade?

 Maltreatment of apparel workers in the developing world as well as here in the US is common practice and has been for decades. 

How do we as a country that prides itself on labor laws and OSHA regulations (the "healthy workplace" standards in the US) so easily ignore this reality when we as consumers can have a direct impact in trade and overseas production if we speak with our wallets?

Doesn’t money talk?

Indeed it does, as many licensors know who place manufacturing requirements in its contracts with importers in an attempt to improve the working conditions of overseas laborers.  (See my article here for more information.)

Many importers of both unfinished and finished products, as well as agribusiness, see Africa as the “new frontier”. 

What I would like to know is:  Will we do it the “right way?”

That is, in a place with loose regulations (at best) will we – those of us going into the many countries that make up Africa – take advantage of the people and their land?

Or, will we create a business environment where human life and dignity are respected and sustainable production is expected, such that the health and welfare of both the people and the environment are respected?

In my view, the latter is the only answer, not only from an ethical standpoint but from that of a sustainable business model. 

Questions/comments?  Post below or email me at clark.deanna@gmail.com

11th Session of the African Growth and Opportunity Act (AGOA) Forum

I attended the AGOA Forum last week in Washington, DC, to which I attended primarily out of curiosity and without any particular expectation or affiliation.

I mention the latter because “going down to Washington” in the context of attending a conference specific to a piece of legislation means being surrounded by lawmakers, lobbyists, and a substantial amount of less visible players whom are trying to make sense of the benefits and impact of the legislation.

At the forefront of the Forum was a focus on two (2) exigent issues.

1)  An extension of the 3rd Party Country Fabric Provision, and

2)  An extension of the AGOA itself which is set to expire in 2015

 AGOA usage is premised on a product being of either African or American origin.  If an article derives from either of these origins, then it is eligible for duty-free treatment under the AGOA.

The 3rd Party Provision is an exemption to this rule whereby countries recognized as a “Least Developed Country” can make products which contain components that neither derive from the US nor Africa, but are instead from other “third party” countries.

The ability to continue using Third Party components is set to expire in about 3 months and many believe the extension is necessary.

The AGOA itself expires in 2015.  Many proponents believe an extension must be implemented now.  They are right.

Or, business needs to know now that it will not be. 

What is needed now is an answer one way or the other.

Any businesswoman attempting to make reasonable financial projections cannot reasonably do so with this uncertainty of an AGOA Extension.  It’s risk enough to consider setting up in an emerging economy but to try and do so in a setting where your basic cost of doing business cannot be calculated due to shifts in landed duty costs of nearly 20%, if we take the case of the ubiquitous cotton t-shirt as an example, is nothing short of a waste of time.

Something business owners already have little of - time that is.

If Congress thinks AGOA is a mere “handout” type of reformative development tool that is a waste of taxpayer dollars then now is the time to inform the public that it will not be continued so that the private sector can made realistic business projections.

Growing an economy in the face of government caused uncertainty during a time of recession is counterproductive.  This is precisely what Congress is doing in its failure to vote one way or the other to extend the AGOA.

Make a decision so that those of us who want to do business in Africa can do so in a realistic commercial environment.

Questions/comments?  Post below or email me at clark.deanna@gmail.com.

Exporting From the US and the USPPI

With President Obama’s export initiative in place, a greater focus is on sales by US sellers to the foreign marketplace.  One important party in these transactions is the person or entity that would be considered the US Principal Party in Interest (USPPI) in export transactions, and particularly so when considering the filing the electronic export information (EEI), which is the export declaration made to the US Census Bureau through its AES Direct website. 

By definition, the USPPI is that who receives the primary benefit of a transaction, be it monetary or otherwise.  This may be the seller of the product or the manufacturer when it sells its goods directly to an entity in a foreign area. 

There are however, many variations for which determining the definition of the USPPI turns, which depends on what their involvement in the transaction is.

If a U.S. manufacturer sells goods as a domestic sale to a U.S. buyer (wholesaler/distributor) and that U.S. buyer sells the goods for export to a FPPI, then the U.S. buyer (wholesaler/distributor) must be listed as the USPPI in the EEI.

If a U.S. order party directly arranges for the sale and export of goods to a foreign entity, then the U.S. order party must be listed as the USPPI in the EEI.

If a customs broker is listed as the importer of record when entering goods into the United States for immediate consumption or warehousing entry, then the customs broker may be listed as the USPPI in the EEI if the goods are subsequently exported without change or enhancement.

If a foreign person is listed as the importer of record when entering goods into the United States for immediate consumption or warehousing entry, then the customs broker who entered the goods, may be listed as the USPPI in the EEI if the goods are subsequently exported without change or enhancement.

Understanding who the USPPI actually is matters, not solely in your typical export transaction, but also for identifying the record keeping requirements of a USPPI in the case of a “routed shipment.”  For more information about this, click here.

Questions/comments?  Post below or email me at clark.deanna@gmail.com

Trading Cloth for Humans?

I recently had the pleasure of sitting down with author, Catherine McKinley, where we found ourselves talking about cloth and trade.

After explaining my research on the AGOA (African Growth and Opportunity Act) trade agreement to her and my focus of its impact on African economies, in particular vis-à-vis the textiles and apparel sector, she then began sharing with me the importance of cloth in African culture as well as in the history of trade.

Part of this discussion included her sharing with me that during the time of the slave trade, her research revealed that cloth had been traded for humans in quantities as small as two (2) bolts of fabric. 

I cringe at the thought of what the duty rate in the tariff would have been on the life of a human, however, with the US abolishing the trans-atlantic slave trade just a handful of years after the first tariffs came into being, I have been unable to locate any data to share here.

In her most recent book, “Indigo,” which came out last year, Catherine discusses this valuable dye and describes its historic significance.  The book has been described by Amazon.com as:

"For almost five millennia, indigo - a blue pigment obtained from the small green leaf of a parasitic shrub - has been at the centre of turbulent human encounters, prized by slave traders, religious figures and the fashion world. Indigo is the story of this precious dye and its ancient heritage: its relationship to slavery as the 'hidden half' of the transatlantic slave trade, its profound influence on fashion, and its spiritual significance, which is little recognized but no less alive today. It is a richly told story, brimming with electrifying tales of those who shaped the course of colonial history and world economy. But this is also the story of a personal quest: Catherine McKinley's ancestors include a clan of Scots who wore indigo tartan, several generations of Jewish 'rag traders' and Massachusetts textile factory owners, and African slaves who were traded along the same Saharan routes as indigo, where a length of blue cotton could purchase human life. Her journey takes her to nine West African countries and is resplendent with powerful lessons of heritage and history."

For more information on how to obtain your own copy of this book, click here.  I'm looking forward to reading my copy!

Questions/comments?  Post below or email me at clark.deanna@gmail.com