Management Dynamics Releases New Version of On-Demand Export Compliance Solution

Enhanced Restricted Party Screening and License Determination and Management among New Features

Management Dynamics today announced the release of Export On-Demand 1.2, its export compliance solution for small and medium-sized exporters. The new release provides for enhanced compliance screening and management of export licenses. Easily configured and deployed in a SaaS-based model, Export On-Demand can be implemented in a modular fashion without the cost and expense of an on-premise solution.
 
“This latest release of Export On-Demand improves support for global exporters with enhanced embargo and restricted party screening, as well as a new license determination and management module,” stated Nathan Pieri, senior vice president, marketing and product management for Management Dynamics. “The modularity of Export On-Demand allows our clients to first establish a foundation by managing product compliance and screening parties, then adding successive capabilities such as global license management, document generation and filing.”
 
To learn more about the features available in Export On-Demand 1.2, read the full press release.
 

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Last Chance to Register for Today’s FTA Management Webinar!

Join our webinar, Best Practices for Managing Free Trade Agreement Management Processes, to learn how your company can successfully implement and optimize NAFTA.  Broadcasting live on Tuesday, April 19 at 2pm EDT, presenters will address key findings from this industry benchmark study.  Presenters include:

  • Suzanne Richer, President, Customs & Trade Solutions, Inc.
  • Scott Byrnes, Vice President of Marketing, Management Dynamics, Inc.
  • Moderator: Lara Sowinski, Managing Editor of World Trade magazine

 Join us TODAY, Tuesday, April 19 at 2pm EDT.  Register now!
 

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U.S. & Colombia Reach Free Trade Agreement

The United States and Colombia finally inked a deal on a free trade agreement after Colombia agreed to increase the protection of their workers and union leaders.

This pact is expected to increase U.S. exports to Colombia by more than $1 billion a year, and could result in the creation of thousands of American jobs. Congress must approve the agreement before it can be implemented.

So what are the benefits to U.S. exporters?

  • A majority of U.S. agricultural exports to Colombia will become duty-free and almost all tariffs will be eliminated within 15 years
  • 80% of U.S. exports of consumer and industrial goods to Colombia will also become duty-free, with the remaining tariffs being eliminated over the next 10 years

It’s unclear when the agreement will be sent to Congress for a vote, but many feel that confirming the deal now is critical. Doing so will allow the U.S. to maintain an economic foothold in the country.

For more information, check out the full article.

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Upcoming Webinar: Best Practices for Free Trade Agreement Management Processes

Both importers and exporters can realize cost savings with the help of Free Trade Agreements, such as NAFTA.  After surveying import and export compliance managers from 200 firms, Customs & Trade Solutions, Inc. and Management Dynamics have uncovered key trends in managing the complex Free Trade Management process.

Join our webinar, Best Practices for Managing Free Trade Agreement Management Processes, to learn how your company can successfully implement and optimize NAFTA.  Broadcasting live on Tuesday, April 19 at 2pm EDT, presenters will address key findings from this industry benchmark study.  Presenters include:

  • Suzanne Richer, President, Customs & Trade Solutions, Inc.
  • Scott Byrnes, Vice President of Marketing, Management Dynamics, Inc.
  • Moderator: Lara Sowinski, Managing Editor of World Trade magazine

 Join us on Tuesday, April 19 at 2pm EDT.  Register today!

 

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China’s Online Censorship May Soon Be Considered as a “Barrier to Trade”

From the strict controls and highly filtered content, including the famously obvious “Tianneman Square” Google search, to the blocking of hugely popular social networking sites, namely Facebook, China’s online censorship has always been viewed as an unjust and uncompromising policy that is likely only to get stricter. However, the advent of social networking popularity and the exponential growth of online transactions (which are often international) has boosted the internet’s business value to an unprecedented level, and sparked a discussion of whether China’s censorship should be taken more seriously.

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In BusinessWeek’s March 9 article, China’s Facebook Syndrome, the authors discuss the idea that China’s blocking of the social networking site could be viewed as a barrier to trade. 

Since 2009, China has blocked Facebook, the world’s largest online social media network. This year, Renren, one of China’s largest social networks, plans to raise $500 million on the New York Stock Exchange (NYX). So a Chinese social network can tap U.S. capital markets, but American social networks can’t tap Chinese consumer markets. Does that sound fair?

According to the article, the idea of internet censorship as a barrier to trade has been floating around since 2007 when the global director of Google presented it to the Office of the US Trade Representative, but has been treated similar to walking on eggshells due to China’s economic position, the legal reach World Trade Organization (WTO) trade laws towards censorship, and the unprecedented matter of the situation. The trend is inching towards de-censorship and openness of the internet though; for example a nonbinding clause protecting “cross-border information flows” is a part of the still-unratified Korea-U.S. Free Trade Agreement and stricter language regarding censorship is being “considered” for other future Trade Agreements. Whether this trend becomes actualized with China, however, is up in the air.

