International

Faster import clearance, duty savings, predictable costs, reduced regulatory oversight and a competitive advantage are all reasons to ensure that your business is compliant with international trade regulations. If you are an importer or exporter, you need a clear understanding of the rules that govern trade in your area. Here are a few of the legislative requirements and regulations you need to understand:

1. The Harmonized System of Tariff Classification

What it is:

Developed and maintained by the World Customs Organization, this multipurpose classification system is comprised of names or terms for goods used as the basis for customs tariffs and for the compilation of trade statistics. It is reviewed and updated periodically to clarify, add, or delete any confusing wording, as well as to incorporate new products entering the marketplace.

Why it’s important:

Not knowing the proper classification of imported goods may result in an error, leading to a chain reaction of errors on rate of duty, import and export controls, restricted goods, etc., resulting in hefty fines or delays at the border.

2. Transfer Pricing

What it is:

Transfer pricing refers to the pricing of contributions (assets, tangible and intangible, services and funds) transferred within an organization. For example, goods from a parent company may be sold to a foreign subsidiary, typical market mechanisms that would normally establish prices between third parties don’t exist. Therefore, the transfer price will affect the allocation of profit among the parts of the company. The value of your product impacts the duty and taxes calculated. Value is defined as all costs that go into getting your goods to its final destination, including price paid, associated costs and transportation. If a transfer price agreement is in place it could also impact the calculation of duties or refunds.

Why it’s important:

Customs valuation and transfer pricing have a lot in common but have competing interests. Customs and Tax authorities worry that multinational entities set transfer prices on cross border transactions to reduce taxation, making customs value a major tax compliance issue.  Lack of attention to customs valuation methodologies exposes companies to audits, investigations and /or penalties. If duty calculated is less than it should be, penalties can result. In other cases, you may be paying more duty than you need to.

There are different rules developed for transfer pricing depending on the authority both attempting to reach arm’s length values.  However, due to differing methodologies and standards, the transfer pricing value may not be suitable for customs value and vice versa. The one thing that is certain is that multinational companies need to comply with both Tax and Customs valuation rules.

3. Trade Agreements and the Specific Rules of Origin

What it is:

A free trade agreement is a treaty between two or more countries where commerce in goods and services can be conducted across common borders, without tariffs or hindrances. However, capital or labour may not move freely.  Member countries usually impose a uniform tariff on trade with non-member countries.  Free trade agreements offer duty relief for many imported goods and eligibility often relies on the specific rules of origin to determine whether goods meet the required transformation to benefit from duty free status.

Why it’s important:

Trade agreements can offer significant cost savings in the form of reduced duty or even duty-free.  It is important to note that importers must understand the legislative requirements and ensure the appropriate audit trails are in place when qualify goods for the benefits of the any agreement.  Each agreement has a set of “Specific Rules of Origin”: that must be adhered to while maintaining the proof of origin for those eligible goods. 

To take advantage of the benefits of these agreements and avoid costly penalties, importers and exporters must ensure compliance with the applicable rules and regulations of the agreement.

4. Customs Compliance, Verification and Audit

What they are:

Compliance refers to conformity in satisfying official requirements of various customs services. Verification is providing evidence that confirms the accuracy of your submissions to customs, and Audit refers to a formal examination of records and documents.

Why they’re important:

Compliance, Verification and Audit help to establish your importer profile, thereby facilitating the movement of your goods across borders. All three processes provide for security, along with the proper collection of duties, taxes, and correct application of preferential duty tariffs so governments can protect selected industries.  For the importer, these processes prevent supply chain bottlenecks, costly production downtime, or errors which may result in expensive penalties.

5. Export Controls and Documentation

What it is:

There are many controls in place for exporting. Specific commodities such as softwood lumber, firearms and peanut butter are controlled and require a special permit. There could be the situation where the destination country may require an export permit.

Why it’s important:

You must understand whether the product and the destination of that product are controlled, regulated or prohibited and whether a permit is required to proceed with the export.

In Canada, for example, exporters are subject to the same rules and regulations as importers in regard to penalties. If you are operating as a Non-Resident Importer, you would also be subject to penalties for any situation involving fraud, negligence and gross negligence. Your company should take the appropriate steps to ensure compliance with Canada’s export laws and implement an internal export compliance program, have documented record keeping policies, have an internal audit procedure, and work closely with both your Customs Broker and Freight Forwarder.

