A Challenge to Shippers Who Would Never Dream of Controlling the Insurance
Shippers who rely on suppliers to furnish cargo insurance or who rely on their carriers to take responsibility for losses may be in for a big surprise. Protecting your investments by insuring your goods provides peace of mind.
Buying CIF: Who’s really responsible if your product is lost or damaged in transit? According to internationally accepted trade terms, referred to as Incoterms, suppliers selling “CIF” (Cost, Insurance, Freight) are responsible for arranging cargo insurance. But just because your supplier has the obligation to arrange insurance under CIF terms, it doesn’t mean that they are ultimately responsible if your product is lost or damaged during transit. The ultimate burden of loss falls upon you, the buyer. This is why many experts recommend importers change their buying terms to EXW, FOB, FCA, CFR or similar terms in order to control the selection, and thereby the quality, of insurance coverage.
How much is that insurance really costing you? Foreign suppliers and their forwarding agents often tack on placement fees to the insurance costs. Those added fees often inflate the cost of insurance well beyond market pricing for the same coverage purchased in the United States. Find out how much you’re really paying and then compare quotes received from BOC International.
Is the coverage your supplier purchased for you adequate? Importers relying on their suppliers to arrange insurance run the risk of having inadequate insurance coverage. Cargo insurance policies can vary widely in levels of coverage, deductibles and special restrictions. Ask your supplier for a complete copy of the insurance policy or for a certificate of insurance detailing all the policy terms and conditions
What’s the financial health of your supplier’s insurance company? Recent financial and catastrophic events have exposed the vulnerability of insurance companies to sudden economic devastation. Importers are encouraged to make certain their suppliers use insurers with a favorable financial rating supplied by a respected financial rating service. A.M. Best, Standard & Poor’s and Moody’s are among some of the world’s most respected. BOC’s insurance company, underwriters at Lloyd’s of London, has an A.M. Best financial rating of A (Excellent).
How will your claim be handled? If insurance is arranged overseas, will you be forced to  deal with an inexperienced, sub-contracted independent adjuster unfamiliar with the assessment of transportation related losses? Ask your supplier for a list of insurance claims adjusters contracted by the insurance company. Adjuster and surveyor networks approved by Lloyd’s of London and AIMA are among the most credible. BOC has a vested interest in your insurance needs and will directly handle cargo claim documentation requirements to ensure prompt processing and timely settlement.
Every Shipper Needs Cargo Insurance
Global trading involves risk; however, broad insurance coverage minimizes your financial risk. Don’t leave your livelihood up to chance! Statistics show that one ship sinks each day and you will experience a General Average loss every eight years. If you are depending on the carrier to cover losses, their responsibility is limited by law as follows:
Ocean Carriers  $500 per shipping unit
A shipping unit may be defined as one ocean container.
Air Carriers  $9.07 per pound
Truckers  $.50 per pound
The insurance we offer is competitively priced and insures approved merchandise against physical loss or damage from external causes. By purchasing cargo insurance, you can avoid inconvenience and frustration. Contact your BOC Representative at 617-345-0050 for your free quote.

Transpacific Network Service Updates
US Pacific Northwest
Dear Valued Customer,
We are reaching out to you to inform you of changes to our Transpacific – US Pacific Northwest services. Due to rising costs and overcapacity in the market, we have made adjustments to our TP2, TP8 and TP9 services.  Our existing TP1 service, serving Vancouver and Seattle, will be removed from our product offering.
Please find the updated service rotations:
TP9 Service

• First port of call changed to Vancouver
• Second port of call changed to Seattle and removal of Prince Rupert
• Addition of Yokohama, Kaohsiung and Xiamen
• Removal of Nansha from rotation
• Westbound rotation to maintain direct coverage of Yokohama and Kaohsiung

The first effective sailing will depart from Kaohsiung the week of August 20-26.
TP9 Eastbound: Kaohsiung > Xiamen > Yantian > Ningbo > Shanghai > Busan > Vancouver > Seattle
TP9 Westbound: Vancouver > Seattle > Yokohama > Busan > Kaohsiung > Xiamen > Yantian > Ningbo > Shanghai
TP8 Service