Here’s the problem: While the USTR has been quietly inserting language in trade agreements, perhaps to cite as precedent in some future negotiation with China, it’s playing a game of inches. China’s Internet users, some 400 million-strong, make up the largest Internet market in the world, one U.S. social networks are largely prevented from competing in. But if the U.S. moved more aggressively and brought a trade case before the World Trade Organization, it could alienate China, disrupting trade in other products—and the outcome would be uncertain. “They are definitely trade barriers,” says James Bacchus, a lawyer at Greenberg Traurig in Washington and a former WTO apellate judge. “Whether they are illegal under WTO trade laws is another matter.”

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Baidu - Google's Chinese Nemesis

There is also an issue of fairness backing opponents of Chinese censorship. At the same time as Facebook is banned in China, several comparable social networking sites, including the Chinese version of YouTube which is also banned, are listed on US stock exchanges. Renren, a Facebook-esque social network which may not even exist without censorship, plans to raise $500 million on the NYSE this year. Consider if Facebook were exporting corn or wheat, the issue of a barrier to trade would be much louder.

Part of the reason the issue is not headlining is due to the lack of pressure which has been put on lawmakers. While Google has put up a fuss about China’s online censorship, it also acknowledges that the issue is about human rights, first. Google spokeswoman, Niki Fenwick, admits “When a government blocks the Internet, it is the equivalent of a customs official stopping goods at the border”. The wording of the standard WTO admission agreement, which China signed, does not help either, as it includes exceptions for enforcing national values and protecting public safety. Any push towards a barrier to entry ruling would be met with an argument that censorship protects China’s citizens from elicit material such as pornography.

The effort to promote visibility and open trade lanes between Chinese and international web users will not be resolved fully or quickly, at least not anytime soon. However, gradual inch-by-inch progress could be made to loosen policies and laws.  Lee-Makiyama, of the European Centre for International Political Economy, states that while “the WTO cannot get rid of censorship”, it could compel China to abandoned its worst practices, namely the lack of transparency of censorship policies. With knowledge of China’s notoriously socialistic politics and economic power, United States lawmakers looking to at the very least make more of an issue of this must apply necessary focus and pressure to the opening of the internet worldwide.

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Japan and India Ink FTA

India and Japan signed a free trade agreement February 16th, eliminating tariffs on 94% of goods between the two countries within ten years and making the two countries each other’s biggest free-trade partners. The two are now Asia’s second and third largest economies after China. The deal comes as Japan looks to expand its markets and improve its competitiveness in relation to South Korea and China, reported the Wall Street Journal. India anticipates the Free Trade Agreement will not only increase its exports but gain the country access to cheaper imports. The FTA is Japan’s twelfth, reported the Journal of Commerce. Currently two-way trade between the two countries totals less than one percent of Japan’s total foreign trade.

At the same time Indian Trade Minister Anand Sharma also proposed to Japanese Prime Minister Naoto Kan a joint revolving $9 billion fund to help finance an industrial corridor between New Delhi and India’s financial capital, Mumbai. Japan and Japanese companies already have invested in the project, which started in 2007 and is expected to attract more than $100 billion in investments.

And two days later, India signed a FTA with Malaysia, reported Voice of America.

To learn more about FTAs, check out this webinar on Moving Beyond Global Sourcing to Trade Agreement Management.

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Businesses, Politicians Clash Over US-South Korea Free Trade Agreement

Since December, when President Barack Obama and South Korean President Lee Myung-bak announced that they made further progress on the US-South Korea Free Trade Agreement (KORUS-FTA), the agreement has been highly debated on its way to Congress. In order for the measure to take effect, both the Congress of the United States and the Congress of South Korea must ratify the agreement.

On one side, local and national business leaders are urging Congress to approve the agreement, citing the success of NAFTA and its effect on US exports and job creation. President Obama, at the time of his signing of KORUS-FTA, stated that deal would “boost US exports to 11 billion and support at least 70,000 jobs.

Failing to act would hurt the US as well, proponents of the measure argue, as South Korea is in talks with Canada about a free trade agreement and has already inked one with the European Union. If approved, these agreements create a more attractive trading option for South Korean businesses than what the US has to offer, and thus inevitably decreasing the amount of US exports to South Korea.

korea-us-free-trade-agreementIf approved, the US will benefit from the gradual reduction of South Korea’s current tariffs of up to 40%, all the way down to zero in 95% of industries within three years, with most remaining tariffs being eliminated within ten years. This will obviously aid many trade industries by reducing the cost of trade and opening new opportunities, including the auto industry and the National Cattlemen’s Beef Association (NCBA), who, along with 60 other food and agricultural groups and companies, have sent a letter to Speaker of the House John Boehner (R-Ohio); House Democratic Leader Nancy Pelosi (D-Calif.); Senate Majority Leader Harry Reid (D-Nev.) and Senate Republican Leader Mitch McConnell (R-Ky.) in support of the recent agreement.

