Program Overview Pat Fosberry – President April 17, 2014

1. Program Overview Pat Fosberry – President April 17, 2014

2. Transportation Committee Meeting • FMC ANPRM (General Counsel Ed Greenberg) • FMC is reviewing 80+ comments, and is making adjustments (but not sharing yet) • Amicus issue (NVOCC released shipment without BOL) • 10.D.1 Violations = Single error can mean a VIOLATION OF LAW • Can eliminate E&O coverage & COGSA defense, attorney fees • NVOCC Committee (Rich Roche) • Demurrage review – Winter delays = big windfalls for carriers • Chassis shortage discussion • Pushing for elimination of tariffs Saturday, April 5, 2014

3. Transportation Committee Meeting • Logistics Committee (Melzie Wilson) • FMCSA – MAP 21 – Details at session • Domestic Moves Best Practices Committee – Merit Tremper • Approved new Delivery Order to carriers for door shipments suggested forms • Export Compliance Committee – Paulette Kolba • USPPI Responsibility Information Sheet on NCBFAA website (Publications & Resources) • Shipper’s Letter of Instruction form on NCBFAA website (Publications & Resources) • Routed Export Transaction NPRM - http://www.gpo.gov/fdsys/pkg/FR-2014-02-06/html/2014-01176.htm Saturday, April 5, 2014

4. Customs Committee Meeting • ITDS • List detailing data, documents, etc. • Part 111 Rewrite • OR&R 111.24 – Confidentiality – Does not allow broker to share info with transport company • Employee reporting • Continuing education • Exam reform • Question order, complexity of questions, questions on practical issues • NCBFAA to submit 30 questions to CBP for each exam • NCBFAA opposes proposed change to online ( no books) Saturday, April 5, 2014

5. Customs Committee Meeting • Broker Known Importer Program • Concept Paper & Questionnaire Draft being made available • Permits • Split support – NCBFAA represents companies, not the individual license • Grass Roots letter by Donna Mullins available • NCBFAA will have position paper by June 21 • ACE • Cloud filing – Is this legal under current regulations? (Foreign server???) • Post Summary Corrections – CBP has visibility of original and corrected Saturday, April 5, 2014

6. Board of Directors Meeting • Audit Committee – Marie Armelagos – Reviews all functions of NCBFAA • Membership – Bruce Goodwin - Over 940 members • NEI – Ken Bargteil – Volunteers needed – LMS purchased, operating by 1-1-15 • Legislative – Jon Kent • No progress in Congress • GSP stalled • BOD Elections – Kathy Carlton, Miami, FL reelected Area 4 Rep • President – Geoff Powell, CH Powell, Baltimore • Vice President – Amy Magnus, AN Derringer, Port Champlain, NY • Secretary – Billy App, JW Allen, New Orleans, LA • Treasurer – Scott Larson, MOL Logistics, Chicago, IL Saturday, April 5, 2014

7. NCBFAA 2014 Annual Meeting – Permits • With the ability of all entry types to be done via RLF next year, current permit regulations will become obsolete • If CBP had a solution, it would have already been put into place. • NCBFAA must present guidelines for the re-write of the regulations. • NCBFAA represents companies, not individual license holders. • Most large brokers support a licensed broker in every office (FedEx, UPS, K&N) • Suggestions: • One licensed broker per company • One licensed broker per office • One licensed broker per ‘area’ • One licensed broker per number of entries • One licensed broker per employees (total or those doing customs business) • NCBFAA will pole its members with specific questions • NCBFAA to present white paper by next BOD meeting – June 21 in Detroit • NCBFAA to present final proposal by GAC – September 14-16 Monday, April 7, 2014

