Understanding Entry Visibility: Explanations & Implications


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Understanding Entry Visibility: Explanations & Implications

  1. 1. © 2014 Integration Point www.IntegrationPoint.com Understanding Entry Visibility: Explanations & Implications
  2. 2. © 2014 Integration Point www.IntegrationPoint.com Today’s Global Trade Climate • Heightened national security • Higher penalties • More global competition • Cost reductions sought • More automation possible and required • Customer safety requirements • Corporate responsibility reporting Today’s Global trade climate is one of growing complexity. Global trade is now the focus of a great amount of scrutiny. There is an increase in security awareness, safety concerns and economic implications.
  3. 3. © 2014 Integration Point www.IntegrationPoint.com 3 Global Trade Requirements • Compliance • Complexity • Credentialing • Confirmation As a result of changing international policies and security measures, global trade is fraught with challenges including: Companies can address each of these challenges with entry visibility.
  4. 4. © 2014 Integration Point www.IntegrationPoint.com 4 Supply Chain Visibility vs. Entry Visibility – What’s the Difference? Supply Chain Visibility – knowing where your goods are and monitoring the success of getting them where they are needed • Collect & analyze data from across the supply chain • Create exception reports & recommendation for corrective action Entry Visibility - proper use of trade compliance data for importation of goods from foreign supplier to destination • Pre-entry documentation & post-entry reconciliation • Automatically validates filings • Determines key compliance data is shared and used correctly by all trading partners
  5. 5. © 2014 Integration Point www.IntegrationPoint.com Compliance Challenges For example, a typical international transaction could include: – 35 documents – 25 parties complying – 600+ regulations – 500+ free trade agreements Trade compliance can get complicated. There are numerous documents required by various countries for exportation and importation.
  6. 6. © 2014 Integration Point www.IntegrationPoint.com How can companies validate 100% of the time?
  7. 7. © 2014 Integration Point www.IntegrationPoint.com “The average trade compliance error rate is 25.7% on international orders. For importers with 1,000 entries per year, that’s 257 entries with errors.” Source: Aberdeen Global Trade Compliance Priorities study
  8. 8. © 2014 Integration Point www.IntegrationPoint.com Complexity Challenges It is imperative that everyone involved uses the same data so that the correct data gets included in the entry filings. However, given the complexity and disparate data sources among the various parties involved, without an automated process coordination, it may be impossible.
  9. 9. © 2014 Integration Point www.IntegrationPoint.com Credentialing Challenges Timely records include: – Value – Quantities – Classification information – Entry filings Under the Mod Act, importers are required to maintain and produce accurate records at the time of entry. An effective post-entry audit solution must support the ability to compare value, quantities, and classification information with what is declared in the entry filings.
  10. 10. © 2014 Integration Point www.IntegrationPoint.com Confirmation Challenges Companies strive for compliance. This requires validation not only of the company’s records, but the records of brokers and other service providers involved in the transaction. With much of this work currently being done manually, the average company is only able to audit approximately 10% of entries filed as part of a "regular random audit process".
  11. 11. © 2014 Integration Point www.IntegrationPoint.com 11 CBP’s Most Common Importer Errors List • Many (errors) are caused by a lack of communication between various departments of the importer or between the importer and its broker. • Importers assume the broker is correctly classifying or valuing imported merchandise • Importers are required, but do not, maintain and produce timely records required at time of entry • Lack of accounting and financial records to support the value, quantities, classification, and other information shown on Customs entry documents. • Claims for duty preference under Free Trade Agreements are often incorrectly classified. • Importers frequently do not verify that the foreign manufacturer or producer of imports can support the claims for the special trade program. • Importers switch suppliers to take advantage of competing lower costs, but neglect to adjust the value of HTSUS 9802 merchandise on subsequent entries. *U.S. Customs and Border Protection Office of Strategic Trade Regulatory Audit Division
  12. 12. © 2014 Integration Point www.IntegrationPoint.com Entry Visibility Requirements Entry Visibility addresses the common causes of entry errors by: • Facilitating communication throughout the supply chain • Facilitating the document collection process and helps importers know what requirements they face in particular countries • Automating the validation of submissions and the reconciliation process at a global level
  13. 13. © 2014 Integration Point www.IntegrationPoint.com 13 How Does Entry Visibility Work? • Provides a global view of all trade activity • Compares all entry data and activity against classification and valuation data • Compares entry against external data sources such as shipper documents, internal data sources such as material receipt files, and 10+2 filings • Completes Post Entry Amendment and Reconciliation • Fully leverages existing Free Trade Agreements • Stores supporting documents at part of an “on line” entry packet
  14. 14. © 2014 Integration Point www.IntegrationPoint.com 14 Entry Visibility Benefits • Duty Savings – 5 companies studied: $150 million saved through better classifications (Aberdeen) – Black and Decker increased NAFTA savings 240%, saved over $4mil more – Companies with multiple shipments that can be combined into single entry • Process Savings – Free up personnel e.g. Eastern Worldwide: 1 minute vs. 25 per shipment – Reduce errors – Reduce cycle time (1 day = .5% of total goods value)
  15. 15. © 2014 Integration Point www.IntegrationPoint.com Entry Visibility Benefits • Compliance Savings – Creating, maintaining, distributing documentation – Penalties for errors • Special Program Savings – Trade Zone tariffs and waivers – Free Trade Agreement management
  16. 16. © 2014 Integration Point www.IntegrationPoint.com 16 The full Entry Visibility Tutorial, including audio, is available at www.IntegrationPoint.com/LP/EntryVisib ilityTutorial.html