September and October 2017 | View Online

World Trader | September and October 2017

Midwest Global Trade Association

From the President

Upcoming Events

If You Send Marketing Emails to Canada, Here's What You Need to Do Now

Update on Termination of Sanctions on Sudan

Trends in Supply Chain Analytics

Has the Beginning of the End Finally Arrived?

Cyber Attacks Effecting the Global Shipping Business

U.S. Trade Deficit Narrows

Importer Identity Theft: A Real Problem

What to Know About Expanding Your Business into Europe

Country of the Month: Canada

Spotlight: Drinkle Biddle

Spotlight: Bremer Bank

Thank You, Newsletter Sponsor: Port of Seattle

From the President

By Anna Ouattara — MGTA President

Anna Outtara

Good morning trade community,

Where has the time gone? I trust that you are enjoying the last few weeks left of summer. It has been really busy on my end however, I still made time to go skydiving. I can now confirm that the air is a lot fresher up there and the clouds taste like marshmallow. Bucket list crossed off.

It’s been six months since I became president of the MGTA and the journey has been quite a ride. A good ride I must say! As stated a few months ago, a few of the MGTA initiatives were centered around community partnership, education, and communication. I would like to report that so far we have done a few events with Greater MSP, District of Export Council, Global Minnesota and we are working on a few more as we move toward the end of the year.

Furthermore, we have redesigned our sponsorship to better suit the needs of our sponsors and working on the membership benefits. In addition, we are broadening our membership base to target various industries (Agriculture, retailers, etc..). As far as education seminars and luncheons, we have great speakers lined up and changed our monthly luncheons to every other month (every 2 months).

Moreover, this past months, we held our strategic planning meeting and I am fortunate to have a great team to execute the future goals we agreed upon to continue the success of the MGTA and server our trade community. As you know, the MGTA is a non-profit, volunteer base organization and I must recognize, appreciate the time and effort that each of the board and committee members put in every day. We believe in servicing our trade community and trust that we will continue to see you, our members, at future events, seminars because we do it for you.

Thank you for your continuous support and for choosing to be member of the MGTA. As always, we are your resource so please visit our website for upcoming events at MGTA.ORG and feel free to email me at with questions and suggestions.

I would like to recognize all of our board and committee members for their commitment and dedication. Thank you.

I would like to recognize all our sponsors for their time, donations, and support at the 2017 MGTA Golf Outing. The Northwest Seaport Alliance, Bremer Bank N.A, Global Transportation Services Inc., Hyundai Merchant Marine, Interlog USA, Inc., Agility Logistics, C&K Trucking, Drinker Biddle, KPMG, Minnesota Greater Metropolitan Area Foreign Trade, Navegate, Neville Peterson LLP, Polaris Industries, Inc., SBS Group of Companies, General Mills, Port of Halifax, Bennett Jones, Global Training Center, JPMorgan Chase & Co., and Learning Lens. Congratulations to all the door prize, on the course sponsor contest, and golf proximity winners. You are awesome for making the best of the outing despite the rain.

I would like to recognize MGTA John Shoffner, CPA, MBA from the DEED for being a great advocate of the MGTA and attending every single event this year.

I would like to recognize the Port of Duluth for their successful opening of the first rail-served intermodal container ramp. Did you know that you could add value to your customers or supply chain by routing your shipments to the port of Duluth? It is ranked among the top 20 ports in the U.S. by cargo tonnage. For more information on the fascinating things happening at the Duluth port visit

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Upcoming Events

September Education Lunch

  • Date: Tuesday September 12, 2017
  • Time: 11:30 a.m to 1:00 p.m.
  • Location: Cooper Pub 1607 Park Blvd. St. Louis Park, MN 55416
  • Registration

There is 'no cost' for attending this event but reservations are requested to ensure there is space available.

Lunch is available at this event at your expense.

Guests are welcome to attend!

Event Information & Registration

“Trusted Trader” with an Administration that Distrusts Trade

  • Date: Thursday, September 21, 2017
  • Time: 8:00 a.m.-12:00 p.m.
  • Location: Quality Bicycle Products (QBP), 6400 W. 105th Street Bloomington, MN 55438
  • Registration


Background of Trusted Trader

In 2014, Customs has designed a trusted trader program to address physical supply chain security, trade compliance, financial compliance, and enforcement. This program would use Centers of Excellence and Expertise (CEEs) to recognize specific, individualized risk assessments and internal controls. It also unifies CTPAT and ISA application processes.

May your Company Ever Be a “Trusted” Trader?

  • In light of Executive Orders, there does not appear to be any laxity of procedural enforcement of current rules and regulations
  • The March 31st Executive Order, asks Commerce, Treasury, USTR, and Homeland Security to “develop and implement strategy and plan for combatting violations of United States trade and Customs laws”
  • Specifically mentioned are enforcement procedures of antidumping and countervailing duties and measure to protect intellectual property (IP) rights

Risk Assessment and Compliance

How at Risk is Your Company from:

  1. Antidumping duty and CVD evasion — Enforce and Protect Act
  2. Violation of IP rights
  3. Misclassification
  4. Valuation Errors
  5. False Origin Claims or Transshipment

Is Your Company Ready to Apply for “Trusted Trade”?

This panel provides a broad overview of the Trusted Trader Program and what it may mean with an Administration that seeks out and condemns violators of Customs rules and regulations.