8. eBond is Coming: How will It Work? • All will be required to be filed in ACE in November, 2015 • eSTB’s will be required to be filed in ACE effective January 3, 2015 • All bonds entered by the Surety • Broker sends eSTB data to Surety • Surety sends approved bond to CBP • CBP accepts and notifies Surety & broker • Broker transmits entry in ACE • ACE matches entry data with bond data; entry is released • Continuous bonds are entered in same platform as now • Revenue stream for brokers should not be affected • Bond issuance available 24/7 Monday, April 7, 2014

9. Export Regulatory Update • AES moved to ACE • Visibility & PGA connections • FTR Regulations now in effect • Ultimate Consignee Type • License Value • Port Departure/Option 4 (10 to 5 days) • Port of Export • 180 days Informed Compliance (October 2, 2014) • AEI Pilot • USPPI Information Sheet • Shipper’s Letter of Instruction Tuesday, April 8, 2014

10. USPPI Responsibility Information Sheet

12. FMC: Where Are We? Chairman Cordero addressed for 1.5 hours. NPRM issues are being reviewed. More business-friendly set of OTI rules Items that have economic impart on OTI’s will not be in final rules Attention will be on OTI’s operating unlawfully Tuesday, April 8, 2014

13. FMCSA: MAP21 • The difference between a Motor Carrier, Freight Forwarder and Property Broker • Motor carrier is comparable to a steamship line (owns trucks, issues BOL’s) • Freight Forwarder is comparable to an NVOCC (does NOT own trucks, issues BOL’s) • Property Broker is comparable to an international freight forwarder (does NOT issue BOL’s) • NCBFAA is reviewing to determine if adding clauses to Terms & Conditions can add extra protection Tuesday, April 8, 2014

14. FMCSA: MAP21 • Words on a document will not prevent you from being sued • Delivery Advice templates presented • Domestic Working Group Agenda • Form/Bill of Lading suggestions when acting as Agent • Training suggestions & recordkeeping best practices • Certificates (Insurance, HazMat, TSA Compliant) • Contracts • List of motor carrier vetting software companies will be provided Tuesday, April 8, 2014

15. Broker Known Importer Program (BKIP) • Custom Broker collects information on importer • Entry can be flagged that importer is a known importer to the broker • Result in possible lower targeting scores for the importer • Broker NOT certifying them or verifying what they say is correct, just that the conversation has taken place • Specific list of questions being supplied by CBP • NCBFAA will be distributing this list Wednesday, April 9, 2014

16. Revisions to Broker Regulations • Confidentiality of Client Records 19 CFR § 111.24 (Reynolds, JSJ) • “Relating to the Customs business of a broker” 19 CFR § 1641(f) • UPS case – CBP ruled that any records is considered Customs business • Continuing Education Requirements (Sykes, CBP) • 40 hours over 3 years • Low/No cost; No travel • Employee Reporting 19 CFR § 111.2(a)(2)(ii)(A), 111.28(b), 111.30(d)(1) • Report all employees or just those doing Customs business? • CBP looking at limiting definition of ‘employee’ Wednesday, April 9, 2014

17. Revisions to Broker Regulations • Broker – Freight Forwarder Relationship • Importer Bona Fides – Place burden to Importer • Allow direct communication between Broker & Importer (modify 19 CFR § 111.36) • Validating Importers (Bona Fides) • CBP interested in creating requirements – amendment of 19 CFR § 141 • Updating regulations will protect Brokers (IPR, Identity Theft, etc.) Wednesday, April 9, 2014

18. Centers of Excellence and Expertise (CEE’s) • 1 - Pharmaceuticals, Health & Chemicals – New York, NY • 2 - Agriculture & Prepared Products - Miami, FL • 3 - Automotive & Aerospace – Detroit, MI • 4 - Apparel Footwear & Textiles – San Francisco, CA • 5 - Base Metals – Chicago, IL • 6 - Petroleum, Natural Gas & Minerals – Houston, TX • 7 - Electronics – Los Angeles, CA • 8 - Consumer Products & Mass Merchandising – Atlanta, GA • 9 - Industrial & Manufacturing Materials – Buffalo, NY • 0 - Machinery – Laredo, TX • Team Number - 0 (Signifies CEE) # (Internal#) 7 (Identified CEE) • Partnership Division (CTPAT, CEE Volunteers) • Validation & Compliance Division (Importers not partnered) • Enforcement Division (trademark, patent, health & safety, ADCVD) Wednesday, April 9, 2014