However, not all businesses and politicians support the agreement because they believe the agreement will actually hurt US businesses and create major job loss due to jobs going overseas. California, one of the US’s largest traders with Korea, lost 800,000 jobs due to NAFTA, according to the California Labor Federation, and would likely see further erosion of jobs with another free trade agreement.

California does not necessarily hold the trend for the rest of the US, as it shares the closest ties with South Korea with more than half of a million South Koreans living in the state, and thus is the most vulnerable economically.

Overall, free trade agreements will at the very least increase opportunities for US businesses to increase exports, and will likely save or create jobs as well. The free trade agreement is even more vital if the EU and Canada agreements get finalized, as US cannot afford to fall behind and lose export revenue to the Asian economic giant.

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Implementing and maintaining compliance with a free trade agreement is a complex and technical process. Make sure your company takes full advantage of the trade agreement savings by benchmarking your process against 300 respondents across many different industry verticals and revenue size.

Download the Trade Agreement Best Practices Benchmark Study today to learn key insider information related to program management challenges, monetary savings, legal responsibilities, and strategies to help your firm initiate and sustain an effective program.

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International Sourcing Strategies and the Influence of Trade Agreements

This post highlights the importance of doing the appropriate research and background checks of all the cost and regulatory elements BEFORE you commit buying components or finished goods from new off shore vendors.

This article is a reprinted with permission: Bob Cowie, VP Consulting, GHY International

International Sourcing Strategies

3640490 s 300x300 Trade Compliance  – International Sourcing StrategiesTaking a proactive approach to the implications of offshore sourcing helps protect your bottom line. Many North American manufacturers are finding it increasingly challenging to deal with a growing influx of imported materials and products originating from off competitors, especially those based in China and India.

These competitive pressures are compelling Canadian and US companies to consider various measures to protect market share, including shifting their sourcing arrangements for components, peripherals and finished products outside of North America, to take advantage of lower cost alternatives originating in the emerging economies of Asia, Eastern Europe and South America.

This post highlights the importance of doing the appropriate research and background checks of all the cost and regulatory elements BEFORE you commit buying components or finished goods from new off shore vendors.

Why is this more important than ever?

Because North American manufacturers have traditionally sourced most of their materials in the US., Canada or Mexico, where duty is generally not an issue of the goods are NAFTA qualifying, and Customs and regulatory issues are well documented and understood. These assumptions can not be taken for granted when sourcing goods outside North America. Canadian and US importers are encouraged to review the full spectrum of variables, including currency exchange ratios, marking and packaging requirements, duty rates and tariff treatment, anti-dumping/countervailing duty applicability, duty drawback eligibility, and NAFTA eligibility, if the offshore components are incorporated into products ultimately sold in Canada or the US.

For example, purchasing motors in China that are incorporated into machines you manufacture in Canada for sale to a customer in the US, may negate the finished product’s NAFTA eligibility and duty free status, thereby increasing the ultimate cost of the product, and possibly eroding your margin or forcing you to raise your retail price and risking your competitive position.

Conversely, if you purchase the motors from China and sell them to an US customer in the same condition and without modification, you may be eligible to recover all Canadian duties paid at time of import under the Duty Drawback program. Of course you will need to assess all the trade offs to arrive at a bottom line comparison that takes all the factors into consideration, and gives you and “apples to apples” view of the offshore versus North American sourcing options.

Taking a proactive approach to studying the implications of off shore sourcing can confirm that you will achieve the desired competitive cost advantage, help you avoid unexpected costs or surprises, and minimize the probability of unexpected regulatory issues with Canada Border Services Agency or United States Customs and Border Protection

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NAFTA and Duty Recovery Saves $6 Million

a guest blog by Nigel Fortlage of International Trade Compliance Strategy at GHY.

NAFTA and Duty Recovery Saves $6 MillionAn industry leading organization specializing in window covering was able to save over $6M in duty as a result of having an effective integrated trade compliance strategy. By coordinating NAFTA with organizational processes by use of a compliance champion, the company was able to assign tariff to every item.

This then allowed the organization to have clear visibility of duty payments thus allowing the option of duty recovery for particular items. By integrating a well structured NAFTA program throughout the industry, the organization was able benefit from multiple drawbacks and save both time and cost.

Case Analyzed

The message is clear, by using the model of an Integrated Trade Compliance Strategy, this firm created efficiencies in terms of process but also cash management with an integrated strategy that factored NAFTA status and duty drawback for Non-NAFTA related products.

The resulting $6 million savings were a result of their in-house trade compliance champion who oversaw the entire process on imports as well as exports and worked in conjunction with their professional trade services provider to handle the claims paperwork on both sides of the border.

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