The trade landscape is becoming increasingly unpredictable, with a U.S.-China trade dispute driving an additional $46 billion USD in tariffs paid by American buyers. Some of these costs could have been avoided. Learn where to look for savings for your trade program in our guide, Reclaiming Lost Profits: The Value of Vendor Data.
A substantial amount of data is associated with every shipment of parts. Efficiently managing this data informs operational decisions that have a lasting impact on a company’s bottom line. For each part, specific data types are used to determine import fees, and understanding them is crucial for companies looking to cut out unnecessary expenses.
The infographic below demonstrates how available data can inform your business decisions.
The World Customs Organization developed a six-digit Harmonized System (HS) of product coding to standardize trade practices around the globe. The U.S. expanded upon these codes to create the Harmonized Tariff Schedule (HTS) codes, an 8–10 digit system of product classification.
HS/HTS codes are typically used in documentation claiming preferential status under various free trade agreements (FTAs). These agreements use specific rule-sets for mapping the HS codes of inputs (parts, subparts, etc.) to finished products, called tariff shift rules. Additionally, discrepancies in HS codes between the export documentation and the importer of record’s customs declaration can lead to customs audits, costing importers time and money. Companies should retain HS/HTS codes for both an imported part as well as the code for the finished product that part will be used in.
Under the United States-Mexico-Canada Agreement (USMCA), the net cost of a part is commonly used in Rule of Origin calculations to determine the country of origin of a produced automotive sub-assembly/product. For example, smaller parts from China totalling one dollar may be added to a larger part worth three dollars from Mexico. The part from Mexico would represent 75 percent of the net cost, and so long as any applicable tariff-shift rules have been met first, the part is eligible for the preferential treatment under USMCA. These calculations, and the adjustments executed based on them, can play a significant role in optimizing trade processes.
Under the USMCA and other agreements, the transaction value, or price payable of a finished product excluding shipping costs, is often used in Rule of Origin calculations to determine the country of origin for a produced electronics part. Each part has an associated price and when parts from one country are manufactured with separate parts from another country, prices are calculated with the source of origin being the country that supplied the most valuable parts, assuming it meets or exceeds established thresholds. Meeting a tariff-shift rule first is usually a precondition to assessing whether a specific regional content value applies to a given part. These calculations, and the adjustments executed based on them, can play a significant role in optimizing trade processes.
Customs authorities use country of origin data broadly for a variety of purposes, including to determine applicable tariff treatments, duties payable, and in some cases, risk of non-compliance with sanctions. Country of origin documentation is necessary to claim most benefits of FTAs, including preferential status under the USMCA. These documents certify that goods have been produced or substantially transformed in a signatory country. Importing from countries where FTAs are not present still requires country of origin information. Countries that are signatories of the World Trade Organization (WTO) receive Most Favored Nation (MFN) status and typically lower tariff rates. Many countries have non-MFN general tariff rates that are substantially higher and can be applied where origin procedures for MFN tariff treatment aren’t met.
To map out trade lanes and optimize FTA utilization, it is important to analyze country of destination in conjunction with country of origin. Most countries also have export licensing requirements that require companies to understand where products are headed. For example, some goods that could be used for military applications cannot be shipped from the U.S. to countries such as Iran, or certain parties in China, among others. This includes potential dual-use inputs that are included as a sub-assembly or part within a finished product.
Trade data can be used to lower business costs, expedite imports, and avoid costly financial penalties. Learn how to effectively manage your trade data in our guide.DOWNLOAD
The key to efficiently managing data is implementing a program that can scale with growth and adapt to disruption. Assent supports your program by automating data management and providing a secure, centralized platform to improve analysis, so you can take advantage of potential savings opportunities.
Tariff rates can differ dramatically based on where goods are coming from and where they’re being imported. To avoid unnecessary tariffs, you can partner with suppliers in countries where trade agreements exist, or that are considered Most Favoured Nations (MFNs) by the World Trade Organization.
Without dedicated resources, you may not be able to capture and analyze trade information, leading to missed opportunities and unnecessary costs. Assent enables you to efficiently engage suppliers to collect these critical data points. Armed with country of origin information and associated HS codes, you can substantially reduce overhead and streamline your trade data program.
In September 2012, the European Union Medical Device Regulation (EU MDR) 2017/745 was first proposed to address weaknesses in the existing Medical Device Directive, which came into force in the 1990s. The new regulation expanded the products in scope, as well as the list of regulated substances.
In September 2012, the European Union Medical Device Regulation (EU MDR) 2017/745 was first proposed to address weaknesses in the existing Medical Device Directive, which came into force in the 1990s. The new regulation expanded the products in scope, as well as the list of regulated substances.Companies have until May 26, 2020, to certify new devices. Devices that were previously certified under the MDD will need to be recertified to meet the new requirements of the EU MDR.
Devices used for cosmetic purposes, which weren’t regulated by MDD, will now require certification under the EU MDR. In total, more than 500,000 devices will now be in scope of the regulation. The EU MDR timeline is aggressive, but proactive compliance can help ensure continued market access, protection from enforcement action and a decreased risk of reputational harm.
How to Recertify a Product Under EU MDR
Products that currently have CE markings from MDD certification will need to be recertified under the EU MDR. Over 300,000 medical devices will require recertification in order to maintain market access. The deadline for each device is dependent on the expiration date of their former certification. However, the certification process is the same for all devices, and it is highly recommended that companies begin immediately. In order to recertify a product under EU MDR, a business must:
- Determine the classification of the device.
- Create a technical file that includes detailed information on the parts involved, the purpose of the device and any testing that has been carried out.
- Ensure a Quality Management System (QMS) is in place to manage product design, product manufacturing and change requests.
- Submit the device for approval by a notified body along with the QMS and technical file data
Approved devices will receive a Declaration of Conformity, after which they can be registered on a central database for medical devices, receive CE markings and be placed on the European Economic Area (EEA) marketplace.
Steps may vary according to the classification of the device, but every application will require a technical file. This involves a great deal of data collection from a company’s supply chain and can take months to complete.
Meeting the EU MDR Timeline
The regulatory bodies that will be responsible for EU MDR certification are still forming. Companies that are in scope of EU MDR should expect a backlog, as thousands of applications must be examined and certified. The deadline for devices looking to enter the EEA market is May 26, 2020. However, new class submissions should happen well in advance, with data collection for technical files starting immediately.
Companies that received MDD certifications for medical devices must have EU MDR certificates before the MDD certificates expire to ensure business continuity. All devices require EU MDR certifications no later than May 26, 2024. Larger companies should expect the technical file to take over a year to complete.
How Assent Can Help You Recertify a Product Under EU MDR
The Assent Compliance Platform is the leading supply chain data management solution, and allows companies to efficiently collect, organize and analyze data from across their supply chains. Our Chemical Reporting Module, part of the platform, enables efficient and accurate EU MDR data collection and management, which is vital to successful certification.
To learn more about how Assent can help you stay compliant with the EU MDR, contact us at [email protected].
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