Negoltaling Gosnpeiit' ^ Wvaniage

Transcription

1 . G k Mastering the Business «Global Trade Negoltaling Gosnpeiit' ^ Wvaniage C;:iit<dct : Best r\ar*-..gi.%' Ghaim Options CRC Press Taylor & Francis Croup Boca Raton London New York CRC Press is an imprint of the Taylor & Francis Croup, an informa business A PRODUCTIVITY PRESS BOOK

2 Contents Preface Acknowledgments Ab out the Author Note xvii xix xxi xxiii Chapter 1 Role of Contracts in Global Trade 1 Contracts in Global Trade 1 Gase Study: When Contracts (or Lack of) Fail 2 Transparency of What Both Parties Are Trying to Accomplish 4 Trust 5 Capabilities That Can Be Delivered 6 Responsible Structure 7 Managing International Contracts: Best Practices and Necessary Deliverables 9 Third-Party Options 11 Consultants 12 Law Firms 12 Chapter 2 Freight, Logistics, and the Global Supply Chain 13 Management 101: The Global Supply Chain 13 Managing Incoterms Options with Freight Forwarders, Customhouse Brokers, and Transportation Intermediaries Advanced Knowledge of Incoterms 15 Global Reach through Office or Agency Network for Local Incoterms Knowledge and Applications 16 Global Resources to Execute Various Incoterms Options 18 Chapter 3 Incoterms: Foundation of Global Trade 25 Functional Definition and Use 25 Terms of Sale 29 Terms of Payment 29 vii

3 viii * Contents How Freight Is Handled 29 How Insurance and Risk Are Managed 29 When and How Title or Ownership Is Transfer red 30 How and When Revenue Gets Recognized 30 Who Is Responsable for Trade Compliance Issues 30 Legal Jurisdiction 31 How Disputes Are Settled 31 How Company Tax Issues (IRS or Equivalent) Are Mitigated 31 Packaging, Marking, and Labeling 32 Intellectual Property Rights 32 What We Need to Know about Incoterms to Obtain Better Commercial Advantages 36 Background and History 36 Incoterm Member Countries 38 UN Convention on Contracts for the International Sale of Goods 38 Issues in World Governance 39 Governmental Profiles 40 World Customs Organization (WCO) 40 Organization for the Prohibition of Chemical Weapons (OPCW) 40 Convention on International Trade in Endangered Speeles of Wild Flora and Fauna (CITES) 40 Montreal Protocol 41 Organization for Economic Cooperation and Development (OECD) 41 Wassenaar Arrangement 41 The Lacey Act 41 Nuclear Non-Proliferation Treaty (NPT) 42 Australian Quarantine and Inspection Service (AQIS) Laws 46 Items You Must Declare When Importing or Traveling or Shipping to Australia 46 Global Governance Guidelines for Incoterms 48 What We Need to Know about Incoterms Rules for Any Modes of Transport 49 Rules for Sea and Inland Waterway Transport 50

4 Contents ix 2000 versus Placing the Book into Two Sections 52 FOB On-Board 53 Domestic Use 55 Security-Related Clearances and Information Are Addressed 57 Terminal Handling Charges Responsibility Clearly Defined 58 "Goods Sold in Transit" Transactions Addressed 59 Ocean Freight and FOB Responsibilities of Seiler and Buyer Redefined 59 Cargo Insurance Better Defined 61 Specific Incoterms Nuance Changes 63 Best Practices: Making the Right Choices 64 Ten Action Steps 64 Engage Senior Management 65 Establish a Point Person and a Team Approach 65 Learn Incoterms and Establish an Incoterms Guru 68 Integrate Incoterms in Every Corner of the Organization 68 Partner with Providers 69 Plan the Best Options and Leverage Sales and Purchases 69 Foreign Inland Freight Can Be a Nondutiable Charge 69 Educate Suppliers, Customers, and Vendors 71 Do Not Operate in a Vacuum 71 Develop and Use Technology Options. 71 Develop Competitor-Friendly Options: Network 73 Networking 76 Develop Resources 77 Key U.S. and Globally Based Associations 77 Global Organizations 78 Key Periodicals 78 Senior Management: Executing a Best Practice Strategy Incoterms Management 88 Develop ITM into Your Business Processes 89 Learn the Basics of Incoterms 89 Develop Resources for Incoterms Expertise 89

5 x Contents Understand How Incoterms Decisions Impact the Global Supply Chain and Break Down Fiefdoms 89 Create Integration Management into Incoterms Decision Making 90 Learn Leverage Options in General, and Then Apply to the Specific Scenarios in Your Global Supply Chain Metrics 90 Establish Service Provider, Supplier, Vendor, and Other Business Relationship Communications and Standard Operating Procedures 90 Integrate Technology into the Incoterms Management Process 91 Create Policy Guidelines for Incoterms Options and Trade Compliance Management; for Public Companies, SOX Incoterms Management Is Critical 91 Engage Incoterms Lobbying to Increase and Enhance Change to Your Companys Benefit 91 Government Security Programs 92 United States: C-TPAT 92 Europe: AEO 94 AEO Guidelines 95 Japan 96 Canada Partners in Protection 97 Chapter 4 Landed Cost Modeling 99 Definition of Landed Costs 99 Cost to Export from the Originating Country: $$$ 102 Inland Freight from Origin to Outbound Gateway: $$ 103 Foreign Freight from Gateway to Gateway: $$$$ 106 Marine Cargo Insurance: $ 107 Warehousing: $ 109 Inland Freight from Inbound Gateway to the Final Destination: $$$ Customs Clearance: $$ Required Documents in Mexico 113 HO Hl