Finally, never assume the steps you took six months ago for an export are the same steps you should take today – regularly review regulations!

Failure to understand and comply with these 5 trade requirements, even without intent, can lead to fines, audits, seizures, inspections, investigations, and possibly imprisonment. These regulations have been established for setting rates of duty and to fulfill the requirements of international trade agreements.Braver is a world class foreign trade and international affairs company. If you are looking for a strong partner to assist you on your overseas business management, contact our businesspeople and get to know more.

Aging is brought about by a cycle of biochemical processes which cause the body to degenerate over a period of time, impacting the health, fitness and physical appearance of the individual.

Anti-aging refers to the process of limiting or retarding these changes through various products and services. Nowadays, good physical personality has become a necessity and determines the success of an individual in different areas of life. The growing consciousness among both the young and old consumers regarding their physical appearance has fostered the demand for anti-aging products and devices.

The global anti-aging market is projected to reach a value of US$79.5 billion by 2024, growing at a compound annual growth rate of 8% between 2019 and 2024.

The advancements in technology, as well as huge investments in research and development activities, have led to the introduction of new anti-aging treatments and products, such as plastic surgeries, breast implants, botulinum toxin injection therapies, etc. which offer long-term results.

Strict rules and regulations have encouraged the manufacturers to introduce safer and more efficient anti-aging products which provide quick results to the consumers, in turn, widening the growth prospects of the market.

Although premium anti-aging products have conventionally been distributed through departmental stores, specialty stores have made them more accessible and widely available. These products are now also being sold through online stores, salons, spas, specialist retail shops, and direct response television such as infomercials and home shopping channels.

The import and export of antiaging products have been increasing a lot all over the world. The high cost of anti-aging products and procedures along with the presence of counterfeit products containing toxic substances pose a major challenge to the market growth. High-income group represents the leading segment as consumers in this segment can easily afford anti-aging cosmetic procedures.

Sunscreen products are the most popular segment as they prevent the skin from premature wrinkling and discoloration, and also protect it from the harmful UV rays. The market has been divided into microdermabrasion and aesthetic energy devices. Amongst these, microdermabrasion devices are the leading segment, accounting for the majority of the market share.

France has the largest anti-aging market, followed by Germany, Italy, United Kingdom, Russia, Spain, United States, Brazil, Japan, South Korea, China, Thailand and India.Braver is a world class foreign trade and international affairs company. We manage import and export operations and strategic overseas developments to many industrial sectors, including cosmetics. Contact our businesspeople and get to know more.

A growing number of companies in the automotive industry are embracing the use of augmented and virtual reality technology for tasks such as part picking and inventory management, as well as for training.

From enhanced design and manufacturing processes to novel staff training and apprenticeship programmes, the use of augmented reality (AR) and virtual reality (VR) in industrial applications is growing.

In the automotive logistics sector, a number of vehicle-makers and logistics service providers have been prompted to investigate the potential of technology such as glasses or goggles that can overlay a heads-up display onto a normal view of the world. Besides innovative pilot projects, some are even moving towards the establishment of AR systems in full operation. 

Many early examples have focused on warehouse management and product picking, but, as the technology improves and the range of products on the market increases, there is some evidence that the use of this technology could go much further. 

As Irma Gilbert, business development manager at Liverpool-based technology start-up Connect 4.0 explains, AR technology can be put to a large number of uses, from maintenance and training to prototyping and product or part visualisation, as well as improving productivity and safety. For automotive, the luxury segment is also using AR to enhance production, reduce cost of design and provide a better customer experience.

BMW, for example, is currently using smart glasses in a pilot project at its Munich plant. As Nela Murauer, head of the Smart Glasses Project, explains, the company is trialling glasses like those from ODG, Vuzix and Google, which are “technically used like a monitor worn on the nose” to display picking information in the worker’s field of vision, while interaction with the warehouse management system is achieved via barcode scans. 

A two-month study suggests a 22% time-saving and a 33% reduction in errors over a typical eight-hour shift when using the technology, and employees have proved to be satisfied with the user interface, says Murauer – though there have been some reports of hardware-related discomfort to the nose and temples, she admits. 

