“Richard will work out of our New York office and will be responsible for overseeing our current offices as well as our future growth plans for Miami and Atlanta. Richard joins us after a successful career with ECU Lines and brings a broad level of experience in the logistics business to our company.”
Allan Zarach, Executive Vice President
Richard joined the freight forwarding industry in 1989, entering a two-year apprenticeship program with Samson Transport (DSV). He began handling European trailer services and progressed to air export and sales positions in both London and Manchester.
He was transferred to DSV Los Angeles in 1994 to handle air export but quickly progressed to a sales executive position. He then joined SBS Worldwide as Vice President of Media. During this time, he built SBS into one of the media’s most recognized logistics companies.
After his tenure with DSV, Richard moved to Scan Shipping as General Manager. He spent three years growing the office when ECU Line brought him on as their Regional Manager for the ea coast st. Richard then spent the next two years at ECU Line.
Richard is a firm believer that people are the product. Investing time, support and promoting growth in employees is ultimately what leads to positive experiences. He believes in being customer-centric in terms of anticipating, determining, and delivering customer solutions.
The last two weeks have been wild with speculation, information and updates regarding the U.S. positions on trade with a number of our partners. The duty increase on the first three lists of Section 301 duties on Chinese goods that was to happen on October 15th (itself a date that was originally postponed for two weeks as a gesture of good will towards China’s 70th anniversary happening October 1st, 2019) was delayed indefinitely as both parties found some common ground in negotiations that we hope will lead to a strong trade agreement. The US and Japan reached a preliminary agreement on a new trade deal that should see 90% of US imports to Japan become duty free or receive preferential trade status. Late last week, Mexico offered to provide almost a billion dollars to improve labor conditions over three years, in an effort to seal up the USMCA agreement that’s stalled over human rights issues.
While the world waited for the increase in Chinese tariffs set for October 15, 2019 we were thrilled to hear that the negotiations between the US and China, often halted over difficulties reaching agreement, had improved to the point a 5% increase in the first three lists was postponed indefinitely. The tariffs haven’t been cancelled or eliminated, neither have they been repealed by the talks. If negotiations break down, it’s still very possible the increase will happen. The final half of the list 4 tariffs, most of which are consumer goods, was originally delayed until December 15th to unburden the holiday shopping season. Those tariffs have not yet been postponed or cancelled, instead they’re still pending as a reminder to the Chinese negotiators that the US is operating in good faith for a solid resolution for both parties. We will continue to update this as more information becomes available.
The US and Japan agreement is still in the early stages, but looks very promising as Japan will begin buying up large amounts of US agriculture products, including beef and pork, at little to no tariffs. These industries have been hard hit by the trade tensions between the US and China, so it’s a welcome relief that other outlets are being found for farmers. Digital trade also features heavily in this agreement and the notice/fact sheet states this agreement will meet the gold standard on digital trade rules set by the USMCA.
Speaking of the USMCA, on October 17th, Mexican President Andres Manuel Lopez Obrador pledged $830 million more over the course of three years to improve labor conditions and build strong worker’s unions to protect laborers working in Mexico. The pay gap between our countries has been a sticking point for years as US companies exploit Mexican workers at a lower price and with a lower standard of employment to improve their profit margins. Democrats in Congress are far more supportive of this agreement now that there are worker provisions and promises attached to the USMCA. The $830 million is in addition to $69 million that was pledged for 2020, bringing the total investment into labor to roughly $900 million over three years.
As more information becomes available, you can count on us to keep you updated. If you want to know which new or pending tariffs impact your cargo, feel free to call your Edward J. Zarach & Associates’ representative to discuss.
Announced this month and effective January 1, 2020, the 9th iteration of Incoterms ® is finally available from the International Chamber of Commerce (ICC). Updated from Incoterms ® 2010, Incoterms ® 2020 has been modernized address issues that weren’t prevalent a decade ago. Incoterms ® are the internationally standardized trade terms used to cover the primary obligations of buyers and sellers, insurance, and the division of costs. Contracts signed before September 2019 will be able to use the Incoterms ® 2010 even if the contract extends into 2020 unless otherwise specified in the contract; contracts signed between September 2019 and January 2020 should take care to specify which iteration will apply; after January 1, 2020 all parties should expect that any reference to Incoterms ® and the governing Incoterms ® of the contract will be Incoterms ® 2020.
