What is the difference between EAR99 and NLR?
It is a common misconception that the terms are
interchangeable and mean the same thing. EAR99 is a
classification, NLR is a designation. Just because an
export is EAR99 does not automatically
signify it is NLR
and vice versa.
EAR99 is a classification for an item. It indicates that
a particular item is subject to the Export
Administration Regulations (EAR), but not listed with a
specific Export Control Classification Number (ECCN) on
the Commerce Control List (CCL). While the
classification describes the item, the authorization for
shipment of that item may change, depending on the
transaction. NLR is the designator of a transaction that
stands for the "No License Required" authorization. NLR
may be used for either EAR99 items, or items on the CCL
that do not require a license for the destination in
question, provided no General Prohibitions apply.
For more information:
Forwarders find China’s VAT system 'clear as mud’
Greg Knowler, Senior Asia Editor JOC| Sep 05, 2014
International freight forwarders that qualify for VAT exemption
in China are complaining that the new system is unclear,
drastically increases their administration work and leaves them
with mountains of documents to file with the China Tax Bureau.
“We need an agreement with the shipper stating that the cargo is
being exported from China. Once that is granted we have to get
the agreement from the shipper for each and every transaction,”
said a Hong Kong forwarder that has six offices on the mainland.
Because of the sensitive nature of the subject, he did not wish
to be identified.
“At the end of every month I need to list the port of loading,
the port of discharge overseas, the contents, the bill of
lading, everything relating to that single shipment. That list
has to show all shipments for which we have agreements and are
therefore exempted from VAT. We do a couple of thousand a month
and it is an administrative nightmare to keep up.”
The VAT system was implemented nationwide in August last year,
replacing business tax and theoretically streamlining the tax
collection operation. In reality, it is creating confusion,
especially among forwarders that qualify for exemption if part
of their income from providing a service is obtained overseas.
According to Robert Smith, Asia Pacific and greater China
indirect tax leader at Ernst & Young, China’s VAT system is one
of the most complex in the world “and requires significant
efforts to stay on top of the changing environment.”
Working with VAT in China requires more transactions, more
documentation, more paper, more invoices, more steps in the
process, more data, more returns, more involvement of the China
Tax Bureau — which was overwhelming for smaller companies.
The Hong Kong forwarder said he had six accountants looking at
the VAT regulations and tried to get them to explain the system.
“After an hour I just had a headache. It is as clear as mud and
so complicated,” he said.
A steady stream of VAT reform regulatory updates are issued by
the China Tax Bureau and its state and municipal offices, making
the system hard to follow, ambiguous and prone to
misinterpretation. There is constant dialogue and attempts to
seek clarification and guidance between forwarders and the tax
authorities, but finding the correct person and receiving clear
answers is rare.
It is not just the smaller forwarders that are struggling for
clarity. Joerg Hoppe, director and head of ocean freight for
north and central China at DB Schenker, said the VAT system was
unclear and subject to varied interpretation by respective local
“We are cautiously proceeding under the assumption that charges
for ‘international freight movements’ — there also is no clear
governmental definition of what that includes or excludes — are
VAT exempt,” he said.
Holger Stoelker, former managing director at logistics provider
Leschaco China (he has subsequently moved on), said VAT reform
continued to be a hot topic on the mainland. “There is still a
lot of uncertainty around on how to handle this for
international logistics companies,” he said.
Kevin Lam, Kerry Logistics director of international freight
forwarding in China, said the latest updated policy was released
in July in which freight forwarding business, both
internationally or between local agents, could enjoy tax
exemption, “so there should be positive effect on the tax burden
of freight forwarders.”
This is subject to change, of course. “Since it was announced by
the State Tax Bureau, we are still waiting for the Municipal Tax
Bureau's confirmation at the moment,” he said.
Imports of Tree Bark and KILLER BEETLES
No, we’re not talking about the band from Liverpool.
