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					         PRELIMINARY
      OVERSEAS SHIPMENT
      OPERATING CONCEPTS
             AND
   MILITARY AND COMMERCIAL
  FOREIGN CUSTOMS INTERFACES

                  REVISION A

                        for the

             DOD CALS IDE PROJECT

                      July 1997


                     Submitted by
     ManTech Advanced Systems International, Inc.
West Virginia Technology Applications Operations Center
          1000 Technology Drive, Suite 3310
            Fairmont, West Virginia 26554

                      In support of
             Contract DASW01-97-D-0006
                and in compliance with
            CDRL Sequence Numbers D003




ManTech Advanced Systems International, Inc.
                                                 I
______________________            ______________________
    Robert S. Kidwell                 Jack G. Richman
    Technical Director               Executive Director
 DoD CALS IDE Project              DoD CALS IDE Project
                                                 TABLE OF CONTENTS


LIST OF FIGURES...................................................................................................................... VII
LIST OF TABLES ...................................................................................................................... VIII
1.0 INTRODUCTION.....................................................................................................................1
2.0 DOD OVERSEAS SHIPMENT EDI OPERATING CONCEPT .............................................2
      2.1 Defense Transportation EDI (DTEDI) Operating Concept ...........................................2
      2.2 Model of Overseas Shipment Documents Process .......................................................8
      2.3 Assessment of the Overseas Shipment Documents Process Operating Concept ........22
             2.3.1 Prepare Cargo EDI Assertion Diagram ........................................................24
             2.3.2 Transport Cargo EDI Assertion Diagram .....................................................26
             2.3.3 Release Cargo EDI Assertion Diagram........................................................28
             2.3.4 Monitor Cargo Status EDI Assertion Diagram ............................................31
             2.3.5 Summary of OSDP Operating Concept Assessment ...................................32
3.0 CUSTOMS SERVICE AND DEPARTMENT OF TRANSPORTATION (DOT)
OVERSEAS SHIPMENT EDI OPERATING CONCEPTS .........................................................33
      3.1 United States Customs Service (USCS) .....................................................................33
      3.2 Department of Transportation (DOT) .........................................................................33
      3.3 Assessment of USCS and DOT Operating Concepts..................................................34
4.0 EXISTING MILITARY FOREIGN CUSTOMS PROCEDURES AND INTERFACES ......35
      4.1 Military Service and Defense Agency Roles ..............................................................35
             4.1.1 Military Traffic Management Command (MTMC) .....................................35
             4.1.2 Air Mobility Command (AMC) ...................................................................35
             4.1.3 Military Sealift Command (MSC) ...............................................................35
             4.1.4 Military Exchange Services .........................................................................36
                     4.1.4.1 Army and Air Force Exchange Service (AAFES) ........................36
                     4.1.4.2 Navy Exchange System (NEX) .....................................................36
             4.1.5 Joint Traffic Management Office (JTMO)...................................................41
             4.1.6 DEFENSE COMMISSARY STORES .........................................................41
      4.2 Status of Forces Agreement (SOFA) ..........................................................................42
             4.2.1 United Kingdom...........................................................................................42
             4.2.2 The Netherlands ...........................................................................................43
             4.2.3 Republic of Germany ...................................................................................43
             4.2.4 Japan ............................................................................................................43
             4.2.5 Hungary........................................................................................................44
             4.2.6 Spain ............................................................................................................44
             4.2.7 Italy ..............................................................................................................44
             4.2.8 South Korea .................................................................................................44
             4.2.9 Saudi Arabia.................................................................................................45
             4.2.10 Turkey ........................................................................................................45
             4.2.11 Panama .......................................................................................................46
      4.3 Existing Military Procedures and Interfaces ...............................................................46
             4.3.1 Military Traffic Management Command .....................................................48
             4.3.2 Air Mobility Command................................................................................49


                                                                 ii
            4.3.3 Military Sealift Command ...........................................................................50
            4.3.4 Army Air Force Exchange Service ..............................................................51
            4.3.5 Joint Traffic Management Office (JTMO)...................................................52
      4.4 Summary of Existing Military Procedures and Interfaces ..........................................53
5.0 EXISTING COMMERCIAL FOREIGN CUSTOMS PROCEDURES, REQUIREMENTS,
AND INTERFACES ......................................................................................................................54
      5.1 Existing Commercial Procedures, Requirements, and Interfaces ...............................54
            5.1.1 The United Kingdom ...................................................................................54
                    5.1.1.1 Tariff Structure..............................................................................54
                    5.1.1.2 Import Duties ................................................................................55
                    5.1.1.3 Levy of Duties ...............................................................................55
                    5.1.1.4 Customs Surcharge and Indirect Taxes .........................................55
                    5.1.1.5 Import Channels ............................................................................55
                    5.1.1.6 Distribution ...................................................................................55
                    5.1.1.7 Ports ..............................................................................................55
                    5.1.1.8 Free Trade Zones ..........................................................................55
                    5.1.1.9 Entry and Warehousing .................................................................56
                    5.1.1.10 Transit .........................................................................................56
                    5.1.1.11 Documentation Required ............................................................56
            5.1.2 The Netherlands ...........................................................................................58
                    5.1.2.1 Tariff Structure..............................................................................58
                    5.1.2.2 Levy of Duties ...............................................................................58
                    5.1.2.3 Customs Surcharge and Indirect Taxes .........................................58
                    5.1.2.4 Import Channels ............................................................................58
                    5.1.2.5 Distribution ...................................................................................58
                    5.1.2.6 Ports ..............................................................................................59
                    5.1.2.7 Free Trade Zones ..........................................................................59
                    5.1.2.8 Entry and Warehousing .................................................................59
                    5.1.2.9 Transit ...........................................................................................59
                    5.1.2.10 Documentation Required ............................................................59
            5.1.3 Republic of Germany ...................................................................................60
                    5.1.3.1 Tariff Structure..............................................................................61
                    5.1.3.2 Import Duties ................................................................................61
                    5.1.3.3 Levy of Duties ...............................................................................61
                    5.1.3.4 Customs Surcharge and Indirect Taxes .........................................61
                    5.1.3.5 Import Channels ............................................................................61
                    5.1.3.6 Distribution ...................................................................................61
                    5.1.3.7 Ports ..............................................................................................61
                    5.1.3.8 Free Trade Zones ..........................................................................62
                    5.1.3.9 Entry and Warehousing .................................................................62
                    5.1.3.10 Transit .........................................................................................62
                    5.1.3.11 Documentation Required ............................................................62
            5.1.4. Hungary.......................................................................................................63
                    5.1.4.1 Tariff Structure..............................................................................63
                    5.1.4.2 Import Duties ................................................................................64


                                                               iii
        5.1.4.3 Preferential Duties ........................................................................64
        5.1.4.4 Customs Surcharge and Indirect Taxes .........................................64
        5.1.4.5 Import Channels ............................................................................64
        5.1.4.6 Distribution ...................................................................................64
        5.1.4.7 Ports ..............................................................................................64
        5.1.4.8 Free Trade Zones ..........................................................................64
        5.1.4.9 Entry and Warehousing .................................................................64
        5.1.4.10 Transit .........................................................................................65
        5.1.4.11 Documentation Required ............................................................65
5.1.5 Spain ............................................................................................................65
        5.1.5.1 Tariff Structure..............................................................................66
        5.1.5.2 Import Duties ................................................................................66
        5.1.5.3 Levy of Duties ...............................................................................66
        5.1.5.4 Customs Surcharge and Indirect Taxes .........................................66
        5.1.5.5 Import Channels ............................................................................66
        5.1.5.6 Distribution ...................................................................................66
        5.1.5.7 Ports ..............................................................................................66
        5.1.5.8 Free Trade Zones ..........................................................................67
        5.1.5.9 Entry and Warehousing .................................................................67
        5.1.5.10 Transit .........................................................................................67
        5.1.5.11 Documentation Required ............................................................67
5.1.6 Italy ..............................................................................................................68
        5.1.6.1 Tariff Structure..............................................................................69
        5.1.6.2 Import Duties ................................................................................69
        5.1.6.3 Levy of Duties ...............................................................................69
        5.1.6.4 Customs Surcharge and Indirect Taxes .........................................69
        5.1.6.5 Import Channels ............................................................................69
        5.1.6.6 Distribution ...................................................................................69
        5.1.6.7 Ports ..............................................................................................69
        5.1.6.8 Free Trade Zones ..........................................................................69
        5.1.6.9 Entry and Warehousing .................................................................70
        5.1.6.10 Transit .........................................................................................70
        5.1.6.11 Documentation Required ............................................................70
5.1.7 South Korea .................................................................................................71
        5.1.7.1 Tariff Structure..............................................................................71
        5.1.7.2 Import Duties ................................................................................71
        5.1.7.3 Levy of Duties ...............................................................................71
        5.1.7.4 Customs Surcharge and Indirect Taxes .........................................71
        5.1.7.5 Import Channels ............................................................................71
        5.1.7.6 Distribution ...................................................................................72
        5.1.7.7 Ports ..............................................................................................72
        5.1.7.8 Free Trade Zones ..........................................................................72
        5.1.7.9 Entry and Warehousing .................................................................72
        5.1.7.10 Transit .........................................................................................72
        5.1.7.11 Documentation Required ............................................................72


                                              iv
5.1.8 Japan ............................................................................................................73
       5.1.8.1 Tariff Structure..............................................................................73
       5.1.8.2 Import Duties ................................................................................73
       5.1.8.3 Levy of Duties ...............................................................................73
       5.1.8.4 Customs Surcharge and Indirect Taxes .........................................74
       5.1.8.5 Import Considerations ...................................................................74
       5.1.8.6 Distribution ...................................................................................74
       5.1.8.7 Ports ..............................................................................................74
       5.1.8.8 Free Trade Zones ..........................................................................74
       5.1.8.9 Entry and Warehousing .................................................................74
       5.1.8.10 Transit .........................................................................................75
       5.1.8.11 Documentation Required ............................................................75
5.1.9 Saudi Arabia.................................................................................................76
       5.1.9.1 Tariff Structure..............................................................................76
       5.1.9.2 Import Duties ................................................................................76
       5.1.9.3 Levy of Duties ...............................................................................76
       5.1.9.4 Customs Surcharge and Indirect Taxes .........................................76
       5.1.9.5 Import Channels ............................................................................76
       5.1.9.6 Distribution ...................................................................................76
       5.1.9.7 Ports ..............................................................................................77
       5.1.9.8 Free Trade Zones ..........................................................................77
       5.1.9.9 Entry and Warehousing .................................................................77
       5.1.9.10 Transit .........................................................................................77
       5.1.9.11 Documentation Required ............................................................77
5.1.10 Turkey ........................................................................................................78
       5.1.10.1 Tariff Structure............................................................................79
       5.1.10.2 Import Duties ..............................................................................79
       5.1.10.3 Levy of Duties .............................................................................79
       5.1.10.4 Customs Surcharge and Indirect Taxes .......................................79
       5.1.10.5 Import Channels ..........................................................................80
       5.1.10.6 Distribution .................................................................................80
       5.1.10.7 Ports ............................................................................................80
       5.1.10.8 Free Trade Zones ........................................................................80
       5.1.10.9 Entry and Warehousing ...............................................................80
       5.1.10.10 Transit .......................................................................................80
       5.1.10.11 Documentation Required ..........................................................81
5.1.11 Panama .......................................................................................................81
       5.1.11.1 Tariff Structure............................................................................82
       5.1.11.2 Import Duties ..............................................................................82
       5.1.11.3 Levy of Duties .............................................................................82
       5.1.11.4 Customs Surcharge and Indirect Taxes .......................................82
       5.1.11.5 Import Channels ..........................................................................82
       5.1.11.6 Distribution .................................................................................82
       5.1.11.7 Ports ............................................................................................83
       5.1.11.8 Free Trade Zones ........................................................................83


                                              v
                     5.1.11.9 Entry and Warehousing ...............................................................83
                     5.1.11.10 Transit .......................................................................................83
                     5.1.11.11 Documentation Required ..........................................................83
     5.2 Summary of Existing Commercial Procedures, Requirements, and Interfaces ..........84
REFERENCES ..............................................................................................................................86
APPENDIX A: LIST OF ACRONYMS .................................................................................... A-1
APPENDIX B: LIST OF CONTACTED AND VISITED AGENCIES AND EMBASSIES ....B-1




                                                                 vi
                                                    LIST OF FIGURES

Figure 2.1-1 Bill of Lading from Shipper to Clearance Authority Operating Concept ................. 3
Figure 2.1-2 Bill of Lading from Shipper to POD Operating Concept .......................................... 5
Figure 2.1-3 Bill of Lading from POD to Consignee Operating Concept ..................................... 7
Figure 2.2-1 Pictorial Diagram of IDEF0 Objects ......................................................................... 9
Figure 2.2-2 Transportation Processes ........................................................................................... 9
Figure 2.2-3 A-0 Movement ........................................................................................................ 12
Figure 2.2-4 A0 Movement .......................................................................................................... 14
Figure 2.2-5 A1 Prepare Cargo .................................................................................................... 16
Figure 2.2-6 Transport Cargo....................................................................................................... 18
Figure 2.3-1 Business Case Model A-0 EDI Assertion Diagram ................................................ 23
Figure 2.3-2 Business Case Model A0 EDI Assertion Diagram .................................................. 24
Figure 2.3.1-1 Prepare Cargo EDI Assertion Diagram ................................................................ 25
Figure 2.3.1-2 DTEDI OSDP Operating Concept, Subproject 1 ................................................. 26
Figure 2.3.2-1 Transport Cargo EDI Assertion Diagram ............................................................. 27
Figure 2.3.2-2 DTEDI OSDP Operating Concept, Subproject 2 ................................................. 28
Figure 2.3.3-1 Release Cargo EDI Assertion Diagram ................................................................ 29
Figure 2.3.3-2 DTEDI Subproject 3 ............................................................................................. 30
Figure 2.3.3-3 NATAP Foreign Customs EDI Interface.............................................................. 31
Figure 2.3.4-1 Monitor Cargo Status EDI Assertion Diagram .................................................... 31




                                                              vii
                                                     LIST OF TABLES

Table 2.2-1 Arrow Definitions ..................................................................................................... 20
Table 4.1.4.2-1 NEX Facilities .................................................................................................... 39
Table 4.3-1 USTRANSCOM Units and Locations ...................................................................... 47
Table 4.3.2-1 AMC Global Missions ........................................................................................... 50




                                                              viii
                                    1.0 INTRODUCTION
This report presents a preliminary analysis of the overseas shipment documents process. The
defense transportation freight movement process includes four major areas: tender submission,
planning, movement, and payment. The overseas shipment documents process is a part of the
movement process.

This report examines the Department of Defense (DoD) overseas shipment Electronic Data
Interchange (EDI) operating concept with respect to overseas shipment documents. DoD
document processes are addressed, and projected EDI operating concepts are explained. A
model of the overseas shipment documents process has been developed as part of this report.
This “As-Is Movement Activity Model” is a representation of the activities associated within the
movement process of the defense transportation freight movement system. This base model will
be used to develop a preliminary business case for adopting a standard electronic interface among
the countries of interest and the U.S. The model will also serve as an assessment tool for
determining the feasibility of developing a generic foreign customs interface.

With respect to developing a foreign customs interface, it would be difficult to include all
customs requirements from every country in the world. However, in this work, we were initially
tasked to look specifically at the following nine countries:

      The United Kingdom
      The Netherlands
      Germany
      Saudi Arabia
      Hungary
      Spain
      Italy
      South Korea
      Japan

After meeting with the customer, it was decided that two additional countries, Panama and
Turkey, should be included in our review.

In order to ascertain DoD‟s interaction with each of the aforementioned countries for overseas
shipments, status of forces agreements with the countries were compiled and reviewed for
relevant information. Further, DoD transportation components were identified, and their roles
within the defense transportation freight movement process were delineated.

This report is a summation of our discovery process results ascertaining current “DoD” and
“EDI” overseas shipment documents concepts, and foreign customs requirements. The
preliminary report was prepared for the purpose of providing information. This revised report
contains an initial assessment of the DoD overseas shipment EDI operating concept with respect
to the implementation of an electronic foreign customs interface. The assessment is included in
Section 2.3.


                                              1
             2.0 DOD OVERSEAS SHIPMENT EDI OPERATING CONCEPT
Shrinking budgets, downsizing forces, and many other factors are contributing to the DoD‟s
effort to “rethink the way it does business.” Although the DoD‟s mission remains “to provide for
the common defense,” the DoD must also be able to project military power anywhere in the
world on relatively short notice. This projection of power requires the DoD to maintain a
material/communications and logistics infrastructure that enables the Department to ship
personnel and materiel globally in times of peace or conflict, and with enough “visibility” to
know where the shipped assets are at any time, as well as their status. Lessons learned from
every major military deployment during this century point out that sound logistics practices are
critical to the success of military operations; yet, every major DoD military operation undertaken
this century has been plagued by logistics and communications difficulties. To this end, the DoD
has started to reengineer many of their logistics and communications business practices, utilizing
commercial business practices and techniques such as Electronic Data Interchange (EDI) where
practical. The Overseas Shipment Documents Process (OSDP) is one of the business processes
where DoD hopes to infuse EDI practices. However, according to the Defense Transportation
EDI (DTEDI) Implementation Plan[1], “This process presents the largest and most complex of
the DTEDI challenges. To electronically process overseas shipment documents, the defense
transportation community needs to develop at least 10 telecommunications links among 15
different systems and support more than 80 EDI interfaces.”

Currently, the DoD is expanding its use of EDI techniques in the logistics process[1]. Further,
DoD has addressed its need for Total Asset Visibility (TAV), as well as Intransit Visibility (ITV)
through a series of plans, programs, and systems development efforts. These efforts, when
completed, will provide the DoD with total visibility of assets throughout the world, the status of
these assets, and the ability to exchange asset data.

Currently, the defense transportation community is exchanging bills of lading, invoices, rate
tenders, and shipment status messages electronically among its members and commercial
industry with some success, often using minimal resources. The United States Transportation
Command (USTRANSCOM) has been designated as the lead agency for DTEDI program effort.
The objective of the DTEDI program is to automate the transfer of data between information
systems that are used for different purposes. The program has categorized critical success factors
for the DTEDI program into two categories: Program Administration and Technology
Management.

