Safe & Compliant Jewelry Shipping:

INTERNATIONAL TRADE SIMPLIFIED

Presenters

Cecilia Gardner, Esq. – ModeratorCEO, President and General CounselJewelers Vigilance Committee

Nuccio Fera – Imports Supervisory Import SpecialistUS Department of Homeland Security, Customs and Border Patrol, JFK Airport

Omari Wooden – Exports Foreign Trade OmbudsmanUS Census Bureau

Presentation: Topics

• Importing Basics

• Exporting Basics

• Country of Origin Markings

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Foreign Trade RegulationsForeign Trade RegulationsKimberley Process OverviewKimberley Process Overview

Omari WoodenOmari WoodenTrade OmbudsmanTrade Ombudsman

Foreign Trade DivisionForeign Trade DivisionU.S. Census BureauU.S. Census Bureau

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Legal RequirementsLegal Requirements

Census Bureau Foreign Trade Regulations (FTR) • 15 CFR, Part 30

Bureau of Industry and Security (BIS) Export Administration Regulations (EAR) • 15 CFR, Parts 700 - 799

Customs and Border Protection (CBP) Customs Regulations • Title 19 CFR, Parts 1 – 199

State Department International Traffic in Arms Regulations (ITAR) • Title 22 CFR, Parts 120 – 130

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What is a Shipment?What is a Shipment?(FTR 30.1)(FTR 30.1)

• ONE USPPI shipping their merchandise, to

• ONE Foreign consignee, on

• ONE Carrier moving the product out of the U.S., on

• ONE day, with

• Valued over $2,500 per Schedule B number or license is required

1Tip: The ONE Rule

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U.S. Principal Party in Interest U.S. Principal Party in Interest (FTR 30.3)(FTR 30.3)

The U.S. Principal Party in Interest is the:• U.S. Person or Entity• Primary Benefactor (Monetary, or Otherwise)• Foreign Entity (if in the U.S. at time goods are purchased or

obtained for export)

Generally that Person can be the:• U.S. Seller: (Wholesaler or Distributor)• U.S. Manufacturer• U.S. Order Party

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Two Types of TransactionsTwo Types of Transactions(FTR 30.3)(FTR 30.3)

Export Transaction (Standard): • USPPI files the EEI or authorizes an agent to file the EEI

Routed Export Transaction: • Foreign Principal Party in Interest (FPPI) authorizes a U.S.

agent to facilitate the export of items from the United States and to prepare and file the EEI

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The Automated Export System is the electronic filing of:• Export Information

AES Filers are:• U.S. Principal Parties in Interest

• U.S. Authorized Agents

Automated Export SystemAutomated Export System

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AES Process FlowAES Process Flow

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AES ResponsesAES Responses

VerifyCompliance

WarningInformational

Fatal

Shipment Rejected

No ITN Issued

Shipment Accepted

ITN Issued

Kimberley Process OverviewKimberley Process Overview

• Public Law 108-19 - Clean Diamond Act – implemented the Kimberley Process (KP) in the U.S. stating that rough diamonds must be controlled via the standards, practices, and procedures of the KP.

• U.S. Census Bureau designated as the export authority for controlling information on rough diamonds that are exported from the U.S.

• Census Bureau validates the KPC – ITN– Must be reported in Automated Export System (Exports)– Must be reported in Automated Broker Interface (Imports)

KPC ClassificationsKPC Classifications

• KP shipments must be classified under the following Harmonized System Subheadings– 7102.10– 7102.21– 7102.31

• The KP Certificate – is a document that participating countries must prepare when exporting or reexporting rough diamonds

Kimberley Process (cont.)Kimberley Process (cont.)

• Resources– KP Rough Diamond Statistics

www.KimberleyProcessStatistics.org – State Department Conflict Diamonds

www.state.gov/e/eeb/diamonds – Main Kimberley Process

www.KimberleyProcess.com – U.S. Kimberley Process Authority

www.uskpa.org

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For More InformationFor More Information

• FTD Call Center: 1-800-549-0595• Select 1 – AES Assistance• Select 2 – Commodity Classification Assistance• Select 3 – Regulations Assistance

• Fax: 301-763-6638

301-763-4670

• Secure Fax: 301-763-8835

• Email:ASKAES@census.gov

ftdregs@census.gov

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For More InformationFor More Information

Census:

AES

http://www.census.gov/aes

Regulations

http://www.census.gov/foreign-trade/regulations/

Foreign Trade Blog

http://blogs.census.gov/globalreach/

CBP:

Appendix A – Commodity Filing Response Messages

http://www.customs.gov/xp/cgov/trade/automated/aes/tech_docs/

Country of Origin Markings: Topics

• The Law

• Marking Requirements

• Exceptions

• Penalties

• Example

The Law: Country of Origin

U.S Customs requires that every article of foreign origin entering the U.S. must be

marked with the country of origin

The Law: Purpose of Markings

To inform the ultimate purchaser in the U.S. of

the country where the article was made

The Law: What is the Country of Origin?

• The country of manufacture, production, or growth of the article

• The last country in which a “substantial transformation” took place

• Assembled Products: country in which the article was fully assembled

The Law: Who is the Ultimate Purchaser?

• The last person in the U.S. who receives the article in the condition in which it was imported, e.g.

– Manufacturer: if the article is destined for “substantial transformation” in a jewelry-making process in the U.S.

– Consumer: if the article will go to market without first going under “substantial transformation” in the U.S.

The Law: What is a “Substantial Transformation?”

• A manufacturing process that creates a new or different article with a different name, character and use.

• This changes the country of origin

• Ex: Polishing a rough diamond

Marking Requirements

• Permanent – Deliberate act required to destroy, remove or

alter

• Legible – Adequate size– Clear enough to be read easily by a person

with normal vision

Marking Requirements

• Conspicuous – Visible with a casual handling of article– Will not be covered by subsequent

attachments or additions– Visible without removing or changing positions

of any parts of the article

Marking Requirements: Forms of Markings

• The BEST form of marking is on the article itself– Branding– Stenciling– Stamping – Molding

Marking Requirements: Forms of Markings

• Other forms acceptable if legible and conspicuous when item reaches the ultimate purchaser

• Tags: attached in conspicuous place and must remain on article

• Adhesive Labels: not recommended• Immediate container okay if:

– Article cannot be marked without damage– Marking article itself would be prohibitively costly

Exceptions: NO Marking Needed

• If article will be processed in the US by the importer in manner that obliterates mark– But not for purpose of concealing origin

• Article is readily identifiable– Clearly gives information about origin, e.g:

“Tahitian Cultured Pearls”

Marking Requirements: Watches

• There are special, more detailed marking requirements for watches and watch cases

• Rules can be found in the U.S. Harmonized Tariff Schedule

Penalties for Non-Compliance

• Unmarked or improperly marked articles are subject to additional duties

• Alteration with intent to conceal country of origin marking:– Fines up to $100,000; and/or – Imprisonment for up to one year

Example

• Finished rings imported from Thailand• In the U.S. rings will be boxed and shipped to retail stores• Who must be informed of country of origin?

Ultimate Purchaser• Who is Ultimate Purchaser of rings in this case?

Consumers• “Made in Thailand” marking required on rings at port of entry?

Yes

Need Assistance? Have Questions?

• The Jewelers Vigilance Committee can help

• Contact Us:

– 212-997-2002

– JVCLegal.org

No part of the information in this presentation constitutes legal advice

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212-997-2002