Jan Cirullies, head of logistics at the Fraunhofer Institute for Software and Systems Engineering (ISST) in Germany, says one of the main applications for AR in warehouses is to support operational processes, either as a permanent tool or a temporary aid. One example of a permanent application is pick-by-vision technology, in which AR devices are used to highlight boxes or shelf locations to pick from, or to optimise packing instructions. 

Among those deploying the technology is VW Group, which is currently running a number of AR-related initiatives across several group companies. Skoda, for example, has introduced an innovative video mapping scheme at its Mladá Boleslav facility in the Czech Republic in an effort to assist staff with material picking by providing extended information and highlighting any process errors.

Elsewhere, VW is using AR goggles to present digitalised training information about a variety of procedures that apprentices can quickly access as they are working – something the company says should help to foster self-teaching skills and enable trainees to adapt their learning behaviour to conditions at the plant.

When it comes to assessing the main benefits of using AR in logistics applications, Cirullies suggests that logistics service providers can expect to achieve a 30% improvement in total process costs, thanks to gains like shorter lead times and lower error rates.

He also believes that AR provides companies across the automotive logistics sector with potentially lifelong technological support. However, despite the undoubted upsides, Cirullies admits that the technology for what he describes as ‘full’ AR – or even ‘assisted reality’ devices featuring monocular and/or fixed positions for information shown in glasses – is “still lacking industry-ready maturity”.

“Hence, scenarios with temporary application are interesting. Even if the device is not suitable for a whole shift – perhaps because of weight-related ergonomic reasons or battery life – selected actions might be supported,” he says.

Based on his experience at UBiMAX, Lampe suggests that AR can lead to 15-35% faster processes depending on existing efficiency levels, as well as near-zero errors in picking. He also points to high employee satisfaction thanks to more ergonomic work processes via hands-free work and the removal of the need to walk to a fixed computer terminal, as well as an end to searching paper lists and a reduction of unnecessary tasks.

In his view, AR can also facilitate more flexible deployment of staff “due to better worker guidance and intuitive mobile visual information provision”. 

“Even new or temporary staff can fulfil tasks at top quality as the AR solution shows what to do and how to do it. Via remote support calls through the smart glasses, workers can also contact their manager and get help, guidance or approvals,” he adds. Woodward goes as far as to say that both AR and VR have the potential to transform the logistics environment, thanks to their ability to improve efficiency. 

“We know that vision picking has improved productivity, reduced errors and positively supported our warehouse operatives in their daily work, with an average uplift of 15% in the number of picks per hour, compared to a conventional approach,” he says.

Seems the use of AR in logistics will expand over the next five to ten years and, as we better understand how to integrate new and legacy systems, that options to develop new applications for repair, maintenance and product development will come to the fore. 

Braver is a world class Latin American company that specializes in foreign trade and international affairs. We monitor worldwide cutting-edge technologies, with potential to change the way we look at the planet and bring it to emerging countries through import and export management. Contact our businesspeople and get to know more.

Countries in South America are poised for growth in certain sectors and industries, creating the opportunity for new and aspiring entrepreneurs to launch many new business ideas.

Smart Home Builder

There is a growing need in South America to have energy and resource efficient homes. Compared to other countries, many South American economies need further support with new technologies to make their existing infrastructure better. Energy and resource wastage is among the highest in the world. This can start at the individual home level. By creating a smart home building company, you can tailor to the needed efficiencies while also providing the new homes for the future. If you have skills in construction or electronic sensors and data, this would be a perfect business idea for you to execute on.

Road & Bridge Development

As populations grow, there will be more demand for reliable and safe roads and bridges. There is even demand for the essential roadways and systems to be built, as this has been proven to constraint countries growth due to poor infrastructure for transportation. A road and bridge development company would need to use sustainable techniques to have a competitive advantage and to drive brand growth, as many Latin Americans want more sustainable brands.

Automated Farming Equipment

As a significant producer and supplier of the world’s food, areas in South America are poised to continue to feed the world. However, as the demand grows, farming techniques need to advance. There is research that shows there is significant room for automation to be utilized in the agricultural sector. This business idea focuses on selling automated farming equipment such as automated tractors. One could use the business model of being a dealer for automated farming equipment, or you could set up a service to have it done for people’s farms.