The most notorious stowaway on and in shipments from Asia is the
Longhorn Beetle. This and many of his friends have hitched a
ride to the U.S. and are devastating our trees and other
vegetation. In an effort to control the buggers from getting
into or on our import shipments, CBP and Agriculture has focused
attention on goods that are made from or have real tree bark
attached. For a period of time all import shipments that
contained tree bark were banned from importation and either
destroyed or exported out of the country.
There is now good news for importing goods with tree bark!
Karen Sperry, Customs and Border Protection Agricultural
Specialist at the port of Milwaukee has shared the following
information for importing goods that are made from or
incorporate real tree bark. The following will be required to
release an import shipment containing bark:
USDA Permit issued to the importer (recommended to apply 30 days
in advance of importing)
tree species of the bark may be required, (the permit would
specify, or you may ask the permit unit)
Documentation that would prove the bark was heat or steam
treated to 56 °C (133 °F) or higher for 30 minutes or
longer; or the temperature of the center of the bark was
raised to at least 71.1 °C (160 °F) for at least
75 minutes such that the moisture content of the bark is 20%
or less as measured by an electrical conductivity meter.
goods cannot be commingled with other regulated materials (other
than solid wood packing materials) unless the chips and the
other regulated articles are in separate holds or in a separate
All pallets and other regulated wood packing materials used in
the shipment are subject to inspection and must conform to 7 CFR
For Permit Information related to forest
Additional information that may be helpful
regarding imports of regulated items.
And in a related story:
A 10-foot-tall pine tree in Los Angeles Griffith Park, dedicated
in 2004 with a plaque to the late musician George Harrison, was
recently destroyed by an infestation, and another will be
planted in its place, according to a city councilman. The
infestation was by beetles. CBS News, 7-22-2014
Impact of the Consumer Product Safety Improvement Act (CPSIA)
The Consumer Product Safety Improvement Act (CPSIA) is a law
that impacts Importers of products sold to or used by children.
The Consumer Product Safety Commission has a web site devoted to
Defining Toys and Child Care Articles
Children’s Toy: Is a product intended for a child 12 or
younger for use when playing.
Excludes: Bikes, Playground equipment, musical instruments,
sporting goods (except for their toy counterparts).
Child Care Article: A product that a child 3 and younger
would use for sleeping, feeding or teething.
Examples: Pacifier/teether, Sippy Cup, Bib, Crib Mattress,
Identifying Children’s Products
There are four factors in determining whether a product is
designed or intended for use by children 12 years of age and
1) A statement by the manufacturer about the intended use of the
product, including a label on the product stating the same.
2) If the product is represented in its packaging, display or
promotion or advertising as appropriate for use by a specified
3) If the product is commonly recognized by consumers as being
intended for use by a child of the ages specified; and
4) The Age Determining Guidelines issued by the commission staff
in Sept 2002.
More simply though a children’s product is defined as a
“consumer product designed or intended primarily for children
12 years of age and younger.
Web site for definition can be located at:
Children's products, which are most strongly affected, are not
just products designed and intended specifically for children
12 years of age and younger. Children's products can also be
considered any products with packaging, promotions, or
advertising that displays their product as appropriate for
children 12 and younger. This means that if a product
designed for adults is being used by a child in an
advertisement, it will then be regulated the same as a
Children’s Metal Jewelry
Lead rules apply to all children’s products, including
Third party testing required
Children’s metal jewelry may or may not also be a
Labeling (Tracking Labels)
Manufacturers must affix a permanent label on their product so
that the ultimate purchaser can ascertain when and where the
product was manufactured and tested.
The law requires that markings with the specified information be
permanent. Hangtags and adhesive labels are not permanent.
Tracking labels will be required for products if they are
primarily intended for children 12 years of age or younger.
The label must be on the product (only once) and on the
Required information for labeling
Manufacturer or private labeler
location of the product
date of production
cohort information (if applicable) (including the batch, run
number, or other identifying characteristic)
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
1. be in English
2. list the name, address,
and phone number of the manufacturer, importer, and/or private
labeler issuing the certificate and any third party testing
3. list the date and place
of manufacture and date and place of testing
4. list the contact
information of the records keeper
5. 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 (not an entry requirement but
a copy should be in the import file).
