Effective January 13, 2021, the CBP has issued a Withhold Release Order (WRO) that all U.S. ports of entry, U.S. Customs and Border Protection (CBP) will detain cotton products and tomato products produced in China’s Xinjian Uygur Autonomous Region. The WRO will detain the following products from China’s Xinjian Uygur: Apparel, textiles, tomato seeds, canned tomatoes, tomato sauce, and other goods made with cotton and tomatoes.
The CBP will begin detaining shipments that “exploit forced labor laws at any point in their supply chain, including the production or harvesting of the raw material”. The agency identified the following forced labor indicators through the course of its investigation: debt bondage, restriction of movement, isolation, intimidation and threats, withholding of wages, and abusive living and working conditions.
COVID-19 has disrupted nearly every part of our lives. Yes, the public health consequences are tragic. But along with this, small and large businesses alike are feeling significant economic pain. Companies in the consumer goods industry are encounteringsignificant supply chain challenges and quickly shifting consumer spending habits. The retail and the apparelapparel industry in particular are facing their own share of supply chain challenges. The list goes on and on.
During times of such economic upheaval and uncertainty, normalcy disappears, once reliable customersstart canceling orders and ask for extended payment terms. Stores suddenly closeand it’s unclear whether they will ever open again. Shipping delays become more common and trading partners less flexible.
In this climate, all businesses need to reduce their risk to survive this economic storm. One way to do this is to leverage financial instruments like letters of credit (LCs), which can help achieve the highest risk-adjusted returns.
How Letters of Credit Can Benefit Your Business
Letters of credit offer businesses substantial advantages that are amplified by the uncertainty caused by COVID-19.
Supply chain risks and cancelled orders are a greater risk in this global pandemic, so letters of credit can give you more confidence that you’ll actually get paid.
Most prominently, letters of credit minimize risk for both buyers and sellers. Buyers are that their goods are shipped and documentation is in order before submitting payment. Sellers get the confidence they need to ship goods to their buyers.
Letters of credit are also helpful because they free up capital for both buyers and sellers. By using an LC, buyers do not need to leave deposits to start production. Instead, the LC is opened for the transaction’s full value, letting buyers more efficiently allocate their capital. Suppliers can then borrow against their letter of credit, which can provide them with more liquidity before the transaction closes. It is a win-win for both buyers and suppliers.
Buyers and sellers may be transacting with new parties or others they may not fully trust, letters of credit can include provisions that must be satisfied before the transaction is completed. This can include everything from inspection of the delivered goods to specific delivery times. These provisions can ensure that your goods arrive in the precise manner that you expect – if they don’t, you have the option to reject the goods without payment or to seek a discount for the suppliers errors-
Helping Business Go Forward
It’s unclear when the COVID-19 crisis will end. In the meantime, business has become inherently riskier. There’s a greater chance that your suppliers and customers won’t pay for your goods and services. Because of this, letters of credit can help you continue business as usual while minimizing risk and preserving cash flow. For these reasons, we encourage you to leverage LCs when possible throughout this global pandemic.
AtExpress Trade Capital, we are happy to help you leverage all the thebenefits of letters of credit. anks require you to jump through several hoops (like collateral requirements or a prior credit relationship with the bank) to obtain a letter of credit. At Express Trade Capital, we have removed these restrictions by allowing clients to use our already existing LC facilities with out banks, thereby allowing you to quickly obtain LCs for your specific business needs without onboarding to a bank.
To learn more about how we can help you, don’t hesitate to click here.
In response to the difficulties facing American businesses due to the COVID-19 pandemic and associated control measures, Customs and Border Protection is contemplating granting relief to importers. In consideration of requests from the National Customs Brokers and Forwarders Association Customs Committee, chaired by GEODIS’ SVP of Trade Services and Government Relations Mary Jo Muoio, along with other industry group requests, CBP is looking at ways to provide flexibility to and extensions for a wide variety of deadlines importers face with customs obligations.
