Production, Operation and Shipment Preparation

Export Academy1 June 2011

Hansar Bangkok HotelVernon Li

Order received

• Good News – The production can start run– May have profit after shipment

• Bad News– Start to arrange material– If the cash flow enough to run the production– If the production can complete on time– if there is any shipment problem– If our product or production method have any problem with

the quality standard or producton standard from customer

Order received

• Other challenges– Any accidents may happen during production– Change of rules and regulations during production– Increase the control of the quality standard– More…..

Basic standards and regulations

• Product Quality standard– If our product meet the general product quality standard

– usually we can get these information from lab test company.

– If our product meet the specific product quality standard from customer. – we can also get these information from the authorized Lab test company assigned by customer.• E.g. normal a chair will require 200 lbs loading ability, there

are company who target consumer is those over 250 lbs big guy – they special request all their chairs need to have at least 300 lbs loading ability

Basic standards and regulation

• Regulation or legislation of each country are different some are general but some are more tough.– REACH – all EU countries– CPSIA – USA– Electric/electronic standard – CE standard – EU, UL

Standard – USA, CSA standard – Canada…– More ..

**Should check careful when you create the item not until you get an order and find out the item cannot meet those country standards and regulation

Quality Standard - REACH• The legislation was proposed under dual reasoning: protection of human health and

protection of the environment.• Using potentially toxic substances (such as phthalates or brominated

flame retardants) is deemed undesirable and REACH will force the use of certain of these substances to be phased out. Using potentially toxic substances in products other than those ingested by humans (such as electronic devices) may seem to be safe, but there are several ways in which chemicals can enter the human body and the environment. Substances can leave articles during consumer use, for example into the air where they can be inhaled or ingested. Even where they might not do direct harm to humans, they can contaminate the air or water, and can enter the food chain through plants, fish or other animals.

• Continued use of many toxic chemicals is sometimes justified because 'at very low levels they are not a concern to health'.However, many of these substances may bioaccumulate in the human body, thus reaching dangerous concentrations. They may also chemically react with one another,producing new substances with new risks.

Quality Standard - CPSIA• The Consumer Product Safety Improvement Act of 2008 is a United States law

signed on August 14, 2008 by President George W. Bush. • The law—public law 110-314—increases the budget of the

Consumer Product Safety Commission (CPSC), imposes new testing and documentation requirements, and sets new acceptable levels of several substances.

• It imposes new requirements on manufacturers of apparel, shoes, personal care products, accessories and jewelry, home furnishings, bedding, toys, electronics and video games, books, school supplies, educational materials and science kits. The Act also increases fines and specifies jail time for some violations.

• This act is seen in part controversial because of its impact to many types of businesses that did not cause the problem. Because of the wide-sweeping nature of the law, many small resellers will be forced to discontinue the sale of children’s products and are in risk of losing(and in some cases have already lost) their business.

• The earlier bill was prompted by various scandals over high lead content in toys, including a December 2006 report at Waxman's behest showing head lead levels in items sold in U.S. Capitol gift shops.

Quality Standard - CPSIA

• It is targeted mostly toward "children's products", which are defined as any consumer product designed or intended primarily for children 12 years of age or younger.

• There are also new rules governing All terrain vehicle (ATVs).

• It also affects any product that is subject to anything the CPSC regulates by requiring certificates of conformance which state that the product was tested to conform to the regulations it is subject to.

Quality Standard – CPSIA• The legislation requires that every manufacturer of a product subject to a

consumer product safety rule will provide a "General Conformity Certificate" to certify, based on unit testing or a reasonable testing program, that the product complies with all safety rules.This requirement was imposed on every product manufactured on or after 12 November 2008. The certificate must:– be in English– list the name, address, and phone number of the manufacturer, importer, and/or

private labeler issuing the certificate and any third party testing facility– list the date and place of manufacture and date and place of testing– list the contact information of the records keeper– list each applicable rule, standard, and ban

• These certificates must accompany the product through the distribution chain through the retailer. They must be available to the CPSC during any inspection.

Quality Standard – CPSIA

Test Standard Publication of Accreditation Procedure

Third Party Testing Required

Lead Paint 22 September 2008 21 December 2008

Cribs and Pacifiers 22 October 2008 20 January 2009

Small Parts 17 November 2008 15 February 2009

Metal Jewelry December 2008 March 2009

Baby Bouncers, Walkers, and Jumpers

March 2009 June 2009

300 ppm Lead Content May 2009 August 2009 (stayed until 2/10/11)

CPSC Children's Product Safety Rules June 2009 September 2009

Children's products are singled out for third party testing by this Act. A schedule for testing is found in Section 102(a)(3)(B) and shows:

Quality Standard - CPSIAWhistleblower protections• The purpose of the Act's whistleblower provision is to protect employees who do the right thing

by speaking up when they believe their employer has violated a consumer product safety law. Specifically, if employees of a manufacturer, private labeler, distributor, or retailer of consumer products, may not have their employer retaliate against them for reporting potential violations of consumer product safety laws.