• Addition of Prince Rupert
• Addition of Shanghai
• Removal of Ningbo

The first effective sailing will depart from Xingang on the week of August 20-26.
TP8 Eastbound: Xingang > Qingdao > Shanghai > Busan > Yokohama > Prince Rupert > Long Beach > Oakland
TP8 Westbound: Prince Rupert > Long Beach > Oakland > Xingang > Qingdao > Shanghai > Busan > Yokohama
TP2 Service

• Addition of Ningbo
• Removal of Shekou

The first effective sailing will depart from Singapore on the week of August 20-26.
TP2 Eastbound: Singapore > Vung Tau > Yantian > Ningbo > Shanghai > Long Beach > Oakland
TP2 Westbound: Long Beach > Oakland > Busan > Shanghai > Ningbo > Chiwan > Singapore
We would like to take this opportunity to say thank you for doing business with us. If you have any questions, please feel free to reach out to your local sales or customer service representative. You will find contact details of our local offices on maerskline.com.

Sincerely,
Your Maersk Line North America Team

China Trade War Continues – Important Updates for Importers
There are two important updates in the Section 301 investigation on China practices.

First, as many have probably heard, the U.S. Trade Representative’s office has issued a notice on a new proposed list of products that could be subject to an additional 10% duty.  This list includes over 6,000 HTS provisions, covering many items.  Specifically excluded are certain pharmaceutical products of Chapter 30 and apparel items of Chapters 61 and 62.

As with the prior proposed lists, the USTR’s office is allowing for a public comment period and public hearing.

Written comments must be submitted by August 17, 2018, with a post-hearing rebuttal comments by August 30, 2018.

The public hearing will be held in Washington, D.C. on August 20, 2018. Those interested in attending must submit requests to appear at the hearing by July 27, 2018. The request to appear must include a summary of testimony and may be accompanied by a pre-hearing submission.

As with the previous proposed lists, the USTR requests that that those seeking inclusion or exclusion that commenters of a specific HTS provision “address specifically whether imposing increased duties on a particular product would be practicable or effective to obtain the elimination of China’s acts, policies, and practices, and whether maintaining or imposing additional duties on a particular product would cause disproportionate economic harm to U.S. interests, including small- or medium-size businesses and consumers.”

The USTR notice including the list of HTS provisions can be accessed at the link below.   If you import from China, I highly recommend that you review this list as there are many HTS provisions included.

https://ustr.gov/sites/default/files/301/2018-0026%20China%20FRN%207-10-2018_0.pdf

Second, the USTR’s office has issued instructions on requesting exclusions from the Section 301 25% duties that became effective on July 6.  These cover the HTS provisions that were included in the first 301 list.  Keep in mind that the second proposed list is still under review by the U.S. government.   The list published on July 10 is a third list of products.
Regarding the exclusion request process, requests must be filed by October 9, 2018.  Any exclusions granted will be retroactive to July 6.   The Federal Register notice includes the following requirements for submissions:

• Identification of the particular product in terms of the physical characteristics (e.g., dimensions, material composition, or other characteristics) that distinguish it from other products within the covered 8- digit subheading. USTR will not consider requests that identify the product at issue in terms of the identity of the producer, importer, ultimate consumer, actual use or chief use, or trademarks or tradenames. USTR will not consider requests that identify the product using criteria that cannot be made available to the public.
• The 10 digit subheading of the HTSUS most applicable to the particular product requested for exclusion.
• Requestors also may submit information on the ability of U.S. Customs and Border Protection to administer the exclusion.
• Requestors must provide the annual quantity and value of the Chinese-origin product that the requestor purchased in each of the last three years. For trade association requestors, please provide such information based on your members’ data. If precise annual quantity and value information is not available, please provide an estimate and explain the basis for the estimation. With regard to the rationale for the requested exclusion, each request for exclusion should address the following factors:
• Whether the particular product is available only from China. In addressing this factor, requestors should address specifically whether the particular product and/or a comparable product is available from sources in the United States and/or in third countries.
• Whether the imposition of additional duties on the particular product would cause severe economic harm to the requestor or other U.S. interests.
• Whether the particular product is strategically important or related to ‘‘Made in China 2025’’ or other Chinese industrial programs

The Notice also states that the USTR office prefers requests to be submitted electronically.  It also provides the following instructions on submission:

To submit requests via www.regulations.gov, enter document ID number USTR–2018–0025–0001 on the home page and click ‘‘search.’’ The site will provide a search-results page listing the Federal Register Notice associated with this docket. Find a reference to this notice and click on the link titled ‘‘comment now!’’. Once posted on the electronic docket, the exclusion request will be viewable in the ‘‘primary documents’’ section.