Learning Objectives

  • Gain insight into current administration tactics and how they align with the Trusted Trader concept
  • Understand areas of focus from a risk assessment and compliance perspective
  • Differentiate levels of participation, validations and incentives

Who Should Attend: Importers, Trade Compliance Professionals, Supply Chain Security and Legal Professionals, International Trade Consultants, and Corporate Counsel


john m peterson

John Peterson — Partner, Neville Peterson LLP

John M. Peterson practices in the areas of international trade and Customs law. He is a graduate of Fordham University and the Fordham University School of Law, from which he received a Juris Doctor Degree in 1977. He regularly represents foreign and domestic clients before the United States Customs Service, the United States International Trade Commission, the United States Department of Commerce, the Federal Maritime Commission, the Foreign Trade Zones Board and the Office of United States Trade Representative, and litigates before the United States Court of International Trade and United States Court of Appeals for the Federal Circuit. He has extensive experience in antidumping and countervailing duty matters, and in related proceedings involving unfair or injurious foreign trade practices. He counsels clients on export control laws, and handles matters involving protection of intellectual property rights in international trade. Mr. Peterson writes regularly for several publications, including The Journal of Commerce and The Exporter, and he lectures on international trade and Customs topics worldwide. He is a member of the Customs and International Trade Bar Association and the Federal Circuit Bar Association. He has served as a United States Panelist in binational dispute resolution proceedings under Chapter 19 of the North American Free Trade Agreement (NAFTA).

maria e celis

Maria Celis — Partner, Neville Peterson LLP

Maria E. Celis has worked in Customs and international trade for over 17 years, and is a partner in the New York office of Neville Peterson LLP. She practices in the areas of international trade, Customs, export law, Food and Drug Administration, and other federal regulatory matters. She is admitted to practice before various federal courts, including U.S. Court of International Trade and the U.S. Court of Appeals for the Federal Circuit. Ms. Celis has been asked to speak before numerous groups regarding trade, including: Cargo Logistics America in San Diego, California; the Mediterranean Anglo- American Business Network (MAABN) in Aix-en Provence and Marseille, France; the Midwest Global Trade Association (MGTA), in Minneapolis, MN; the Xinji Chamber of Commerce in Hebei, China; and the Knowledge Group Webinars on such issues as Exporting and Business Strategies During a Recession, INCOTERMS, Free Trade Agreements, Essential in Commercial Contracts, and Payment Terms in International Commercial Contracts; Revisiting NAFTA; and the Trans-Pacific Partnership Agreement.


7:30 a.m. Registration and continental breakfast
8:00 a.m. Program
12:00 p.m./Noon Adjourn

Registration Fees

Member: $50
Non-Member: $60
Student: $10


Parking at QBP is limited. If you have the ability to carpool, that is great. All visitors are required to present a photo ID during the check-in process.

October Lunch Event

  • Date: Tuesday, October 10, 2017
  • Time: 11:30 a.m to 1:00 p.m.
  • Location: Cooper Pub 1607 Park Blvd. St. Louis Park, MN 55416
  • Registration

There is 'no cost' for attending this event but reservations are requested to ensure there is space available.

Lunch is available at this event at your expense.

Guests are welcome to attend!

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If You Send Marketing Emails to Canada, Here's What You Need to Do Now

Reprinted with permission. Copyright, ASAE: The Center for Association Leadership, (July 2017), Washington, DC.

Canada’s Anti-Spam Law took effect in 2014, but a three-year grace period just ended. Sending marketing emails to the Great White North now demands you ask users to opt in.

Earlier this month, new rules regulating email communications took effect in Canada, forcing American associations that have members and customers there to adjust their marketing strategy and take a close look at their email lists.

Canada’s Anti-Spam Law (CASL), which as been around since July 1, 2014, requires email marketers to receive direct consent from users (that is, users must explicitly opt in to receive emails), instead of implied consent (marketers give users the opportunity to opt out). But the law included a grace period: Organizations that had a preexisting business relationship with a user—such as an association member—could continue communications under implied consent for three years.

This is a reminder for you to take steps to comply with the law and get systems in place to deal with it.

That period ended July 1.

“The message is, if you’re an American company that sends any kind of marketing material online to Canadians, this is a reminder for you to take steps to comply with the law and get systems in place to deal with it,” says Peter N. Mantas, a partner at the Ottawa law firm Fasken Martineau.

CASL’s rules now dictate that implied consent for business relationships lasts two years after a business transaction and six months after an inquiry. Implied consent is also two years for relationships that don’t involve commercial transactions, such as volunteer work or donations.

After those periods are over, sending an email to a user in Canada gets tricky. If you had been sending messages under implied consent and haven’t had a relationship with a user in that time period, an email asking for direct consent now violates the law.

“While you can use that implied consent to try to get express consent from the people to whom you’re already sending commercial emails, the problem under CASL is that even sending an email asking for that express consent constitutes a commercial message for which you needed some level of consent,” says Shahin O. Rothermel, an associate for the law firm Venable.

To ensure that you’re compliant, “organizations should take a close look at their sign-up process,” Rothermel says. “That’s the easiest way to make sure their members are opting in.” They should also keep good records on the when consent was given, the level of consent, the content of the messages, and recipients’ IP addresses. “In the event of a challenge, the onus is going to be on the organization sending the message to show it has consent or that it has complied,” she says.

For the moment, email marketers needn’t fear class-action suits alleging noncompliance: Last month, the Canadian government suspended a CASL “private right of action” provision that would have allowed individuals to sue organizations under the law. So for now, only the Canadian Radio-Television and Telecommunications Commission is empowered to enforce the law and levy fines.