Construction Safety Management Company

With the growth in the infrastructure sector in South America, there will a growing need for more safety management companies. Especially since there is a shortage of technical professions, employers may have to seek employees from abroad so safety standards will need to be raised. For this idea, you would help other companies manage their safety programs, return to work programs when people get hurt, and make sure all potential regulations and laws are being followed.

Sensor Manufacturer

There is a huge amount of manufacturing that takes place in South America. From electronics to airplanes, a wide variety of items are created there and that sector will continue to flourish. This business idea takes hold of that growth and the huge demand for sensors by becoming a wholesale sensor manufacturer. Sensors are needed in so many electronic products these days as we create smart devices, newer phones, and smart homes to name a few. This is more of a high-investment business idea, but it has the potential to be a multi-million dollar company.

Internet Infrastructure

South America is poised for an Internet Infrastructure Development Company. There is a growing need to have reliable and fast internet across every country in that area. Some places already have reliable internet sources, however, the rural and remote locations need the infrastructure built and there could be government grants or loans that will help you get started. This can be a medium-cost business as you can get grants, but the profit potential is great.

International Trade

Blockchain technology could be used to create an import and export automation company. To make this business idea happen, one would create a blockchain ledger that would store the transactions and contents of peoples packages. An initial verification at the entry port would need to be done, but after that, it could potentially be sent around the world without needing to be checked at every border. This would save a significant amount of time at the borders in South America, but it also has the potential to fight against drug trafficking. To execute this business idea one would require a large amount of investment and patience to deal with government contracts. However, if the product was made right and contracts where established, this business could last for a long time. The graph below perfectly outlines that you could raise money from venture capitals or conduct an Initial Coin Offering.

Tourist Automation

Even the tourist industry needs automation. It mainly consists of some of the back-office tasks. This business idea would solve all these back-office administrative duties, so more employees can concentrate on providing a seamless experience to their potential and new customers. If you have a desire to learn and develop an automation business, this would be a great opportunity for you.

Online/ AI Investment Management

As Latin Americans become more wealthy, there is going to be widespread need across South America for investment management. However, with the new age of technology, expensive financial advisors won’t be needed. Instead, a similar approach can be taken from business ideas in the USA with AI investment platforms. This business idea would be able to have a strong competitive advantage but would require a large amount of funding to get off the ground.

Private Universities

There is strong research to show that the South American economies are in desperate need of higher education programs to fill the demand for educated citizens. There is lots of room for improvement from the current options so offering a private institution that takes a more unique approach from other western or eastern schools could provide a unique advantage for this idea. One could start small by offering a single degree vertical or specialty MBA to keep startup costs low.

Private Technical Schools

Like university education, there is a strong need for private technical schools. Many trades are in need of certified workers who can support the growing infrastructure, housing, and manufacturing industries that are growing every day. This idea could be similarly executed like the private universities by picking one vertical like electrical or construction, and execute on that course program for a group. This could be a low-cost business idea if you already have the certification and know what it takes to teach it.

Sustainability Management

Many Latin Americans want to support companies and brands that are sustainable and will be around for the long term. This is where the business idea of sustainability consulting comes in. One could start this idea with low capital investments and consult with current businesses on how they can make their supply chains or products more sustainable. A huge challenge identified related to this area is promoting the new sustainable practices in a way that will drive brand awareness and growth. If you have a passion for sustainability, this would be a great business idea for you 

Drone Distribution Companies

The current state of Latin America infrastructure is not where it needs to be to distribute the coming demand for e-commerce products. To fix this shift and to make buying online access to all, one could start a drone distribution company. With little regulations around the industry, there is a lot of room for growth and taking the market share of traditional distribution providers. If you like this idea, you could start it with one single drone and a single shipping path and go from there. That would keep this business low cost in the beginning.

Package Delivery Services

This business idea may not seem new but there is demand for better and more efficient package delivery services. To differentiate from the drone delivery idea above, this company would use bikes or scooters to get around and deliver the packages. Again, the growth of e-commerce is only going to create more demand for instant delivery services. To make this even more independent of an idea, you could outsource all your delivery drivers by paying them a simple delivery fee for each package delivered. A similar model is the Uber model of getting others to do the work and you pay them a percentage of revenues.

