The importance of Compliance

This morning, I was at the CSCB (Canadian Society of Customs Brokers) BC Regional Annual Conference.

CBSA (Canada Border Services Agency) - Customs - talked about the quality of trade data - or the data that Importers and Customs Brokers transmit to Canada Customs. They feel that there is a very low level of compliance with regards to origin, tariff classification, value for duty and end use of goods.

They have done some studies and found that there has been a 'high level' of non compliance.

This really disturbs me. We spend a great deal of time and effort to make sure that the information for our clients shipments is very accurate. Almost to a fault. Some of our clients complain about the amount of calls or information requests they get. On the other hand, some of our clients have been audited and have been very happy with the results.

Customs is working on audits for importers who are not compliant. I suppose our extra efforts are appreciated by some clients, and may never be truly appreciated until they are audited.

June 2007 Economic Digest - Importing and Exporting

June 2007 Edition

IMPORTS

 
The U.S. remained by far the world's leading importer of goods in 2006, with more than twice the share of Germany, ranked second in the global total. Third-place China's imports grew by 20 per cent last year, the fastest pace of any of the top 15 importers; its exports grew by 27 per cent. Hong Kong and Singapore owe their high positions in the list to imports for re-export. According to the WTO, global merchandise trade grew by 8 per cent last year, the fastest rate since 2000.

TUNNEL

Russian officials along with some Alaskan backers, are stepping up their long-dormant scheme to build a US$60-billion rail and tunnel link across the Bering Strait to connect Asia and North America. The sponsors insist the scheme, which would include 6,000 kilometres of transportation links over some of the world's most inhospitable terrain, makes perfect sense. The project would take 15 years to construct. The idea of a tunnel or bridge across the 85-kilometre Strait first emerged more than 100 year ago.

PURCHASING

A company called ShopText has introduced a system that lets people buy products instantly using text messages, a process that eliminates the need to go to a store or even visit a website. Someone seeing an advertisement in a magazine for instance, can order it on the spot simply by sending the text code found beside the item through their cellphone. CosmoGirl magazine will feature text-message codes throughout its June\July issue, both in the advertising and editorial pages.

TRAFFIC

The world's largest shopping centre in Dongguan, China looks almost deserted. Situated north of Hong Kong with a population of six million, the development stands as a symbol of China's failure to stimulate more spending by its 1.3-billion people. The mall's 220 palm-tree-lined acres has an indoor amusement park, replicas of seven cities including Venice, Milan, and Amsterdam, and a model of the Arc de Triomphe. There is retail space for 1,500 stores in the 85-hectare mall only a handful of which are leased. The developers expected to attract 100,000 visitors a day but get only 10,000 a day.

WIRELESS

The City of London has become Europe's biggest wireless hotspot. The network spans the entire Square Mile, giving its estimated 350,000 workers internet access via their laptop or mobile phones. Some 130 base stations are being used to cover the area and users will be charged about US$20.00 a month. There are 2,000 conventional internet hotspots around London However, they require users to log in every time. Users of the City's system will log in only once.

ARTS

The live performing arts industry in Canada, including both for-profit and not-for-profit companies generated operating revenues of C$1.2-billion in 2005, up 2.2 per cent from the previous year. Total industry operating revenue was split almost equally between the two sectors. Performing arts companies in Ontario and Quebec combined, continued to generate three-quarters of total industry revenues.

SAVINGS

The U.S. Department of Energy predicted energy savings of 0.4 per cent a day as a result of the earlier-than-usual daylight savings time. However, the data indicates U.S. electricity usage was virtually unchanged for the three weeks in question. It also appears to have driven up gasoline consumption as motorists took advantage of the evening daylight to hit the road. The increase in usage represents an additional 266,000 barrels of oil each day of crude oil imports.

MUSIC

Specializing in Latin music could be a life-saver for CD shops in the US, which have suffered a big fall in sales in recent years because of piracy and internet downloads. Album sales fell 4.9 per cent to 588-million units in 2006. By contrast, Latin music sales have increased by 5.2 per cent over the same period, notching up 37-million units. Demographic tendencies suggest that these figures will continue to grow.

POWER

Russia has started building the world's first floating nuclear plant, designed to provide power for remote areas. The plant, costing US$200-million is due to be launched in 2010 and is to be used by Sevmash, a shipbuilding firm that produces nuclear-powered submarines. However, Russia hopes that the technology will be of interest to Pacific island states and more than 12 countries have expressed interest in the project. Russia plans to build seven floating nuclear plants by 2015.

WASTE

US and European cities have wrestled with excess food waste for more than a decade, but Hong Kong's prosperity and shrinking landfill space are now pushing it to adopt a new consumption ethic. In the past five years, the amount of food wasted by Hong Kong's restaurants, hotels and food manufacturers has more than doubled. Food accounts for about one third of the 9,300 tons of waste deposited at landfills each day. One restaurant is now charging customers US$.64-cents an ounce for leftovers and many other restaurants are threatening to do so.