Specifically, CBP is considering granting a ninety-day extension of duty payments. At this time CBP is working to understand authorities and mechanisms which may allow this and specifics are not available. In the meantime, CBP is reviewing extraordinary requests on a case-by-case basis. As of today, lacking specific individual permissions, duty and related obligations remain in place. We expect more information in the near future and will alert our clients as soon as known. If you would like to seek temporary duty-payment relief from CBP, please contact us immediately. Initially, this relief would be for importers having duty payments due in the next week; if broader CBP issued extensions are not granted, we will pursue additional case-by-case requests.
If you have questions about your duty payments, bond obligations or challenges meeting other CBP commitments, contact your account representative at Express Trade Capital, Inc.
CBP has initiated a series of calls informing industry groups and leadership on the impact to trade caused by the spreading COVID-19 disease. During the call, CBP confirmed that recently enacted traveler restrictions for select individuals traveling into the United States do not extend to cargo. At this time, CBP is guided by the medical community’s finding that cargo is not a host for the virus. As a result, there are no procedural impacts to the clearance of cargo and delays should not occur.
Additionally, at this time, CBP’s port operations personnel have been minimally impacted; there are a few cases where officers are self-quarantined as a result of coming in contact with a person carrying or exposed to the virus. As the fallout continues, if more staff is exposed or ill or impacted personally by school closures and the like, there could be an impact to cargo processing. However, CBP in the ports and in mission support roles is proactively reviewing work and prioritizing in the event staff is reduced.
Again, at this point these are planning measures similar to what CBP conducts anytime they face staffing challenges.
If you have any concerns or questions, please reach out to your EXPRESS account representative.
The well being of our clients, employees and partners are
paramount to Express Trade Capital, Inc. We wanted to share with you that we
are open for business and have remote back-up plans in place should the
situation require. These are very fluid and challenging times and Express Trade
Capital prides itself on being a Pro-Active Leader in the Factoring, Trade
Finance & Logistical arenas.
We continue to monitor the entire situation carefully and look forward to working with you regarding all of your financial needs. Our extremely talented team is dedicated to providing you the highest level of personalized service always.
If you are experiencing any issues that may impact your account, please contact us so that we can better prepare and confront potential problems proactively.
The Office of the United States Trade Representative
announced on March 2, 2020, regarding products and countries eligible for
preference treatment under the Generalized System of Preferences (GSP) annual
review. The attached notice includes articles and countries that are under
List I identifies articles which will be removed from eligibility due to import volumes exceeding the 2019 competitive needs limit unless successfully petitioned
List II identifies articles which will be granted a de minimis waiver and be eligible unless successfully petitioned
List III identifies articles from select beneficiary countries which may be predesignated and be eligible if successfully petitioned
List IV identifies articles which will lose a current de minimis waiver and lose eligibility unless successfully petitioned
Interested parties may also submit petitions for inclusion or exclusion of specific products and beneficiary countries.
The deadline for submissions to modify the GSP status is set
for March 26, 2020. For further information as to how this will impact your
import program please contact us at email@example.com.
China officials have extended the Spring Festival Holiday until after February 2. The length of the extensions may vary depending on the location. Shanghai has extended until February 10, while others until February 14 or longer. As factories re-open, labor continues to be minimal as public transportation in certain cities or provinces are still under restriction and quarantine. These can last up to an additional 14 days or longer. Trucking equipment and services as well are still impacted due to the lack of labor as well as road restrictions preventing normal pickup and delivery services.
Flights: Over 60 airlines have announced cancellation from flights to/from
Flights: Freighter flights are slowly returning as demand continues to
increase. As of now, 60% of freighter flights are still not operating.
Airfreight Pricing: Due do the current supply & demand, transit is continued to be limited under a Force Majeure environment based on first come basis.
airports that are impacted are PVG & CGO with limited amount of staff. WUH
is closed until further notice and those operating under normal conditions
include, BJS, SZX, HKG, LAX, ORD, JFK, AMS, & FRA.
All Seaports are operating under normal conditions, excluding Wuhan & Yichang a Hunan province. Ocean demand has dropped by more than half and is not expected to pick up again until after February 20.
Please contact our logistics office with any further questions firstname.lastname@example.org.