According to the ICC, significant changes include:
Incoterms® 2020 provides for demonstrated market need in relation to bills of lading (BL) with an on-board notation and the Free Carrier (FCA) Incoterms® rule.
Incoterms® 2020 aligns different levels of insurance coverage in Cost Insurance and Freight (CIF) and Carriage and Insurance Paid To (CIP).
Incoterms® 2020 includes arrangements for carriage with own means of transport in FCA, Delivered at Place (DAP), Delivered at Place Unloaded (DPU), and Delivered Duty Paid (DDP).
There is a change in the three-letter name for Delivered at Terminal (DAT) to DPU.
Incoterms® 2020 includes security-related requirements within carriage obligations and costs.
For further information we encourage you to reach out to your Edward J. Zarach representative to discuss how the changes may impact your freight. Also, if you’re looking for a great breakdown on the differences and updates to Incoterms ® 2020, Hellenistic Shipping News has a great chart for handy reference!
On October 1, 2019 US Customs and Border Protection will increase Customs user fees and fee caps as established by the Consolidated Omnibus Budget Reconciliation Act (COBRA) for the fiscal year of 2020. Crucial changes include the MPF minimum rising to $26.79 from $26.22; the MPF maximum increased to $519.76 from $508.70; and the dutiable rate will be $5.89, up from $5.77. The increased fees will be effective from October 1, 2019 in accordance with the FAST Act, a 2015 law that requires CBP to make inflation adjustments to fees.
Barge and Other Bulk Carrier Arrival: $117.88 / $1,607.50
annual cap (FY2019 $115.37 / $1573.29)
Private Vessel or Aircraft First Arrival/Calendar Year
Prepayment: $29.47 (FY2019 $28.84)
Commercial Vessel or Aircraft Passenger Arrival: $5.89 (FY2019
$5.77), or $2.07 from a U.S. Territory
Customs Broker Permit: $147.89 (FY2019 $144.74)
Express Consignment Carrier/Centralized Hub Facility, per
Individual Waybill/Bill of Lading: $0.38 minimum, $1.07 maximum (FY2019 $0.37 /
Surcharge for Manual Entry or Release: $3.21 (FY2019 $3.15)
Informal Entry or Release Not Prepared by CBP Personnel:
$2.14 automated, $6.43 manual (FY2019 $2.10 / $6.29)
Informal Entry or Release Prepared by CBP Personnel:
$9.64 (FY2019 $9.44)
The updated information about the COBRA fees was announced in the Federal Register on August 2.2019.If you have any questions or need guidance on your customs clearance, please reach out to your Edward J. Zarach & Associates representative.
Geneva, Switzerland is currently hosting the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) which occurs every three years to determine what resolutions to expand, adapt, and strengthen from myriad government submissions. CITES is based on a 1975 treaty that works to encourage international trade while protecting species from extinction. The discussions set to take place encompass everything from the ivory trade, rhino horn trade and even timber concerns about rosewood used for musical instruments.
Over 34% of the new proposals are in direct response to
amphibians and reptiles that have become endangered or threatened because of
the exotic pet trade. Some species have seen up to an 80% loss of population
due to smuggling. While the proposal to list the Union Island gecko on Appendix
I was passed unanimously, other amendments weren’t so well received.
A proposal to list the extinct woolly mammoth on Appendix II
was withdrawn before a vote when it became clear that it wouldn’t pass. The
idea to list woolly mammoths comes from an attempt to further protect elephants
from the ivory trade. Mammoth ivory is virtually indistinguishable from
elephant ivory and as climate change begins melting the permafrost, more ivory
mammoth tusks are being exported.
The Asian small-clawed otter was listed on Appendix I, which
bans all international trade of the adorable critters that are facing
decreasing numbers thanks to their popularity on social media and the loss of
their wetland habitats in Southeast Asia.