2.1 Defense Transportation EDI (DTEDI) Operating Concept
This section focuses on the DoD EDI efforts with respect to the overseas shipment documents
process. DoD‟s current EDI operating concept for the overseas shipment documents process
consists of three subprojects:

   Advance Transportation Control and Movement Document (ATCMD) from shipper to
    clearance authority.



                                              2
   Bill of lading and other shipment information transactions from shipper to Point of
    Debarkation (POD).

   Various types of shipment information from POD to consignee.

The operating concept for each of the three subprojects above is only a proposed operating
concept, because the availability of automation at each of the required nodes in the transportation
pipeline does not presently exist. Pictorial representations of the three subprojects are presented
in Figures 2.1-1, 2.1-2, and 2.1-3.

Currently, the “Bill of Lading from Shipper to Clearance Authority Operating Concept,” Figure
2.1-1, calls for the utilization of ASC X12 transaction sets to perform the overseas shipment
documents process between the shipper to the clearance authority, as well as from the clearance
authority to the consignee. The shipper is defined as “A Service or Agency Activity (including
the contract administration or purchasing office of vendors) or a vendor that originates
shipments.”[2] Clearance authority is defined as “ The activity which controls and monitors the
flow of cargo into the airlift or water transportation system.”[2] There are two categories of
clearance authorities, Airlift Clearance Authority (ACA) and Ocean Cargo Clearance Authority
(OCCA). The ACA is defined as “A service activity that controls the movement of cargo
(including personal property) into the airlift system.”[2] An example of an ACA would be Air
Mobility Command (AMC). The OCCA is defined as “The Military Traffic Management
Command (MTMC) activity which books DoD-sponsored cargo and passengers for surface
movement, performs related contract administration, and accomplishes export/import surface
traffic management functions for DoD cargo moving within the Defense Transportation System
(DTS).”[2]

                  ATCMD
                  (858)
                                                      Shipment      Challenge
    Shipper                            Clearance      (TBD)                      Consignee
                 Challenge             Authority
                 Information
                 Status
                 (864)



    Figure 2.1-1 Bill of Lading from Shipper to Clearance Authority Operating Concept

This operating concept calls for the transmittal of the ATCMD from the shipper to the clearance
authority utilizing the Accredited Standards Committee (ASC) X12 858 transaction set. The 858
“Shipment Information Transaction Set” can be used to provide the sender with the capability to
transmit detailed bill of lading, rating, and/or scheduling information pertinent to the shipment.
Information that is found within the 858 transaction set includes:




                                              3
      General Shipment Information
      Cargo Manifest
      Priority
      Terms of Sale
      Origin Station, Destination Station
      Administrative Contacts
      Route Information
      Special Handling Instructions
      Equipment Details
      Insurance Information
      Consignee Information
      Hazardous Material Information
      Tariff Information
      Import, Export License Information

among others. Once the ATCMD EDI information is received by the clearance authority from
the shipper, the clearance authority may issue a “Challenge Status” to the shipper, using the ASC
864 transaction set. The ASC 864 “Text Message Transaction Set” provides the user with the
capability to electronically send messages, contracts, explanations, and other one-time
communications, with the purpose of providing communication to the recipient in some human-
readable form. The clearance authority will utilize this transaction set to communicate to the
shipper additional requirements required for the OSDP not previously addressed. The shipper‟s
communications network will dictate what capabilities exist to receive information from the
clearance authority. Should the clearance authority “challenge” the shipment, then the DoD‟s
current operating concept calls for the clearance authority to notify the consignee of the
challenge. It has not been determined what type of transaction will be used by the clearance
authority to notify the consignee. If the transaction is performed via EDI, then an appropriate
ASC X12 transaction set may be required.

Figure 2.1-2 presents the “Bill of Lading from Shipper to POD Operating Concept,” for the
OSDP. The operating concept calls for the use of the ASC X12 858 transaction set as the
primary EDI mechanism. As shown and previously discussed, the shipper transmits the ATCMD
(858) information to the clearance authority. The clearance authority is then responsible for
transmitting the ATCMD data to the Port of Embarkation (POE) so that a manifest may be
generated by the POE. The manifest is generated by the POE and sent, using ASC X12
858/304/856 transactions, to the Port of Debarkation (POD) and/or to the over-ocean carrier.
Any corrections to the manifest are also transmitted by the POE to the POD using 858/304/856
transactions. The ASC X12 304 “Shipping Instructions Transaction Set” provides the format and
establishes the shipping instructions data contents. When the transaction set is transmitted to an
ocean carrier, it provides all of the information necessary to prepare and distribute a contract of
carriage, such as an ocean bill of lading, sea waybill, or other shipping documents. When the
transaction set is transmitted to a freight forwarder or customs broker, it provides for the
transmission of shipping and financial information required by the forwarder or customs broker
to move the cargo and provide the services requested. The 304 includes information such as:



                                              4
      Shipment Information
      Cargo Information
      Financial Information
      Import/Export License Information
      Route Information
      Handling Instructions

among others.

                                                                                           Manifest
                                                                                         (858/304/856)


            ATCMD (858)                                     ATCMD (858)
                             Clearance                                                      Manifest
                             Authority                                                     Correction    POD
                                                                                         (858/304/856)




                                    Bill of Lading (858)




                                     TCMD (858)
 Shipper                                                                           POE




             Bill of Lading (858)                           Bill of Lading (858)           Manifest
                                                                                         (858/304/856)
                TCMD (858)                                      TCMD (858)
                                                                                            Manifest
             Bill of
                                           CCP             Bill of                         Correction    Over-ocean
             Lading                                        Lading
             (858)                                         (858)
                                                                                         (858/304/856)    Carrier
             TCMD                                          TCMD
              (858)      Carrier                            (858)        Carrier



            Figure 2.1-2 Bill of Lading from Shipper to POD Operating Concept

The ASC X12 “Ship Notice/Manifest Transaction Set” is used to list the contents of a shipment
of goods as well as additional information relating to the shipment such as order information,
product description(s), physical characteristics, type of packaging, marking, carrier information,
and configuration of goods within the transportation equipment. This transaction set enables the
sender to describe the contents and configuration of a shipment in various levels of detail, and
provides an ordered flexibility to convey information, especially concerning hazardous materials.




                                                                     5
The current operating concept calls for the shipper to send the bill of lading and TCMD
information (via 858) to the POE. Shippers use various shipping documents, including
Government Bills of Lading (GBLs), TCMDs, and commercial paper to move shipments to
POEs. The POEs, however, do not have the capability to receive GBLs electronically, nor do
they have the capability to create other transportation documents (such as TCMDs or manifests)
using EDI standards [1].

As shown in Figure 2.1-2, the shipper also sends bill of lading and TCMD information via the
X12 858 transaction directly to the carrier, or to the Container Consolidation Point (CCP) if
required. The CCP provides a means of combining shipments from multiple shippers. These
combined shipments may then be sent directly to a single consignee or, by use of stopoffs or
Break-Bulk Points (BBPs), to multiple consignees. The military services and Defense Logistics
Agency (DLA) have established CCPs throughout the Continental U.S. (CONUS) to consolidate
cargo for onward movement. However, some CCP functions may be performed by the POE for
loose shipments arriving at the port [2]. The current operating concept calls for the CCP to send
bill of lading and TCMD information that they received from the shipper to the POE, or directly
to the carrier via 858. The CCP adds the necessary container information to the TCMDs received
from the shipper for each shipment. When the container must be moved to the POE by a
negotiable document, the CCP prepares the GBLs or Commercial Bills of Lading (CBLs) as well
[2].

The “Bill of lading from POD to Consignees Operating Concept” is shown in Figure 2.1-3. The
POD will send manifest information using the ASC X12 858/856 transaction set to the Theatre
Traffic Management System. The Theatre Traffic Management System will work in concert with
the Joint Theatre Transportation System (JTTS). When developed and fielded, the JTTS will be
capable of processing shipment information received from port systems; tracking containers and
pallets; reading Automatic Identification Technology (AIT) and other devices; interfacing with
the Global Transportation Network (GTN); and generating documentation for deploying and
redeploying unit cargo and personnel, and for retrograde cargo [3]. The POD will also send bill
of lading (858) and manifest information (858/856) directly to the consignee. Bill of lading (858)
information will also be sent to the carrier from the POD.

When transshipping activities receive multiple shipments that have been unitized, then breakbulk
points (BBPs) may be used. In this case, the current operating concept calls for the POD to
forward manifest information (858/856) and bill of lading information (858) to the BBP.
MILSTAMP (Military Standard Transportation and Movement Procedures) requires the BBP to
notify the POD that the unitized shipment has been received, and requires the BBP to return to
the POD the signed documentation. Similarly, the BBP notifies the POD when the shipment is
not received within 10 calendar days of its anticipated delivery [2]. This passing of information
from the BBP to the POD is shown as a dashed line called “Return Information” in Figure 2.1-3.
In both cases, information is passed from the BBP to the POD, and therefore, EDI techniques
should be utilized. The ASC X12 858/856 transaction sets for manifest information may be used
as the EDI transaction sets for return of signatory information from the BBP to the POD. For
notification of late shipments (those shipments not received within 10 calendar days of
anticipated delivery) the ASC X12 864 “Text Message Transaction Set” may be used. The BBP


                                              6
is also responsible for forwarding manifest information (858/856) to the consignee, and bill of
lading information to the consignee, and carrier if required.


                                            Theatre
                 Manifest (858/856)          Traffic
                                           Management
                                             System


               Customs Manifest (309)




              Customs Declaration (353)
                                           Customs

               Manifest Acceptance (355)
   POD

                                           Bill of Lading (858)




                                           Manifest (858/856)
                                                                                                Consignee
                 Manifest (858/856)                                      Manifest (858/856)


                   Return Information
                                                                         Bill of Lading (858)
                 Bill of Lading (858)
                                                BBP               Bill of Lading
              Bill of Lading                                           (858)
                   (858)
                               Carrier                                              Carrier



          Figure 2.1-3 Bill of Lading from POD to Consignee Operating Concept

Foreign customs interface of EDI transactions occur between the POD and customs using three
ASC X12 transaction sets: 309, 353, and 355. The current operating concept calls for the POD
to forward customs manifest information to customs using the ASC X12 309 “U.S. Customs
Manifest Transaction Set.” This transaction set is used by carriers, terminal operators, port
authorities, or service centers to provide U.S. Customs with manifest data on cargo arriving in or
departing from the U.S. on oceangoing vessels, railroad trains, or other types of conveyances.
The 309 contains information such as:

      Manifest Information


                                                        7
      Bill of Lading Details
      Port Information
      Conveyance Identification
      Hazardous Material Information

among others. The transaction set can also be used by carriers to provide terminal operators, port
authorities, or service centers with manifest data on cargo arriving at their facilities.

The POD also sends a customs declaration to foreign customs using the ASC X12 353 “U.S.
Customs Events Advisory Detail Transaction Set.” This transaction set can be used by carriers to
notify U.S. Customs of events concerning cargo moving in-bond or of conveyance arrivals or
departures. These events include the arrival of containers, or cargo covered by individual ocean
bills of lading or in-bond numbers which have been moved in-bond to an island destination or
which have been exported from the United States. Carriers can also use this transaction set to
notify U.S. Customs of the arrival or departure of a conveyance for which an electronic manifest
has been filed, and for the transfer of custodial liability when an in-bond movement involves
multiple legs.

The current operating concept calls for foreign customs to issue a manifest acceptance to the
POD using the ASC X12 355 “U.S. Customs Acceptance/Rejection Transaction Set.” This
transaction set can be used by U.S. Customs to report errors and discrepancies discovered in the
U.S. Customs transaction sets to ocean carriers, terminal operators, port authorities, and service
centers.

2.2 Model of Overseas Shipment Documents Process
In order to fully describe the overseas shipment documents process, an Integrated Definition
Language 0 (IDEF0) activity model was developed for part of the transportation process. The
IDEF0 modeling technique was chosen for the following reasons:

      It provides a business view of the process
      It provides a means of integrating actions with information
      It provides for development of business cases
      It provides a foundation on which performance metrics can be measured

An IDEF0 model is a pictorial representation of a business process consisting of boxes and
arrows. The boxes of an IDEF0 model represent business activities: the actions or series of
actions that have a purpose and create something (output). The arrows represent objects that
interact with the activity. Figure 2.2-1 presents a pictorial diagram of IDEF0 objects.




                                              8
                                                           Control




                                      Input                          Output
                                                   ACTIVITY




                                                           Mechanism




                          Figure 2.2-1 Pictorial Diagram of IDEF0 Objects

Figure 2.2-1 indicates four types of arrows; input, output, control, and mechanism. The input
arrow represents items, such as objects or data, that are either consumed or somehow
transformed by the activity. The output arrow represents items that occur as a direct result of the
activity. The control arrow of an IDEF0 model represents conditions that influence, rule, or
regulate the desired output. The mechanism arrows represent the items (e.g., people, machinery,
etc.) that perform the activity. The functions of each arrow are important when interpreting the
“Model of the Overseas Shipment Documents Process” developed for this task.


    Tender
  Submission          Planning                          Movement                              Payment



                                               Domestic
                                               Shipment
                                               Documents
                           Routing
  Maintain     Movement     and      Carrier                  Status Discrepancy                Carrier
   Rates       Requests    Rating    Booking               Information Reports     Invoices    Payment    Claims




                                                Overseas
                                               Shipment
                                               Documents



                               Figure 2.2-2 Transportation Processes

The “Model of Overseas Shipment Documents Process” was developed based upon the
Transportation Processes diagram from the DTEDI Implementation Plan[1], depicted in Figure
2.2-2. The model focuses on the “movement” section of the transportation processes diagram,
where the overseas shipment documents activity occurs. The entire “movement” section was not
modeled. Only the overseas shipment documents activity and its by-products were considered


                                                    9
during the development of the model. The domestic shipment activity, status information
activity, and discrepancy reports activity were omitted from the model because they are not
within the scope of the overseas shipment documents activity.

The model was developed from the perspective of the shipper. The scope of the model is limited
to those activities involved in the movement of cargo, with respect to the overseas shipment
documents process. The activity definitions are included as part of the model. The arrow
definitions are included in Table 2.2-1. The model is pictorially presented within the following
pages.




                                            10
       Activity Name   Activity                                 Activity Definition
                       Number
MOVEMENT                  0       The third of four activities required to perform the “Overseas Shipping Document
                                  Process.” The other three include 1) Tender Submission 2) Planning and 4)
                                  Payment. The movement activity defines the scope of this model. The model
                                  was developed from the “shipper‟s perspective,” where the shipper is defined as
                                  the owner of the cargo. There are three major activities associated with
                                  movement: Prepare Cargo, Transport Cargo, and Release Cargo.
U S E D A T:   AU THO R:                                      DA TE : 9 De c . 1 9 9 6      WOR KIN G                      RE ADE R         DA TE CO NTE XT:
               P R OJ E C T: Mode l 1                         RE V:    3 J a n. 1 9 9 7     DR AFT
                                                                                            RE COMME NDE D                                                TOP
               N OTE S : 1 2 3 4 5 6 7 8 9 1 0                                              P U BLICA TION

                                                                                                    Re l e a se
                                                            Plan                                    Condi t i on
                                                                   Bi l l of                        Re sponse
                                          Cl e a r a nc e                    Re gul a t i ons/
                                          Aut hori t y             La di ng
                                                                             S t a nda rds                              Re por t
                                                                                                 Loc a l                Re que st
                                                                                                 Cust om s
                                                                                                 Re gul a t i ons




                                                                                                                                                  E xe c ut e d B i l l of
                                                                                                                                                  La di ng

                                                                                                                                                  TCMD

                                                                                                                                                  S t a t us Re port
  Ca r go                                                                       MOVE ME N T
                                                                                                                                                   Ma ni fe st

                                                                                                                                                   Re l e a se d
                                                                                                                                                   Ca r go
                                                                                                                                                   Re l e a se
                                                                                                                                                   Condi t i on
                                                                                                                    0




                                                    G TN           S hi ppe r                                       Loc a l
                                                                                      Ca r ri e r    POE     POD
                                                                                                                    Cust om s



N ODE :                         TITLE :                                                                                             N UMBE R:
               A-0                                                     MOVEMENT




                                                                   Figure 2.2-3 A-0 Movement
   Activity Name   Activity                                           Activity Definition
                   Number
PREPARE CARGO         1       The Prepare Cargo activity consists of all of the actions necessary to ready the cargo for
                              transportation. It includes determining the cargo-specific requirements for shipping, making the
                              cargo ready by packaging or other means, as well as staging the cargo. The cargo is prepared by
                              either the shipper or carrier, using the previously developed shipping plans, and considering
                              required regulations/standards, as well as the clearance authorities‟ requirements. Information
                              outputs of the activity include the completed TCMD, as well as the preparation status during any
                              portion of the activity.
TRANSPORT CARGO       2       The Transport Cargo activity consists of all of the actions necessary to ship the cargo from the
                              POE to the POD. It includes loading the cargo, moving the cargo, and unloading the cargo
                              according to the plan, bill of lading, and any regulations or standards. Once the cargo is loaded,
                              a manifest of the cargo is developed, and the bill of lading is executed. The status of the cargo is
                              monitored and reported (typically to the GTN) during both the movement activity as well as the
                              unloading activity. The shipper and/or the carrier will be responsible for the loading of the
                              cargo, while the carrier is responsible for both the movement and the unloading of the cargo.
                              The major output of this activity is the incoming cargo to the POD and completed movement
                              documentation.
RELEASE CARGO         3       The Release Cargo activity consists of all of the necessary actions required to clear the incoming
                              cargo and documentation through customs. The local customs personnel will perform this
                              activity in accordance with local customs regulations with respect to the type of cargo requiring
                              release. Local customs may in fact release the cargo conditionally to the consignee. A
                              conditional release is one where the shipper or carrier must perform additional activities prior to
                              the finalization of the movement process. At the completion of this activity, the cargo is
                              released and the necessary paperwork is finalized to complete the movement activity.
MONITOR CARGO         4       The Monitor Cargo Status activity is an iterative process that consists of all of the actions
STATUS                        necessary to report the current cargo position within the Defense Transportation System to the
                              GTN. The GTN is an automated system that provides the integrated transportation data
                              necessary to accomplish transportation planning, command and control, patient movement, and
                              intransit visibility of units, passengers, and cargo during peace and war. Status reports are
                              generated during this activity in response to report requests.
U S E D A T:   AU THO R:                                    DA TE : 9 De c . 1 9 9 6    WOR KIN G                     RE ADE R           DA TE CO NTE XT:
               P R OJ E C T: Mode l 1                       RE V:    6 J a n. 1 9 9 7   DR AFT
                                                                                        RE COMME NDE D                                                    TOP
               N OTE S : 1 2 3    4 5 6 7      8 9 10                                   P U BLICA TION                                         A-0

