Atlanta companies that do not keep meticulous records of their customs transactions could face fines of up to four times the amount of duties they are required to pay on imports and exports under the new Free Trade Area of the Americas (FTAA) regulations scheduled to take effect in 2005.
“Free trade is great, but the penalties are severe if companies are ignorant of the exact customs laws and exact duties they are supposed to pay on their products,” Lynne Wendt, partner at the law offices of Wendt & Temples LLC, told GlobalFax. Ms. Wendt shared her customs law expertise as a panelist at the April 3 Atlanta Summit of the Americas at Emory University’s Goizueta Business School.
There are no official FTAA customs regulations yet in place, but Ms. Wendt imagines they will be very similar to those of the existing North American Free Trade Agreement (Nafta) regarding duty rates on products and rules of origin. She said that companies should start now to thoroughly learn the rules of origin for their products, especially if they are thinking of opening a manufacturing site in the Americas.
One of the most common mistakes companies make, Ms. Wendt noted, is forgetting that parts of their products are manufactured in other countries, so they claim false ‘preferences’ to receive reduced or duty-free rates. Customs service attorneys can impose large fines, she warned, for this type of negligence.
Companies need to develop internal compliance programs now to scrutinize the customs laws applicable to their products, she said, because “when the supposed flood gates open for free hemispheric trade, goods won’t flow as freely as people think.”
Visit www.customs.treas.gov for U.S. customs regulations and information. See www.mercosur.org for customs laws in certain South American countries. Visit http://aaatrading.com/nafta for a concise guide to Nafta regulations. Contact Ms. Wendt at (404) 523-2980 for more information.