Not all resolutions had a clear yes or no. The saiga antelope was denied a move up to Appendix I banning all trade, but was given an annotation that placed the quota of wild caught saiga at zero which leaves open trading of captive raised saiga. Other animals given protections include giraffes, which were added to Appendix II that restricts their export to only legally hunted giraffes that aren’t compromising the species’ survival. The black rhino had its quota raised from five to “a number not exceeding half a percent of the country’s total black rhino population.”
We at Edward J. Zarach & Associates understand how
important these changes are to many of our readers. As we move forward, we
encourage everyone to reach out to our trophy hunting division to discuss your
planned hunts or imports and know what pitfalls to avoid with your specific
Today, in apparent retaliation for the 4th tranche tariffs placed on the remaining $300 billion in Chinese imports by President Trump – some of which will be effective on September 1, 2019 and the rest on December 15, 2019 – China announced they would be placing an additional 5% to 10% in tariffs on $75 billion of US imports on the exact same timetable.
After the announcement by China, President Trump urged American manufacturers to return their businesses back to US soil to avoid these duties and advised a reciprocal action would be coming soon.
Just an hour ago President Trump announced an increase in tariffs against Chinese imports that will become effective on October 1, 2019. According to the United States Trade Representative, the tariffs will increase by 5% on $550 billion worth of Chinese imports.
The first 3 lists totaling $250 billion in imports dutiable at 25% will increase by 5%. Effective October 1st, the duty on List 1, 2, and 3 goods will be collected at 30%.
The last list, split between 4A and 4B, with the effective dates of September 1st and December 15th respectively, which was to be set at a duty of 10% will increase by 5% to 15% with the same September and December effective dates.
We at Edward J. Zarach & Associates are carefully watching this unfold and will continue to bring you the most up to date information as it becomes available.
Two weeks ago, President Trump tweeted out that the trade negotiations between the US and China had faltered and a 4th tranche of tariffs, set at 10% would be applied to the remaining $300 billion of Chinese imports that aren’t covered by the first three sets. On August 13th the USTR announced that certain goods on the list wouldn’t have the September 1st effective date and would be effective on December 15, 2019 to avoid higher prices during peak season. As of August 15, 2019 we’ve learned that these tariffs will be applied based on the date of entry and not on the date of departure.
“We’re doing this for the Christmas season,” Trump told reporters Tuesday afternoon, according to associated press. “Just in case some of the tariffs would have an impact on U.S. customers.” The list of goods on the extension include many consumer products including electronics, clothing, shoes and some toys, all of which are the backbone of the holiday shopping season. The USTR also declared they’d be removing any products on the list that had health, safety, national security or other concerns.
Though the USTR will be conducting the same exclusion
process for List 4 (A&B) so importers can request an exclusion for
individual products, the dates for that process have not yet been set.
Unfortunately, the bifurcation of the list may be too late as some companies
have already started ramping up orders for the holiday season in anticipation
of the tariffs that were announced two weeks ago.
The crux of the issue for us here at Edward J. Zarach & Associates is the planning and timing that goes into the shipments we handle for our clients. We understand how important it is to have foreknowledge of issues that can impact their supply chains and we’re committed to giving you the best information we have. We’ll keep monitoring this situation to counsel on the best way to plan for your 4th quarter. If you have any questions or need help on this at all, please reach out to your Zarach representative for assistance.
Our previous coverage of these issues between the US and China can be found here and here.
Customs and Border Protection this week held their annual Trade Symposium in downtown Chicago. The event draws importers, exporters, attorneys, customs brokers and anyone who does business with the agency in a trade capacity. CBP puts a lot of time and effort into this event every year and the commitment of the agency’s senior leadership to attend and speak and be available was on display. On the first day alone the event featured the acting head of CBP Mark Morgan as well as acting DHS Secretary Kevin McAleenan who was elevated from the position of CBP Commissioner into his current role.
The agency reiterated to the trade they are committed to transparency, collaboration and communication. Given the fluidity with which the agency is responding to threats and new business models like e-Commerce, narcotics and synthetic opioids, agricultural initiatives and enforcing trade remedies like Section 232 and Section 301 investigations, it is no wonder they reiterate the reliance on the private sector to help them in their mission.