Mantas cautions that email marketers shouldn’t rest easy. Private right of action “isn’t gone, it’s just been put on hold,” he says. “It could come back at any time, on short notice. There’s a reprieve, but you really need to start paying attention to this.”

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Update on Termination of Sanctions on Sudan

By George W. Thompson — Thompson & Associates, PLLC

Among the Obama administration’s final actions was issuance of Executive Order 13761 (Jan. 13, 2017) suspending most United States trade sanctions against Sudan. The EO asserted that the reasons for imposing the sanctions in 1997 had changed. In particular, the government of Sudan had reduced its in-country military activity and showed cooperation in resolving conflict issues.

In recognition of these changes, EO 13761 revoked sections of previous Executive Orders that had established the sanctions in the first place. The catch, however, was that the effective date of revocation would be July 12, 2017, six months after EO 13761 was issued. Also on that date, the State Department was required to issue “a report on whether the Government of Sudan has sustained the positive actions that gave rise to” the revocation, and issue annual update reports thereafter.

General License Authorizes Most Transactions with Sudan

Complementing EO 13761, the Office of Foreign Assets Control issued a general license to the Sudanese Sanctions Regulations authorizing “all prohibited transactions, including transactions involving property in which the Government of Sudan has an interest.” Newly-permissible activities “include the processing of transactions involving persons in Sudan; the importation of goods and services from Sudan; the exportation of goods, technology, and services to Sudan . . .” Before the general license was issued, of course, OFAC’s regulations prohibited United States persons from conducting virtually all import, export, reexport, trade and financial transactions with Sudan.

Even with these changes, Sudan is not yet treated as a completely “normal” country for trade purposes. OFAC continues to require licenses for “the export of agricultural commodities, medicine, and medical devices to Sudan”, plus the Darfur Sanctions Regulations, 31 C.F.R. Part 546, and South Sudan Sanctions Regulations, 31 C.F.R. Part 558, continue in place and Sudan remains designated as an “AT” terrorist-supporting country under the Export Administration Regulations, effectively limiting exports to EAR99 items. Nevertheless, the general license permits U.S. persons, wherever located, to take part in most transactions with the country.

Innocuous Delay or Spanner in the Works?

Everything seemed to be moving along swimmingly until the recent issuance of EO 13804 (July 11, 2017), delaying the “progress report” by three months, until October 12, 2017. The stated reasons for this action are “to take additional steps to address the emergency . . . with respect to the policies and actions of the Government of Sudan, including additional factfinding and a more comprehensive analysis of the Government of Sudan’s actions.”

The White House notification message to Congress gave a little more explanation for the delay: “While the Government of Sudan has made some progress in areas identified in Executive Order 13761, I have decided that more time is needed for this review to establish that the Government of Sudan has demonstrated sufficient positive action across all of those areas.” The “some progress” language strikes me as a hopeful sign that termination of the sanctions remains on track, and the current Administration wants to build a more complete record before finalizing the revocation. Press reports, however, emphasize disarray and disagreement within the Administration as the reasons for the postponement.

Perhaps the three-month extension simply is intended to buy more time to make a final decision. If the Administration already had decided to reverse the revocation process, it could have issued a negative report on July 12. What puzzles me, though, is removal of the annual report requirement. It was included in EO 13761 to ensure that the government of Sudan does not revert to its previous behavior after the sanctions are finally revoked. Was this requirement deleted because no one wants to read yet another government report, or does it portend that the sanctions ultimately will remain in place?

Whatever the Administration’s rationale for the postponement, there now is an element of uncertainty over the ultimate fate of the Sudanese Sanctions Regulations. U.S. persons, both companies and individuals, who are now doing business with Sudan under OFAC’s general license should be aware that the termination process still has a ways to go before it’s final.

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Trends in Supply Chain Analytics

By Adam Redlin — BSM Global

The field of supply chain management has evolved dramatically from the fields’ inception nearly 40 years ago. While systems were developed very early in the computing age to better control the data flow to enable business to improve supply chain execution, it was not until recently that businesses had the tools to analyze the large amounts of data influencing the supply chain. Today’s leading firms, from Amazon to Zara, are analyzing “big data” to fundamentally shift their procurement, supply or sales strategies.

Basic supply chain analytics is nothing new; for decades companies have captured specific performance metrics to gauge supplier and carrier performance. An area with significant potential for improvement, however, is supply chain agility, which is the ability of companies to quickly adapt to the rapid change ever present in markets today. Historically, industries like ocean shipping were relatively stable. There was, of course, seasonal volatility, but rates were on the whole slightly more predictable than we see today. Over the past few years, more extreme rate fluctuations and disruptive events, such as the Hanjin bankruptcy, have shaken the shipping world. Few companies are shielded from these events, yet fewer can take advantage of them.

In order to thrive in the more volatile and competitive world, businesses today are resorting to analysis of unstructured data for help to optimize decision making. Novel forms of data such as news events, weather, or even social media are beginning to work their way into demand planning. Rather than relying solely on hard historical data and traditional tracking of orders, companies are tapping into these data sources to provide further insights into consumer habits or potential disruption points. In-depth analysis of this data does more than just to reduce risk, it’s creating opportunities for competitive advantage.

The immense power of advanced analytics to drive proactive decision making could (with ease) be demonstrated by a wide range of industries. In agriculture for example, the volatile nature of crop yield and demand uncertainties make it difficult to determine transportation and storage. Capture and analysis of climate and weather data, combined with historical rate data could help traders more accurately predict where to secure capacity. Taking this further, the use of predictive analytics could help traders to build superior models to determine the right amount of grain to purchase, maximizing profit opportunities.

