And Then There Were 11: the TPP Moves on Without the US

Posted by Gary M. Barraco

It was a busy Saturday at the Asia-Pacific Economic Cooperation (APEC) Summit as trade ministers from 11 countries announced an agreement to push ahead with a trade deal whose destiny was uncertain after President Donald Trump dropped out a few months ago. Despite the US decision to pull out of the Trans-Pacific Partnership (TPP) free trade pact to pursue an ‘America First’ protectionist trade agenda, the remaining 11 countries came away with a blueprint to start trading more freely between themselves in a resurrected form of the TPP deal. 

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Topics: Duty Management, Global Trade Management, Free Trade Agreements

A Step in the Right Direction: Tariff Reductions Ahead

Posted by Gary M. Barraco

Instead of a trick this Halloween, the footwear industry got a big treat as the US Congress put its best foot forward to provide duty-free access for some footwear products through the Generalized System of Preferences (GSP) program. As part of the proposed GSP Footwear Act of 2017, outdoor footwear, low-cost rubber sole shoes with textile uppers, and slippers could be considered for duty-free savings. In particular, imports of protective active footwear, like certain hiking, trekking and running shoes could see the elimination of existing duties which are as high as 20%. If approved, the industry gains an estimated $57 million per year in duty savings. Certain footwear not produced domestically would be eligible to be added to GSP for the first time since the program was enacted over 40 years ago.

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Topics: Duty Management

Plastic Lions, Tigers, and Bears - OH MY!

Posted by Gary M. Barraco

There’s a slew of new regulatory requirements on the horizon that will keep production and supply chain managers up at night on how to effectively manage them.

It isn’t often that government agencies reduce the burden on manufacturers, but during an October 18th meeting the Consumer Product Safety Commission (CPSC) altered the current ruling requiring third-party testing of seven plastics sometimes found in children’s toys and child care products. 

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Topics: Product Testing, Risk and Quality Management

Voluntary vs. Mandatory Product Safety

Posted by Gary M. Barraco

A few weeks ago, I attended a meeting in the DC area conducted by various organizations focused on product safety testing as a critical function of product commercialization and sale. A primary topic centered around the development and implementation of voluntary product testing standards. Regulatory standards exist, like the US Consumer Product Safety Improvement Act (CPSIA), California Prop 65, EU REACH and CE programs, China GB and others. However, companies and organizations are working to build standards before they become a law, as a means of self-policing. 

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Topics: Product Testing

Make No Mistake, Denied Party Screening & Sanctions Apply to Embassies Too

Posted by Gary M. Barraco

It’s always hot news when Amazon is referenced in a story, but this time the online retail marketplace giant is in hot water. In August 2017, the media reported that the US Securities and Exchange Commission filed an investigation into the company’s processing and delivery of thousands of dollars worth of orders of consumer products, (including jewelry, home and kitchen appliances and musical instruments), to individuals and entities connected with Iran. Amazon is being investigated for delivering orders to an Iranian embassy, as well as to an individual who may have committed, threatened to commit or supported terrorism.

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Topics: Export Compliance, Restricted Party Screening

Technology Provides an Inside Track to Product Testing Concerns

Posted by Gary M. Barraco

Drawstrings that cause choking. Ingesting baby rattle contents. Fire-sparking cellphone batteries. Electric-shocking power adapters. Consumers beware! According to the U.S. Consumer Product Safety Commission (CPSC), recalls that should put consumers on high alert occur daily. It seems product recalls are now the norm on a wide range of products from cellphones to ATVs, high heels, children’s clothing, and more. 

In one week, the CPSC reported several recalls on its website: incorrect venting Nutrilife® hydrogen peroxide bottles cause fires or burns; melting hoses in Academy Sports + Outdoors pet crawfish kits; cracking rings on BRIO baby rattles cause choking; and tires blowing out on Polaris’ recreational off-highway vehicles cause crashes.

Recalls are a nuisance for consumers but have serious repercussions for a brand or manufacturer. They can cause brand blemish, unexpected operational burdens, and costly remediation. I recently met with a senior executive from Samsung and we discussed the impact on the organization’s transportation side from the Galaxy Note7 recall. He urged me to think about the return shipping process for over 2.5 million units. The published estimated cost for the entire product recall: $17 billion.

The complexity of today’s global supply chains only means an increasing vulnerability to unexpected supply disruptions, with more suppliers and contract manufacturers added into the supply chain.
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Topics: Product Testing

Beating Stormy Weather: Supply Chain Resiliency

Posted by Gary M. Barraco

Hurricane season is upon the Western Hemisphere, and 2017 looks to be a record-breaking year. Before Hurricane Irma barreled through Florida, where businesses, government agencies and residents were braced for the deluge, it leveled small islands in the Caribbean with high winds, leaving chaos in its wake. A few states over, the floodwaters of Hurricane Harvey may be receding but the price tag is rising to a multi-billion-dollar record. Unfortunately, ongoing disasters are not just attributable to hurricanes. In the western U.S. and Canada, wild fires continue to encroach upon civilization, spelling destruction for homes and businesses in their path. Mexico’s strongest earthquake in a century left dozens dead and buildings destroyed. 

The west isn’t alone in facing life-threatening weather conditions. Heavy monsoon rains paralyzed Mumbai, India's financial hub, flooding streets and disrupting land, air and road traffic. In the Pacific, Macau is suffering an economic loss of US$1.42 billion in the wake of Typhoon Hato, and the Hong Kong Observatory expects three more typhoons to sweep in over the coming weeks.

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Topics: Global Trade Management Software, Supplier Management, Transportation Management, Supply Chain Visibility, Production Management

Going Digital: What Does it Mean for Global Trade Management?

Posted by Gary M. Barraco

The industry is buzzing about the concept of digitizing the supply chain. Stories flood the media about how companies must digitize, but the process is still in its early years. Only one third of 490 top supply chain executives recently surveyed by Cognizant and Forbes Insights believe their companies have achieved high maturity of digitization of their supply chain in strategy, planning or execution.

...But what does that mean anyway?

                                            

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Topics: Global Trade Management Software, Global Trade Management, Global Supply Chain

Trump Extends Duty Savings Programs for Travel Goods to All GSP Countries

Posted by Gary M. Barraco

On July 5, 2017, President Trump signed a proclamation officially granting duty free benefits on 28 lines of travel goods to all GSP countries. The U.S. travel goods industry had been impatiently waiting for this announcement since last June, when the Obama Administration granted only a limited number of countries.  

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Topics: Duty Management

Leveraging Restricted Party Screening Software to Minimize Risk from Politically Exposed Persons

Posted by Gary M. Barraco

2017 might go down in the record books as the year of changing trade regulations. Tax and duty, preferential trade, import/export controls, and other complex laws are all under the regulators microscope in countries around the world. Adding another layer of risk, organization like the Financial Action Task Force (FATF), UK National Crime Agency (NCA) and others are working to ensure that businesses do not engage in bribery as a means to obtain or retain business. Numerous countries around the world have passed anti-corruption laws, such as the US Foreign Corrupt Practices Act (FCPA), the UK Bribery Act, the Canadian Corruption of Foreign Public Officials Act (CFPOA), Chinese Anti-Corruption Laws, and more. Some of these laws does not distinguish between small and large bribery payments, thus prohibiting any facilitation payments.

Many organizations are already getting hit with huge fines for breaches in anti-money laundering rules in the United Kingdom, Hong Kong and Germany. The first step toward compliance with these regulations is to identify those individuals that may be part of your company’s operation.

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Topics: Restricted Party Screening