METERS

Every household in the UK will be able to request a free device that shows how much electricity is being used in the home at any one particular moment. It is hoped that the monitors will help to cut greenhouse gas emissions and the amount of energy wasted by appliances being left on standby. Households in the UK are responsible for about one third of the nations greenhouse gas emissions.

FORTUNE

General Electric tops the Fortune list of most admired companies in 2007. Second is Toyota followed by Proctor & Gamble, Johnson & Johnson, Apple, Berkshire Hathaway, FedEx Microsoft, BMW and PepsiCo.

NAVIGATION

Millions of drivers use satellite navigation systems. Now scientists believe that they have discovered why such space-age technology seems to fail for no good reason. It is because of the sun. Bursts of radiation caused by solar flares interfere with the signal from the satellites orbiting the earth, causing the receivers in cars to lose track of their position.

CHAMPAGNE

France's champagne makers have agreed to harvest more grapes from 2007 and to plant new vines in the future to head off possible shortages amid growing demand from outside Europe. France's champagne makers sold an estimated 322-million bottles in 2006 and harvested enough grapes to produce 360-million bottles in two years' time once the wine has matured. Production in champagne is limited by an 80-year-old law to 34,000 hectares.

TRADE

A free-trade pact between the U.S and South Korea is putting pressure on Japan to move towards a similar agreement with Washington. While Tokyo has pursued free-trade deals with other Pacific Rim countries, the U.S.-South Korea accord has spurred fears that Japan might fall behind in the global race to cut trade barriers. Total trade between the U.S. and South Korea last year was US$74-billion while trade between the U.S. and Japan was $200-billion. Japan and the U.S. together account for 38 per cent of global gross domestic product.

BAGS

British Airways has been named as the carrier that has lost more bags than any of its European rivals. Last year, BA mislaid 23 bags per 1,000 passengers, two more than the carrier in second place, Air Portugal and nearly five more than Lufthansa. One consumer watchdog estimates that 5.6-million bags were "mishandled" last year by 24 European carriers.

ITALIAN

Increased consumption of pizza and pasta in the U.S. are expected to drive retail sales of Italian foods to more than US$13.8-billion by 2011, from nearly $12-billion in 2006. Pizza and pizza products account for more than 45 per cent of total Italian food sales at retail. Sales in this category topped $5.3-billion in 2006.

POLLUTION

The Port of Los Angeles and the nearby Port of Long Beach are being encouraged by a broad coalition of local activists to curb emissions related to the shipping industry. Their first action item is to try to streamline the trucking network that transports goods to and from the ports. Recently, the coalition unveiled a plan calling on the two ports to give trucking contracts only to companies that pledge to honour existing government standards for emissions. It is hoped that this plan, which would affect 16,000 truckers, could become a model for the rest of the nation's ports and its 85,000 truck drivers.

METALS

Shortages and strong demand continue to support metal prices. Nickel rose by 44 per cent earlier in the year with the price briefly reaching US$50,000 a tonne. Tin prices have passed $14,000 a tonne for the first time in 20 years. Copper prices are rising again because of strong demand from China. However, aluminum prices are only 13 per cent higher than they were a year ago.

PENCILS

More than half of all pencils come from China. In 2004, factories there turned out 10 billion pencils, enough to circle the earth more than forty times. The average pencil holds enough graphite to draw a line about 35 miles long or to write roughly 45,000 words. Most pencils sold in North America today have eraser tips, while those sold in Europe have none.

OIL

Britain became a net importer of oil and oil products last year for the first time since 1980. Net imports were 6.6 million tonnes in 2006, compared with 2.4 million tonnes the year before. Once a major producer of oil, Britain's aging North Sea oil fields are drying up and new ones are too small to compensate.

PUBLISHING

The Canadian publishing industry recorded total revenues of just over C$2.4 billion in 2005, up only 1.6 per cent from 2004. Total revenue gains were strong in the West with British Columbia up 19.9 per cent, Saskatchewan up 9 per cent and Alberta up 8 per cent. Companies in Ontario and Quebec accounted for the majority of book publishing industry profit. They earned C$270-million of the industry's $285-million profit.

WAITING

A recent survey in the U.S. showed that one in ten shoppers leaving a store without making a purchase cited wait-to- checkout as a factor in their decision not to buy. The study conducted from 3,500 in-store audits, as well as 17,000 shoppers, further found that when forced to wait in line for more than four minutes, customer satisfaction levels fell below 80 per cent.

MEASUREMENTS

M:Metrics of Seattle, which focuses on mobile analytics, is offering a new research service that measures mobile Web access trends. It is the first service that measures which services are actually being used, which games subscribers play, how many e-mail messages they send, music they download and other features they use. This could unleash the cellphone's advertising potential and will be of great interest to the advertising industry.

CHEESE

Italian supermarkets are now training their in-store cameras on Parmesan cheese which has become very popular with thieves.

Thank you for reading the A & A Economic News Digest. For more information visit our website www.aacb.com or contact A & A Contract Customs Brokers Ltd. at strehler@aacb.com.

Past issues of the A&A Economic News Digest can be found at http://www.aacb.com/publications/ed/index.asp