Importers know that CBP has opened their Centers of Excellence and Expertise (CEE’s) and that those groups are responsible for the processing and handling of entries of major commodity groups. Africa Bell, the Acting Executive Director of the Office of Trade Transformation, shared that the Base Metals CEE are responsible for the enforcement of the trade remedies of Section 232 steel and aluminum and fully 74% of the total lines for steel and 50% of the lines for aluminum fall under their jurisdiction.
Finally, there was a major takeaway about the evolution of e-Commerce and how it is changing CBP’s business processes. For example, while there were 35 million formal and informal entries filed over the course of a year, in the same period of time there were 625 million small package shipments through e-Commerce, the postal service and other means. Coupled with the increase in de minimus amounts to $800, many retailers are moving their supply chains further upstream into countries like China where they are packaging direct to consumer rather than into distribution centers in the United States. A representative of Zulily, the online clothing retailer, said they scaled up testing the concept in 2016 to shipping 9 million packages direct to buyers in 2018.
There were additional sessions focused on forced labor, illicit trade and changing processes at land border ports of entry. The takeaway is that while CBP’s mission of trade has been diversified greatly over time, there is no less focus on facilitating legitimate trade and importers should continue to take steps for compliance for product safety, security and ensuring accurate sourcing as potential transshipment routes are exploited to evade trade remedy duties.
Importers who have been attempting to get their products removed from one of three lists of HTS numbers carrying an additional 25% in duty from China are no strangers to the process of requesting exclusions. However, effective June 30th, the Office of the United States Trade Representative has announced a changed policy for the group of products which were on the third list and were increased from 10% to 25% earlier this year.
Beginning on June 30th at http://exclusion.ustr.gov, companies will use an online portal to submit an exclusion request for consideration by the agency. The window for submission is only open between June 30th and September 30th.
Remember, an exclusion request is a public request and for fourteen days after posting, responses as to why the product should not be excluded can be submitted by interested parties. The original submitter of the exclusion will then have seven days to file a response.
Companies wishing to file an exclusion will need to register with the portal when it opens. The data elements that will be required for the exclusion request can be found in .pdf format here with thanks to Susan Kohn Ross of MSK.
If you or your company are interested in requesting an exclusion and would like for Edward J. Zarach & Associates to assemble and submit the request on your behalf, please contact your account representative who will work with you on this process.
The Craft Beer Modernization and Tax Reform Act of 2017 (CBMA) was passed as part of the Tax Cuts and Jobs Act. It amends the Internal Revenue Code with respect to the tax assessed on of certain imported and domestically produced alcoholic beverages, including beer, wine and distilled spirits.
The CBMA is unlike any other tax reduction program in that it’s controlled overseas and seemingly backwards. To receive the reduction the importer must go to the manufacturer for a certification that states the importer is entitled to the reduction on a set number of barrels/bottles, etc., for the stated year (2018 or 2019). Importers need to reach out to their manufacturers to be supplied this document in a timely manner helping to avoid any lapses. A working template is available for the manufacturers that they can renew yearly. We recommend educating your manufactures about what they need to provide for this program. Requirements are detailed here for your use.
This certification can dramatically decrease the tax due on imports. In one case, we’ve seen importers receive $20,000 back on one importation. This Program is now being considered for 2020 calendar year. We encourage all importers to reach out to their suppliers to take advantage of this reduction and to make sure we get a yearly copy of the CBMA Assignment Certification to use when we process your cargo. Please feel free to reach out to us if you need assistance on this. The CBMA is unlike any other tax reduction program in that it’s controlled overseas and seemingly backwards. To receive the reduction the importer must go to the manufacturer for a certification that states the importer is entitled to the reduction on a set number of barrels/bottles, etc., for the stated year (2018 or 2019). Importers need to reach out to their manufacturers to be supplied this document in a timely manner helping to avoid any lapses. A working template is available for the manufacturers that they can renew yearly. We recommend educating your manufactures about what they need to provide for this program. Requirements are detailed here for your use.