The Federal Register Notice, published today, can be accessed at the following:

https://www.gpo.gov/fdsys/pkg/FR-2018-07-11/pdf/2018-14820.pdf

If you have questions on either of these developments, please contact our office and we would be happy to discuss these further.

Paula M. Connelly, Esq.
Law Offices of Paula M. Connelly
100 Trade Center
Suite 660
Woburn, MA 01801
781-897-1771
www.connellycustomslaw.com

Customs Lawyer
Paula M. Connelly is a principal in the Law Offices of Paula M. Connelly, a law firm specializing in Customs and international trade matters. She has been practicing law since 1991 and prior to working as an attorney, worked as a licensed Customs broker for several customs brokerage companies in the Boston area. She has over 20 years experience in Customs and International Trade matters and works with numerous importers and exporters in addressing and resolving import and export compliance issues.

BOC International will be closed on Wednesday for the 4th of July holiday. Please contact your BOC Representative if you have any questions.

Under Section 301 Action,  USTR Releases Proposed Tariff List On Chinese Products
 
WASHINGTON, DC – As part of the U.S. response to China’s unfair trade practices related to the forced transfer of U.S. technology and intellectual property, the Office of the U.S. Trade Representative (USTR) today published a proposed list of products imported from China that could be subject to additional tariffs.
Following USTR’s Section 301 investigation, President Trump announced in March that the United States will impose tariffs on approximately $50 billion worth of Chinese imports and take other actions in response to China’s policies that coerce American companies into transferring their technology and intellectual property to domestic Chinese enterprises.  These policies bolster China’s stated intention of seizing economic leadership in advanced technology as set forth in its industrial plans, such as “Made in China 2025.”
The proposed list of products is based on extensive interagency economic analysis and would target products that benefit from China’s industrial plans while minimizing the impact on the U.S. economy.  Sectors subject to the proposed tariffs include industries such as aerospace, information and communication technology, robotics, and machinery.
The proposed list covers approximately 1,300 separate tariff lines and will undergo further review in a public notice and comment process, including a hearing.  After completion of this process, USTR will issue a final determination on the products subject to the additional duties.
The total value of imports subject to the tariff increase is commensurate with an economic analysis of the harm caused by China’s unreasonable technology transfer policies to the U.S. economy, as covered by USTR’s Section 301 investigation.
Today’s announcement comes just days after the USTR filed a request for consultations with China at the World Trade Organization (WTO) to address China’s discriminatory technology licensing requirements.  Such consultations are the first step in the WTO dispute settlement process.  If the United States and China are unable to reach a solution through consultations, the United States may request the establishment of a WTO dispute settlement panel to review the matter.
https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/april/under-section-301-action-ustr