Penalties• The Act imposes or increases both fines and jail time penalties, and mandates coordination with

the CPSC when effecting a manufacturer's product recall. • The law increases civil penalties for failure to report possible product hazards to the CPSC in a

timely manner from $5,000 per violation (with a cap of $1,825,000) to $100,000 per violation (with a cap of $15 million)

• increases criminal penalties for various prohibited acts to include forfeiture of assets and imprisonment for up to five years, and eliminates the requirement that the CPSC first notify a company of noncompliance before seeking criminal penalties

• requires CPSC approval of the remedy offered in a product recall, rather than giving the recalling party its choice of repair, replace, or refund[3]

Important Export Documentation• Invoice – with correct information• Packing List – with correct product detail• Bill of Lading/forwarder Cargo receipt• Certificate of Country of Origin• Other documents requested by customer or the importing

country.– For USA shipment

• GENERAL CERTIFICATE OF CONFORMITY – ( CALL “GCC” )• LACEY ACT DECLARATION (Plant And Plant Product Declaration Form) or CALL

“PPQ” (FOR WOODEN PRODUCTS)• FUMIGATION CERTIFICATE (FOR WOODEN PRODUCTS OR WOOD PACKING

MATERIAL) • And any documents require for payment settlement.• Ct-Pat declaration upon request.

– For other countries • Need to check from the Purchase order or L/C from customer to be sure.

The Lacey Act – Brief History

• Created in 1900• Oldest wildlife protection statute in the United

States.• Designed to prevent commerce in protected

animal and plant species.• Amended in 1987 and 2008.

The Lacey Act - Purpose

• Prevent trade in illegally harvested lumber• Prevent trade in wood products made from

illegally harvested lumber.• Redefines plant to mean any wild member of

the plant kingdom including roots, seeds, parts, or products thereof, including trees from either natural or planted forest stands.

The Lacey Act – Import Declaration

• The Lacey Act declaration from is only required for Certain goods classified in Chapters 44, 66, 82, 92, 93, 94, 95 and 97 of the Harmonized Tariff Schedule.

• The Lacey Act declaration form can be found online at http://www.aphis.usda.gov/plant_health/lacey_act/downloads/declarationform.pdf

Articles made with MDF

• If you have a product made from MDF (medium density fibreboard) then you can write Special/MDF for the genius and species in box 14 of the declaration. However, please note that USDA is considering changing this requirement.

• For up to date information on the Lacey Act declaration go to http://www.aphis.usda.gov/plant_health/lacey_act/index.shtml

What goods are covered by the Lacey Act declaration

• Chapter 44 (Wood and Articles of Wood)– 4401 (fuel wood)– 4402 (wood charcoal)– 4403 (wood in the rough)– 4404 (hoopwood; poles, piles, stakes)– 4406 (Railway or tramway sleepers)– 4407 (wood sawn or chipped lengthwise)– 4408 (sheets for veneering)– 4409 (wood continuously shaped)– 4412 (plywood, veneered panels)– 4414 (wooden frames)– 4417 (tools, tool handles, broom handles)– 4418 (builders’ joinery and carpentry of wood)– 4419 (tableware & kitchenware of wood)– 4420 (wood marquetry and statuettes)– 4421 (other articles of wood)

What goods are covered by the Lacey Act declaration

• Chapter 66 (Umbrellas, Walking Sticks, riding crops)– 6602 (Walking sticks, whips, crops)

• Chapter 82 (Tools)– 8201 (hand tools)

• Chapter 92 (musical instruments)– 9201 (pianos)– 9202 (other stringed instruments)

• Chapter 93 (Arms and Ammunition)– 9302 (Revolvers and pistols)– 9305.10.20 (Parts & accessories for revolvers & pistols)

• Chapter 94 (Furniture)– 9401.69 (seats with wood frames)

• Chapter 95 (Toys, games & sporting equipment)– 9504.20 (articles and accessories for billiards)

• Chapter 97 (Works of art)– 9703 (sculptures)

Lacey Act vs. Lacey Act Declaration

• Even if a shipment is exempt from the declaration requirement – the Lacey Act is still in force.

• For example: Christmas ornaments– Wooden Christmas ornaments are classified under

9505.10.1500– For Chapter 95 the Lacey Act declaration only applies to

goods that are classified under 9504.20 (Articles and accessories for billiards)

– The Lacey Act still applies to the wooden ornaments. The ornament cannot be made from illegally harvested trees but a declaration is not required.