Children's products are singled out for third party testing by
General Conformity Certificate
A general certification requirement is sometimes called a
“supplier’s declaration of conformity.” These general conformity
certifications do not need to be based on testing done by a
third-party laboratory. Certification must be based on a test of
the product or a “reasonable testing program.” This new general
certification requirement goes into effect on November 12, 2008.
What must be covered by a certificate?
Any consumer product imported or distributed in commerce if the
product is subject to a consumer product safety rule under the
CPSA/CPSIA or any similar rule, ban, standard, or regulation
enforced by CPSC.
Third-Party Testing of Children's Products
The new legislation imposes an additional third-party testing
requirement for all consumer products primarily intended for
children twelve years of age or younger. Every
manufacturer (including an importer) or private labeler of a
children’s product must have its product tested by an accredited
independent testing lab and, based on the testing, must issue a
certificate that the product meets all applicable CPSC
CPSC is given authority either to accredit laboratories (“third
party conformity assessment bodies”) for doing the required
testing of children’s products or to designate independent
accrediting organizations to accredit the testing laboratories,
with one exception. The Commission itself must accredit
laboratories that are controlled by the manufacturer of the
children’s product in question. To assure their impartiality,
government labs must also meet strict standards of independence.
The CPSC must maintain an up-to-date list of accredited labs on
its web site. CPSC has authority to suspend or terminate a
laboratory’s accreditation in appropriate circumstances.
The third-party testing and certification requirements for
children’s products are phased in on a rolling schedule. The
statute requires the CPSC to issue laboratory accreditation
regimes for different categories of children’s products. Once
the CPSC issues the laboratory accreditation requirement for
that category of children’s products, each children’s product in
that category that is manufactured more than ninety days after
that date must be tested and certified to the applicable
requirements. The schedule for CPSC to issue the laboratory
accreditation requirements and the certification schedule is set
forth on the timeline shown in the chart below.
part laboratories can be found at:
The required certificates, whether general conformity
certificates or certificates for children’s products based on
third-party testing, must be in English and also may be in
another language. They must include information on the identity
of the manufacturer or private labeler of the product, the
testing laboratory, and the date and place of manufacturing and
testing the product.
Products without the required certificate cannot be imported or
distributed in commerce in the United States. The certificate
must accompany the product or product shipment and must be
available to CPSC and Customs and Border Protection upon
request. Failure to furnish the certificate or furnishing a
false certificate can subject the manufacturer or private
labeler to civil and criminal penalties.
CPSC LEAD TESTING EXEMPTIONS
The Consumer Product Safety Commission has voted to approve a
list of products that are now exempt from lead testing for
children's products under the Consumer Product Safety
Improvement Act (CPSIA). CPSC commissioners agreed that the
following items do not exceed the CPSIA lead limits and
therefore are not subject to those limits or the related testing
Textiles (excluding after-treatment applications, e.g., screen
prints, transfers, decals or other prints) consisting of natural
fibers or manufactured fibers, whether dyed or undyed. For
apparel items, this means that fabric and yarn will be exempt
from lead testing but not metal or plastic findings, trimmings,
fasteners, buttons, zippers, etc.
Other plant-derived and animal-derived materials; i.e., wood,
natural fibers, coral, amber, feathers, fur, untreated leather,
bone, sea shell, animal glue, bee's wax, seeds, nut shells,
flowers and bone, provided these materials are not treated with
any chemicals or surface coating.
Paper and similar materials made from wood or other cellulosic
fiber, including paperboard, linerboard and medium, and coatings
on such paper that become part of the substrate.
Printing inks using the modern CMYK printing process (excluding
spot colors, other inks that are not used in CMYK process, inks
that do not become part of the substrate, and inks used in
after-treatment applications, including screen prints,
transfers, decals or other prints) and the paper used in books.
