Small and medium-sized U.S. businesses, along with their larger counterparts, are more aware than ever about the benefits of exporting. They understand the tremendous growth opportunities that lie beyond our borders. Unfortunately, they also understand that these opportunities generate their own particular set of challenges. Chief among them, according to a recent DHL customer survey, is the very real difficulty that companies face when negotiating Customs requirements and procedures here in the United States and around the world. In fact, 33 percent of respondents to the DHL survey indicated that inconsistent Customs processes represent the biggest hurdle to international trade. Another 13 percent flagged confusing and inconsistent trade laws as the largest problem.
Fortunately, there is help available, and more promising Customs modernization efforts are well under way. In fact, Customs agencies in countries around the globe, including here in the United States, are moving to make the complex process of filing documentation for international shipments easier, and to create more uniformity in the processing and releasing of shipments from one point of entry to another. To be successful in this evolving environment, logistics managers and other key leaders across the supply chain need to keep a close watch on new developments.
Here is what you should know about improvements in Customs processes:
The frustration experienced by small business owners and logistics managers stems in great measure from the extensive paperwork and inconsistent filing requirements involved. Automation here in the U.S. and in other trading partner countries aims to solve this issue. The U.S. Customs and Border Protection (CBP) is implementing the Automated Commercial Environment (ACE), which should be fully operational later in 2016. It will consolidate and streamline the export and import process, providing a single window for entry processing, cargo release and export processing. No longer will importers and exporters have to submit the same data to different U.S. agencies, or key it in manually. Importantly, in the future, automation should allow for better cooperation among Customs agencies in different countries, so that information can be shared for faster and more secure border processing globally.
Trade Rule Awareness
Not only are trade rules different from country to country, they are also evolving rapidly, and are not always easy for business owners and managers to access and understand. DHL is working with Customs authorities and organizations such as the World Trade Organization and the World Customs Organization to make trade rules more transparent. The goal is to make it easier for companies to understand the specific trade requirements of the countries where they are doing business.
The World Trade Organization (WTO) members concluded negotiations on a Trade Facilitation Agreement (TFA), which will enter into force once two-thirds of members have completed their domestic ratification process. The agreement contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between Customs and other appropriate authorities on trade facilitation and Customs compliance issues. The TFA further contains provisions for technical assistance and capacity building in this area. DHL is a member of The Global Alliance for Trade Facilitation, a public-private partnership focused on capacity building tied to the WTO TFA. The Alliance is funded by such countries as the U.S., Canada, Germany and U.K.
Raising the De Minimis Threshold
The streamlining of low-value shipments across the border is critical for small businesses, especially in light of the rapid growth of e-commerce and advancements in express delivery logistics. DHL and other key logistics leaders are pushing to create a commercially meaningful de minimis threshold, allowing businesses and individuals to ship non-restricted items at a higher value without incurring duties and taxes. Here in the U.S., the Customs Reauthorization Bill, which went into effect earlier this year, raised the de minimis threshold from $200 to $800 for non-restricted items being imported. Raising the level in other countries will help low-value exports from the U.S. move faster and more cost-effectively.
Aligning Customs procedures and rules across countries is essential to truly streamline the movement of goods across borders. Today, mutual recognition agreements remove barriers to trade and create consistency in Customs on a country-to-country basis. And trusted trader programs provide an avenue for certain importers to receive expedited Customs processing benefits. Ultimately, the goal should be to have an aligned procedure across all countries.
Important changes that are already under way promise to lighten the burden of Customs processing, while clarifying and unifying trade laws and rules. Of course, there are many resources already available to help, including the Customs Services and Support resources of DHL.
How is your company handling the complexities of Customs clearance? Let us know on Twitter @DHLUS.