TradeLane

It’s beginning to look a lot like Christmas… an Aussie Christmas with sunny skies, blistering heat, packed beaches and rapidly depreciating personal bank accounts. But if that’s not enough to get you excited, there is, of course, the recently released Goods Compliance Update (“The Update”) from the Australian Border Force (“ABF”).

The Update aims to highlight pertinent issues identified by the ABF, compliance areas of focus, and provides some statistics on the Compliance Programme results for the 2015/2016 Financial year. I’ll reiterate that second point - the ABF highlight the compliance areas of focus, hence if your activities fall within these areas it is recommended that you assess, and if appropriate address, any risks.

In my former life as an export agent, I dreaded getting calls from a supplier who was shipping under a “Routed Transaction.” In most cases, the supplier would insist that they did not have any obligations to provide any information. They thought that when the terms were Ex Works (EXW), they could say “we fulfilled our obligations; please pick up the freight.”

Last year I published a blog entitled “The No-No List.” were I talk about bad ideas in Trade and in my household. Well, a year later I’m sure we are a little older, a little smarter, and my sweet children have learned to stop putting gum in each other’s hair… maybe not but I’m definitely a year older. 

Since my first day at Tradewin, I have always been interested in items being seized at the border and general non-compliance.  It seems like such an interesting crossroad of illegal activity.  Some I think are quite obvious to you and I, while others are not so much. 

First Sale for Export is a duty mitigation program that is designed to reduce the dutiable value of eligible products imported into the United States. Usually, an importer would pay a higher duty amount based on the value of goods purchased from what is known as the ‘second sale’. This is the transaction between the importer and the middleman (vendor) which usually includes the middleman’s markup. Through the First Sale for Export program, importers are able to declare value on the goods purchased on the ‘first sale’, or the transaction between the middleman and the factory. In declaring First Sale valuation, an importer is able to cut out the middleman markup and to minimize the amount of duty paid when importing goods into the United States.

This duty savings program is especially popular among the textile and apparel industries where commodities have excessive middle man markups and duty rates as high as 32%. With a large potential to save on duty, it logically follows that this industry makes up the majority of the goods declared under the First Sale program.

Remember back in your college days, when you had to stay on top of all your financial aid forms?

Remember how your parents would nag you about CSS and FAFSA every year when the submissions were due?

As a current college student and Tradewin intern, I am no stranger to financial aid deadlines and nagging parents – in fact, I’ve got three years of experience under my belt. Although it’s a pain to keep track of all the forms, it is important to make sure they are all filled out correctly and submitted on time. Otherwise, the College Board (or worse, the federal government!) will make life difficult.