                           Regulations/                    Bill of Lading                Local                   Release Condition
           Clearance                           Plan
                           Standards                                                     Customs                 Response
           Authority
                                                                                         Regulations                                           Report Request


                                              Transport Ready                                                                                        Executed Bill of
                           PREPARE            Cargo                                                                                                  Lading
                            CARGO
  Cargo                                                                                                                                                         TCMD
                                          1                                       Preparation Status



                                                                                   Transportation
                                                                TRANSPORT          Status
                                                                  CARGO
                                                                                                                                                             Manifest
                                                                            2

                                                                                                                                                     Release Condition

                                                                                                       RELEASE                                            Released
                                                                                                        CARGO                                             Cargo
                                                                            Incoming                                    Release Status
                                                                            Cargo and                             3
                                                                            Documentation



                                                                                                                                                                Status
                                                                                                                                       MONITOR                  Report
                                                                                                                                     CARGO STATUS

                                                                                                                                                      4

                                                                                                                                             GTN
                                                                                                    Local
                    Shipper                            Carrier      POE     POD                     Customs

N ODE :                         TITLE :                                                                                     N UMBE R:
                A0                                                   MOVEMENT




                                                                      Figure 2.2-4 A0 Movement
     Activity Name         Activity                                          Activity Definition
                           Number
Determine Cargo Specific     11       The Determine Cargo Specific Requirements activity consists of all actions necessary for the
Requirements                          shipper to develop the initial paperwork for the cargo movement. The shipper, utilizing the
                                      shipping plan as the major guide, and adhering to the required regulations and standards where
                                      required, will develop the initial paperwork that will satisfy the clearance authority, as well as
                                      any paperwork required for the readying and staging of the cargo. The major output of this
                                      activity includes the cargo preparation checklist that will be used to ready the cargo, and the
                                      TCMD. The TCMD, which is prepared by the shipper, lists all of the data about a shipment, and
                                      may be prepared in several different formats. All cargo, except unaccompanied baggage (Code-
                                      J), must have a completed TCMD. The ATCMD provides the clearance authority, port,
                                      receivers, and others with advance notice of shipment information necessary to process the cargo
                                      through the Defense Transportation System.
Make Ready                   12       The Make Ready activity consists of all of the necessary actions required to prepare the cargo for
                                      staging. The shipper, guided by the cargo preparation checklist, will prepare the cargo for
                                      staging at the POE. The shipper may have some interaction with the carrier prior to staging to
                                      determine carrier-specific staging requirements prior to the actual staging activity. The Make
                                      Ready activity also includes palletization of the cargo, if required.
Staging                      13       The Staging activity consists of all of the necessary actions required to prepare the cargo for
                                      loading onto the transportation equipment (plane, ship). The carrier, utilizing the plan as a
                                      guide, will organize the cargo in the order that it will be loaded onto the transportation
                                      equipment.
U S E D A T:   AU THO R:                                    DA TE : 1 0 De c . 1 99 6   WOR KIN G             RE ADE R       DA TE CO NTE XT:
               P R OJ E C T: Mode l 1                       RE V:    6 J a n. 1 9 9 7   DR AFT
                                                                                        RE COMME NDE D
               N OTE S : 1 2 3 4 5 6 7 8 9 1 0                                          P U BLICA TION                              A0

      Clearance               Regulations/                            Plan
      Authority               Standards




                                                                                                                                              TCMD
                        Determine Cargo
                            Specific              Cargo Preparation Checklist
                         Requirements

                                          11




                                                                             Make
                                                                             Ready
                                                                                             Prepared Cargo
  Cargo
                                                                                        12


                                                                                                                                             Preparation
                                                                                                                                             Status


                                                                                                                         Staging


                                                                                                                                   13
                                                                                                                                         Transport Ready
                                                                                                                                         Cargo




                                        Shipper                                                                                    Carrier




N ODE :                         TITLE :                                                                             N UMBE R:
                A1                                             PREPARE CARGO




                                                                 Figure 2.2-5 A1 Prepare Cargo
       Activity Name   Activity                                          Activity Definition
                       Number
Load                     21       The Load activity consists of all of the necessary actions required to place the cargo onto the
                                  transportation equipment. Utilizing the plan and the bill of lading as a guide, and considering
                                  any necessary regulations and standards, the carrier, shipper, and POE personnel will load the
                                  cargo. Necessary documentation required for the movement of cargo is also finalized at this
                                  point. Those documents include the executed bill of lading as well as the completed manifest.
Move                     22       The Move activity consists of all of the necessary actions required to transport the cargo from the
                                  POE to the POD. The carrier, utilizing the plan as a guide, will move the cargo to the POD as
                                  stated by the manifest and executed bill of lading.
Unload                   23       The Unload activity consists of all of the necessary action to remove the cargo from the
                                  transportation equipment and prepare it for release by the local customs personnel. The carrier,
                                  aided by POD personnel if required, will off-load the cargo, and finalize any documentation
                                  necessary at the POD for the successful release of the cargo from customs.
U S E D A T:    AU THO R:                                DA TE : 1 0 De c . 1 99 6      WOR KIN G                RE ADE R            DA TE CO NTE XT:
                P R OJ E C T: Mode l 1                   RE V:    3 J a n. 1 9 9 7      DR AFT
                                                                                        RE COMME NDE D
                N OTE S : 1 2 3 4 5 6 7 8 9 1 0                                         P U BLICA TION                                      A0

               Regulations/                     Plan
               Standards       Bill of Lading




                                                                                                                                                  Executed Bill of
                                                                                                                                                  Lading

  Transport Ready             Load                                                                                                               Manifest
  Cargo

                                         21



                                                                                                                                                   Transportation
                                                                                                                                                   Status
                                                                                     Move
                                                           Loaded
                                                           Cargo
                                                                                            22




                                                                                                         Moved Cargo        Unload


                                                                                                                                       23        Incoming Cargo
                                                                                                                                                 and
                                                                                                                                                 Documentation
                   POE          Shipper                Carrier                                                                        POD


N ODE :                          TITLE :                                                                               N UMBE R:
                  A2                                     TRANSPORT CARGO




                                                             Figure 2.2-6 Transport Cargo
                              Table 2.2-1 Arrow Definitions

             Arrow Name                                      Arrow Definition
Bill of Lading                       Two Types: Commercial Bill of Lading (CBL) and
                                     Government Bill of Lading (GBL).
                                     Commercial Bill of Lading - A contract between shipper
                                     and carrier, where the carrier furnishes transportation
                                     services for the cargo.
                                     Government Bill of Lading - Same as a CBL with the
                                     addition of a signature block provided for the Releasing
                                     Officer, Issuing Officer, and government agency against
                                     which the charges are billed. Appropriation charges,
                                     department symbol, authority for the shipment, a showing as
                                     to actual delivery, and the extent of loss and damage are
                                     additional information blocks included.
Cargo                                The items to be shipped. Includes both materiel and
                                     personnel.
Cargo Preparation Checklist          A list prepared in accordance with regulations and standards
                                     and detailing how the cargo should be prepared for loading to
                                     fulfill the requirements stated in the GBL and plan.
Carrier                              The contracted agent responsible for transporting the cargo.
Clearance Authority                  The activity that controls and monitors the flow of cargo into
                                     the airlift or water transportation system.
Executed Bill of Lading              The completed bill of lading.
GTN                                  Global Transportation Network - A repository of
                                     transportation information that can provide status of cargo.
Incoming Cargo and Documentation     The cargo and documentation that arrives at the release
                                     authorization point.
Loaded Cargo                         The cargo that has been readied for shipment.
Local Customs                        The local customs regulatory officials that will approve the
                                     release of the cargo.
Local Customs Regulations            Those rules and regulations that the local customs officials
                                     must follow in order to release the cargo.
Manifest                             A list of loaded cargo.
Moved Cargo                          The cargo that arrives at the release approval point.
Plan                                 The previously developed documentation that describes the
                                     rules, requirements, and actions necessary to ship the cargo.
POD                                  Port of Debarkation - The place where the cargo is removed
                                     from the equipment that transported it ( ship, airplane) and
                                     placed it on shore.
POE                                  Port of Embarkation - The place where the cargo is loaded
                                     onto the equipment that will transport it to its destination.




                                          20
                           Table 2.2-1 Arrow Definitions (cont.)
            Arrow Name                                       Arrow Definition
Preparation Status                    The information that is transmitted to the shipper (and GTN)
                                      that details the status of the cargo within the transportation
                                      network.
Prepared Cargo                        The cargo that has been readied for staging.
Regulations/Standards                 The rules that govern the preparation and transportation of
                                      the cargo.
Released Cargo                        The customs cleared cargo that has been approved for
                                      release.
Release Condition Response            The actions that the shipper or shipper‟s agent performs to
                                      satisfy local customs personnel during a conditional release.
Release Condition                     The conditions that need to be met for the cargo to be
                                      released.
Release Status                        The current release state of the cargo.
Report Request                        The call for notification from authorities to ascertain the
                                      cargo‟s status. It may be an electronic or paper response.
Shipper                               The “owner” of the cargo to be transported.
Status Report                         The report that delineates the current whereabouts of the
                                      cargo, its condition, and release status. May also include
                                      Estimated Time of Arrival (ETA).
TCMD                                  Transportation Control Movement Document - Provides
                                      clearance authority, ports, etc. with the information necessary
                                      to process shipments, and is the basis for the preparation of
                                      manifests.
Transportation Status                 The current position of the cargo within the transportation
                                      system.
Transport Ready Cargo                 The cargo that has been packaged and prepared for shipment.




                                             21
2.3 Assessment of the Overseas Shipment Documents Process Operating Concept
The overseas shipment documents process operating concept presented in the DTEDI
Implementation Plan is a proposed operating concept. DTEDI has broken the OSDP operating
concept into three subprojects: ATCMD from shipper to clearance authority; bill of lading and
other shipment information transactions from shipper to POD; and various shipment information
from POD to consignee. DTEDI states that “...these operating concepts need to be thoroughly
analyzed before they can be considered complete.” DTEDI identifies program management
critical success factors key to EDI efforts, and groups them into two categories: Program
Administration and Technology Management. Within the Program Administration category,
DTEDI identifies the following as critical success factors:

      Recognize one lead agent for the DTEDI Program

      Centralize Trading Partner Management

      Coordinate Military Service and Defense Agency Implementation

      Measure program performance

      Monitor program funding requirements

Critical success factors for Technology Management include:

      Resolve data quality problems

      Consider other data quality matters

      Use Commercial-Off-The-Shelf (COTS) software

      Ensure a viable communication infrastructure

In addition, the Implementation Plan lists future initiatives that are critical for the defense
transportation community in order to continually improve its business techniques by enhancing
its EDI capabilities. These future initiatives include:

      Evaluate emerging EDI applications and techniques

      Pursue the development of EDIFACT

      Integrate EDI with identification technologies

Assessing the OSDP operating concept at this time is difficult because there is no explanatory
text provided for the three subproject diagrams. However, from an EDI perspective, important
EDI implementation-considerations may be derived from the proposed operating concept. These


                                             22
EDI implementation considerations are assessed with respect to the “Model of Overseas
Shipment Documents Process,” and EDI assertion points are included in the model.

                                                                              Release
                                                     Regulations/             Condition
                                      Plan           Standards                Response
                                               Bill of                                       Report
                                              Lading          Local
                         Clearance                                                          Request
                                                              Customs
                          Authority
                                                              Regulations




                             EDI             EDI                                        EDI
                                                                          EDI




                                                                                                              Executed Bill of
                                                                                                        EDI   Lading

                                                                                                        EDI   TCMD


                                                                                                        EDI   Status Report

 Cargo                                                       MOVEMENT
                                                                                                        EDI   Manifest

                                                                                                              Released
                                                                                                              Cargo
                                                                                                              Release
                                                                                                        EDI
                                                                                                              Condition
                                                                                              0




                                EDI                                                   EDI

                                GTN                Shipper                                    Local
                                                                    Carrier     POE   POD
                                                                                              Customs




               Figure 2.3-1 Business Case Model A-0 EDI Assertion Diagram

Figure 2.3-1 shows many potential assertion points for EDI transactions in the business case
model of the overseas shipment documents process. These EDI assertion points are areas where
EDI transactions could be performed in lieu of paper transactions. Each potential assertion point
is indicated by a gray arrow that points in the same direction as the ICOM to which it is attached.
The direction of the EDI assertion arrow is not indicative of the direction of data flow for the
proposed EDI transaction.

When the “Model of Overseas Shipment Documents Process” is broken into its A0 activities, the
EDI assertion points are shown associated with the indicated activity. The Business Case Model
A0 EDI Assertion Diagram is provided in Figure 2.3-2.




                                                             23
         Clearance
         Authority        Regulations/
                          Standards
                                                                    Bill of Lading            Local                    Release Condition
          EDI                            Plan
                                                                  EDI                         Customs                  Response
                                                                                              Regulations                                                Report Request
                                                                                                              EDI
                                                                                                                                                 EDI
                                         Transport Ready
                                         Cargo                                                                                                                         Executed Bill of
                                                                                                                                                                       Lading
                      PREPARE                                                                                                                                EDI
 Cargo                                                                                                                                                                          TCMD
                       CARGO
                                                                                     Preparation Status
                                    1



                                                                                      Transportation
                                                               TRANSPORT              Status
                                                                                                                                                             EDI
                                                                 CARGO
                                                                                                                                                                             Manifest

                                                                              2

                                                                                                                                                             EDI       Release Condition



                                                                                                            RELEASE                                                     Released
                                                                                                             CARGO                                                      Cargo

                                                                            Incoming                                          Release Status
                                                                            Cargo and                                    3
                                                                            Documentation                                             EDI



                                                                                                                                                                                      Status
                                                                                                                                                                         EDI          Report
                                                                                                                      EDI                      MONITOR
                                                                                                                                            CARGO STATUS
                                                                                                               EDI

                                                                                                                                                                   4



                                                                                              EDI         Local
            Shipper                                  Carrier        POE     POD                           Customs
                                                                                                                                           EDI         GTN




                       Figure 2.3-2 Business Case Model A0 EDI Assertion Diagram

As shown in Figure 2.3-2, the movement of cargo consists of four activities. The four activities
have EDI assertion points coupled to their ICOMs. In order to provide an assessment of these
EDI assertion points, each activity has been assessed individually. These activity assessments,
with respect to the assertion of EDI transactions, are provided in the following sections.

2.3.1 Prepare Cargo EDI Assertion Diagram
Figure 2.3.1-1 shows the proposed EDI assertion points for the “Prepare Cargo” activity.




                                                                                     24
               Clearance
               Authority
                                Regulations/
                                                                        Plan
                                Standards
               EDI




                                                                                                                  EDI
                                                                                                                                        TCMD
                      Determine Cargo
                             Specific             Cargo Preparation Checklist
                           Requirements

                                          11                               EDI




                                                                                Make
                                                                                Ready
                                                                                             Prepared Cargo
       Cargo
                                                                                        12


                                                                                                                                               Preparation
                                                                                                                                  EDI          Status



                                                                                                              Staging



                                                                                                                        13
                                                                                                                                  Transport Ready
                                                                                                                                  Cargo




                                        Shipper                                                                         Carrier




                            Figure 2.3.1-1 Prepare Cargo EDI Assertion Diagram

As shown in Figure 2.3.1-1, there are four proposed EDI assertion points related to the “Prepare
Cargo” activity. The first EDI assertion point is coupled to the clearance authority for the
“Determine Cargo Specific Requirements” activity. During this activity, the shipper will
determine and develop the necessary paperwork to satisfy the clearance authority, as well as any
paperwork required for the readying and staging of the cargo. The determine cargo specific
requirements also has two other EDI assertion points; one coupled to the cargo preparation
checklist for the “Make Ready” activity, and one coupled to the TCMD. Finally, an EDI
assertion point is proposed for the preparation status that is coupled to the “Staging” activity.
Figure 2.3.1-1 implies an electronic interface between the shipper and clearance authority, and is
consistent with DTEDI‟s OSDP operating concept, Subproject 1, as shown in Figure 2.3.1-2.




                                                                                  25
                ATCMD (858)


                                               Shipment Challenge (TBD)
   Shipper                         Clearance                              Consignee
               Challenge Status    Authority
               Information (864)




               Figure 2.3.1-2 DTEDI OSDP Operating Concept, Subproject 1

The DTEDI operating concept calls for the shipper to send ATCMD information to the clearance
authority using ASC X12 transactions. The proposed EDI assertion points for “Prepare Cargo”
activity includes EDI transactions of TCMD data, preparation status data, as well as the clearance
authority couplings. Not included in DTEDI Subproject 1 is the proposed cargo preparation
checklist EDI assertion point. Although not required to complete the foreign customs interface,
an electronically-transmitted cargo preparation checklist might be advantageous for expediting
the OSDP.

Figure 2.3.1-1 is also consistent with the North American Trade Automation Prototype (NATAP)
model of the shipments documents process. The NATAP model has the shipper electronically
exchanging information with the host customs agency, who acts as the “clearance authority” in
the commercial-model instantiation.

2.3.2 Transport Cargo EDI Assertion Diagram
Figure 2.3.2-1 shows the proposed EDI assertion points for the “Transport Cargo” activity.




                                               26
           Regulations/         Bill of Lading
                                                 Plan
           Standards


                          EDI



                                                                                                                        Executed Bill of
                                                                                                         EDI
                                                                                                                          Lading

 Transport Ready            Load                                                                                EDI
                                                                                                                                     Manifest
 Cargo

                                          21




                                                                                                                           Transportation
                                                                                                                EDI         Status

                                                                      Move
                                                             Loaded
                                                             Cargo
                                                                             22




                                                                                  Moved Cargo
                                                                                                Unload



                                                                                                           23    Incoming Cargo
                                                                                                                 and
                                                                                                                 Documentation

                   POE
                                Shipper                 Carrier                                           POD




                                    Figure 2.3.2-1 Transport Cargo EDI Assertion Diagram

Figure 2.3.2-1 shows three activities associated with the transportation of cargo, with four
proposed EDI assertion points identified. Three of the proposed EDI assertion points are coupled
with the “Load” cargo activity. Bill of lading and manifest information could be transacted using
EDI as proposed in Figure 2.3.2-1. This is consistent with the DTEDI OSDP Subproject 2
operating concept shown in Figure 2.3.2-2.