Renewable Energy for Homes

Energy efficiency is significantly lower across Latin American countries when compared to the rest of the world, leaving a lot of room for competition to come in and improve upon existing setups. One business idea that would do just that would be a renewable energy home consultant. You would consult with homeowners on how they could install more energy efficient appliances and structures. For instance, solar panel roofing and radiant floor heating could be included in your portfolio of products you suggest for installations. To make money, you could charge a single consultation fee, as well as generate referral commissions from when you refer a specific product for a homeowner to buy and install.

If you are looking for a strong partner to help your company unveiling the Latin American market, bring your project to Braver and let us show you the way. Contact our businesspeople and get to know more.

Significant and sustained increases in the world trade should be a worry for many as the increase in trade uncertainty observed in the first quarter could be enough to reduce global growth by up to 0.75 percentage points in 2019. In August, the US Institute for supply management latest report shows a contraction in production, purchasing, and employment indices.

Uncertainty generated from Brexit, the US-China trade war, Japan – South Korea trade wars, and general discontentment with global trend towards widening income inequality is creating a toxic mix for politicians to deal with.

The irony is the conventional approach of blaming your trading partners for your problems is only likely to exacerbate a general lack of confidence and increase further uncertainty.

The current round of the G7 summit in Biarritz concluded with support “to overhaul the WTO to improve effectiveness with regard to intellectual property protection, to settle disputes more swiftly and to eliminate unfair trade practices.”

In essence, it’s signaling a need to strengthen the capabilities of the WTO to act faster and more decisively in resolving disputes that are even more political than structural in nature, requiring a more multi-faceted engagement approach. Whilst this may help in the long-run, in reality, companies will have to contend with uncertainty in global trade for some time to come as well as the impacts on the real economy from these disputes.

And all of this is happening as IMO 2020 approaches, the January 1, 2020, date by which the International Maritime Organization mandates a switch to lower sulfur fuels in order to achieve an 80% reduction in sulfur emissions leading to significant cost increases in the shipping goods via ocean freight (initial estimates between US$180,00  and US$420,00 per a twenty feet container dependent on routing, base fuel costs, carrier).

So given the significant uncertainty around global trade agreements, the increasing use of trade as a political football, the increasing costs to trade and the shortening of product lifecycles as customers want faster, newer more differentiated offerings. Is it still worth it?

Of course this is very much dependent on what industry you are in. Whether you’re a global manufacturer or a wholesaler sourcing goods, your perspectives may be different based on investments made, sensitivity to current trade/tariff measures, customer demands, your markets, and the degree to which you are exposed to political debate and targeting.

However, I would offer that the benefits of specialization, economies of scale and unique factors of production that have underpinned global trade still exist as Adam Smith put it in 1776:

“By means of glasses, hotbeds, and hot walls, very good grapes can be raised in Scotland, and very good wine too can be made of them at about thirty times the expense for which at least equally good can be brought from foreign countries. Would it be a reasonable law to prohibit the importation of all foreign wines, merely to encourage the making of claret and burgundy in Scotland?”

Today this simple analogy still holds true in skills, competences, capabilities, and access to markets and insights so that over time the expectation is that trade will prevail.

While the recent outlook has been gloomy, opportunities for 2020 include a resolution to a number of ongoing disputes and a final settlement on Brexit (hopefully). Additionally, the maturation in technologies such as blockchain, process automation, forecasting and demand management solutions can also offset costs associated with IMO and support greater agility in the uncertain supply chain world that we currently live in.

Indeed, if 2019 was the year of trade uncertainty, 2020 could be a restorative year in our ability to execute global trade. Partnering with an experienced supply chain leader will be essential to minimizing cost increases while ensuring the efficient flow of your company’s goods and services.

Braver is a world class foreign trade and international affairs company. We monitor worldwide cutting-edge technologies, with potential to change the way we look at the planet and bring it to emerging countries through import and export management. If you are looking for a strong partner to help your company unveiling the Latin American market, bring your project to Braver and let us show you the way. Contact our businesspeople and get to know more.