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UPS Global Customs Webinar 4 August 2016 Global Trade Compliance 1

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UPS Global Customs Webinar 4 August 2016

Global Trade Compliance

1

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

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

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

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

Global Trade Compliance

Changing the global trade landscape

• Presenters

• Host

• Greg Maddaleni, LCB

• Customs Brokerage Manager

• Panelist

• Bill Ansley

• Vice President, UPS Trade

Management Services

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

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

this presentation, or for the consequences of any actions taken on the basis of the information provided.

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

3

Global Trade Compliance

Agenda

Global trade regulatory trends

Impacts to a company’s trade compliance

Available company trade compliance options

UPS® Tradenomics viewpoint

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

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

this presentation, or for the consequences of any actions taken on the basis of the information provided.

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

4

2016 – a big year in trade

Numerous acts and initiatives to facilitate trade

Item Facilitates

trade

Reduces

tariffs

US Customs Trade Facilitation Act – 2016 a

Union Customs Code (EU) – 2016 a

WTO Trade Facilitation Agreement – pending ratification a

US ACE implementation – 2016 a

Trans-Pacific Partnership – pending ratification a a

T-TIP (EU – US) – pending a a

Numerous (existing) FTA’s a

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

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

this presentation, or for the consequences of any actions taken on the basis of the information provided.

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

5

2016 – a big year in trade

The global trade environment is a mixed picture

• Trade detractors

• Brexit

• US election year

• Trade restrictions outpacing trade remedies (2016 WTO report)

• Longer term trends

• Trade openness

• Population growth, rise in middle classes worldwide

• Cross border company mergers & acquisitions

Sources: New York Times (Jun-Jul 2016), WTO (Jul 2016), OECD Observer (May 2013), UNCTAD (Oct 2015))

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Trade Openness (World)(Trade as a percent (%) of GDP)

% of

GDP

Source: World Bank (May 2016)

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

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

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

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

Impact of Trends to Trade Compliance –

Assessing your challenges and responsibilities

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

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

this presentation, or for the consequences of any actions taken on the basis of the information provided.

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

7

Do any of these scenarios sound familiar to you?1. Company export sales constantly increasing

2. We’ve acquired a new overseas company (or they have acquired us)

3. New branch facilities in other countries

4. We have evolved to multiple operating divisions, across multiple countries

Challenges

Rise in company

export sales

Growing global supply chain

Multiple operating divisions

Varying trade

regulations worldwide

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

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

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

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

8

Compliance basics – “Must know, must have”

Must know:

Must Have - Management Strategy to:

“In the middle of

difficulty lies

opportunity”

- Albert Einstein• Corporate policies and standards

• Contractual agreements

• 3 P/L Partners – brokers and forwarders

• Declaration process and governing agencies in each country

• Local country requirements and resources

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

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

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

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

9

Compliance Basics – “Must Know, Must Have”

Must have (or must be able to):

• Avoid potential corruption

• Properly declare valuation

• Determine and share product classification

• Verify country of origin and qualify FTA/Duty deferral claims

• Reconcile quantity received vs. declared

• Maintain records and data

“In the middle of

difficulty lies

opportunity”

- Albert Einstein

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

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

this presentation, or for the consequences of any actions taken on the basis of the information provided.

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

10

Trade Compliance Blind Spots

Lack of Controls:

• Designated Compliance Manager

• 3 P/L Selection and Management

• Established Procedures

• Audit and Verification Programs

• Corporate Oversight

Training and Awareness:

• Corporate Policies and Standards

• Basic Compliance and Declaration Process

• Documentation and SOPs

• Established Training Programs and

Certifications

• Recurrent Training and Documentation

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

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

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

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

Trade Compliance Management –

Available alternatives

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

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

this presentation, or for the consequences of any actions taken on the basis of the information provided.

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

12

Global Brokerage Models –”The Good, The Bad and The Ugly"

Carry clear vs. standalone brokerage

• Brokerage provided as part of transportation function

• Broker responsible for clearance regardless of transportation arrangements

Consolidated brokers vs. multiple brokers• Brokerage consolidated by country/region/globally across all businesses

• Broker selected by business, mode of transportation, or other special needs

Managed services• Brokers managed by 4 P/L or other outside resource

• Managed services control tower to manage and monitor brokers BPO Control Tower

Broker

Forwarder

Carry Clear Standalone

Importer

Broker

Broker

Broker

Broker

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

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

this presentation, or for the consequences of any actions taken on the basis of the information provided.

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

The case for managed services

Knowledge and control of import and export activities globally

• “Trusted partner” providing knowledgeable resources to augment importer’s internal resources

• Simplified communication through single managed services provider (MSP)

• Regional centers providing local expertise and coverage

• Broker and entry management with auditing

– Reduce the potential of supply chain delays and costly penalties

• Ability to:

• Implement and monitor global standards

• Monitor shipment activity and track key import data across multiple brokers

• Develop and track relevant KPI’s to positive change

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

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

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

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

Global technology considerations

• How can ERP* systems assist with global compliance management?

• Often companies use multiple ERP’s

• Can a GTM** system provide a complete solution?

• What else may be required such as:

– Additional ongoing content?

– Skilled decision making?

* Enterprise resource planning

** Global trade management

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

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

this presentation, or for the consequences of any actions taken on the basis of the information provided.

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

The benefits of a good compliance program

Enhances your supply chain with increased velocity and fewer disruptions or delays

• Reduces risks

• Provides lower operating costs

• Reduces order cycle times for fulfillment

• Increase sales

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

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

this presentation, or for the consequences of any actions taken on the basis of the information provided.

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

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

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

this presentation, or for the consequences of any actions taken on the basis of the information provided.

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

Polling questions results

Trade compliance blind spots

What blind spot concerns you the most in the "lack of controls" area?

Corporate

Policies and

Standards

Basic

Compliance and

Declaration

Process

Documentation

and SOPs

Established

Training

Programs and

Certifications

Recurrent

Training and

Documentation

14% 8% 21% 19% 20%

Designated

Compliance

Manager

3 P/L Selection

and Management

Established

Procedures

Audit and

Verification

Programs

Corporate

Oversight

10% 10% 22% 41% 16%

What blind spot concerns you the most in the "training and awareness" area?

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

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

this presentation, or for the consequences of any actions taken on the basis of the information provided.

© 2016 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

Global trade compliance

18

• Even with periodic detractions, global trade continues to increase

• Inquire about your own Tradenomics discussion

• Available at checkout

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

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

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

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

Thank you

19

Global Trade ComplianceAugust 4, 2016

Welcome to our webinar presented by UPS.

The webinar will start at 4:00PM ET.

If you would like to use the conference bridge to call in, please find your dial-in info from

the "Event Info" tab at the top section of your screen.

While we are waiting, you may prepare some questions for the Q&A time at the end of

the webinar. Should you have any questions, please don't hesitate to ask “All

panelists” using the "Q&A" function on your screen.