Advanced analytics tools offer new competitive advantages to business precisely because of the high-level data integration and the outsize role the supply chain plays in a company’s cost and profit structures. Supply chains oftentimes seem deceptively simple despite their inherent complexity. Businesses can discover new advantages by further excavating data as well as by taking a more proactive approach.

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Has the Beginning of the End Finally Arrived?

By Jakub Kowalczyk — LiteSentry Corp

We all may have seen a Tesla Electric Vehicle (EV) on the road and are all familiar with Elon Musk, EV’s still make a relatively small percentage of the total US car sales market. In 2016 EV sales jumped 37 percent to a total sales of 159,139. While this is a tremendous increase it represents a small fraction of the 17 million plus total vehicles sold in the US in 2016 which is still dominated by internal combustion (IC) engines.

That may change faster than we know. Recently Volvo Cars became the first mainstream automaker to sound the death knell of the IC engine, saying that all the models it introduces starting in 2019 will be either hybrids or powered solely by batteries. Between 2019 and 2021, Volvo will introduce five 100% electric models, and ensure the rest of its conventional petrol and diesel range has a hybrid engine of some form.

This is seen as a bold move by Volvo since Hybrids, which combine battery power with gasoline or diesel engines, accounted for about 2 percent of passenger car sales in the United States in 2016, a number that has been declining because gasoline prices have fallen.

“Our customers are asking more and more about electric cars,” Hakan Samuelsson, the chief executive of Volvo, said in a recent telephone interview. While Volvo’s strategy has risks, Mr. Samuelsson acknowledged, “a much bigger risk would be to stick with internal combustion engines.” In another statement Mr Samuelsson, said: “This announcement marks the end of the solely combustion engine-powered car.”

Although no other traditional carmakers have declared their intention to bury the internal combustion engine, virtually all of them are investing in hybrid and battery technology. The writing is on the wall to move away from solely IC engines. While consumer demand for electric cars is so far small, carmakers view it as a way for them to meet stricter fuel economy and pollution standards. Experts such as Prof David Bailey,at Aston University, said: “It’s indicative of the speeding up of the shift over to electrics, particularly in the wake of the VW dieselgate scandal, and it’s a sign that the industry is really starting to move and it will become mainstream.

“By the mid-2020s I expect there to be a tipping point where the electric car starts to outcompete the internal combustion engine. It’s the way it’s going.” This may be added by an unlikely partner, the self-driving car. Advances in self-driving cars will also encourage a shift to battery power: It is simpler to link self-driving software to an electric motor than to a conventional engine.

As technology improves, prices fall, public charging stations become more commonplace it is most likely a matter of when, and not a matter of if when EV and Hybrids out sell the solely industrial combustion engine.

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Cyber Attacks Effecting the Global Shipping Business

By Eirk Cowles — SBS Group of Companies

Cyber-attacks are nothing new to the technically driven world. In the early morning hours of June 27th A.P. Moller-Maersk group was the latest company to be hit. As you can imagine, there was much unease and discomfort amongst companies with shipments carried by Maersk. A company that currently carries nearly 18% of the container freight shipments worldwide was forced to shut down 76 APM terminals Maersk owned worldwide because of the technology hack. Also, with international computer systems down it lead to delays in bookings, container releases, and EDI feeds among other items. Maersk had to resort back to the basics by doing things with paper and via fax. Petya, the cyber-attack, started in the Ukraine hitting power and governmental entities first, quickly spreading around the globe.

Shortly after noon on June 29th Maersk group confirmed systems and operations were back to normal.

MSC (Mediterranean Shipping Company) who joined together with Maersk in April 2017 to form the 2M ocean alliance was not directly affected by the Petya attack. However, since Maersk and MSC share many freight lanes around the world, shipments moving on and through Maersk owned vessels and ports were affected.

Shortly after the Petya attack, many other ocean carriers checked system securities for vulnerabilities to other such cyber-attacks in the future. The overall basic findings were alarming, many carriers found they were very unsecure. Years of low earnings and massive loses led many ocean carriers to cut IT resources.

Steamship lines like many other transportation modes rely heavily on Global Positioning Systems (GSP), fortunately the Petya attack did not affect any of these systems. Since these systems are the principle means of navigation for sea captains, any such attack could alter GSP navigations causing port delays, schedule failure and may even cause some vessels reroutes from their standard lanes.

To date there has not been a number confirmed of what this attack will cost Maersk group financially but some sources are saying $50 million plus.

“The Maersk attack raises our awareness of the vulnerability of shipping and ports to technological failure,” said Professor Dave Last. (pervious president of Britain’s Royal Institute of Navigate)

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U.S. Trade Deficit Narrows Sharply in June 2017, but Long-Term Deficit Trend Remains

By Todd R. Vollmers — Global Access Capital

A strengthening world economy and increased demand for U.S. exports overseas contributed to a recent sharp drop in the U.S. trade deficit with other nations. On August 4, 2017, the Commerce Department reported that compared to May 2017 the U.S. trade deficit for June had decreased 5.9% to $43.6 billion, (making it the lowest since October 2016) as exports of goods and services rose $2.4 billion (1.2%) to $194.4 billion, and imports of goods and services fell $0.4 billion (0.2%) to $238 billion. Additionally, the U.S. trade deficit shrank with: Mexico (to $6 billion from $7.3 billion); Canada (to $0.6 billion from $1.4 billion); the EU (to $12.5 billion from $12.8 billion); and Japan (to $5.6 billion from $5.8 billion). Conversely, the trade deficit with China during the same period grew (to $32.6 billion from $31.6 billion).