6 Contents xi Import Licenses, Permits, and Registrations: $$ 113 Bottom of Form 114 Preshipment Inspection 114 Ancillary Freight Charges, Demurrage, etc.: $ 116 Duties, Taxes, VAT, or GST, etc.: $$$$ 118 Government Inspection Requirements: $ 122 Handling and Related Services: $$ 123 Gase Studies 125 Landed Duty Paid: Import Gase Study Landed Cost GIF: Gase Study Reducing Costs: Case Study Small U.S. Exporten Changing the Incoterms Choice: Case Study Chinese Exports to the United States: Case Study Trade Compliance Issue: Case Study German Optics Company, the DDP Advantage: Case Study Chapter 5 Global Regulation and Compliance Management 133 Overview 133 Trade Compliance and Regulation Impact Incoterms Options 133 Exports 133 U.S. Government Resources for AES 139 North American Free Trade Agreement (NAFTA) 140 Pedimento Form 142 United States Foreign Trade Regulations 143 Foreign Trade Regulations 15 CFR Part 30, Incoterms, and Routed Transactions 143 Asia Reviewed 147 Importing into China 148 General Documents 148 Specific Documentary Requirements 149 Australia 153 South Korea 154 Europe 155 France 155

7 xii Contents Examples of Value-Added Taxes 157 Canada 158 United Kingdom 158 Australia 158 New Zealand 159 Europe 159 German Export Control 162 Objectives of Export Control 162 International Export Control Bodies 163 Licensing Procedure 163 Developing Nation: Importing into Nigeria 164 Import Guidelines 164 Latin America 168 Brazil 168 Mexico 170 Argentina 172 Imports 173 Importing into the United States 174 Basic Guidelines for Importing into the United States 174 Arrival of Goods 175 Entry of Goods 176 Other Types of Entry 177 Customs (CBP) Examination of Goods 177 Importer's Security Filing and Incoterms in the United States 179 Powers of Attorney and Incoterms 180 Customs Powers of Attorney 181 Revocation of a Power of Attorney 181 Customs Bonds 181 Types of Bonds 183 Amount of Bond 183 Breach of Bond 183 Managing Incoterms Trade Compliance Issues: USPPI and Ultimate Consignee 184 USPPI: United States Principal Party in Interest 184 Exporter of Record Replaced by U.S. Principal in Interest (USPPI) 186

8 Contents xiii Responsibility of USPPI and Forwarding Agent in a Normal Export Transaction 186 Responsibility of USPPI and Forwarding Agent in a Routed Export Transaction 187 Ultimate Consignee 188 Referred Websites for Managing Compliance 190 Networking 193 Develop Resources 194 Key U.S. and Globally Based Associations 194 Global Examples 195 Key Periodicals 195 Chapter 6 Education, Training, and Skill Set Development 205 Internal Training Options: Connectivity in Your Company 205 Senior Management Overview 207 Middle Management Oversight 208 Operational Level Functionality 208 Training Skill Set Agenda 209 Chapter 7 Risk Management and Insurance Controls 211 Risk Management in the Global Supply Chain: A 10-Step Primer 211 Overview 211 Ensure Senior Management Commitment 212 Establish a Risk Management Focus 213 Complete a Global Risk Management Assessment and Benchmarking 214 Identify the Three Key Risk Providers 214 Profile the Major Areas of Risk and Establish Risk Strategies 215 Decide Risk Retentions and Transference Policies 216 Identify the Benefits of Loss Control Management 216 Establish Trade Compliance Protocols 216

9 xiv Contents Use Technology in Risk Mitigation 216 Training Is a Work-in-Process 217 Risk Management Gase Study 217 Terms of Sale versus Terms of Payment 217 Marine Cargo Insurance and Incoterms 220 Transfer of Title and Revenue Recognition 239 Transfer of Title or Ownership 239 Revenue Recognition 242 Evidence of Arrangement 245 Delivery or Services Rendered 246 Price Is Fixed or Determinable 246 Collectability Is Reasonably Assured 246 Incoterms and Sarbanes-Oxley 247 Tax Considerations 250 Additional Tax Issues 251 Ad Valorem 252 Value-Added Tax 252 Supplemental Taxes 253 Summary 254 Intellectual Property Rights, Trademarks, and Patents Carnets and Incoterms 256 Carnet Use 257 Chapter 8 Bonded Warehouses and Foreign Trade Zones 259 Bonded Warehouses 259 General Provisions in Vietnam for Bonded Warehouses 260 India 261 United Kingdom 262 Definition of a Customs Warehouse 262 United States 263 What Is a U.S. Customs Bonded Warehouse? 263 What Are Its Advantages? 263 Mexico 266 Packing, Marking, and Labeling 266

10 Contents xv Chapter 9 Global Supply Chain: Best Practices 269 Senior Management: Executing a Best Practice Strategy Incoterms Management 269 Develop ITM into Your Business Processes 270 Learn the Basics of Incoterms 270 Develop Resources for Incoterms Expertise 271 Understand How Incoterms Decisions Impact the Global Supply Chain and Break Down Fiefdoms 271 Create Integration Management into Incoterms Decision Making 271 Learn Leverage Options in General and Then Apply to the Specific Scenarios in Your Global Supply Chain Metrics 271 Establish Service Provider, Supplier, Vendor, and Other Business Relationship Communications and Standard Operating Procedures 272 Integrate Technology into the Incoterms Management Process 272 Create Policy Guidelines for Incoterms Options and Trade Compliance Management; for Public Companies, SOX Incoterms Management Is CriticaL.272 Engage Incoterms Lobbying to Increase and Enhance Change to Your Company's Benefit 273 Government Security Programs 273 United States: C-TPAT 273 Europe: AEO 275 AEO Guidelines 276 Japan 277 Canada Partners in Protection 278 Chapter 10 Summary 279 Appendix 283 Index 373