page 1

Deep SenGupta Principal

Trade & Customs Advisory Services

Trade facilitation strategies for global supply chains

FedEx Trade Networks • FTN Transportation & Brokerage, Inc.:

• World Class Customs Brokerage • Global Shipping Solutions

• FTN Trade Services, Inc.: • Trade Facilitation Tools (“WorldTariff”) • Trade & Customs Advisory Services (“TCAS”)

Our Service portfolio

TCAS: Import & Export compliance Compliance Evaluations & Manuals HTS/HS Classification NAFTA & other Free Trade programs Cargo Security Initiatives: C-TPAT, FAST, ISA Training on International Trade issues

WorldTariff: Worldwide duty & tax

Why are our customers interested in our services?

Save Money! Reduce avoidable penalties Not overpaying customs duties

Save Time!

Fewer cargo exams Fewer delays

Compliance page 5

Our Agenda For Today

Companies that are engaged in International trade should make every effort to mitigate:

– Landed cost & customs duties

– Shipment delays

– Avoidable import & export penalties

Compliance page 6

Benefits of Compliance

• Doing it right the first time is cheaper than going back and fixing it later • Demonstrated compliance will result in:

– Fewer cages & intensive cargo exams – Fewer penalties – Fewer information requests, and – Fewer delays resulting in less cost

• Less cost + Less customs processing time = Greater competitive advantage in the marketplace.

7

Import-Export Compliance Quiz i. Do you have a Import-Export compliance department? ii. Do you have a Compliance manual to address the handling

of Import-Export activities? iii. Are entries reviewed for accuracy (dutiable and non-dutiable

costs , proper duty rates) and are discrepancies brought to Customs’ attention?

iv. Are your products properly classified with a 10-digit HTS number?

v. Are you confident that you are not over-paying or under-paying customs duties?

8

vi. Do your employees receive annual training on Import-Export procedures?

vii. Are internal audits performed frequently? viii. Have you taken all necessary steps to implement a cargo

security program? ix. Do you feel confident that your company could withstand a

Customs audit ? x. Are you maximizing your participation in lawful duty reduction

programs (such as duty drawback, Foreign Trade Zones or Free Trade Agreements/NAFTA)?

STOP! If you answered “NO” to any of these questions, then your

company is taking regulatory risks.

Import-Export Compliance Quiz

Compliance page 9

Customs Duties

What is your Landed Cost ?

In addition to the basic cost of an item, the ultimate cost of delivery may include Customs duties VAT/GST HMF/MPF Brokerage fees Cost of special packaging Drayage & Ocean shipping costs Port handling fees

Compliance page 11

Customs duties and import taxes

• Do I currently know how much customs duty my company pays?

• Do I know how the duty is calculated? • Am I satisfied that duty assessments on my business are

correct? • Can I be more efficient if I pay attention to customs

planning?

• Am I confident that I am importing my products under the correct Harmonized Tariff System (HTS) code?

Benefits and Uses of WorldTariff • Save Money by planning ahead

• Achieve global compliance while streamlining the

import process

• Make more informed international business decisions

• Improve product planning & global sourcing decisions

• Available online at www.worldtariff.com • Only $7 a query

© 2005 WorldTariff SM All Rights Reserved.

Compliance page 15

Reduce Shipment Delays

1/25/10 Compliance page 16

Suspect Areas

VACIS Image of Tank Car Loaded with 1,157 Kilos of Marijuana

1/25/10 Compliance page 17

1/25/10 Compliance page 18

1/25/10 Compliance page 19

1/25/10 Compliance page 20

1/25/10 Compliance page 21

Compliance page 22

Reduce avoidable penalties

Tips to avoid customs clearance delays 1. Provide information that is complete and legible 2. Correctly complete all necessary documents, keeping your

answers specific, accurate, and free of spelling errors 3. Keep your information consistent across all documents 4. List each commodity separately; providing a detailed and

accurate description of each commodity, including what it's made of and how it will be used.

5. If available, provide the HTS or HS number. 6. Legibly print the commodity's country of origin/manufacture,

indicating where your commodity was manufactured, grown or produced.

7. Provide phone number or fax information for the sender and consignee.

Import: Top risk areas 1. Customs Valuation 2. HTS Classification 3. Free Trade Agreements / NAFTA 4. Country of Origin marking 5. Recordkeeping

Export: Top risk areas 1. Know your product’s ECCN number:

Shipping without an export license 2. Know your ultimate customer: Shipping

to an embargoed destination 3. Restricted party screening 4. Filing the Electronic Export information

for shipments above $2500 (except to Canada)

5. Recordkeeping

Compliance page 26

Export administration regulations: Fines and Penalties Criminal Penalties:

• Maximum of five times the value of the export/re-export or $1,000,000 (whichever is greater).

• In the case of an individual, a fine not more than $250,000, or imprisonment not more than 10 years, or both.

Civil Penalties: • $250,000 (maximum) imposed for any

EAR violation Denial of Export Privileges

Compliance page 27

Thank You!

CONTACT INFORMATION Deep SenGupta

Principal Trade & Customs Advisory Services (TCAS)

Mobile: 1.415.385.4894 E-mail: deep_sengupta@ftn.fedex.com