More specifically, the June 2017 reduction in the goods and services trade deficit reflected a decrease in the trade deficit for goods of $2.1 billion to $65.2 billion, and an increase in the trade surplus for services of $0.6 billion, to $21.6 billion. Trade deficits in goods, as opposed to services, has long been the primary factor in the overall U.S. trade deficit. On a non-seasonally adjusted basis, there was an increase in U.S. exports of goods to Japan (8.3%), Mexico (7.4%), Canada (1.1%), and the EU (0.2%), while U.S. exports of goods to China fell (4.7%). Steady growth in Asia, South America, and Europe, along with a weakened U.S. dollar, added to increased U.S. exports of, among other things, capital goods, motor vehicles, soybeans and petroleum, as exports rose to their highest level in 2 ½ years. U.S. petroleum exports, in particular, were a significant factor and reached an all-time high. Meanwhile, imports in June 2017 fell largely due to declines in consumer goods including jewelry, apparel, and cellphones, as well as a reduction in imported crude oil.

However, the much longer and broader trend indicates a growing trade deficit, as the U.S. continues to import more goods and services than it exports. During the first half of 2017, the trade deficit increased $26.7 billion, or 10.7%, compared to the same period in 2016. Although so far U.S. exports have risen $64.9 billion, or 6% this year, imports have grown by $91.7 billion, equal to 6.9%. In fact, with the U.S. incurring trade deficits in goods and services combined, and goods alone in 2016, it is noteworthy that the country has not experienced an annual trade surplus since 1975, when Gerald Ford was president. According to historical data published by the Census Bureau, which goes back to 1960, the U.S. had goods and services trade surpluses in 13 of the 16 years between 1960 and 1975. Since then, the U.S. has run a goods and services trade deficit in each of the 41 years after 1975.

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Importer Identity Theft: A Real Problem

By Michael Laden — Trade Innovations, Inc

With increasing frequency unsuspecting importers are being victimized by unscrupulous persons who have discovered how easy it is to assume a legitimate importer or corporation’s identity. Just like its counterpart, individual or personal identity theft, a case of corporate identity fraud can cripple an otherwise law-abiding company. We are working with a client who recently had two Immigration and Customs Enforcement (ICE) agents show up unannounced at their east coast offices one sleepy morning. The news they brought turned their world upside down and as I write this, they are still untangling the mess at great expense.

Somewhere along the way the “bad guys” secured the company’s Employer Identification Number (EIN) or Internal Revenue Service number. A malicious person in possession of this number can simply have a customs broker perform a bond query to obtain the other necessary information to make entry. And don’t forget, your company’s EIN number is out there everywhere; it appears on every customs entry and every W-2 or W-9 sent to employees. It’s much easier to obtain than someone’s social security number. Armed only with the EIN number and a company’s bond information, the “bad guys” can prepare a bogus Power of Attorney (POA) and retain a customs broker. It’s basically that simple.

Once the above steps have been completed the “bad guys” present the customs broker with a set of documents covering one or more consignments of counterfeit or illegal goods. If the “bad guys” pay the customs broker for their fees and the duties this scheme could go unchecked for months or years. Such was the case with the client mentioned in the first paragraph. And, the “bad guys” were so sophisticated that they targeted this importer because they were apparel importers. This would provide important “cover” for their illicit shipments of apparel and footwear. In most cases that we are familiar with however, the “bad guys” abscond with the goods following release and they do not pay the broker or the duties. This of course limits the damage done, but is still very problematic for the importer. The default on the surety bond will need to be addressed and all of the bogus entries identified and reported to CBP.

U.S. Customs & Border Protection (CBP) has recently been reminding customs brokers to be ever-vigilant in accepting POA’s from new customers; however a broker’s ability to verify the POA signatory and other corporate information represented therein is fairly limited. This is especially true for privately held companies and entities.

So how can you best protect your company from identity theft? First and foremost, to the greatest extent possible jealously guard and protect your corporate information. Secondly, all companies should periodically review their entry data with CBP. You do so in one of two ways, by accessing the Automated Commercial Environment (ACE) or by making a Freedom of Information Act request (FOIA) for your company’s Importer Trade Activity (ITRAC) data. At this particular point in time the ITRAC data is more robust; although one day ACE data will be more reliable and easier to obtain. The necessity of doing this is largely dictated by your volume, but at a minimum it should be done annually. In order to view your ACE data you will need to establish an ACE Portal account for your company with CBP; the process is free. Some of the things you want to look for when reviewing this report are for activity in unusual ports of entry, unusual broker filer codes or the importation of suspect commodities. Last but certainly not least, pay close attention to all CBP correspondence and communication, and all dates and deadlines imposed. If you receive a Request for Information (CF-28) or Notice of Action (CF-29) for a suspicious shipment investigate it immediately and if warranted discuss it with CBP.

One other way to monitor your activity with CBP is through your surety company. Really good sureties have comprehensive reporting programs that tell them and their clients when something has gone awry with CBP or something suspicious appears in their activity report.

Corporate identity theft is becoming an increasingly pervasive problem for importers, CBP and customs brokers alike. The best way to combat it is by closely scrutinizing your customs entry activity on a regular basis and by taking quick affirmative action if anomalies are found.

