TradeLane

To celebrate International Customs Day, we wanted to provide you with our Top 5 Trade Lessons for 2022!

1. Be Resilient | At the end of 2020, I believed that 2021 would be the year of Supply Chain Resiliency. Year after year of turmoil from Brexit, trade wars, and the pandemic has taught us that the single-sourcing model and "just in time" inventories, that are thinner than those old paper bills of lading, might be a thing of the past. Remember that retooling supply chains and ensuring that your trade compliance programs are incorporated into them takes some time. New Free Trade Agreements, Drawback programs, and export controls, among other issues, must be considered. Much of the work that began in 2021 will spill over into 2022.
   
   
2. Be Flexible | I think many in the trade learned to embrace flexibility. I don't mean that half the industry is now doing yoga in their bedrooms during conference calls, though that may be the case. I mean that many of our supply chains simply have not worked in the traditional sense in so long that one has merely to learn to roll with the punches. We have seen incredible space constraints, chip shortages, lockdowns, regulatory barriers, WFH, then to the office and back to WFH, as well as worker shortages. However, we persevered. We changed our habits, our buying patterns, and our priorities. Procurement strategies adapted, origins changed. Some of us can now touch our toes.
   
   
3. Be Empathetic | This may be up for debate in some circles, but along with our newly found flexibility, I think many of us learned to be more empathetic, certainly on the service side. I can speak from experience that everyone is trying extremely hard under these challenging circumstances. There are moments of frustration and, certainly, delays, but also an undercurrent that we are all in this together.
   
   
4. Be Creative | "Necessity is the Mother of Invention" is an old proverb that has proven to be true. As the challenges of the last few years assailed us, many had to get very creative. We saw companies charter bulk vessels, reroute cargo networks around bottlenecks, and put a lot more investment into near-sourcing entire factories. These changes created new regulatory challenges that needed to be understood and overcome, from valuation to classification to Free Trade Zones. We looked to build new systems and utilize new technologies. I think this will change our supply chain DNA in some significant ways. As we go into 2022, there is a lot of exciting new tech in the supply chain world like the Internet of Things, BlockChain, and Machine Learning, all of which will slowly start to change the way we do business in the coming years. Keep an eye on my favorite, 3D printing… the Customs implications of it are pretty interesting.
   
   
5. Be Knowledgeable | Human Capital has proven to be even more valuable in today's world. The pandemic will surely end, but there will forever be more challenges on the horizon. Whether it be geopolitical risks or something as sudden as an underwater volcano, trade will continue to be challenged, and those challenges will be met with resilient, flexible, empathetic, and creative professionals.

So for everyone in the industry, Happy International Customs Day from your friends at Tradewin. We're here to help.

Earlier this year, the World Customs Organization (WCO) released 2022 Harmonized System (HS) Updates. These updates mark the most significant change in the HS nomenclature in five years and require an adjustment of HS codes in member countries. Since this release, US importers have been preparing for the implementation scheduled for January 1, 2022, while monitoring changes in other import markets.

A preliminary release of the 10-digit HTS US changes was made in the US on September 28, 2021.
This release has allowed US importers to start preparing for the impact of this change. CBP has delayed the implementation of these code changes from January 3 to January 27, 2022.

This slight delay will give importers much appreciated time to prepare. If you are looking for help navigating this change, either in the US or globally, please feel free to reach out to Tradewin.

If you would like to read other publications from Tradewin on HTS classification changes, please read Tradewin’s blog originally posted on October 15, 2021, “HS2022: The codes they are a-changin'”

The Regional Comprehensive Economic Partnership (RCEP) will enter into force on 1st January 2022. As of 2nd November 2021, the minimum number of ratifications needed for the agreement to enter into force was reached. In this blog post, Tradewin answers five important things you need to know about the RCEP:

1. So, what should I do?
Well, use it of course. Many of the ASEAN preferential trade agreements are statistically under-utilised, which goes against the reason these agreements were negotiated in the first place.

2. Which countries can I use RCEP with on 1st January 2022?
Currently, six ASEAN member states (Brunei Darussalam, Cambodia, Lao PDR, Singapore, and Thailand), and four non-ASEAN signatories (Australia, China, Japan, and New Zealand) have ratified the agreement. RCEP can therefore be used on trade between these countries, as of 1st January 2022. If other signatories ratify any time between now and then, they can be included for use as well.

3. Should I use RCEP over other ASEAN and ASEAN + Free Trade Agreements?
Not necessarily, but maybe. The preferential rates of duty, rules of origin, and operational certification procedures may be more or less favourable under one agreement compared to another. Be sure to verify before proceeding.

4. So, when is RCEP more favourable?
Generally, if you are producing, hubbing, or transiting through one or more of the signatory countries, the RCEP allows you a larger production base in comparison to any of ASEAN’s older regional preferential agreements. This means that if you are producing finished or semi-finished goods, raw materials originating from a larger pool of countries can be accumulated. If you are hubbing or transiting, the back-to-back proof of origin arrangement applies to a larger pool of countries as well. However, be mindful of local procedural challenges that often arise in such circumstances.

5. How do I prove eligibility?
RCEP aims to be more facilitative than any regional agreement before it. The objective is for all signatories to eventually implement and accept self-declarations of origin (DOOs). But because the RCEP consists of diverse signatories in different phases of development, the implementation of DOOs is staggered.

As an example, Australia, New Zealand, and Singapore already accept and facilitate exporters to self-declare. Cambodia and Lao PDR, who have ratified RCEP, have 20 years from entry into force to implement DOOs. Exporters from these countries must obtain certificates of origin (COOs) instead. Thailand, Malaysia, and Indonesia are expected to require COOs as well, at least in the early phases of implementation, and have 10 years from entry into force to implement DOOs. Countries accepting DOOs and those requiring COOs are expected to be clarified in local rules in due course.

Ultimately, the RCEP aims to be facilitative. But with increased self-regulation comes increased expectation of voluntary compliance and robust internal controls. If you need any assistance with import and export consulting, please do not hesitate to reach out to us.

Trade Compliance: Systems + Knowledge
Two Peas in a Pod

Watching the news can really make you wonder about how we will all get through things.