The CPSC also determined that adhesives and binding materials
used in children's books will normally be inaccessible and
therefore fall within the inaccessibility exception to the lead
Precious gemstones, semiprecious gemstones and other minerals
(excluding any mineral based on lead or lead compounds,
including aragonite, bayldonite, boleite, cerussite, crocoite,
galena, phosgenite, vanadinite and wulfenite).
Natural or cultured pearls.
Metals and alloys, including surgical steel and precious metals.
The CPSC stated that the determination that these products do
not contain lead does not relieve the products from lead testing
if the product or material is altered or modified so as to
exceed the lead content limits.
The legislation reduces the limit of lead allowed in surface
coatings or paint to 90 ppm (from the current limit of 600 ppm)
effective on 14 August 2009.
The legislation reduces the amount of total lead content in
children's products to
600 ppm by 10 February 2009
300 ppm by 14 August 2009
100 ppm by 14 August 2011
As of February 10, 2009, it shall be unlawful for any person to
manufacture for sale, distribute in commerce, or import any
children's toy or childcare article that contains the
phthalates, DBP or BBP at levels higher than 0.1 percent.
The legislation bans from any children's toy that can be put in
a child's mouth or childcare articles phthalates DINP, DIDP and
DnOp at levels higher than 0.1%.
Frequently Asked Questions for third party testing (from CPSC
General Certification of Conformity
certificates be used to meet the requirements of Section 102
rather than paper?
The Commission has issued
a rule specifically allowing use of an electronic certificate
provided the Commission has reasonable access to it, it contains
all of the information required by section 102 of the CPSIA, and
it complies with the other requirements of the rule. The rule is
available on the CPSC World Wide Web site at
Who must issue the
Under the Commission's
http://www.cpsc.gov/businfo/frnotices/fr09/certification.pdf, for products
manufactured overseas, the certificate must be issued by the
importer. For products produced outside the United States, the
certificate must be issued by the U.S. manufacturer. Neither a
foreign manufacturer nor a private labeler is required to issue
a certificate. Neither need be identified on the certificate
issued by the importer or domestic manufacturer.
Must each shipment
be "accompanied" by a certificate?
Yes, the law requires that
each import (and domestic manufacturer) shipment be
"accompanied" by the required certificate. The requirement
applies to imports and products manufactured domestically. Under
the rule issued by the Commission an electronic certificate is
"accompanying" a shipment if the certificate is identified by a
unique identifier and can be accessed via a World Wide Web URL
or other electronic means, provided the URL or other electronic
means and the unique identifier are created in advance and
available with the shipment. Certificates can also be
transmitted electronically to a broker with other customs entry
documents before a shipment arrives so long as they are
available to the Commission or Customs and Border Protection
staff if the product or shipment is inspected.
Is the importer or
U.S. manufacturer required to supply the certificate to its
distributors and retailers?
Yes. The importer or U.S.
manufacturer is required to "furnish" the certificate to its
distributors and retailers. The Commission's rule states that
this requirement is satisfied if the importer or U.S.
manufacturer provides its distributors and retailers a
reasonable means to access the certificate.
certifier(s) sign the certificate?
No. Issuing the
certificate satisfies the new law. It does not have to be signed
by the issuer(s).
On what does my
certification have to be based?
The general conformity
certification must be based on a test of each product or a
reasonable testing program.
Where must these
certificates be filed?
A certificate does not
have to be filed with the government. As noted above, the
certificate must "accompany" the product shipment, and be
"furnished" to distributors and retailers, and be furnished to
CPSC upon request.
Are youth ATVs
subject to the third party testing requirements of section
102(a)(2)? And if so, when?
Section 102(a)(2) requires
third party testing for children’s products that are subject to
a children’s product safety rule. A children’s product is a
consumer product designed or intended primarily for a child 12
years of age or younger (see section 232(a)). Thus, youth ATVs
intended primarily for children 12 years of age or younger will
need to comply with the third party testing requirements of
section 102(a)(2). This will require third party testing for
compliance to the new ATV standard. A manufacturer’s
certification based on that testing requirement will be required
90 days after the Commission publishes accreditation
requirements for testing laboratories that will test conformity
to the ATV standard.