About the Author:
Michael Laden is the CEO of Trade Innovations, Inc. a specialty advisory service providing the trade with time-tested practical solutions to increase compliance, security and supply chain velocity; while reducing expense. He has more than 40 years of experience in the international trade industry. He is a Licensed Customs Broker (1981) and recognized expert in customs compliance and supply chain security and strategy. Mr. Laden served two-terms on the Commercial Operations Advisory Committee (COAC) and was a founding and charter member of the Business Alliance for Customs Modernization (BACM). He has served on the Board of Governors for the American Association of Exporters and Importers (AAEI) since 1988, and is a past Chairman. He was also a member of the World Customs Organization’s Private Sector Consultative Group (PSCG) and met regularly in Brussels, Belgium to discuss issues affecting customs compliance, security and global trade. Mr. Laden was also appointed to the WCO Task Force on Supply Chain Security.

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What to Know About Expanding Your Business Into Europe

Clusters may not be a familiar business model to many US companies, but when considering establishing European operations, it might be the most important factor when determining where to set up shop.

By Alastair Stevenson

US companies considering expanding into Europe for the first time must weigh the costs, risks and benefits of where to put down roots. Though Brexit’s impact has yet to be fully understood, the UK has historically been viewed as the most sensible location on account of its relatively similar regulations and accounting practices, and lack of a language barrier. However, companies would be remiss to rule out the rest of Europe, as other countries could be a better fit for their business model. A key factor that US companies may not be considering—but should—is clusters.

Clusters are groups of companies in related industries that operate in a concentrated area—based on demand, supply chain and resources—and they form naturally as a result of spillover. Well-established across Europe, clusters can be beneficial at both the company and regional levels, and they often become areas of concentrated employment.

Clusters don’t garner significant attention in the US, despite well-known examples such as Silicon Valley, Hollywood and Detroit, but they’re prevalent in Europe and play a vital role in its economy, which is largely a combination of interdependent clustered regions. The European Cluster Observatory—an initiative run by a unit of the European Commission—dedicates itself to studying clusters across the region. In November 2016, the Observatory published its second "European Cluster Panorama," which found that Europe consists of 327 clustered regions, each possessing a unique profile and differing performance capabilities. The report also identified 51 clustered industry categories across Europe, all of which depend on one another in some capacity.

Because of their prevalence, clusters can have a significant impact both on the European and global economies, so understanding the advantages and challenges they present is important for companies considering expansion.

What to Know About Clusters in Europe:

Importance in Europe
Primary Benefits
Key Challenges
Expansion Considerations

Importance in Europe

Speaking to the European Parliament ahead of the vote that elected him European Commission president on July 15, 2014, Jean-Claude Juncker outlined his policy agenda, detailed in “A New Start for Europe: My Agenda for Jobs, Growth, Fairness and Democratic Change.” With the EU’s economy still recovering from the global financial crisis, economic stimulus was highly emphasized in Juncker’s plan. Consequently, the commission launched a wide range of initiatives aimed at revitalizing the economy.

Clusters were, and still are, essential to the European Commission’s initiatives because of the important role they play in job creation and improving growth and investment opportunities. The Panorama identified the top 20 percent of regions by location quotient, which measures a region’s industry specialization by calculating its shares of employment for both the region and Europe as a whole. As a result, “strong” clusters were defined as “situations in which a region is specialized in a set of related industries relative to peers.”

In addition to recognizing strong clusters, data from the Panorama can help to more clearly detect areas of economic concern, such as potential regressing clusters and unemployment hotspots. While a clearer understanding of these areas is important in helping inform policymakers’ initiatives, it’s also crucial information for companies to consider when evaluating expansion in Europe.

Primary Benefits

Industry Specialization

Clusters are most effective when they’ve reached critical mass, which indicates significant market demand for a particular good or service. The European Commission’s “Smart Guide to Cluster Policy” explains that this, in turn, allows companies to narrow their focus and specialize in a particular area. As companies become more specialized, employees develop more advanced skills, ultimately resulting in higher levels of overall productivity and innovation. As competition increases, companies must continue innovating and developing new products and services to maintain a competitive advantage and remain afloat. And the companies that thrive often become more competitive not just regionally, but also globally.

Supply chain

Clusters typically serve markets beyond their immediate area, connecting to other industries with complementary strengths in regional and global supply chains. The Smart Guide notes that as specialization increases among companies in a specific cluster, they have to rely on business partners to supply the products and services outside their scope of work. As a result, cross-industry supply chains are created and grow, spreading benefits such as increased employment across industries and regions.

Employment and wages

The Panorama found that clustered industries account for 47 percent of all European employment covered in the data. At the time of its publication, the average annual full-time salary for clustered industries was 34,800 euros ($39,023) in Purchasing Power Parity (PPP), which accounts for differences in local price levels. This represents a salary 17 percent higher than non-traded industries, whose production is only consumed locally, as opposed to traded industries, whose production is consumed beyond the immediate region. This wage gap has been growing slowly over time, and likely comes as the result of some of the benefits of clusters: higher levels of productivity, more capital and enhanced skills. The Panorama determined that the oil and gas industry leads Europe’s cluster categories with an average annual full-time salary of more than 63,000 euros ($70,648) in PPP—about five times higher than the apparel industry, which pays the average annual salary of clusters.


A key strength seen in clusters is their ability to not only survive, but to thrive by adapting to changing conditions over time. As mentioned above, the most successful clusters innovate constantly, rather than staying rigid in their operations and processes. This pays off, as the Panorama found that strong clusters account for 46 percent of all traded industries’ employment, and they have about twice as much economic activity in a specific cluster category than the European average.