                                                                      27
                                                                                            Manifest
                                                                                          (858/304/856)


            ATCMD (858)                                     ATCMD (858)
                             Clearance                                                       Manifest
                             Authority                                                      Correction    POD
                                                                                          (858/304/856)




                                    Bill of Lading (858)




                                     TCMD (858)
 Shipper                                                                            POE




             Bill of Lading (858)                           Bill of Lading (858)            Manifest
                                                                                          (858/304/856)
                TCMD (858)                                      TCMD (858)
                                                                                             Manifest
             Bill of
                                           CCP             Bill of                          Correction    Over-ocean
             Lading                                        Lading
             (858)                                         (858)
                                                                                          (858/304/856)    Carrier
             TCMD                                          TCMD
              (858)      Carrier                            (858)         Carrier



               Figure 2.3.2-2 DTEDI OSDP Operating Concept, Subproject 2

DTEDI Subproject 2 calls for bill of lading information to be transacted electronically between
shipper, POE, CCP, and carrier, depending on the type of cargo to be shipped. Manifest
information is electronically exchanged between the POE, POD, and over-ocean carrier in
DTEDI Subproject 1.

Figure 2.3.2-1 also shows a proposed EDI assertion point for transportation status information
coupled to the “Load,” “Move,” and “Unload” activities. This is consistent with the “Defense
Intransit Visibility Integration Plan” which calls for the GTN to monitor the status of all
shipments. Figure 2.3.2-1 is also consistent with the NATAP model. NATAP defines the
manifest as the bill of lading information augmented with additional required government data.
The NATAP model identifies the common data elements, that are routinely contained on the bill
of lading and manifest, that will be exchanged electronically as part of the foreign customs
interface (NATAP Data Elements Reference).

2.3.3 Release Cargo EDI Assertion Diagram
Figure 2.3.3-1 shows the proposed EDI assertion points for the “Release Cargo” activity.



                                                                     28
                                                          Release Condition
                                                  EDI         Response




                                       Local Customs
                                        Regulations




                 Incoming Cargo
                 and Documentation


                                                RELEASE
                                                 CARGO
                                                                     EDI
                                                           3

                                                                              Release Status




                                                Local Customs
                                       EDI




                     Figure 2.3.3-1 Release Cargo EDI Assertion Diagram

As shown in Figure 2.3.3-1, the “Release Cargo” activity has three proposed EDI assertion
points. Two of the proposed EDI assertion points, one for local customs and the other for release
condition response, are directly related to foreign customs interface electronic data transactions.
Recall that local customs has been defined in the model of overseas shipment documents process
as the “local customs regulatory officials that will approve the release of the cargo.” This will be
where the interface with foreign customs occurs in the OSDP. The release condition response
has been defined in the model of overseas shipment documents process as “the actions that the
shipper or shipper‟s agent performs to satisfy local customs personnel during a conditional
release.” One such way to satisfy local customs personnel is to provide/augment/update
electronic shipment data. The other proposed EDI assertion point is for release status, which is a
proposed EDI message to the GTN. This proposed EDI assertion point could provide for
intransit visibility.

Figure 2.3.3-1 is consistent with the DTEDI OSDP Subproject 3 operating concept, as well as the
NATAP model. In the DTEDI OSDP Subproject 3 operating concept, shown in Figure 2.3.3-2,
EDI transactions occur between the POD and local customs. These transactions are shown as
ASC X12 309 Customs Manifest, 353 Customs Declaration, and 355 Manifest Acceptance.
These transactions could occur via the electronic foreign customs interface.




                                                29
                                                   Theatre
                        Manifest (858/856)          Traffic
                                                  Management
                                                    System


                      Customs Manifest (309)




                     Customs Declaration (353)
                                                  Customs

                      Manifest Acceptance (355)
            POD

                                                  Bill of Lading (858)




                                                  Manifest (858/856)
                                                                                                       Consignee
                        Manifest (858/856)                                      Manifest (858/856)


                          Return Information
                                                                                Bill of Lading (858)
                        Bill of Lading (858)
                                                       BBP               Bill of Lading
                     Bill of Lading                                           (858)
                          (858)
                                      Carrier                                              Carrier



                                      Figure 2.3.3-2 DTEDI Subproject 3

In the NATAP model, shipment information is sent to foreign customs via EDI from a
transponder located within the truck or railcar. In the case of a truck, when approaching the
border the driver receives either a “red” or “green” light indicating whether the cargo (as well as
the truck and driver) have been cleared through customs and immigration. This operating
concept is presented in Figure 2.3.3-3.




                                                            30
                                    Foreign Customs




                   Figure 2.3.3-3 NATAP Foreign Customs EDI Interface

2.3.4 Monitor Cargo Status EDI Assertion Diagram
Figure 2.3.4-1 shows the proposed EDI assertion points for the “Monitor Cargo Status” activity.

                Release Status
                                            EDI               Report Request


                                                        EDI




                                                                               Status Report
                      Preparation EDI                   MONITOR
                                                                         EDI
                      Status                            CARGO
                                                        STATUS
                            EDI
           Transportation
                                                                    4
           Status



                                                      EDI

                                                              GTN


                Figure 2.3.4-1 Monitor Cargo Status EDI Assertion Diagram

As shown in Figure 2.3.4-1, the “Monitor Cargo Status” activity has EDI assertion points
coupled with it from all of its ICOMs. The “Monitor Cargo Status” activity has been defined in
the model of overseas shipment documents process as “an iterative process that consists of all of
the actions necessary to report the current cargo position within the Defense Transportation
System to the Global Transportation Network (GTN).” Since the GTN is the automated system
that provides the integrated transportation data necessary to accomplish transportation planning,


                                                  31
command and control, patient movement, and intransit visibility, it is proposed that all status
reports and report requests utilize EDI transactions with the GTN during the monitor cargo status
activity.

2.3.5 Summary of OSDP Operating Concept Assessment
At present, three subprojects for performing the overseas shipment documents process using EDI
have been developed and are included in DTEDI. Those three subprojects are:

   1. ATCMD from shipper to clearance authority.

   2. Bill of lading and other shipment information transactions from shipper to POD.

   3. Various shipment information from POD to consignee.

From an EDI perspective and given the information available within DTEDI, there is nothing
precluding the implementation of the three subprojects that make up the overseas shipment
documents process. Further, these three subprojects share consistencies with the “Model of
Overseas Shipment Documents Process” as well as NATAP‟s operating concept.




                                             32
    3.0 CUSTOMS SERVICE AND DEPARTMENT OF TRANSPORTATION (DOT)
             OVERSEAS SHIPMENT EDI OPERATING CONCEPTS
Both The United States Customs Service (USCS), and the Department of Transportation (DOT)
are working towards the end goal of having a paperless working environment. A large portion of
this effort is now being accomplished in order to electronically transfer overseas shipping
documents. Sections 3.1, 3.2, and 3.3 very briefly describe some of the work now in process.

3.1 United States Customs Service (USCS)
The United States Customs Service continues to move forward in their accounting for and
inspecting of imported and exported materials. USCS is continually improving their processes
and are now using an Automated Commercial System (ACS) to track, control, and process all
commercial goods imported into the United States. It is also understood that the USCS is also
responsible for the status and accountability of individuals traveling both in and out of the United
States.

The USCS is also working with other government agencies to electronically transfer data on
customs transactions as well as receive data on agency cargo status and authorizations for cargo
disposition. Using such information as departure, arrival, and closure dates, cargo is tracked
from the port of unlading to the port of entry or exportation. More specifically, in the area of
exportation, the USCS is currently involved with the Foreign Trade Division of the Bureau of
Census (Commerce), the Bureau of Export Administration (Commerce), the Office of Defense
Trade Controls (State), other federal agencies, and the export trade community in a joint venture
designed to collect and share data by using the Automated Export System (AES).

The AES will collect commodity data for all means of transportation. Plans are to collect
transportation data for rail, truck, and air by December 1997. Some export shipment and vessel
data is already being transmitted electronically from exporters or their agents. The overall goal is
to use a system that allows for the electronic declaration filing of export documents.
Additionally, it is the intent of the USCS to have a paperless program that controls import and
export transactions, eliminating the need for paper documentation.

3.2 Department of Transportation (DOT)
The Department of Transportation serves as the focal point in the U.S. Federal Government for
the coordinated national transportation policy. Like the USCS, they too are moving forward in
efforts to electronically share transportation information.

The DOT specializes in many areas such as air traffic control, highway engineering, rail safety,
hazardous materials, auto and truck safety, and program administration. Little is known about
the DOT at this time due to efforts being focused on other Federal Agencies in Task 1.
Information acquired in the future will expand upon the DOT‟s mission, and its current and
future efforts to interface with the international transportation community.




                                              33
3.3 Assessment of USCS and DOT Operating Concepts
Current environments dictate change in both organizations. With the dawning of the “Internet”
and international electronic commerce it is now imperative that, both organizations possess the
capability to communicate in a real time environment and exchange electronic information. The
world is becoming smaller due to electronic real time exchange of information and electronic
commerce. Both businesses and agencies are being forced to automate systems and improve
capabilities in order to be competitive in today‟s marketplace.

As previously mentioned, the USCS is already well on its way to electronically exchange
information with other federal and international agencies, as well as electronically transferring
vital import and export documentation. Future efforts will expand upon the current and future
USCS and DOT activities to expand their internal and external capabilities.




                                             34
4.0 EXISTING MILITARY FOREIGN CUSTOMS PROCEDURES AND INTERFACES
The following sections describe existing military component transportation roles, Status of
Forces Agreements (SOFAs), as well as their procedures and interfaces to customs.

4.1 Military Service and Defense Agency Roles
USTRANSCOM employs its service components--Military Traffic Management Command
(MTMC), Military Sealift Command (MSC), and Air Mobility Command (AMC) to satisfy the
DoD's worldwide transportation needs. USTRANSCOM integrates all transportation resources
while its three components execute the missions. MTMC, the land component, orchestrates
movement of equipment, vehicles, weapon systems, supplies, ammunition, and troops within
their area of operation. It uses surface transportation assets to accomplish its mission. To
enhance its future operations, MTMC is pursuing the single port management concept, similar to
the Tanker Airlift Control Element (TALCE) employed by AMC. The sea component of
USTRANSCOM, MSC, provides ocean transportation for DoD cargo supporting U.S. forces
around the world. Using more than 145 ships organized in four major area commands, MSC
fulfills over 90 percent of the DoD's total transportation requirements during both peace and
war.[4]

4.1.1 Military Traffic Management Command (MTMC)
The current mission statement for MTMC is to:

   “Support the Department of Defense components and the mobilization community worldwide
   during peace and war with proactive planning, immediate response to crisis, and 21st Century
   technologies.”[5]

4.1.2 Air Mobility Command (AMC)
The AMC mission statement encapsulates who AMC is and what AMC does. Everyone
associated with air mobility is part of a cohesive team that makes the AMC mission happen.
AMC is responsive to their customers' needs and strives to employ resources in the most
effective and efficient ways possible. AMC‟s total commitment to quality is how AMC will
continue to improve process and provide effective, reliable, and efficient services. Global Reach,
the ability to project and sustain forces worldwide, is unique to the United States of America.
AMC operates around the world, around the clock, in support of America's national interests,
every day.[4]

4.1.3 Military Sealift Command (MSC)
The USTRANSCOM component that fulfills 90% of the DoD‟s total transportation requirements
has the simplest mission statement of all USTRANSCOM components. It states, simply:

       “Service to Customers.”[6]



                                             35
4.1.4 Military Exchange Services

The categories of merchandise and price limitations on goods sold by military exchange services
in the continental United States are established by regulations approved by Congress. These
limitations do not apply to overseas exchanges.

4.1.4.1 Army and Air Force Exchange Service (AAFES)

One of the largest retail merchandise stores worldwide, AAFES has the following mission
statement:

  “Provide Quality Merchandise and service at uniformly low prices to active duty military,
  Guard and Reserve members, Military retirees and family members, regardless of where
  they‟re stationed and to donate 100 percent of our earnings back to our customers for quality
  of life programs and modern places to shop.” [7]

To sell to the Army and Air Force Exchange Service, a firm must offer its product to the
appropriate buyer at headquarters or the exchange region office. No merchandise is purchased by
individual exchanges. The Headquarters buyers purchase all resale merchandise that is
commonly stocked in post and base exchanges in CONUS, and all resale merchandise of United
States origin for overseas exchanges. Merchandise peculiar to single exchange regions is
purchased by these four exchange regional offices, each of which has approximately 36
exchanges located in its geographical area. The exchange regional offices are as follows:

Central Region                                   Eastern Region
Army and Air Force Exchange Service              Army and Air Force Service
P. O. Box 650454                                 P. O. Box 650455
Dallas, TX 75265-0455                            Dallas, TX 75265-0454
(214) 280-7101                                   (214) 280-7201
Southern Region                                  Western Region
Army and Air Force Exchange Service              Army and Air Force Exchange Service
P. O. Box 65044                                  P. O. Box 650429
Dallas, TX 75265-0447                            Dallas, TX 75265-0429
(214) 280-7301                                   (214) 280-7401



4.1.4.2 Navy Exchange System (NEX)

Navy Exchange Command (NEXCOM) is headquarters for the worldwide Navy Exchange
System. The system employs over 18,000 associates to support and manage its four programs:

       Navy Exchanges
       Navy Lodges


                                            36
       Navy Uniforms
       Ship Stores

NEXCOM was officially established in April 1946, with its overriding objective to improve the
quality of life of Navy personnel. NEXCOM's roots can be traced back to the merchant
"bumboats" of the 1800s. At that time, sailors relied on bumboats for their daily needs. Soon,
independent stores cropped up aboard ships and ashore with no standard of conduct.

At the end of World War II, Captain W. H. Bingham was appointed to develop a resale program
to legitimize the stores. This resulted in the official establishment of the Navy Ships Stores
Office in Brooklyn, NY. The name was later changed to Navy Resale System Office, and then to
Navy Resale and Services support Office. In 1981, the command was moved to Staten Island,
NY. Ten years later, the name was changed to the present Navy Exchange Service Command,
and in 1993, NEXCOM relocated from Staten Island, NY, to Virginia Beach, VA.

As headquarters for the Navy Exchange System, one of NEXCOM's primary responsibilities is
supporting five Navy Exchange Service Centers (NEXCENs). These service centers are located
in:

       Norfolk, VA.
       Jacksonville, Fla.
       San Diego, Calif.
       Pearl Harbor, Hawaii
       Naples, Italy

These NEXCENs assist NEXCOM in fulfilling its quality of life mission by providing assistance
to the many retail and service outlets in their geographic regions. They are a vital link between
headquarters and the exchanges. Supporting the NEXCENs allows NEXCOM to strengthen the
service it provides to all four of the Navy Exchange System Programs.

The Navy Exchange Program is the largest and most complex of the four systems. All 123
Navy Exchanges provide authorized patrons with goods and services at an overall savings in
convenient, modern facilities. Dividends are reinvested in the sailor by directly supporting
Morale, Welfare, and Recreation (MWR) programs. These programs include community
development activities and all quality of life programs for Navy personnel and their families.

The Navy Uniform Program provides the sole source of authorized uniforms to all officers and
enlisted personnel. Uniforms may be obtained from any one of the 123 Navy Exchange uniform
stores worldwide, or through the Uniform Support Center's mail order program.

The Navy Lodge Program was originally established in 1964 as the Navy Hotel and Guest
Lodges and operated under the Club Program. Today, lodges provide military families clean,
comfortable accommodations at 41 locations around the world.




                                             37
The Ship Stores Program serves the men and women aboard Navy ships by providing a
selection of basic merchandise, convenience items, and gift-type merchandise for purchase by the
ship's crew. Ships stores also operate services such as vending machines and electronic game
machines for amusement during off-duty hours. Ships stores are appropriated fund activities, but
are authorized to make a profit. These profits are used to support shipboard MWR programs.

With the exception of the Ships Stores Program, activities of NEXCOM operate as non-
appropriated fund activities. They are self-supporting and all dividends are reinvested in the
sailor to support MWR programs and navy exchange buildings and equipment. All of the
programs focus on the sailor and the necessity of a good quality of life. This is the mission, goal,
and driving force behind NEXCOM.

Most navy exchanges offer a wide variety of services that may include:

      Main Retail Store
      Barber Shop
      Beauty Shop
      Snackbar
      Auto Repair Center
      Cafeteria
      Laundromat
      School Lunch
      Optical Shops
      Flower Shops
      Photo Finishing
      Custom Service
      Tailor Service

Some NEX facilities, due to there size and location, may not offer all of the above listed services.
Table 4.1.4.2-1 identifies NEX facilities located in some of the countries delineated in the SOW.