UPDATE: Additional Duty on Imports of Steel and Aluminum Articles under Section 232
Related CSMS:  18-000240, 18-000249, 18-000257, 18-000258, 18-000296, 18-000317, 18-000352
BACKGROUND:
On March 8, 2018, the President issued Proclamations 9704 and 9705 on Adjusting Imports of Steel and Aluminum into the United States, under Section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862), providing for additional import duties for steel mill and aluminum articles, effective March 23, 2018.  See the Federal Register, 83 FR 11619 and 83 FR 11625, March 15, 2018.  On March 22, 2018, the President issued Proclamations on Adjusting Imports of Steel and Aluminum into the United States. See the Federal Register, 83 FR 13355 and 83 FR 13361, March 28, 2018.  On April 30, 2018, the President issued Proclamations 9739 and 9740 on Adjusting Imports of Steel and Aluminum into the United States.  See the Federal Register, 83 FR 20683 and 83 FR 20677, May 7, 2018.  On May 31, 2018, the President issued Proclamations on Adjusting Imports of Steel and Aluminum into the United States.
These duty requirements are effective with respect to goods entered, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on March 23, 2018.
COMMODITY:
Steel mill and aluminum articles, as specified in the Presidential Proclamations.
COUNTRIES COVERED BY SECTION 232 IMPORT DUTIES:
Please note that the Section 232 measures are based on the country of origin, not the country of export.
Steel:
As of June 1, 2018:  All countries of origin except Argentina, Australia, Brazil, and South Korea.
Aluminum:
As of June 1, 2018:  All countries of origin except Argentina and Australia.
COUNTRIES COVERED BY SECTION 232 ABSOLUTE QUOTAS:
Steel:
As of June 1, 2018:  Argentina, Brazil, and South Korea.
Aluminum:
As of June 1, 2018:  Argentina.
For both steel and aluminum, imports of United States origin are not covered by the Section 232 measures.
FILING INSTRUCTIONS:
SECTION 232 IMPORT DUTIES:
Use non-quota entry type codes.
UPDATE:  As of June 1, 2018, for all imports of aluminum from South Korea, importers should also use non-quota entry type codes.
Steel Products
In addition to reporting the regular Chapters 72 & 73 of the Harmonized Tariff Schedule (HTS) classification for the imported merchandise, importers shall report the following HTS classification for imported merchandise subject to the additional duty:
9903.80.01 (25 percent ad valorem additional duty for steel mill products)

Aluminum Products
In addition to reporting the regular Chapter 76 of the HTS classification for the imported merchandise, importers shall report the following HTS classification for imported merchandise subject to the additional duty:
9903.85.01 (10 percent ad valorem additional duty for aluminum products)
SECTION 232 ABSOLUTE QUOTAS:
Use quota entry type codes (entry types 02, 06, 07, 12, 23, 32, 38, or 52).
For further guidance, see CBP quota bulletins at https://www.cbp.gov/trade/quota/bulletins
Generalized System of Preferences (GSP) and African Growth and Opportunity Act (AGOA)
GSP and AGOA-eligible goods that are subject to Section 232 duties or quotas may not receive GSP or AGOA duty preference in accordance with 19 USC 2463(b)(2).
On imports subject to Section 232 duties or quotas (including imports from Argentina and Brazil), in addition to any applicable Section 232 duties, importers should pay the normal trade relations (column 1) duty rates and not submit the GSP Special Program Indicator (SPI) “A” or the AGOA SPI “D”
FOR FURTHER INFORMATION:
For more information, please refer to the Presidential Proclamations on Adjusting Imports of Steel and Aluminum into the United States, Federal Register, 83 FR 11619 and 83 FR 11625, March 15, 2018; the March 22, 2018 Presidential Proclamations on Adjusting Imports of Steel and Aluminum into the United States. 83 FR 13355 and 83 FR 13361, March 28, 2018; and the April 30, 2018 Proclamations on Adjusting Imports of Steel and Aluminum into the United States. 83 FR 20683 and 83 FR 20677, May 7, 2018; and the May 31, 2018, Proclamations on Adjusting Imports of Steel and Aluminum into the United States.
Also see Frequently Asked Questions at https://www.cbp.gov/trade/programs-administration/entry-summary/232-tariffs-aluminum-and-steel
Questions related to Section 232 entry filing requirements should be emailed to traderemedy@cbp.dhs.gov.  Questions from the importing community concerning ACE rejections should be referred to their Client Representative.

NEW REQUIREMENTS FOR EXPORTS TO CHINA
ADJUSTMENT TO CHINA CUSTOMS ADVANCED MANIFEST (CCAM) REGULATIONS
Advisory, Customer Services
General Administration of Customs China (GACC) has released Order No.56 [2017] to adjust the Advanced Manifest rule (GACC advisory in Chinese) to ensure smooth customs clearance and effectively strengthen customs’ implementation of safe entry and risk prevention for import and export goods into/from China.
The rule will be effective from 1st June 2018 and includes the implementation of following.
1.China Customs Advanced Manifest (CCAM) enforcement wherein Advanced Manifest must be submitted to China Customs 24 hours prior to cargo loading on vessels sailing to/from China mainland ports.

