Chapter 10
Benefits of Trade Compliance Systems
Increased level of compliance Decreased number of physcial inspections Faster release of shipments Avoidance of fines and penalties. Opportunity to interface with other systems.
The Weighted-Factor Rating Model
Compares the attractiveness of several locations along a number of quantitative and qualitative dimensions.
Right-to-Work Laws
25 states have laws protecting the right of employees to decide whether or not to join or support a union.
Businesses violating trade regulations face fines of up to ...............................
40% of the value of the merchandise for "negligence,"
Offshore Factory
A factory set up for manufacturing or assembly in a country where labor and/or raw materials are less expensive, for eventual import back into the manufacturer's home country.
Server Factory
A factory set up to take advantage of government incentives, and/or reduced tax/tariff barriers, to meet regional or local market needs
Land Availability and Costs
As land and construction costs in big cities continue to escalate, the trend is to locate in the suburbs and rural areas.
Global Location Decisions
Companies can locate anywhere in the world due to increased globalization, technology, transportation, and open markets.
Penalties For Violations Can Be Substantial
Criminal Penalties Civil Penalties Statutory Sanctions
Global Logistics Intermediaries
Customs Brokers International Freight Forwarders Trading Companies Non-Vessel-Operating Common Carriers (NVOCC)_
Shipments must conform to.................. Complete and submit................ Submit a .................. for the product
Export Administration Registration a Shippers Export Declaration (SED) Commercial Invoice
Outpost Factory
Factory set up in an area with an abundance of advance supplier, competitors, research facilities, etc.
Contributor Factory
Focused on product development and engineering for products that they manufacturer
Business Clusters
Geographic concentrations of interconnected companies and institutions.
Taxes and Incentives
Global Location Factors Countries with high tariffs discourage importing goods into the country and encourage multinational corporations to produce locally.
Environmental Issues
Global warming, air pollution, and acid rain are debated as being the price of industrialization.
Currency Stability
Impacts business costs and consequently location decisions.
International Trade Compliance
Is a major concern and dozens of laws, regulations and rules have to be checked and complied with for every import and/or export transaction.
U.S. Customs and Border Protection (CBP)
It is the gateway agency for more than 20 other government agencies each of which has some control over various aspects of international trade. Its' mission is to safeguard America's borders enhancing the Nation's global economic competitiveness by enabling legitimate trade and travel.
Labor Issues
Labor availability, productivity, and skill.
Source Factory
Manufactures products at low cost but with skilled workers and significant managerial resources
Foreign Trade Zones (FTZ's)
Physical areas inside the US supervised by U.S. Customs and Border Protection that are considered to be outside of the U.S. territory
Lead Factory
Source of product and process innovation and competitive advantage across the entire organization (world-class)
Access to Suppliers and Cost
Supplier proximity influences the delivery of materials and the effectiveness of the supply chain.
Utility Availability and Cost
Supply of electricity has not always kept pace with the high speed of development.
Access and Proximity to Markets
The trend in manufacturing is to be within delivery proximity of your customers.
Break-Even Model
Useful location analysis technique when fixed and variable costs can be determined
Export Process
When a shipment is ready to be exported, the shipper will file export documents for the goods' at the port of departure
Quality-of-Life Issues
You will need people to work at these locations - so consider the following Quality-of-Life issues in terms of maturity, sophistication, robustness, etc., in each location, and do a comparison/evaluation
CBP protects U.S. through ................. at ports of entry.
active inspections
Trade Compliance Systems
can automate the process of checking every transaction
International Trade Compliance
complex process. completing and filing about 35 documents. over 600 laws and 500 trade agreements which are constantly changing. Interfacing with about 25 parties
World Trade Organization (WTO>
deals with the global rules of trade between nations. Its main goal is to ensure that trade flows as smoothly, predictably and as freely as possible.
Department of homeland security first priority is to prevent the entry of terrorists and the instruments of terrorism, while simultaneously .............
ensuring the efficient flow of lawful traffic and commerce.
An intentional or unintentional export of controlled technology can easily occur within the walls ...................
even if located within the borders of the United States.
Regional Trade Agreements
impact location decisions
CBP has a strong base of .............................. to safeguard the American public and promote legitimate international commerce.
industry partnerships and technology
While in the FTZ, merchandise.....
is not subject to U.S. duty or excise tax.
CBP is also concerned with....
revenue collection (i.e. tariffs and duties).
On March 1st 2003, DHS assumed responsibility for ................... which straddle 350+ official ports of entry and connects our homeland to the rest of the world.
securing our nation's borders and transportation systems
Trade regulations and related content are at the heart of ITC, but ..........................
staying up-to-date is a major challenge
Import Process
the Importer of Record (i.e., the owner, or purchaser) must file entry documents at the port of entry.
Deemed Exports
the release of technology or source code that is subject to the Export Administration Regulations, to a foreign national (i.e., non-US citizen) located in the United States.
Increased revenue
through global business (i.e., more customers) and economic opportunities
Increased sourcing options
with more potential sources of supply to choose from including potential economic opportunities