                                              38
                          Table 4.1.4.2-1 NEX Facilities

Location                                     Address

Great             HIGH WYCOMBE                                  LONDON
Britain          Navy Exchange Officer                   Navy Exchange Manager
           U.S. Navy Exchange High Wycombe               U. S. Navy Exchange Det
                    PSC 821, Box 46                          PSC 802, Box 98
                  FPO AE 09421-0003                        FPO AE 09499-0003
              COMM:011-441-494-455001                  COMM:011-441-71-514-4255
                     DSN:232-5001                                DSN:n/a
                FAX:011-441-494-455003                  FAX:011-441-71-514-4171

                   WEST RUISLIP                              ST. MAWGAN
                 Navy Exchange Officer                    Navy Exchange Officer
           U.S.Navy Exchange Det West Ruislip              Navy Exchange Det
                   PSC 821, Box 103                 Joint Maritime Facility St. Mawgan
                  FPO AE 09421-0103                           PSC 804,Box 9
              COMM:011-441-895-616578                      FPO AE 09409-1009
                       DSN:n/a                         COMM:011-441-637-878823
                FAX:011-441-895-616574                           DSN:n/a
                                                        FAX:011-441-637-878821

 Italy            CAPODICCHINO                                    GAETA
                   General Manager                            Sales Supervisor
                    Navy Exchange                      U.S. Naval Exchange Det Gaeta
              U.S. Navy Exchange Naples                           PSC 811
                PSC BOX 810, Box 30                          FPO AE 09609-003
                 FPO AE 09619-0003                      COMM:011-39-771-470-028
              COMM:011-39-81-724-4334                          DSN:625-7592
                    DSN:625-4334                         FAX:011-39-771-470-562
               FAX:011-39-81-570-1203

                       NAPLES                               LA MADDALENA
                 Navy Exchange Officer                       General Manager
               U.S. Navy Exchange Naples                 U.S. Navy Exchange Det
                    PSC 810, Box 30               U.S. Naval Support Office La Maddalena
                  FPO AE 09619-0003                         PSC 816, Box 1750
               COMM:011-39-724-4334                         FPO AE 09612-0003
                     DSN:625-4334                      COMM:011-39-789-798-404
               FAX:011-39-81-570-1203                         DSN:623-8404
                                                          FAX:011-789-798-407
                    PINETAMARE                                SIGONELLA
                 Navy Exchange Officer                    Navy Exchange Officer
             U.S. Navy Exchange Pinetamare             U.S. Navy Exchange Sigonella


                                      39
               PSC 810, Box 30                  PSC 824, Box 1000
              FPO AE 09619-0003                 FPO AE 09627-1000
           COMM:011-39-81-724-4997            COMM:011-39-95-564379
                DSN:724-4997                      DSN:624-4379
            FAX:011-39-81-724-4997            FAX:011-39-95-713-0003


Japan              ATSUGI                              NEGISHI
             Navy Exchange Officer                  Sales Supervisor
           U.S. Navy Exchange Atsugi          U.S. Navy Exchange Negishi
                PSC 477, Box 10                     PSC 472, Box 9
              FPO AP 96306-1209                  FPO AP 96348-0003
          COMM: 011-81-462-51-1520           COMM:011-81-045-661-4155
                 DSN:264-3111                       DSN:242-4155
           FAX:011-81-467-78-2695             FAX:011-81-045-661-4145

           SANNO Hotel (TOKYO)                       SASEBO
           Branch Exchange Manager             Navy Exchange Officer
           U.S. Navy Exchange Sanno            Navy Exchange Sasebo
              Unit 45003, Box 31                  PSC 476, Box 30
             APO AP 96337-0110                  FPO AP 96322-1100
          COMM:011-81-03-3440-7871         COMM:011-81-956-24-6111, x3537
                 DSN:559-7135                      DSN:252-3537
           FAX:011-81-03-3440-7824          FAX:011-81-956-24-611, x3474

                  YOKOSUKA
                 General Manager
        U.S. Navy Exchange Japan Complex
                PSC 473, Box 70
               FPO AP 96349-1100
          COMM:011-81-311-743-7400
                  DSN:243-7400
              FAX:011-81-468-1342

Spain               MORON                              ROTA
              Navy Exchange Officer                General Manager
        U.S. Navy Exchange Det Moron AFB       U.S. Navy Exchange Rota
                PSC 62, Box 7192                   PSC 819, Box 17
               APO AE 09643-5000                 FPO AE 09645-0003
           COMM:011-34-95-584-8592            COMM:011-34-56-82-2557
                  DSN:722-8592                      DSN:727-2557
             FAX:011-34-95-584-8203            FAX:011-34-56-82-2303




                                 40
4.1.5 Joint Traffic Management Office (JTMO)
The newest component to the USTRANSCOM family, JTMO, actually falls under MTMC
command. The mission statement for JTMO is:

   “Serve as MTMC‟s single focal point for the execution of surface intermodal movements
   within the Defense Transportation System. This mission includes domestic and international
   freight, cargo, and container movements. Personal property and commercial travel
   movements are not part of the JTMO‟s mission. Determine the most efficient methods of
   moving specific numbers of personnel and quantities of materials to locations where they are
   needed.”[8]

4.1.6 DEFENSE COMMISSARY STORES
The Defense Commissary Agency (DeCA), under the authority, direction, and control of the
assistant Secretary of Defense (Force Management Policy) is responsible for providing an
efficient and effective worldwide system of commissaries for the resale of groceries and
household supplies at the lowest practical price (consistent with quality). These services are
provided to members of the military services, their families, and other authorized patrons.

The majority of resale merchandise for defense commissary stores is purchased under
brand-name contracts issued by the Defense Personnel Support Center (DPSC). The purchase of
other than brand name resale items is handled by DeCA. DeCA has two centralized buying
activities: one for purchasing equipment, supplies, and services and one for all commissary
items other than the DPSC brand name items. Along with the two centralized buying activities,
there are six regional offices. Firms offering items for resale within defense commissaries must
market their items at the regional activity. The two service centers and six regional offices are as
follows:

East Service Center                                         West Service Center
Defense Commissary Agency                                   Defense Commissary Agency
Building P-11200, 38th St. & E Ave.                         Building 3184
Attn: DeCA/ES-AM                                            Attn: DeCA/WS-AM
Fort Lee, VA 23801-6390                                     Kelly AFB, TX 78241-6290
(804) 734-8520                                              (210) 925-8231 or
                                                            (210) 925-3568

Southwest Region                                            Midwest Region
Defense Commissary Agency                                   Defense Commissary Agency
Attn: DeCA/SW-AM                                            Attn: DeCA/MW-AM
MCAS El Toro, Building 329                                  Kelly AFB, TX 78241-6290
Santa Ana, CA 92709-5002                                    (210) 925-5924 or
(714) 726-444 or                                            (210) 925-5520
(714) 726-4539




                                              41
Northeast Region                                           Southern Region
Defense Commissary Agency                                  Defense Commissary Agency
Attn: DeCA/NE-AM, Building 2257                            Attn: DeCA/SO-AM
Fort Meade, MD 20755-5220                                  Maxwell AFB, AL 36112-6722
(301) 677-9095 or                                          (205) 953-3136 or
(301) 677-9160                                             (205) 953-3137

Northwest Region                                           Central Region
Defense Commissary Agency                                  Defense Commissary Agency
Attn: DeCA/NW-AM                                           Attn: Central Region
Building 9630                                              1140 Gator Boulevard
Fort Lewis, WA 98443-7300                                  Norfolk, VA 23521-2228
(206) 967-4560                                             (804) 363-3513



4.2 Status of Forces Agreement (SOFA)
With the United States maintaining the largest contingent of troops overseas and specifically in
North Atlantic Treaty Organization (NATO) countries, it became clear that an agreement was
needed that defined the status of these forces. On September 19, 1951, the Status of Forces
Agreement between NATO and the United States of America was signed in Washington, D.C.
This agreement addresses problems associated with and arising from the stationing of armed
forces of one NATO country in the territory of another.

The major provisions addressed in the agreement are:

      Obligations of the forces to respect the host nation‟s laws
      Provisions for entry, presence, and departure of military and civilian personnel with
       relaxation to customary immigration procedures
      Rules for driving permits, wearing of uniforms, and marking of service vehicles
      Carrying of arms
      Criminal jurisdiction
      Claims for damage, taxation, customs duties, and exemptions
      Foreign exchange controls
      Actions during wartime conditions

These provisions are still in effect today and facilitate the stationing and logistical support of
troops outside the United States. This section highlights key provisions of the SOFA that relate
to the import, acceptance, and maintenance of troops and materials within the respective
countries.

4.2.1 United Kingdom
No SOFA agreements with the United Kingdom have been found as of the date of this
preliminary report. Any additional information found will be included in the “Final Overseas


                                             42
Shipment Operating Concepts and Military and Commercial Foreign Customs Interfaces”
document.

4.2.2 The Netherlands
The United States may station troops in the Netherlands as mutually agreed upon and for the
furtherance of the objectives of NATO. The Netherlands will also provide necessary land and
utilities to facilitate the stationing of United States troops. United States forces, its civilian
components, and their dependents may import duty free new and used personal effects including
furniture for a period of six months from the date of first arrival.

United States forces may procure supplies, facilities, and services directly from local sources in
the Netherlands. The United States forces may also import free of duty reasonable quantities of
supplies and other goods for use by members of the United States forces, civilian components,
and their dependents and distribute them through official activities.

United States military exchanges and commissaries, officers clubs, and similar activities may be
established and may operate without being subject to taxes. Title to removable equipment,
materials, and supplies brought into, or acquired in, the Netherlands by or on behalf of the United
States in connection with the SOFA will remain in the United States Government. This property
will be free from all duties, inspections, and other restrictions, whether on import or export, and
free of all taxes.

4.2.3 Republic of Germany
The customs office of entry shall, in general, allow goods to be forwarded directly to the agency
of the force or the civilian component authorized to receive them under the simplified procedure
provided for by German customs legislation. The official certificate shall, in that case, serve as a
customs document during transportation. The customs office of entry shall certify clearance on
all copies of the official certificate and retain one copy.

The customs office of entry shall, in general, permit direct transportation of the goods, under the
simplified customs procedure provided for in the German customs legislation (to the German
customs office of exit).

4.2.4 Japan
With respect to facilities and areas which are to be used by United States armed forces for limited
periods of time, the Joint Committee shall specify, in the agreements covering such facilities and
areas, the extent to which the provisions of this agreement shall apply. The SOFA states:

   “All materials, supplies and equipment imported by the United States armed forces or the
   authorized procurement agencies of the United States armed forces, or by the organizations
   provided for in Article XV, for the official use of the United States armed forces, the civilian
   component, and their dependents, and materials, supplies and equipment which are to be used
   exclusively by the United States armed forces or are ultimately to be incorporated into articles


                                              43
   or facilities used by such forces, shall be permitted entry into Japan; such entry shall be free
   from customs duties and other such charges.

   United States and foreign vessels and aircraft operated by, for, or under the control of the
   United States for official purposes, shall be accorded access to any port or airport of Japan
   free from toll and landing charges.”

4.2.5 Hungary
No SOFA agreements with Hungary have been found as of the date of this preliminary report.
Any additional information found will be included in the “Final Overseas Shipment Operating
Concepts and Military and Commercial Foreign Customs Interfaces” document.

4.2.6 Spain
No SOFA agreements with Spain have been found as of the date of this preliminary report. Any
additional information found will be included in the “Final Overseas Shipment Operating
Concepts and Military and Commercial Foreign Customs Interfaces” document.

4.2.7 Italy
No SOFA agreements with Italy have been found as of the date of this preliminary report. Any
additional information found will be included in the “Final Overseas Shipment Operating
Concepts and Military and Commercial Foreign Customs Interfaces” document.

4.2.8 South Korea
The Republic of Korea grants, and the United States of America accepts, the right to dispose
United States land, air, and sea forces in and about the territory of the Republic of Korea as
determined by mutual agreement.

Members of the United States armed forces, the civilian component, and their dependents shall
be subject to laws and regulations administered by the customs authorities of the Republic of
Korea.

All materials, supplies, and equipment imported by the United States armed forces (including
their authorized procurement agencies and their non-appropriated fund organizations provided
for in Article XIII), for the official use of the United States armed forces, the civilian component,
and their dependents, materials, supplies, and equipment which are to be used exclusively by the
United States armed forces or are ultimately to be incorporated into articles or facilities used by
such forces, shall be permitted entry into the Republic of Korea; such entry shall be free from
customs duties and other such charges.

United States and foreign vessels and aircraft operated by, for, or under the control of the United
States for official purposes shall be accorded access to any port or airport of the Republic of
Korea free from toll and landing charges.


                                               44
4.2.9 Saudi Arabia
No SOFA agreements with Saudi Arabia have been found as of the date of this preliminary
report. Any additional information found will be included in the “Final Overseas Shipment
Operating Concepts and Military and Commercial Foreign Customs Interfaces” document.

4.2.10 Turkey
For the implementation of the “agreement between the parties to the North Atlantic Treaty,
regarding the status of their forces”, dated June 19, 1951 [11], the two governments have agreed
as follows:

   1. All persons who are relatives of, and in accordance with United States laws and
      regulations, depending for support upon and actually residing with any member of a
      United States force or the civilian component, except those who are not United States
      citizens, shall also be considered dependents and will be treated in all respects as those
      persons defined in article I, paragraph 1, sub-paragraph c, of the aforesaid NATO
      agreement.

   2. For the purpose of the application of the aforesaid NATO agreement and of the provision
      of this agreement, persons “who are in the employ of” the United States armed services,
      within the meaning of article I-1.(b) of the aforesaid NATO agreement, without prejudice
      to the other requirements of that article, shall include employees of the United States
      military organizations, employees of the United States Government departments, post
      exchange, and recreational organizations for military personnel, Red Cross and United
      States organization personnel and technical representatives of contractors with the United
      States forces who are assigned to the United States military organization in Turkey. All
      of these persons are subject to military law. Should any other specific categories become
      involved, the United States Government would wish to discuss their inclusion in these
      paragraphs with the authorities of the Turkish Government.

Additionally, defense treaties and agreements exist between the United States and Turkey that
address redistributable and excess equipment and materials furnished pursuant to the mutual
defense assistance programs, the introduction of modern weapons into NATO defense forces in
Turkey; the establishment of a facility for repairing and rebuilding M-12 range finders in Turkey;
the establishment of a weapons production program, the payment to the United States of net
proceeds from the sale of defense articles and services under the military assistance program; the
grant of defense articles and services under the military assistance program; and a memorandum
of understanding on cooperative measures for enhancing air defense capabilities of selected
locations within Turkey.

Other treaties and agreements between the United States and Turkey mutually support a lend
lease program, mutual security, postal matters, shipping, trade and commerce, economic and
technical cooperation, aviation, and agricultural commodities.



                                             45
4.2.11 Panama
Agreements and treaties are currently in force that relate to the sale of military equipment,
materials, and services to Panama. These treaties and agreements are written and designed to
contribute to the internal security of Panama.

Additionally, agreements exist that provide for the common defense and economic and military
cooperation between the United States and Panama. Furthermore, an agreement exists that
allows the United States the detail of a military officer to serve as adviser to the Minister of
Foreign Affairs of Panama.

Other agreements currently in force allow for mutual cooperation for reducing demand,
preventing illicit use and combating illicit production and traffic of drugs; the support and
assistance from the United States Coast Guard for the National Maritime Service of the Ministry
of Government and Justice; and a memorandum of understanding concerning the provision of
helicopters for the purpose of more effectively combating the illicit production and trafficking of
drugs and other international criminal activities, with general provisions.

Agreements also exist for other areas such as shipping, postal matters, property transfer,
scientific cooperation, telecommunication, trade and commerce, use of canals, customs activities,
economic and military cooperation, economic and technical cooperation, maritime matters, and
military missions.

Finally, the Panamanian Defense Forces were disbanded following the United States military
occupation of Panama. A public force, modeled after the Costa Rican National Police, and to be
trained by the United States, was created in their place. The President of Panama is the nominal
Commander-in-Chief (CINC) of the Public Forces.

4.3 Existing Military Procedures and Interfaces
The following background information illustrates the evolution of military organizations
involved in transportation over the past several years to arrive at current base locations, and
operating posture. Most of the changes have been the result of changing military operational
goals, and unrest in many foreign countries. Table 4.3-1 lists the unit and location for the
components of USTRANSCOM in the nine countries delineated in the Statement of Work
(SOW).




                                              46
                   Table 4.3-1 USTRANSCOM Units and Locations

  Country                MTMC                              AMC                       MSC
              1320th Medium Port
              Command                             627 Air Mobility Support
United        Unit 1035, Box 460                  Squadron                 DET
Kingdom       APO AE 0464-5460                    RAF Mildenhall, United London, England
              (MTMC Terminal United               Kingdom
              Kingdom)
              Felixstowe, United Kingdom
              1318th Medium Port
              Command
              PSC 72, Box 187                     No information found at    MSCO
Netherlands   APO AE 09715-5220                   this time                  Benelux,
              Rotterdam, Netherlands                                         Netherlands
              (MTMC Terminal Benelux)
              w/ Rhine River terminal in
              Mannheim, Germany
                                                  621 Air Mobility /
                                                  623 Air Mobility Support
                                                  Squadron
Germany       1325th Medium Port                  Ramstien AB, Germany
              Command
              Unit 22419                          626 Air Mobility Support No information
              APO AE 09069-4463                   Squadron                 found at this time
              Bremerhaven, Germany                Rhine-Main AB,
              (MTMC Terminal                      Germany
              Bremerhaven)

Hungary       No information found at this No information found at           No information
              time.                        this time                         found at this time
                                           625 Air Mobility Support
Spain         MTMC unit relocated to Saudi Squadron                          No information
              Arabia                       NAS Rota, Spain                   found at this time
              1321st Medium Port
              Command                      No information found at           COMSCEUR
Italy         APO AE 09613                 this time                         CAPT. J. Meyers
              Livorno, Italy                                                 44-171-355-5307
              (MTMC Terminal Italy) w/ an                                    Naples, Italy
              outport in Lisbon Portugal
              1317th Medium Port           631 Air Mobility Support
South Korea   Command                      Squadron                          MSCO Korea
              Unit 15179                   Osan AB, Korea
              APO AE 96259-0268
              Pusan, South Korea


                                             47
   Country                 MTMC                           AMC                    MSC
                1314th Medium Port               630 Air Mobility Support COMSCFE
                Command                          Squadron                 CPT. L. Diddlemyer
                Unit 35144                       Ykota AB, Japan          81-311-769-6318
                APO AP 96376-2900                                         Yokohama, Japan
 Japan          Okinawa, Japan                   633 Air Mobility Support
                                                 Squadron
                1316th Medium Port               Kadena AB, Japan         MSCO
                Command                                                   Okinawa
                PSC471
                FPO AP 96347-2900
                Yokohama, Japan
                1311th Medium Port
 Saudi          Command                          No information found at   MSCO
 Arabia         Bahrain, Saudi Arabia            this time.                Southwest Asia
                2 other detachments in
                Kuwait, and Qatar



4.3.1 Military Traffic Management Command
Since July 1983, Headquarters MTMC Europe has been located in Capelle aan den Ijssel,
adjacent to the city of Rotterdam in The Netherlands. Today, MTMC Europe is a regional
transportation command with manned sites in eleven nations in the European, Mediterranean,
and Middle East areas. Its ports handle over three million tons of cargo per year. The command
executes MTMC's worldwide missions in the U.S. European Command, and parts of the U.S.
Atlantic Command and U.S. Central Command's area of operations.

On October 1, 1991, the Azores was transferred to MTMC Europe. On December 2, 1991, a
temporary MTMC terminal located in Ad Dammam, Saudi Arabia, took on the difficult mission
of returning unit equipment and containers. This happened with strict time constraints and
minimum staffing under MTMC Europe. On June 25, 1992, MTMC Terminal Saudi Arabia was
deactivated.