  • The Panorama assigned “performance stars” to identify regions that most successfully leveraged a cluster’s presence. Stars were awarded to locations that ranked in the top 20 percent of European regions in any of the following three categories:
    • Absolute size: Indicates the number of employees and companies
    • Productivity: Indicates the wages paid—adjusted for local cost levels—in a regional cluster
    • Dynamism: Indicates an average measurement of employment growth and presence of fast-growing new companies

Top 10 Clusters in Europe

Istanbul Region

  • Largest City: Istanbul
  • Total stars: 101
  • Employment share of strong clusters: 58.14%
  • Top 3 clusters by location quotient: Appliances, Textile manufacturing, Biopharmaceuticals

Ile-de-France Region

  • Largest City: Paris
  • Total stars: 92
  • Employment share of strong clusters: 63.75%
  • Top 3 clusters by location quotient: Performing arts, Video promotion and distribution, Marketing and design and publishing

Upper Bavaria Region

  • Largest City: Munich
  • Total stars: 92
  • Employment share of strong clusters: 48.34%
  • Top 3 clusters by location quotient: Aerospace vehicles and defense, Biopharmaceuticals, Video production and distribution

Stuttgart Region

  • Largest City: Stuttgart
  • Total stars: 83
  • Employment share of strong clusters: 56.29%
  • Top 3 clusters by location quotient: Production technology and heavy machinery, Automotive, Metalworking technology

Cologne Region

  • Largest City: Cologne
  • Total stars: 80
  • Employment share of strong clusters: 44.26%
  • Top 3 clusters by location quotient: Video production and distribution, Metalworking technology, Insurance services

Lombardy Region

  • Largest City: Milan
  • Total stars: 80
  • Employment share of strong clusters: 63.65%
  • Top 3 clusters by location quotient: Textile manufacturing, Insurance services, Financial services

Darmstadt Region

  • Largest City: Frankfurt
  • Total stars: 76
  • Employment share of strong clusters: 53.28%
  • Top 3 clusters by location quotient: Biopharmaceuticals, Financial services, Insurance services

Dusseldorf Region

  • Largest City: Dusseldorf
  • Total stars: 73
  • Employment share of strong clusters: 32.04%
  • Top 3 clusters by location quotient: Production technology and heavy machinery, Communications equipment and services, Upstream chemical products

Hamburg Region

  • Largest City: Hamburg
  • Total stars: 73
  • Employment share of strong clusters: 67.49%
  • Top 3 clusters by location quotient: Water transportation, Metal mining, Medical devices

Slaskie Region

  • Largest City: Katowice
  • Total stars: 73
  • Employment share of strong clusters: 61.61%
  • Top 3 clusters by location quotient: Coal mining, Lighting and electrical equipment, Furniture

Key Challenges

For all of the benefits clusters bring, they’re not perfect. The Panorama noted that economic forces naturally encourage dispersion, so as clusters grow, the disadvantage of “congestion costs” emerges as a result of clusters’ agglomeration. This can be most prevalent when companies bid higher prices for scarce resources, such as salaries for employees with desirable skills.

As discussed throughout, successful clusters thrive by continually innovating, but disruption still remains a potential drawback, especially as clusters grow in size. The Panorama referred to this as the “lock-in” effect, which occurs when all the companies in a cluster use a certain technology that is then disrupted by innovation in other locations. The Panorama noted that the interplay between the “forces of agglomeration and dispersion shapes the evolution of clusters over time.”

Expansion Considerations

As companies consider expanding into Europe, an understanding of local clusters can help them make an informed decision about the right location in which to establish operations. And despite any short-term startup challenges, companies should remember that clusters have proven staying power and can help position them for long-term growth in the European market.

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Country of the Month: Canada

By Euler Hermes

Country Rating: AA1


  • Politically stable
  • High per capita GDP
  • Resilient services sector
  • Strong banking system
  • Accommodative monetary policy
  • High data transparency
  • Large oil and gas reserves
  • Diverse GDP


  • Risk of housing bubble in some regions
  • Sensitive to commodity prices
  • Dependence on exports
  • High exposure to the U.S. economy
  • High personal debt
  • Government revenues dependent on oil
  • Slow wage growth

Economic Outlook

Continued resilience with one major risk
The Canadian economy was resilient in 2016 despite still low oil prices, and the Alberta wildfires which were the costliest natural disaster in Canadian history. The fires caused Q2 GDP to fall -1.2% q/q annualized and drove the full year rate down to only +1.4%, masking the strength the rest of the year which provided numerous upside surprises. The factors which created those upside surprises will also lay a foundation for continued strength in 2017, which we expect to grow +2.1%.

The services sector has been very stable throughout the recovery and will provide a basis for continued growth in 2017. The energy sector, which finished the year growing +5.5% y/y might have hit bottom as the majority of bankruptcies and consolidations may have worked their way through the system. Commodity prices are rebounding, typically a strong sign for Canada. Leading indicators from the Bank of Canada (BoC) Business Outlook Survey and the CFIB Business Barometer point to strength through the year.

On the manufacturing side, leading indicators are also robust with new orders up +6.8% y/y in December and the inventory/sales ratio down at the lowest level in six years. The employment situation is encouraging as job growth is actually accelerating from only +0.4% y/y in July ‘16 to +1.6% y/y in February ’17. At the same time, the unemployment rate is historically low at 6.9% vs a long-term average of 7.7%, while the participation rate remains near average at 65.8%, all of which will promote robust consumer spending which grew +2.2% in 2016. Fiscal policy remains stimulative.