2.The manifest data must be accurate and complete for all goods under the Bill of Lading (BL).

3.Full details of the Shipper and Consignee (or Notify Party if Consignee is To Order) must be provided in the shipping instruction (SI). Due to this adjustment in policy, Enterprise codes are newly required as follows.
In accordance with China Customs requirements, we will require the following information upon booking for cargo destined to China to ensure that shipments will not be delayed or denied entry into the People’s Republic of China:
o Shipper contact name and phone number
o Shipper Tax ID or Unified Social Credit Code (USCI)
o Consignee contact name and phone number
o Consignee Tax ID or Unified Social Credit Code (USCI)
To comply with the above regulatory requirements and ensure no delays with China Customs clearance, please ensure to provide the data in your shipping instruction (SI) for vessels loading to China from 1st June 2018 onwards. Please follow the documentation cut off as advised by your nearest booking office.
We will keep you informed of any further development.
If you have any questions, please contact your BOC Representative.
Thank you for your support.

 Cargo Insurance: General Average Article
May 18, 2018 by The Loadstar
Shippers with Cargo on Maersk Honam Face Hefty Bill to Get it Released
Maersk Honam fire in the Arabian Sea.
By Gavin van Marle (The Loadstar) – Shippers with cargo aboard the fire-stricken Maersk Honam will have to stump up over half its value if it is to be released under general average arrangements.
MSC, Maersk Line’s 2M partner, confirmed this morning that the vessel is due to finally dock at Dubai on 22 May, with discharging likely to take between four days and a week.
This week, vessel salvor Richard Hogg Lindley (RHL) fixed the salvage security at 42.5% of the cargo value, as well as requiring a further 11.5% as a general average deposit.
This means a shipper with goods worth $100,000 in a container faces a combined general average and salvage security bond bill of $54,000 to have the cargo released.
MSC said this week: “The submission of the GA and salvage securities is a prerequisite for the cargo to be released from Jebel Ali.
“Following completion of the discharging operations, the containers identified as potentially damaged will undergo an inspection at Jebel Ali and relevant customers will be invited to be represented at a joint inspection.
“Containers that are identified as sound will be loaded at first opportunity to reach their final destination, provided GA and Salvage securities have been submitted and released confirmed by RHL.”
Alex Kemp, partner at global law firm HFW, explained: General average is a tool for sharing the losses arising from a marine casualty between all the parties involved in that casualty. The vessel owners, bunker owners, container shell owners and cargo owners will all contribute their share to the losses incurred.
“In order to ensure that everyone pays their fair share, the vessel owner usually has the power to detain the cargo pending the provision of security. If security is not provided, it is often open to the vessel owner to sell the cargo in order to raise the funds to pay the contribution due from that particular cargo owner,” he said.
However, in a further twist today, MSC that it would also look to pass on part of the extra transport and port costs incurred in Dubai to shippers with undamaged cargo.
“In consideration of the important geographical deviation provoked by the salvage operations and of the consecutive extra handling/storage costs that will accrue at port of refuge, MSC will unfortunately not be in position to carry your cargo to destination without collecting additional charges.
“We are therefore requesting an amount of $750 per 20ft or $1,250 per 40ft. This amount is destined to cover all additional transhipment, storage and on-carriage costs MSC will face as the result of this regrettable casualty.”
It added: “We are profoundly sorry for these additional costs which are imposed on us by the situation.”
For shippers that do not want to pay the extra charge, MSC said their containers would be “handed back to your local representatives under the double prerequisite that the original bills of lading have been returned to us duly endorsed and that your shipment has been released from general average/salvage, and will be subject to payment of storage and demurrage as per our tariff”.
Customers have until the close of business on 24 May to relay their decision to the carrier.
The Loadstar is fast becoming known at the highest levels of logistics and supply chain management as one of the best sources of influential analysis and commentary.