MTMC Europe was a subordinate of Headquarters MTMC until 1992. On July 10, 1992,
MTMC Europe was realigned under MTMC Eastern Area, Bayonne, New Jersey. As part of
MTMC, TTU Spain, Barcelona was added to MTMC Europe in January 1977, MTMC Europe's
Outport Barcelona was officially closed on September 30, 1992. Outport Barcelona's closure
was due to the reduction of U.S. Air Force presence in Spain.

On October 1, 1992, the overall responsibility of the U.S. Army Europe (USAREUR)
organization, Joint Traffic Management Agency (JTMA) at Oberursel, Germany, was transferred
to MTMC Europe. Within the MTMC organization, the control of JTMA was delegated to the
Directorate of Inland Theater Transportation (ITTD), formerly the Personal Property Directorate
(PPD).


                                            48
On September 30, 1994, MTMC 1311th Medium Port Command (MTMC Terminal Spain),
located at Rota, Spain, was deactivated due to the reduction of the U.S. Air Force presence in
Spain. In April 1996, MTMC Europe's Terminal Southwest Asia in Bahrain had been officially
activated as MTMC's 1311th Medium Port Command. The terminal has three detachments: in
Saudi Arabia, Kuwait, and Qatar. On October 1, 1996, MTMC Europe became a subordinate
area command of Headquarters, MTMC in Falls Church, Virginia.[8]

4.3.2 Air Mobility Command
The entire globe is Air Mobility Command‟s area of responsibility. During calendar year 1995,
the men and women of the command flew into all but seven nations of the world. Command
aircraft during the year flew over 72,000 missions and delivered over 1.8 million passengers and
720,000 short tons of cargo. Tankers off loaded 137 million gallons of fuel. Even on a slow day,
AMC personnel can anticipate flying between 175 and 200 airlift and air refueling missions.

In recent years, AMC airlifters and tankers have been called upon to perform their combat
mission to project power and to display national resolve. Examples include transport aircraft
loaded with troops en route to Haiti when the invasion was called off. In Operation Southern
Watch, airlift and air refueling helped impose a no-fly zone over southern Iraq. For Operation
Vigilant Sentinel, which augmented Southern Watch, air mobility ensured a timely response to
political turmoil in Iraq and the potential of Iraqi military aggression against the states of
Southwest Asia.

The command has supported implementation of many varied national objectives. In support of
arms limitations, for example, air mobility aircraft have airlifted nuclear inspectors in compliance
with the Strategic Arms Reduction Treaty. Transport and tanker aircraft have flown in support of
the campaign to stop illegal drug trafficking.

Efforts to build bridges to the former Soviet Bloc have been supported by Air Mobility
Command. Through an on-going program called Provide Hope, AMC airlifts humanitarian
cargo to the former Soviet republics. In Cooperative Nugget, the command transported
representative army units from 14 nations of the former Soviet Union and Warsaw Pact to the
United States for an exercise with U.S. forces; the exercise was part of the Partnership for Peace
program designed for nations of the former Soviet Bloc seeking closer ties with NATO. During
Peace Shield „95, AMC airlifted American soldiers to the Ukraine for a joint exercise with
Ukrainian troops. In an exercise of U.S. and Russian troops in the United States called
Peacekeeper „95, Russian and AMC mobility aircrews conducted joint maneuvers.

AMC flies humanitarian missions virtually every day of the year. An airlift of relief supplies to
Bosnia known as Provide Promise surpassed the Berlin Airlift as the longest sustained
humanitarian airlift, while at home, command aircraft brought medical supplies, equipment, and
investigators to Oklahoma after a terrorist bomb destroyed a federal office building in Oklahoma
City. Humanitarian missions have also evacuated noncombatants as well as seriously ill or
injured patients. In Operation Assured Response, foreign nationals were extricated from Liberia



                                              49
as factional fighting produced anarchy. Emergency medical evacuations involved people from
all stations in life, from an ill President of Fiji, to shark-attack victims, to children who ingested
poison. Additional recent operations which show the scope of AMC‟s global reach mission
include:

                              Table 4.3.2-1 AMC Global Missions

            MISSION                                               OPERATION
 PROVIDE COMFORT                                Relief to Kurds and no-fly zone in northern Iraq.
 DENY FLIGHT                                    No-fly zone over Bosnia.
 SAFE HAVEN                                     Support move of Cuban refugees to Panama.
 PROJECT SAPPHIRE                               Airlift weapons grade uranium from Kazakstan to
                                                the United States for safekeeping.
 VIGILANT WARRIOR                               Augment Southern Watch forces to defend
                                                Kuwait in response to Iraqi troop movements.
 UNITED SHIELD                                  Support redeployment of last UN forces from
                                                Somalia.
 SAFE PASSAGE                                   Repatriate Cuban refugees in Panama.
 SAFE BORDER                                    Support peacekeeping mission following a border
                                                dispute between Peru and Ecuador.
 CARIBBEAN EXPRESS                              Relief to U.S. Virgin Islands following hurricane
                                                Marilyn.
 JOINT ENDEAVOR                                 Deployment and support of NATO forces in
                                                Bosnia.
                                                Noncombatant Evacuation Operation (NEO) of
 ASSURED RESPONSE                               Americans and others from Monrovia, Liberia,
                                                following the civil war.
 DECISIVE ENDEAVOR                              UN peace implementation effort in Croatia.



4.3.3 Military Sealift Command
Military Sealift Command (MSC) area commands continue to have key roles in the
newly-structured MSC. Led by Navy captains and ultimately located in Norfolk, Virginia; Pearl
Harbor, Hawaii; Yokohama, Japan; and Naples, Italy; the area commands will be the MSC face
to the fleet. Area commanders will exercise operational control and provide ship husbanding
and, in the case of MSC Europe and MSC Far East immediate, priority repair for all MSC ships
in their areas of responsibility.

Area commands will work with all MSC customers to help develop requirements and provide
on-site assistance, as needed. The overseas area commands will continue to provide ocean and
intermodal transportation toward requirements that originate in their respective areas of
reporting.




                                               50
The U.S. area commands will reduce significantly in size during the coming years to less than 80
employees each, down from more than 550 at MSC Atlantic in Bayonne, NJ, and 470 at MSC
Pacific in Oakland, CA. In the near term, most of the displaced area command employees will
remain in their same geographic areas, and some will transition to positions that will be
co-located with the area command, but will report to MSC program managers.

MSC Mid-Atlantic, located in Norfolk, VA, will be disestablished and most personnel will move
into Naval Fleet Auxiliary Force or Special Mission Program project offices located in the
Norfolk area. The reduced MSC Atlantic staff will move to the Norfolk area when funding
becomes available, but not later than 1998. The Fast Sealift Squadron staff will remain located
in New Orleans; however, the Navy captain serving as the squadron commander and contractor's
on scene representative responsible for ship readiness will be replaced by a civilian
headquartered in Washington, DC, within the Sealift Program. MSC Atlantic will retain offices
in Port Canaveral, FL and in Panama.

MSC Pacific, currently located in Oakland, CA, with offices in San Diego, CA, and Pearl
Harbor, HI, will relocate to Pearl Harbor, closer to its primary customer, the Commander-in-
Chief, Pacific Fleet. MSC Pacific will retain an office in San Diego and in Concord, CA.

The size, structure and functions of both MSC Far East in Yokohama and MSC Europe will
remain largely unchanged by the reinvention. MSC Europe, currently located in London with a
sub-area office in Naples, will move to Naples to be closer to its customers but retain a
detachment in the London area for transportation, as well as offices in The Netherlands and in
Southwest Asia in Bahrain. MSC Europe also has operational command of Maritime
Prepositioning Squadron One, in the Mediterranean.

MSC Far East remains in Yokohama, Japan, with offices in Okinawa, Korea, Diego Garcia and
Guam. Maritime Prepositioning Squadrons 2 and 3 report to MSC Far East, as does the MSC
detachment in Singapore.[9]

4.3.4 Army Air Force Exchange Service
AAFES services active duty military, National Guard members, and reservists, and their
dependents. Additionally, AAFES does business and buys goods or supplies from some 12,600
United States firms. Approximately 94% of these are small businesses. The sale of some
categories of retail merchandise is limited within CONUS by the Armed Service Exchange
Regulations approved by the United States Congress. There are no limitations on retail
merchandise sold in overseas exchanges.

Fourteen Distribution Centers (DCs) are strategically located to support exchange facilities
worldwide. Five DCs are located within CONUS, three in Europe, four in the Pacific, one in
Hawaii, and one in Panama. The DCs receive, process, and ship a variety of general and
specialized merchandise. The following is a list of DCs located in CONUS.




                                            51
The Atlanta DC
Forest Park
Atlanta, Georgia
Provides general merchandise support to exchanges located in the southeastern part of the United
States.

The Oakland DC
Oakland, California
Distributes general merchandise support to stores west of the rockies, including Alaska, and
throughout the Pacific.

The Waco DC
Waco, Texas
Supports exchanges east of the rockies and west of the Mississippi.

The Dan Daniel DC
Newport News, Virginia
Serves stores along the northeastern seaboard of the United States and also exchanges in Europe
with general merchandise support.

The Fashion Distribution Center (FDC)
Dallas, Texas
Distributes women‟s, men‟s, and children‟s fashion and seasonal clothing to exchanges world
wide.

The other DC‟s located in Europe, the Pacific, Hawaii, and Panama provide local support for
high turnover items and also serve as transship points for receipt of store orders from DCs in the
United States.

AAFES works in and through the Defense Transportation System. AAFES has been working
closely with USTRANSCOM for the past fourteen months on current transportation and billing
practices. AAFES believes they have the best distribution system in the world.

4.3.5 Joint Traffic Management Office (JTMO)
On February 2, 1996, USTRANSCOM Command and Control (TCJ5) presented
USTRANSCOM‟s Streamlining Work Group (SWG) recommendations to Commander-in-Chief
Transportation (CINCTRANS). Included among these recommendations was the establishment
of a JTMO for intermodal cargo and container operations at HQJTMO. The SWG‟s intent was
to eliminate fragmented traffic management by combining it into the JTMO traffic management
functions currently performed at MTMC, MSC, and AMC.

By a memorandum dated February 5, 1996, Deputy CINC (DCINC) directed MSC and MTMC to
develop a Joint Concept of Operations (CONOPS) for the JTMO. MSC and MTMC developed




                                             52
separate CONOPS and presented a JTMO concept brief to CINCTRANS, who approved
establishment of the JTMO for surface intermodal cargo and container movements at HQMTMC.

On May 22, 1996, USTRANSCOM established direction responsibilities for the formation of
Joint Traffic Management Office at Headquarters MTMC. The mission of the office will be to
serve as the single USTRANSCOM focal point for the execution of surface intermodal
movements within the defense transportation system.[10]

4.4 Summary of Existing Military Procedures and Interfaces
MTMC‟s role is essentially the management of transportation resources, as distinguished from
the carrier operational roles of AMC and MSC. The operational carriers, AMC and MSC, must
contend with foreign customs laws and regulations as stated by the SOFA for that host nation.
All interland cargo movement will be coordinated through MTMC/JTMO. The JTMO must
contend with all local laws and regulations for intermodal transportation within the host country.

The JTMO will receive its validated requirements from the Mobility Control Center at the
USTRANSCOM Joint Movement Control Group (JMCG), and then apply its expertise to
determine the most efficient methods of moving the specified numbers of personnel and
quantities of materials to the locations where they are needed in the most timely and efficient
manner.

AAFES retail merchandise and food of foreign origin to be stocked and sold in the overseas
exchanges are primarily bought by Sales Directorate‟s Europe buyers from sources in Europe.
The Sales Directorate‟s Purchasing Pacific Division handles sources in the Pacific. A variety of
customer service concessions are operated under contract with individuals and businesses.
Barber and beauty shops, laundry and dry cleaning, optical shops, flower shops, watch repair,
amusement, music and beverage vending, and full-line product vending are examples of some of
the services provided.

AAFES operates 10,878 facilities worldwide, supporting 25 separate businesses in 25 countries
and overseas areas, and in every state in the union. These include 1,423 retail facilities (172 are
main stores of shopping centers) and 218 military clothing stores on Army and Air Force
installations around the world.[7]




                                              53
         5.0 EXISTING COMMERCIAL FOREIGN CUSTOMS PROCEDURES,
                      REQUIREMENTS, AND INTERFACES
The following sections briefly explain current commercial foreign customs procedures,
requirements, and interfaces relating to the nations identified below. In order to ensure validity
and accuracy of data, a number of reliable information sources were queried in order to obtain
information used in this section. Sources visited and interviewed within the United States
Federal Government include the United States Commerce Department, the United States
Customs Service, the Department of Defense, as well as civilian commercial international
carriers, and foreign embassies. Additionally, other sources were used to validate the
information shared and to provide historical and reference information as needed. Those sources
include the Pentagon Library, the National Defense University Library, and the monthly
International Trade Reporter published by The Bureau of National Affairs, Washington, D.C. A
list of agencies and embassies contacted and visited is provided in Appendix B of this report.
The content found in this section is a result of interviews, research, and input from the above
named agencies. The format followed parallels that found in the International Trade Reporter
and it is with their consent that we use the format and some portions of the content.

5.1 Existing Commercial Procedures, Requirements, and Interfaces
The United States Export Administration Regulations‟ interim rule took effect in 1996,
restructures, and reorganizes the Export Administration Regulations. This is the mechanism
which the Bureau of Export Administration (BXA) imposes export and re-export controls on
items and activities within its jurisdiction. The interim rule was written and clarifies the
language in regulations, simplifies their applications, and makes export control easier. Although
the rule took effect in April 1996, mandatory compliance has been delayed until January 1, 1997.

The following is a list of procedures, requirements, export controls, and interfaces for the United
Kingdom, the Netherlands, Germany, Hungary, Spain, Italy, South Korea, Japan, and Saudi
Arabia.

5.1.1 The United Kingdom
The United Kingdom is a member of the European Union (EU). Other members include Austria,
Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, Spain, and Sweden. Together, they form a customs union that calls for
free trade, and the absence of customs duties and quotas on trade among members. The
following vital areas and key terms are used to explain import requirements as they relate to the
host nation.

5.1.1.1 Tariff Structure
Tariff on imports from countries outside the EU has been improved, creating the so-called
common customs tariff, now referred to as the Common External Tariff (CXT). CXT rates of




                                              54
duty are uniformly applied to imports into EU countries from non-EU sources. Exceptions are
for imports from associated countries and countries having special agreements.

5.1.1.2 Import Duties
Import duties are payable in British currency.

5.1.1.3 Levy of Duties
In certain instances, import duties are levied on a specific basis. When duties are levied on
weight, the dutiable weight is considered the net weight. The term “gross weight” includes
packaging, and the term “net weight” excludes both the inner and outer packaging. In some
cases, a net tare is used to arrive at a net dutiable weight.

5.1.1.4 Customs Surcharge and Indirect Taxes
Imports are subject to a value-added tax payable on importation. This is based on the Cost,
Insurance, and Freight (CIF) duty-paid value of the goods. The standard rate is currently 17.5%.
No tax is levied on certain essentials, such as food stuffs, animal foodstuffs, medicines,
children‟s clothing and shoes, books, newspapers, and fuels. A reduction in tax liability is
provided for imports such as capital goods that are used for, or will be used for, business
purposes under specified conditions.

5.1.1.5 Import Channels
The United Kingdom has a well-developed network of import channels. Their import channels
vary based upon the products involved, and individuals affecting such action commonly are
commission agents, specialized importers, brokers, and import distributors.

5.1.1.6 Distribution
Some firms elect to appoint one distributor to cover the entire country while other firms may
elect to appoint a number of distributors for greater market penetration. Many United States
firms maintain their own organizational structure in the United Kingdom. Others may appoint
agents that may be willing to handle additional items on a commission basis.

5.1.1.7 Ports
The United Kingdom has over 400 ports, with some of the largest being London, Heathrow,
Belfast (Northern Ireland), Gatwick, and Stanstest. Also included in this number of ports are the
major airports.

5.1.1.8 Free Trade Zones
There are a number of free trade zones within the United Kingdom. These free trade zones were
established in 1983. Goods entering the zones are treated for customs purposes as being outside


                                                 55
the customs territory of the United Kingdom. Additionally, goods entering the free port are
subject to simplified customs procedures, among other non-tariff advantages. Activities
permitted in the free ports include loading, unloading, transshipment, storage, stockholding,
sampling, packing, labeling, and other forms of handling related activities.

5.1.1.9 Entry and Warehousing
To enter goods, British law requires that a written declaration entry form be submitted to the
British customs authorities. Similar to other nations, the British Government allows goods to be
imported temporarily without payment of duties and taxes. These are normally goods that are
used in the production or manufacture of a product for export. Goods that are imported with the
intention of being stored in bonded warehouses must be cleared through customs. This is
normally done by the use of a special customs-entry form. The storing facility/bonded
warehouses are all approved by the British customs authorities, and are operated either publicly
or privately.

In addition to the storing facilities/bonded warehouses, there are also the Queen‟s warehouses.
These warehouses are primarily used for the safe storage of goods in custody or for the security
of duty owed. Many goods found in these warehouses are a result of forfeiture, abandonment, or
not being entered within allowable time limits. Once the owner pays the duties, taxes, and
expenses, he/she can retrieve their held goods.

5.1.1.10 Transit
Special notices issued by the British Commissioners of Customs and the Excise govern the
procedures and conditions by which goods temporarily entering the United Kingdom can be duty
free. Many items that enter the United Kingdom are there temporarily and are being re-exported.
The time frame for their staging within the United Kingdom is usually six to twelve months from
the date of import. Extensions can also be obtained if needed. Additionally, many items entering
the United Kingdom may enter duty free. Examples of these are machinery or equipment
imported on loan or lease for temporary use within the United Kingdom.

5.1.1.11 Documentation Required
The following highlights and addresses all shipments into the United Kingdom regardless of
value and/or mode of transportation. Listed below is key documentation and related processes
needed in order to properly transport and account for imported cargo.

      Commercial Invoice: Two copies of the invoice on shipper‟s letterhead need to be sent
       to the consignee. The commercial invoice should list parts by description rather than part
       number, should state terms such as Free on Board (FOB), CIF, gross and net weights,
       country of origin, and all other relevant information needed to establish the full price of
       the goods.




                                             56
   Certificate of Origin: Two copies of the certificate of origin are normally required. The
    certificate must be certified or notarized with the county clerk‟s certificate attached. An
    additional notarized copy is usually required for the files.

