UPS® Customs Brokerage Webinar 29 March 2017

Benefits and Challenges of ACE Post Summary Transactions

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Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of customer, unless expressly authorized by UPS. The information provided here is based on information obtained from government, industry, and other public sources and reflects prevailing conditions and our opinions

and views as of this date, all of which are accordingly subject to change. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was otherwise reviewed by us. SCS accepts no liability for the content of

this presentation, or for the consequences of any actions taken on the basis of the information provided. This presentation does not constitute legal advice.

© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

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Benefits and Challenges of ACE Post Summary Transactions

Agenda

UPS trade update

ACE timing

Post summary transactions overview

Key transactions and their implications

UPS Tradenomics

Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of customer, unless expressly authorized by UPS. The information provided here is based on information obtained from government, industry, and

other public sources and reflects prevailing conditions and our opinions and views as of this date, all of which are accordingly subject to change. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and

completeness of all information available from public sources or which was otherwise reviewed by us. SCS accepts no liability for the content of this presentation, or for the consequences of any actions taken on the basis of the information provided.

© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. This presentation does not constitute legal advice.

$337.3B US

exports to

Canada (2015)

$267.2B US

exports to

Mexico (2015)

UPS Trade Update

NAFTA trade update

• Mexico – proposing an accelerated timeline for renegotiation

• Mid-year start

• Potential December finish

• US – renegotiations will focus on the “anomalies”

• E.g. Rules of origin

• Two bi-laterals vs one tri-lateral not determined

• Goal is to increase total trade while reducing the trade deficit

Source: Bloomberg/Bureau of National Affairs International Trade Reporter, March 16,2017

Source: USTR

Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of customer, unless expressly authorized by UPS. The information provided here is based on information obtained from government, industry, and other public sources and reflects prevailing conditions and our opinions

and views as of this date, all of which are accordingly subject to change. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was otherwise reviewed by us. SCS accepts no liability for the content of

this presentation, or for the consequences of any actions taken on the basis of the information provided. This presentation does not constitute legal advice.

© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

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Timeline overview

1. Planned ACE transition away from ACS (for primary transactions)

2. Actual ACE transition away from ACS

3. Planned ACE release of post summary transactions

4. Rescheduled release of ACE post summary transactions

5. Actual rollout currently pending

Mar ’16

Oct ’16

Jan 14th

Oct ’15

?

Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of customer, unless expressly authorized by UPS. The information provided here is based on information obtained from government, industry, and other public sources and reflects prevailing conditions and our opinions

and views as of this date, all of which are accordingly subject to change. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was otherwise reviewed by us. SCS accepts no liability for the content of

this presentation, or for the consequences of any actions taken on the basis of the information provided. This presentation does not constitute legal advice.

© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

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Post summary transactions overview

What they are

• Liquidation

• Post summary corrections

• Protests

• Reconciliation

• Duty drawback

What to review?

Impact of ACE

General implications

Why consider?

Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of customer, unless expressly authorized by UPS. The information provided here is based on information obtained from government, industry, and other public sources and reflects prevailing conditions and our opinions

and views as of this date, all of which are accordingly subject to change. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was otherwise reviewed by us. SCS accepts no liability for the content of

this presentation, or for the consequences of any actions taken on the basis of the information provided. This presentation does not constitute legal advice.

© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

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Automation and digitization of required data elements

Post summary transactions

Benefits

• Streamlined process

• Predictability

• Speed

• Visibility

Challenges

• Set up and adapt to new process

• CBP “targeting”

• CBP data retention, monitoring and data mining

Source: cbp.gov

Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of customer, unless expressly authorized by UPS. The information provided here is based on information obtained from government, industry, and other public sources and

reflects prevailing conditions and our opinions and views as of this date, all of which are accordingly subject to change. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public

sources or which was otherwise reviewed by us. SCS accepts no liability for the content of this presentation, or for the consequences of any actions taken on the basis of the information provided. This presentation does not constitute legal advice.

© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

Liquidation

• Impact of ACE

• Weekly processing (formally every two weeks)

• New Electronic Bulletin Board

– Provides public notice

• 365 day deemed liquidation

Implications:

• Greater visibility from a “public notice” perspective

Definition

• CBP’s process to review an entry and finalize their position on duties

Source: cbp.gov

Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of customer, unless expressly authorized by UPS. The information provided here is based on information obtained from government, industry, and other public sources and

reflects prevailing conditions and our opinions and views as of this date, all of which are accordingly subject to change. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public

sources or which was otherwise reviewed by us. SCS accepts no liability for the content of this presentation, or for the consequences of any actions taken on the basis of the information provided. This presentation does not constitute legal advice.

© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

Post Summary Corrections

• Under ACE

• An automated process both for submitting and receiving PSC responses

• PSC – did you know?

• CBP will manage the process via targeting

• CBP will retain data for monitoring and data mining purposes

Implications:

• Diligence on the part of the importer to provide consistent and accurate data

Definition

• Electronic corrections via ACE on entry summary data presented to and

accepted by CBP

Source: cbp.gov

Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of customer, unless expressly authorized by UPS. The information provided here is based on information obtained from government, industry, and other public sources and

reflects prevailing conditions and our opinions and views as of this date, all of which are accordingly subject to change. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public

sources or which was otherwise reviewed by us. SCS accepts no liability for the content of this presentation, or for the consequences of any actions taken on the basis of the information provided. This presentation does not constitute legal advice.

© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

Protests

• Impact of ACE

• Conversion to a semi-automated process

– Upload via the ACE Secure Data Portal

– Partial integration with ACE (paper submissions still possible)

– Some back end processes to remain manual

Implications:

• Trader may want to weigh the option of a protest, which still has manual

components vs utilizing a post summary correction

Definition

• The legal vehicle for importers and interested parties to administratively contest

CBP decisions related to imported merchandise

Source: cbp.gov

Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of customer, unless expressly authorized by UPS. The information provided here is based on information obtained from government, industry, and other public sources and

reflects prevailing conditions and our opinions and views as of this date, all of which are accordingly subject to change. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public

sources or which was otherwise reviewed by us. SCS accepts no liability for the content of this presentation, or for the consequences of any actions taken on the basis of the information provided. This presentation does not constitute legal advice.

© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

Reconciliation

• Impact of ACE

• Reconciliation is no longer limited to pre-approved companies

– Participation by a company on an as needed basis

• Did you know?

• Only mechanism available to reconcile adjustments to declared (dutiable) value

Implications:

• Companies with only occasional need for reconciliation can leverage its

benefits

Definition

• Allows an importer, using reasonable care, to make entry where not all of the

necessary elements to calculate duty and provide entry are final

Source: cbp.gov

Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of customer, unless expressly authorized by UPS. The information provided here is based on information obtained from government, industry, and

other public sources and reflects prevailing conditions and our opinions and views as of this date, all of which are accordingly subject to change. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and

completeness of all information available from public sources or which was otherwise reviewed by us. SCS accepts no liability for the content of this presentation, or for the consequences of any actions taken on the basis of the information provided.

© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. This presentation does not constitute legal advice.

More than $2

billion in

unprocessed

duty drawback

claims each year

Duty drawback

• Impact of ACE

• Consolidation to one entry type (Type 47)

• Filers to provide the applicable provision (from form 7551)

• Impact of Trade Facilitation and Trade Enforcement Act of 2015

• Applying drawback at the 8 digit HTS code level

• “Commercially interchangeable” requirement being dropped

• Time window to process claim expanded from three to five years.

Source: cbp.gov

Implications:

• More flexibility to recoup duties and other certain taxes on re-exported and

destroyed goods

Definition

• The refund of certain duties, internal revenue taxes and certain fees collected

upon the importation of goods, upon their exportation or destruction

Source: globalcustoms.net

Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of customer, unless expressly authorized by UPS. The information provided here is based on information obtained from government, industry, and other public sources and reflects prevailing conditions and our opinions

and views as of this date, all of which are accordingly subject to change. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was otherwise reviewed by us. SCS accepts no liability for the content of

this presentation, or for the consequences of any actions taken on the basis of the information provided. This presentation does not constitute legal advice.

© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

• Post summary activity – being “Proactively

Reactive”

• Attempting to avoid all post summary activities could

be cost prohibitive

• Managing the post entry process with ACE

• What can you get out of the ACE data versus broker

data

• What would you like to do with it?

Post-

summary

activities

Entry/

entry

summary

Cost associated with moving transactions to entry summary

Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of customer, unless expressly authorized by UPS. The information provided here is based on information obtained from government, industry, and other public sources and reflects prevailing conditions and our opinions

and views as of this date, all of which are accordingly subject to change. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was otherwise reviewed by us. SCS accepts no liability for the content of

this presentation, or for the consequences of any actions taken on the basis of the information provided. This presentation does not constitute legal advice.

© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

• Drawback changes

• Moving from 10 digits to 8 digits

• Process possibly more challenging

• Potentially better payoff

• Reconciliation

• Ensure accuracy

• Drive for change upstream

Inventory at

8 digit level

Inventory at 10

digit level

Inventory Alignment with Drawback

Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of customer, unless expressly authorized by UPS. The information provided here is based on information obtained from government, industry, and other public sources and reflects prevailing conditions and our opinions

and views as of this date, all of which are accordingly subject to change. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was otherwise reviewed by us. SCS accepts no liability for the content of

this presentation, or for the consequences of any actions taken on the basis of the information provided. This presentation does not constitute legal advice.

© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

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Questions and answers

UPS Trade Management Services – when you join forces with an expert

Consulting services Managed services

Compliance consulting Trade compliance process management

Trade consulting Broker/forwarder management

Tariff engineering FTA (free trade agreement) management

Security initiatives consulting Post-entry management

FTA feasibility evaluations Data management

Classification management

Import/export license management

Denied-party screening management

Proprietary and Confidential: This presentation may not be used or disclosed to any person other than employees of customer, unless expressly authorized by UPS. The information provided here is based on information obtained from government, industry, and other public sources and reflects prevailing conditions and our opinions

and views as of this date, all of which are accordingly subject to change. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was otherwise reviewed by us. SCS accepts no liability for the content of

this presentation, or for the consequences of any actions taken on the basis of the information provided. This presentation does not constitute legal advice.

© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

Benefits and Challenges of ACE Post Summary Transactions

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• Please request on checkout a copy of our presentation and our exclusive article on the Benefits and

Challenges of ACE Post Summary Transactions

• Upcoming webinar:

• The impact and implications, no matter where you are, of non-US free trade agreements (May 9, 2017)

The material and information contained in this document is for general information purposes only. UPS does not act as a customs law adviser. You

should not rely upon this material or information as a basis for making any business, legal or any other decisions. UPS makes no representations or warranties

of any kind, express or implied about the completeness, accuracy, reliability, suitability or availability with respect to the material and information contained in

this document for any purpose. UPS will not be liable for any false, inaccurate, inappropriate or incomplete information presented in the document.

Thank you

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