19. Centers of Excellence and Expertise (CEE’s) • Account Based • Partnered accounts & CEE Volunteers • Roll up IR numbers under one account • Process all lines by one CEE regardless of HTS# • All automated entry types processed by CEE • Protests and inquiries should go to CEE • Transaction by Transaction • Tariff break out by scope of industry Wednesday, April 9, 2014

20. Centers of Excellence and Expertise (CEE’s) • Prepare - Identification of accounts assigned to CEE’s • Account notification • CST Team • CST Codes (CSMS# 14-000033) • Changes to HTS Numbers • Expansion of CEE’s (Pharma, Electronics, Petroleum) • Engage – CEE assigned accounts and the CEE’s • Communicate – CBP issues, entry info requests, trends, Post Entry questions/concerns • Document submission – IT/Software solutions, Exercise caution over documents provided • Develop communication standards with CBP – XXXCEE003@broker.com; CEE to publish list • Refine & Improve – “Trade Process Document”, Exceptions to centralization, Internal audits • Get involved and stay involved • Broker should encourage importers to apply to CEE’s • BWG – Broker Working Group – work through local associations and NCBFAA

21. Keynote Lunch with CBP Commissioner Kerlikowski • Admitted he is not fluent in the role of the broker • Touched base on ACE, ITDS, Exports, and most issues brokers are facing • Relies on his team to inform him of broker issues • Very complimentary of Custom Brokers Wednesday, April 9, 2014

22. ACE • Brenda Smith – CBP, Executive Director, ACE Business Office • Able to facilitate CEE’s, Exports, Manage by Account • ACE Capacity Overview • Pre-Arrival Manifest (80%) • Arrival Cargo Release (75%) • Post Release Entry Summary (65%) • Exports (55%) • PGA Integration – FDA, APHIS/Lacey Act (50%) • Single Window • PGA Message Set (EPA & FSIS in pilot in certain ports) • Interoperability Web Service (IWS) • Document Image System (DIS) • May 1, 2015 – Mandatory for all electronic manifest filing • November 1, 2015 – Electronic cargo release and related entry summary filing • October 1, 2016 – All remaining electronic portions of the CBP cargo process Wednesday, April 9, 2014

23. ACE • Completion Dates for Key Ace Functionality – Vince Iacopella, Janell • April, 2014 – Cargo Release for all modes • January, 2015 – Import & export manifest for all modes • July, 2015 – All entry types • October, 2016 – All development complete • Does your company have a plan with their IT company? • Benefits • Survivability • Paper • Simplified Release (Quicker release, CBP more time to clear cargo before arrival) • Operations must be covered under regulations, thus the new updates to Part 111 (Agile Policy) • Still issues with posting release on the House BOL level • Don’t Wait – Migrate • ACE Transition Toolkit available on the NCBFAA website Wednesday, April 9, 2014

24. Enforcement Through Trade Transformation • Rich DiNucci • Compliance and accuracy through CEE’s • Improvements in targeting • 5106 – New forms will help targeting • BKIP will help process & CBP • Confidentiality still will be an issue under current regulations • Client will complete 5106 via app on ACE and submit direct to CBP • Brokers can submit on behalf of importer IF they are willing to accept liability • Compliance is a two-way discussion; Enforcement is one-way • Who do we contact if there is a cargo hold – port or CEE? CEE is first point of contact. • ITDS should allow more agency cooperation (EPA example in New York) • Training carriers, CFS, etc. – Paperless inbond example Wednesday, April 9, 2014