   Packing List: A copy of the packing list should accompany the shipping documents.
    This is even more important when multiple packages are involved. The packing list,
    along with the invoice, should be attached to the waybill or bill of lading and not the
    package.

   Bill of Lading: There are no regulations specifying the form or number of bills of lading
    required for any particular shipment. A bill of lading usually shows the name of the
    shipper, the name and address of the consignee, port of destination, description of goods,
    listing of the freight, number of bills of lading in the full set, and the date and signature of
    the carrier‟s official acknowledging receipt on board of the goods for shipment. This
    information should correspond with the information shown on the invoice and the
    packages. The airway bill replaces the bill of lading on air cargo shipments.

   Special Documents: Special documents are usually required when certain items such as
    meat, plant, sanitary, chilled or frozen byproducts, as well as animals are exported to the
    United Kingdom. This documentation is also accompanied by proper certification when
    required. Certain wood or wood products also require special documentation and proper
    certification.

   Standards and Special Requirements: The British Standards Institute has prepared
    standards for virtually all manufactured goods. British standards can be identified by a
    “kite” symbol and the letters “BS” followed by four digits. It is the intent of the British
    Government to have all items meet these requirements.

   Labeling: A conspicuous indication of the country of origin must appear on certain
    imported items bearing the United Kingdom name. Foodstuffs must comply with food
    labeling regulations and special storage regulations. Such items as name under which the
    product is sold, list of a ingredients descending in weight, net quantity in metric units, and
    date of minimum durability or “use by” date must appear on the label. Other labeling
    requirements may also include special storage conditions, name of business, and address
    of packager. Specific labels and requirements may be required for items considered to be
    hazardous substances such as chemicals and other items such as cosmetics.

   Marking: There are multiple rules established for marking shipments and any commonly
    accepted shipping practices may be used. As a general rule, inscribed plainly on the
    package(s) should be the consignee‟s mark with port marks, in order to facilitate the
    arrival of the shipment.

   Packing: The exporter needs only to consider the matter of packing for safe delivery at
    the point of destination in the United Kingdom. Dangerous and/or hazardous materials
    need to be packed in accordance with the United Kingdom‟s approved code of practices.


                                            57
5.1.2 The Netherlands
The Netherlands is a member of the EU. Other members include Austria, Belgium, Denmark,
Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Portugal, Spain, Sweden, and the
United Kingdom. Together, they form a customs union that calls for free trade, and the absence
of customs duties and quotas on trade among members. The following vital areas and key terms
are used to explain import requirements as they relate to the host nation.

5.1.2.1 Tariff Structure
Tariffs on imports from countries outside the EU have been improved, creating the so-called
common customs tariff, now referred to as the Common External Tariff (CXT). CXT rates of
duty are uniformly applied to imports into EU countries from non-EU sources. Exceptions are
for imports from associated countries and countries having special agreements.

5.1.2.2 Levy of Duties
EU members‟ trade is duty-free, and there are relatively few special duties. If such duties are
levied, they are based on the unit volume or length, the number of units imported, or the net
weight or the gross weight minus a specific tare allowance.

5.1.2.3 Customs Surcharge and Indirect Taxes
There is no customs surcharge in the Netherlands. There is, however, a Value Added Tax
(VAT). This tax is put on all domestic and imported goods at every stage of manufacturing
distribution. The VAT is currently 17.5%. A rate of 6% is levied on certain essentials, such as
foodstuffs, farm animals, designated medicines, books, newspapers, oil, gas, electricity, water,
and several other goods. Excise duties are levied on such goods as wine, beer, sugar, tobacco
products, soft drinks, petroleum products, as well as other domestic and imported goods.

Violations in regard to customs regulations could result in fines, and/or fines and imprisonment.

5.1.2.4 Import Channels
The Netherlands has highly-developed import channels with agents, distributors, and experienced
importers. Importers and purchasers handle a large percentage of imported communities and use
their own accounts in order to distribute goods throughout their country.

5.1.2.5 Distribution
Foreign firms customarily have one exclusive representative for the entire country. This is
mainly because the Netherlands represents a compact market, however the representative may
appoint sub-agents to cover sectors of the market if profit margin and sales volume warrant.




                                              58
5.1.2.6 Ports
The Netherlands principal ports are Amsterdam and Rotterdam. The Utrecht and the Hague are
reached by Rotterdam. Schipol Airport is the main airport and it services Amsterdam.
International airports are also located at Groningen, Eelde, Zestienhoven for Rotterdam, and
Beek for Maastricht.

5.1.2.7 Free Trade Zones
There are no free trade zones or free ports, and customs facilities provide the same services that
are provided in free trade zones. Customs activities are found at the major ports and airports.

5.1.2.8 Entry and Warehousing

Goods entering the Netherlands may be declared for home consumption, storage in bonded
warehouse, transit, transportation to another location for delivery, or for re-exportation.

Temporary exemptions from duty and taxes on goods for re-export are granted if the goods
remain in the same state for a specific period of time. Security for those goods needs to be
posted in the form of a bond, cash deposit, or other means in order to satisfy customs
requirements. Import tax and duty is only charged on those goods or products sold in the EU.

5.1.2.9 Transit
Whenever goods arrive in the Netherlands for transshipment, they need to be registered with
customs and their destination identified. A bond must be posted with the Netherlands customs
whenever a transit passport is issued to a shipping agent or person designated to be in charge of a
ship‟s cargo. The goods are normally unloaded, inspected by customs, and resealed if possible.

The Netherlands adheres to the Transit International Routier (TIR) Customs Convention and
accepts shipments from the United States made in accordance with the TIR carnets. These
carnets allow goods (freight shipments) to cross international borders of member nations without
discharge from road vehicles or inspection from customs at border point crossings. The
convention also provides coverage and security for goods under the TIR carnet.

5.1.2.10 Documentation Required
The following highlights and addresses all shipments into the Netherlands regardless of value
and/or mode of transportation. Listed below are key documentation and related processes needed
in order to properly transport and account for imported cargo.

      Commercial Invoice: Three copies of the invoice are to be completed on all drafts for
       collection in the Netherlands. The following information is desired and should be given:
       description of merchandise, name of exporter, name and address of consignee or
       importer, method of transportation, origin of shipment, origin of merchandise, shipment‟s



                                              59
       identifying numbers and marks, sizes, and gross and net weight of goods. The value of
       the goods should also be stated and identified as FOB or CIF. Finally, if a shipment is
       mixed, that fact needs to be stated on the invoice.

      Certificate of Origin: Generally, a certificate of origin is not required. However, if
       requested, two copies of the certificate are normally provided to the importer or others.
       The certificate also must be certified by a recognized chamber of commerce and a
       notarized copy is usually kept for the files.

      Bill of Lading: Normally, four copies of the bill of lading are required. A bill of lading
       usually shows the name of the shipper, the name and address of the consignee, port of
       destination, description of goods, listing of the freight, number of bills of lading in the
       full set, and the date and signature of the carrier‟s official acknowledging receipt on board
       of the goods for shipment. This information should correspond with the information
       shown on the invoice and the packages. The airway bill replaces the bill of lading for air
       cargo shipments.

      Special Documents: Depending on the country of origin, certain live animals may not be
       imported. Live animals and meat products must be inspected prior to entry into the
       Netherlands and a health certificate must be issued.

      Standards and Special Requirements: Pharmaceuticals must be registered with the
       Department of Pharmaceutical Affairs prior to importation into the Netherlands market or
       into the free trade zones or free ports.

      Labeling: Labels should normally indicate the following: List of ingredients, including
       food additives, usually in descending order by weight; the name, address, and telephone
       number of the manufacturer or distributor; net weight or volume in metric units; and
       instruction for storage and use, as applicable. Other information that may be required is
       the product expiration date, percentages of major product ingredients, special food
       additive codes, and nutritional information based on the destination country‟s regulations.

      Marking: There are no stipulations for how shipments are to be marked so commonly
       accepted shipping practices should be used. As a general rule, inscribed plainly on the
       package(s) should be the consignee‟s mark with port marks in order to facilitate the
       arrival of the shipment. Packages should also be marked with the country of origin
       identified.

      Packing: The exporter needs only to consider the matter of packing for safe delivery at
       the point of destination in the Netherlands.

5.1.3 Republic of Germany
The Republic of Germany is a member of the EU. Other members include Austria, Belgium,
Denmark, Finland, France, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain,


                                              60
Sweden, and the United Kingdom. Together, they form a customs union that calls for free trade,
and the absence of customs duties and quotas on trade among members. The following vital
areas and key terms are used to explain import requirements as they relate to the host nation.

5.1.3.1 Tariff Structure
Tariffs on imports from countries outside the EU have been improved, creating the so-called
common customs tariff, now referred to as the common external tariff. CXT rates of duty are
uniformly applied to imports into EU countries from non-EU sources. Exceptions are for
imports from associated countries and countries having special agreements.

5.1.3.2 Import Duties
Import duties are payable in German marks. If foreign currency is used for any reason, the
currency is exchanged at the exchange rate in effect at the time of clearance.

5.1.3.3 Levy of Duties
Only a few items are subject to specific duties, and all customs transactions are conducted using
the system of metric weights and measures.

5.1.3.4 Customs Surcharge and Indirect Taxes
Germany levies no customs surcharges. A VAT is the basic German indirect tax and a rate
import tax is normally charged on the total landed cost of items plus any applicable duty or
excise tax. A rate of 7% is used on most food, agriculture goods, and printed materials. A rate
of 15% is used on most non-agricultural goods.

5.1.3.5 Import Channels
The majority of imports into Germany go through import houses, import wholesalers, and other
general importer-distributorships. These organizations handle consumer and industrial supplies
(except bulk commodities) as well as smaller types of equipment.

5.1.3.6 Distribution
With the unification of Germany, contracts with agents and distributors still have the same legal
requirements as when western Germany was a separate nation. Brokers, sales agents, and
manufacturers‟ representatives play an important role in the importation and distribution of all
types of goods.

5.1.3.7 Ports
Germany has several principal ports of entry that include Wilhelmshaven, Hamburg, Rostock-
Uberseehafen, and Bremen. The major international airports are Stuttgart, Munich, Hanover,
Hamburg, Leipzig, Frankfurt, Dusseldorf, Dresden, Cologne, Bonn, and Berlin (East and West).


                                             61
5.1.3.8 Free Trade Zones
German import taxes and duties become payable when goods are cleared for domestic
consumption. Certain operations are permitted within the free trade zones. They are loading,
unloading, sorting, storing, stockholding, sampling, repackaging, labeling, and exhibiting, as well
as other forms of handling-related activities. The only location where these activities cannot be
performed is Cuxhaven. Only storage of goods is allowed to take place in Cuxhaven.

5.1.3.9 Entry and Warehousing
An application or special customer declaration must be filled out at the port of entry before any
goods can clear customs. Once cleared, freight shipments are allowed to cross international
borders of TIR Convention member countries without discharge from road vehicles or containers
at border point crossings.

Imported goods can be stored in certified warehouses without payment of duty and taxes. Stored
goods may undergo normal handling to ensure that appearance, marketability, and preservation is
maintained.

5.1.3.10 Transit
Shipments are accepted under the TIR carnet. Freight shipments are also allowed to cross
international borders of TIR convention members without discharge from road vehicles or
containers at border points by customs.

5.1.3.11 Documentation Required
The following highlights and addresses all shipments into Germany regardless of value and/or
mode of transportation. Listed below is key documentation and related processes needed in order
to properly transport and account for imported cargo.

      Commercial Invoice: One copy of the invoice on the exporter‟s letterhead needs to be
       sent to the consignee. The commercial invoice contains such details as the names of the
       buyer and seller, place and date the invoice was prepared, method of shipment, number,
       markings, kinds of packages, and description of goods. Consular legalization and
       commerce certificates are not required to process a commercial invoice.

      Certificate of Origin: Two copies of the certificate of origin are normally required. The
       certificate must be certified by a recognized chamber of commerce with a notarized copy
       required for their files.

      Packing List: A copy of the packing list is not required but thought helpful. Information
       found on the packing list should be in gross and net weights, and the cost, insurance, and
       freight value for each commodity should be listed.



                                              62
      Bill of Lading: There are no regulations specifying the form or number of bills of lading
       required for any particular shipment. A bill of lading usually shows the name of the
       shipper, the name and address of the consignee, port of destination, description of goods,
       listing of the freight, number of bills of lading in the full set, and the date and signature of
       the carrier‟s official acknowledging receipt on board of the goods for shipment. The
       above information should correspond with information shown on the invoice and the
       packages. The airway bill replaces the bill of lading on the air cargo shipments.

      Special Documents: Sanitary certificates, in German or English, are needed for the
       import of plants and some animals. Special documents are usually required when certain
       items such as frozen or fresh meat are imported into Germany. Additionally, certain
       wood or forest products may also require special documentation.

      Standards and Special Requirements: Special standards are in effect for such items
       such as food products, cosmetics, and motor vehicles. This includes vitamins and
       vitamin-enriched foods.

      Labeling: There are no requirements for labels indicating the country of origin. Certain
       commodities are subject to special regulations and must be labeled showing the
       composition, country of origin, content in metric units, manufacturer, and common
       product name. Special labels and requirements apply to items such as hazardous
       substances, drugs, solvents, footwear, and precious metals.

      Marking: There are no special marking requirements. However, accepted shipping
       practices dictate that the consignee‟s mark with port marks be inscribed and numbered.

      Packing: New packing laws went into effect December 1, 1991. The new law has the
       manufacturers and distributors taking back packing materials and items such as cans and
       plastic containers. The only exception to this rule is called the “green dot” program. A
       green dot symbol placed on the shipment allows the licensed holders to take items like
       packing materials to a recycling center for disposal.

5.1.4. Hungary
Hungary uses a custom tariff system that is multi-column. Different customs duties get applied
to the product dependent upon their origin. Additionally, Hungary adheres to Article VII of the
General Agreement on Tariffs and Trade.

5.1.4.1 Tariff Structure
Hungary uses the Harmonized System Convention and has adopted the Harmonized Commodity
Description and Coding System for tariff classification.




                                               63
5.1.4.2 Import Duties
Hungary has no specific duties.

5.1.4.3 Preferential Duties
Imports from developing countries are granted tariff preference. Hungary has reached a number
of preferred agreements with neighboring countries, and currently has a free trade agreement with
Slovenia.

5.1.4.4 Customs Surcharge and Indirect Taxes
Imports are subject to a VAT of 25%.

5.1.4.5 Import Channels
Hungary is currently involved in an economic reform program. Exporters to Hungary may sell
directly to economic associations, specialized groups, individual entrepreneurs, legal entities, and
private persons.

5.1.4.6 Distribution
Hungary‟s distribution system is currently being overhauled. Agents and distributors have
become increasingly popular and several Hungarian companies have established
agent/distributorship deals with the United States and other foreign entities. Any Hungarian
company engaging in trade must have the words “trade” or “trading” in the company‟s name.

5.1.4.7 Ports
The Danube River supports Hungary‟s major ports, which are Budapest and Dunaujvaros. The
government has announced plans for six more ports along the Danube River. Currently, much of
Hungary‟s imports are routed through ports in Germany, Poland, and Romania.

5.1.4.8 Free Trade Zones
Hungary has free trade zones and they are under the control of their customs. The free trade
zones have no time limit on storage of shipments and warehousing operations are permitted.

5.1.4.9 Entry and Warehousing
Upon entry to Hungary, all goods must apply for customs clearance. Goods can be cleared for
domestic use, warehousing, or for temporary importation. Duty is paid by the person clearing the
goods. The limit for warehousing is 24 months for imports, however that period can be extended
for another 24 months through application.




                                              64
5.1.4.10 Transit
Cleared goods that are intended for re-exportation must be transported within 12 months. Goods
that are going to be introduced into products or re-exported may be admitted duty free.

5.1.4.11 Documentation Required
The following highlights and addresses all shipments into Hungary regardless of value and/or
mode of transportation. Listed below is key documentation and related processes needed in order
to properly transport and account for imported cargo.

      Commercial Invoice: Three copies of the commercial invoice are required and should
       have the names and addresses of the shipper and consignee. They should also have the
       country of origin and place where merchandise was purchased, number of packages,
       description of outer packing, and quantity and value of the merchandise. The invoice
       must be signed by the shipper.

      Certificate of Origin: If needed, two copies of the certificate of origin are required. The
       certificate must be certified by a recognized chamber of commerce, with an additional
       notarized copy required for the files.

      Packing List: A packing list is not required, however, it facilitates clearance through
       customs. If used, it includes the net and gross weight of each package, marks and number
       of packages, and a complete description of each package and its contents.

      Bill of Lading: There is no requirement for a bill of lading. An air waybill can replace a
       bill of lading on air shipments and all bills of lading should agree with other shipping
       documents as well as match the container‟s markings.

      Special Documents: Special documents such, as veterinary certificates and
       phytosanitary certificates are required. A quality certificate is required to cover imported
       consumer goods.

      Standards and Special Requirements: Special requirements are in place for such items
       as pharmaceuticals, printed materials, pyrotechnics, and gas-powered weapons.

      Marking: There are no requirements on how shipments are to be marked. It is only
       requested that imported products show directions on proper use.

      Packing: The exporter needs only to consider the matter of packing for safe delivery.

5.1.5 Spain
Spain is a member of the EU. Other members include Austria, Belgium, Denmark, Finland,
France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Sweden, and
the United Kingdom. Together, they form a customs union that calls for free trade, and the


                                             65
absence of customs duties and quotas on trade among members. The following vital areas and
key terms are used to explain import requirements as they relate to the host nation.

5.1.5.1 Tariff Structure
Tariffs on imports are based on the Harmonized Commodity Description and Coding System of
tariff classification.

5.1.5.2 Import Duties
Import duties are payable in Spanish pesetas, and the conversion rate is that of the day of
clearance.

5.1.5.3 Levy of Duties
In certain instances, import duties are levied on the dutiable basis indicating a tariff for each
item. Such duties are levied on net weight or gross weight, length, volume, or number of units
imported. The metric system for weights and measures is used.

5.1.5.4 Customs Surcharge and Indirect Taxes
There are two VATs in effect. The standard rate is 16%, and a reduced rate of 7% is assessed on
basic items such as foods, medicines, agricultural products, books, and some films. The luxury
tax was discontinued.

5.1.5.5 Import Channels
Spain uses agents and distributors to handle imports, with the major import-hubs being Madrid
and Barcelona. Agents and distributors maintain offices in major cities such as Madrid, as well
as offices in other parts of the country.