Monetary policy is very accommodative and will remain so through 2017 as the BoC faces stubbornly low inflation. In turn, a loose BoC and a tightening Fed will also keep the CAD weak vs. the USD, making Canadian exports more competitive. Exports will also benefit from a stronger US economy in 2017 which will stimulate demand for Canadian goods. Clearly the outlook for 2017 is brighter, and as a result we expect bankruptcies to continue to creep down, falling -1% through the year.

One Major Risk
Canadian housing prices grew 13.4% y/y in February vs. a long-term average of only +6.6%, creating the risk of a bubble. Prices in Toronto and Hamilton are now growing at record rates of 23% y/y and 20% y/y respectively. Housing prices in Vancouver were rising at 26% y/y last August as Chinese investors had poured into the market, parking money offshore. Recognizing the danger of an asset bubble, measures were put into place to cool the market. The British Columbia government imposed a 15% tax on foreign purchases in Vancouver in August ’16. This did drive prices down — for three months. The federal government made mortgages less accessible nationwide in October ’16. These measures also slowed the market, but just for a few months.

Overly rapid price inflation, combined with record-high personal debt levels are a dangerous combination, and a burst bubble could cause a wave of defaults and a massive loss of wealth. We expect the government to take more measures soon to slow the market, but it will have to delicately balance the goal of slowing the market while avoiding bursting the bubble.

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Spotlight: Drinkle Biddle

Anna Outtara

Drinker Biddle is a national, full-service law firm providing litigation, regulatory and business solutions to public and private corporations, multinational Fortune 100 companies and start-ups. Building on a rich 167-year history, our more than 635 lawyers across 12 offices today uphold our firm’s reputation for outstanding legal results and bring a sophisticated, forward-thinking approach to every client engagement.
We combine a comprehensive range of legal services with significant national roles in industries, including—but not limited to—health care, financial services, insurance, energy, retail, education, and pharma and life sciences. Through deep industry knowledge and a commitment to excellence, clients can rely on us to deliver the counsel and insight needed to win complex class actions, close billion-dollar transactions and stay ahead of ever-changing regulations.

Our firm, lawyers and practice groups are routinely recognized for their results, client service and pro bono efforts. Among our recent recognitions:

  • In 2017, 13 of our practice groups were recognized as leaders in their fields by Chambers and Partners, a client and peer reference-driven guide to the world’s top lawyers
  • Intellectual Property Practice Group ranked in the World Trademark Review 1000 for 2017, recognizing the Washington D.C. and Chicago offices, as well as individual lawyers
  • Named insurance “Law Firm of the Year” by international industry-leading publication Reactions Magazine in 2015 and 2016. Drinker Biddle was also named the number one insurance law firm in five of the six categories in the Reactions Legal Survey 2016, namely Litigation, Regulatory, M&A, ILS and Insolvency
  • Recipient of the of the Philadelphia Bar Foundation’s 2017 Pro Bono Award, a prestigious honor recognizing one firm that “performs outstanding volunteer efforts in providing legal services to those in need.”

A description of the selection process methodologies for the awards referenced here and throughout our website is available here: Awards Methodologies

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Spotlight: Bremer Bank

Bremmer Bank

At Bremer Bank, we pride ourselves on being an active partner for growing businesses. Bremer’s deep financial resources and broad capabilities mean that we can help our clients anticipate and prevent financial roadblocks; protect and grow their assets; and pave the way for their future.

We respect the impact that businesses have in our community. Bremer’s business and agricultural bankers understand the unique nature of businesses — the changes and challenges you face from year to year. Whether you’re just getting established, a long-standing operation or anywhere in between, our experts use their years of experience to develop solutions that best fit the goals of our clients.

At Bremer, you will work face-to-face with a team of employee-owners empowered to make decisions locally. This means we can respond quickly and imaginatively to your business’ financial needs. And because Bremer employees are part owners in our business, our people are truly invested in your success.

Whether you’re a small, mid-sized or large operation, Bremer Bank partners with businesses of all sizes to provide custom-tailored, innovative financing options. We pay attention to our client’s current needs and anticipate how we can help in the future. It’s a higher level of responsiveness that means you can talk to a banker who knows your situation and get quick turnarounds.

Bremer Bank offers a comprehensive range of international services to meet the needs of importing and exporting clients. Our services include payment vehicles to help clients expand their international sales, minimize the risks of purchasing and selling products overseas, and manage foreign currency exposure.

Bremer International Services has partnerships with government entities, private insurance brokers/consultants, and international correspondent banks that allow us to offer the necessary expertise and solutions that our clients’ require in order to meet the challenges in the global marketplace and expand their international business.

In addition, Bremer Bank offers a suite of automated, analytical Treasury Management services. We know that short-term cash fuels business vitality and growth and we can help clients optimize their cash and processes. As a dedicated and trusted partner for businesses of all sizes, Bremer Bank helps clients identify and implement the right financial tools to support decisions, effectively manage funds, stay up-to-date and drive their business forward.

As a multi-billion dollar regional financial services company, Bremer is able to provide state-of-the-art solutions to meet any of your business banking, investment, trust, and insurance needs. Our team approach allows us to take a look at the full scope of your financial picture. We take the time to listen, ask questions, and customize financial solutions to best meet your goals.

Visit to learn more about how Bremer Bank can help you plan for the future.

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Thank You, 2017 Annual Sponsors!

Bremer Bank


Neville Peterson, LLP

Drinker, Biddle, and Reath


SBS Group of Companies

Cassidy Levy Kent

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Global Training Center

Cassidy Levy Kent

Bennett Jones