5.1.5.6 Distribution
The major markets in Spain are located in and around the major cities. Spain uses a system
where agents and distributors are used to cover the entire country. Spain uses a “freedom of
contract” theory, in that contracting parties may stipulate conditions, undertakings, and
stipulations as long as it does not violate Spanish public policy, laws, or morals. In general, the
method of distributorship is agreed to by all parties involved.

5.1.5.7 Ports
Spain has eight major ports. Palma de Mallorca and Port Mahon are the major ports of call for
the Balearic Islands. Las Palmas de Gran Canaria and Santa Cruz de Tenerife are the main direct
ports of call for the Canary Islands. Spain also has more than 20 international airports.




                                              66
5.1.5.8 Free Trade Zones
There are free trade zones in Barcelona, Cadiz, Vigo, and other Spanish areas. Imported goods
are free of payment to customs as long as they stay in the free trade zone. Duties do become
payable however, once the goods are removed from the free trade zone for Spanish use. Special
permission is needed for the transport and storage of hazardous materials.

5.1.5.9 Entry and Warehousing
Spanish customs agents or brokers are used when clearing goods into Spain. Imports must be
described in metric tons in order to clear customs, and a customs declaration must be filled out
for all imported goods. This declaration is then filed with the Secretariat of Commerce. A bill of
lading also has to be presented to the Spanish customs before obtaining any imported goods.
Imported goods may also be declared for consumption, transit, re-export, or warehousing. Goods
for consumption, however, cannot be re-exported.

Spain uses a warehousing method that utilizes four different types of warehouses and/or deposits.
The four types are customs warehouses (goods may be stored for up to four months with fees),
free deposits (goods may be stored free for up to four years), commercial deposits (similar to free
deposits with limited privileges), and floating deposits for combustibles.

5.1.5.10 Transit
Transit shipments are allowed to pass through Spain. They are usually kept under customs
surveillance when they are in warehouses and awaiting the proper declaration. Maritime transit
of goods needs only a ship‟s manifest, and no customs declaration is required. It is only when
goods have been declared for consumption and nationalization in Spain that an export declaration
is required.

5.1.5.11 Documentation Required
The following highlights and addresses all shipments into Spain regardless of value and/or mode
of transportation. Listed below is key documentation and related processes needed in order to
properly transport and account for imported cargo.

      Commercial Invoice: One original and one copy of the commercial invoice are required
       for customs. The invoice may be prepared in English with each class of goods being
       explained carefully. For shipments that exceed $1,000.00 American currency, an invoice
       and certificate of origin must be presented to the consulate.

      Certificate of Origin: Three copies of the certificate of origin are required for shipments
       valued at $1,000.00 or more in American currency. The consulate retains copies and the
       original is returned to the shipper. In special instances, the certificate of origin may be
       required to be presented along with other Spanish forms, to the consulate for legalization.




                                              67
      Packing List: A packing list may not be required, however, a copy of the packing list
       should accompany other shipping documents.

      Bill of Lading: There are no regulations specifying the form or number of bills of lading
       required for any particular shipment. A bill of lading usually shows the name of the
       shipper, the name and address of the consignee, port of destination, description of goods,
       listing of the freight, number of bills of lading in the full set, and the date and signature of
       the carrier‟s official acknowledging receipt on board of the goods for shipment. This
       information should correspond with the information shown on the invoice and the
       packages. The airway bill replaces the bill of lading on air cargo shipments.

      Special Documents: Special documents such as veterinary certificates, sanitary and
       health certificates, phytosanitary certificates, pharmaceutical certificates, and other
       certificates may be required when importing certain products or animals into Spain.

      Standards and Special Requirements: Spain has established special certification for
       certain products. Products that fall into this category are electrical products, foodstuffs,
       cosmetics, pharmaceuticals, veterinary supplies, hazardous substances, motor vehicles,
       machinery and other items such as alcoholic beverages.

      Labeling: The label must show the quantity of goods, and correspond with the
       description shown on the other import documents. Special labels are used for foodstuffs,
       textiles, cosmetics, and other items such as drugs. Goods that do not comply with
       Spanish marking or labeling may be denied entry.

      Marking: There are no stipulations on how shipments are to be marked, however,
       commonly accepted shipping practices should be used. As a general rule, inscribed
       plainly on the package(s) should be the consignee‟s mark with port marks in order to
       facilitate the arrival of the shipment. It is also helpful to number all packages.

      Packing: There are specific regulations for packing and transport of polyethylene
       imports. Other imports should be packed in order to prevent damage and facilitate safe
       transport.

5.1.6 Italy
Italy is a member of the EU. Other members include Austria, Belgium, Denmark, Finland,
France, Germany, Greece, Ireland, Luxembourg, the Netherlands, Portugal, Spain, Sweden, and
the United Kingdom. Together, they form a customs union that calls for free trade, and the
absence of customs duties and quotas on trade among members. The following vital areas and
key terms are used to explain import requirements as they relate to the host nation.




                                               68
5.1.6.1 Tariff Structure
Tariffs on imports are based on the Harmonized Commodity Description and Coding System of
tariff classification.

5.1.6.2 Import Duties
Specific duties are levied on a few items, ad valorem duties are levied on a cost, insurance,
freight basis, and preferential duties among members of the EU is duty-free.

5.1.6.3 Levy of Duties
In certain instances, import duties are levied on the dutiable basis.

5.1.6.4 Customs Surcharge and Indirect Taxes
There are no customs surcharges, but Italy has adopted a VAT that is 15%.

5.1.6.5 Import Channels
Many imports into Italy are handled by importers who purchase for their own account and
distribute throughout Italy and Europe. Imports can enter Italy through a variety of channels
depending upon the nature of commodities; sales territories covered, and type of service to be
used. Wholesalers also constitute an important segment of importers doing business in Italy.

5.1.6.6 Distribution
Italy has three types of distribution agreements. They are exclusive distributorship (distributor
has sole right to sell specified goods within a defined area), quasi-exclusive distributorship
(distributor sells almost all specified products within a defined area), and information
distributorship agreements (grantor imposes heavy obligations on the distributor).

5.1.6.7 Ports
Italy has 15 principal ports.     Included in these are import and export ports, as well as a
transshipment port.

5.1.6.8 Free Trade Zones
Free trade is authorized and goods may be brought into the zone without paying custom duties.
While goods are held in the zones, they are free from such duties and operations such as loading,
unloading, mixing, warehousing, and cargo handling are authorized. Retail sale is prohibited and
there are no free ports in Italy.




                                               69
5.1.6.9 Entry and Warehousing
Italian law states that all goods must be declared within 15 days after arrival at customs. In
exceptional cases this may be extended to (but not exceed) three months. Goods may be declared
for consumption, transit, warehousing and re-exportation. Sometimes inspection is waived and a
special license can be obtained allowing goods to proceed straight to importer‟s warehouse.

Italy uses a warehousing method that utilizes three different types of warehouses. The three
types are customs owned and operated, general stores (privately-owned but authorized and
supervised by customs), and commercial-company warehouses (leased warehouses on customs
premises and supervised by customs).

5.1.6.10 Transit
A written permit is needed for any goods that are shipped in transit through Italian ports. In the
event that a permit is not presented in the required time, customs officials may store goods in
customs warehouses at the expense of the interested party.

5.1.6.11 Documentation Required
The following highlights and addresses all shipments into Italy regardless of value and/or mode
of transportation. Listed below is key documentation and related processes needed in order to
properly transport and account for imported cargo.

      Commercial Invoice: Three copies of the commercial invoice on shipper‟s letterhead is
       required. Certification must be made by a recognized chamber of commerce, and a copy
       of the invoice is kept for the files.

      Certificate of Origin: A certificate of origin is not usually required, however, one can
       be requested by the importer or letter of credit. An original copy must be mailed to the
       importer with other relevant shipping documents and a copy of the certificate must
       accompany the shipment.

      Packing List: A packing list may not be required, however, a copy of the packing list
       should accompany other shipping documents.

      Bill of Lading: There are no regulations specifying the form or number of bills of lading
       required for any particular shipment. A bill of lading usually shows the name of the
       shipper, the name and address of the consignee, port of destination, description of goods,
       listing of the freight, number of bills of lading in the full set, and the date and signature of
       the carrier‟s official acknowledging receipt on board of the goods for shipment. This
       information should correspond with the information shown on the invoice and the
       packages. The airway bill replaces the bill of lading on the air cargo shipments.




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      Special Documents: Special documents such as veterinary certificates, sanitary and
       health certificates, phytosanitary certificates, and other certificates may be required when
       importing certain products or animals into Italy.

      Standards and Special Requirements: Italy has special certifications for certain
       products such as wood products, beeswax and honey, and televisions.

      Labeling: No labeling requirements exists to show the country of origin. Certain
       products such as beer, wine, foodstuffs, vinegar, and packaged food are subject to special
       labeling. Other products in that category are also subject to special labeling requirements.

      Marking: There are no stipulations on how shipments are to be marked, however
       commonly accepted shipping practices should be used. As a general rule, inscribed
       plainly on the package(s) should be the consignee‟s mark with port marks in order to
       facilitate the arrival of the shipment. It is also helpful to number all packages.

      Packing: Imports should be packed to facilitate safe shipment and prevent damage.

5.1.7 South Korea
South Korea maintains a three-column import tariff schedule.

5.1.7.1 Tariff Structure
Tariff imports are based on the Harmonized Commodity Description and Coding System of tariff
classification.

5.1.7.2 Import Duties
Specific duties are levied based upon weight, quantity, or volume. Other items have an ad
valorem duty that are levied, and preferential duties are based upon the Bangkok Agreement.

5.1.7.3 Levy of Duties
Duties are payable in won.

5.1.7.4 Customs Surcharge and Indirect Taxes
There is a 10% value tax and a special excise tax for luxury goods. Taxes can range from 10% to
100% based upon the item imported. Taxes are levied either at the sale of the product or at
importation.

5.1.7.5 Import Channels
There are three principal ways of importing into South Korea; they are letters of credit,
Documents against Acceptance (D/A), and Documents against Payment (D/P).


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5.1.7.6 Distribution
Distribution methods in South Korea vary with product and individual situations. Normally, they
are tailored to fit particular situations. Registered traders are authorized to import goods in their
names, while offer-agents and commissioned agents register with the Association of Foreign
Trading Agents of Korea, and act as representatives of foreign manufacturers and suppliers. A
number of foreign trade companies also have registered commission or offer agents.

5.1.7.7 Ports
South Korea has eleven major ports and three international airports.

5.1.7.8 Free Trade Zones
South Korea has two free zones that are primarily used for traditional purposes such as assembly
and processing of goods.

5.1.7.9 Entry and Warehousing
South Korean law states that all goods must be declared within 30 days from the date the goods
entered the bonded area. Goods not claimed within 30 days are considered unclaimed goods and
are subject to being sold at a public auction.

South Korea has adequate bonded storage facilities available under the direct supervision of the
collector of customs. They are designated bonded areas and fees tend to be high.

5.1.7.10 Transit
South Korea is a signatory to the TIR Customs Convention that means that freight shipments are
allowed to cross international borders without discharge for customs inspection.

5.1.7.11 Documentation Required
The following highlights and addresses all shipments into South Korea regardless of value and/or
mode of transportation. Listed below is key documentation and related processes needed in order
to properly transport and account for imported cargo.

      Commercial Invoice: Three copies of the commercial invoice are needed. The original
       plus two copies are needed, stating relevant cargo and shipping information.

      Certificate of Origin: Duplicates of the certificate of origin are required for certain
       select goods from certain select countries.

      Packing List: Two copies of the packing list are required.



                                               72
      Bill of Lading: There are no regulations specifying the form or number of bills of lading
       required for any particular shipment. A bill of lading usually shows the name of the
       shipper, the name and address of the consignee, port of destination, description of goods,
       listing of the freight, number of bills of lading in the full set, and the date and signature of
       the carrier‟s official acknowledging receipt on board of the goods for shipment. This
       information should correspond with the information shown on the invoice and the
       packages. The airway bill replaces the bill of lading on air cargo shipments.

      Special Documents: Special documents such as sanitary and health certificates, free sale
       certificates, quarantine certificates, and other certificates may be required when importing
       certain products or animals into South Korea.

      Standards and Special Requirements: South Korea may require inspection of live
       animals and food. Special information may be requested for chemicals, agricultural
       goods, and heavy equipment.

      Labeling: All goods need to be marked in Korean or English with the country of origin.
       Special labeling may be required for such things as imported food.

      Marking: There are no stipulations on how shipments are to be marked, however
       commonly accepted shipping practices should be used. As a general rule, inscribed
       plainly on the package(s) should be the consignee‟s mark with port marks in order to
       facilitate the arrival of the shipment. It is also helpful to number all packages.

      Packing: Imports should be packed to facilitate safe shipment and to prevent damage
       and pilferage.

5.1.8 Japan
Japan‟s customs tariff is administered by the Customs Bureau of the Ministry of Finance.

5.1.8.1 Tariff Structure
Tariff imports are based on the Harmonized Commodity Description and Coding System of tariff
classification.

5.1.8.2 Import Duties
Specific duties are levied on items such as alcohol, while ad valorem duties are based on cost,
insurance, and freight. Preferential duties are given to developing countries for agricultural and
industrial products.

5.1.8.3 Levy of Duties
Duties are payable in Japanese yen.



                                               73
5.1.8.4 Customs Surcharge and Indirect Taxes
A 3% consumption tax is levied on all domestic and imported goods and services. Automobiles
are subject to a tax of 4.5%. Effective April 1997, the rate will be raised to 5% for all products.

5.1.8.5 Import Considerations
Japan believes its resources are time, money, and personnel. Japanese business is dependent
upon personal relationships, externally and internally, with consumer preference remaining very
important. The Japanese tend to adhere to very detailed import procedures, with requirements to
provide full explanation at every stage of the import process. The Japanese also adhere to strict
delivery dates, quality standards, and warranties.

5.1.8.6 Distribution
Japanese distribution of product(s) is characterized by close personal relationships developed
over the years with importers, retailers, manufacturers, and wholesalers. It is not easy for
foreigners to do business in Japan, due to their firm business practices and customs. The
Japanese tend to have a very conservative approach to business.

The Japanese use agents, and their market presence takes the form of a representative or agent,
branch office, subsidiary, or joint venture. The likelihood of the Japanese switching suppliers is
small, especially when they are satisfied.

5.1.8.7 Ports
Japan has four major ports and four international airports. Construction plans are in place for
eight additional airports.

5.1.8.8 Free Trade Zones
There are free trade zones in Naha and Okinawa. Goods intended for re-exportation are brought
into the free trade zones for temporary storage, recapping, processing, finishing, and other
products. There are no free trade zones on the island of Japan.

5.1.8.9 Entry and Warehousing
An import declaration form (C5030) is required for clearance of most imports. Cargo is usually
cleared through customs by an authorized customs broker acting as an agent for the importer.
Three copies of the declaration are presented to customs.

Japan has adequate bonded storage facilities available that are under the direct supervision of the
collector of customs. They are designated bonded areas, and fees tend to be high.




                                              74
5.1.8.10 Transit
Japan is a signatory to the TIR Customs Convention. This means that shipments are facilitated
through the country in route to their final destination.

5.1.8.11 Documentation Required
The following highlights and addresses all shipments into Japan regardless of value and/or mode
of transportation. Listed below is key documentation and related processes needed in order to
properly transport and account for imported cargo.

      Commercial Invoice: No special form or commercial invoice is prescribed, but two
       copies signed on the shipper‟s letterhead must proceed with the shipment and accompany
       each shipment. The commercial invoice is required by customs for validation of goods.

      Certificate of Origin: A certificate of origin is required for merchandise granted duty.
       Consular legalization is not required.

      Packing List: Two copies of the packing list are recommended, showing details of
       goods, weights, and measurements of each package.

      Bill of Lading: Three signed original bills of lading usually are sent through banking
       channels, and at least two are signed to the consignee. A bill of lading usually shows the
       name of the shipper, the name and address of the consignee, port of destination,
       description of goods, listing of the freight, number of bills of lading in the full set, and the
       date and signature of the carrier‟s official acknowledging receipt on board of the goods
       for shipment. This information should correspond with the information shown on the
       invoice and the packages. The airway bill replaces the bill of lading on air cargo
       shipments.

      Special Documents: Special documents, such as sanitary certificates, are usually
       required for all plants, soils, animals, meat and animal viscera entering Japan.

      Standards and Special Requirements: Japan has special standards for industrial and
       agricultural items as well as automobiles, consumer products, foodstuffs, chemicals,
       roller skates, pharmaceuticals, electrical appliances, and refrigerant recovery and
       recycling equipment.

      Labeling: Labeling requirements do not apply at customs but apply at the point of sale.
       Labels can be affixed either before or after customs clearance. Beer and cosmetics must
       have a label affixed to each individual item.

      Marking: There are no stipulations on how shipments are to be marked, however,
       commonly accepted shipping practices should be used. As a general rule, inscribed
       plainly on the package(s) should be the consignee‟s mark with port marks in order to



                                               75
       facilitate the arrival of the shipment. It is also helpful to number all packages.
       Incomplete addresses or wrong addresses can result in delay.

      Packing: Imports should be packed to facilitate safe shipment and prevent damage. The
       use of straw packing material is prohibited.

5.1.9 Saudi Arabia
In 1981, Saudi Arabia became a member of the Gulf Cooperation Council (GCC) made up of
Bahrain, Kuwait, Oman, Qatar, and the United Arab Emirates. Since its inception, the GCC has
made strides to establish regional transport, communications infrastructures, joint ventures
among members, and coordinate outside trade agreements and policies.

5.1.9.1 Tariff Structure
Saudi Arabia uses the Harmonized Commodity Description and Coding System for tariff
classification.

5.1.9.2 Import Duties
Custom duties for major imports are 12%. For commodities that compete with national
industries, the duties are 20%. Tobacco and tobacco products are assessed at 30%.

5.1.9.3 Levy of Duties
Most duties are assessed on an ad valorem CIF basis, except for a few specific duties. Specific
duties are assessed in metric capacity and/or weight, with only a few items being affected causing
this duty rate to be low.

5.1.9.4 Customs Surcharge and Indirect Taxes
Imports are subject to a customs surcharge of 3%. The other tax that is levied is an import
inspection tax on all imports at a rate of 0.5%.

5.1.9.5 Import Channels
Business transactions are normally based upon quality, cost, and time. Import agents and local
representatives are used to offer importers a closer proximity to the Saudi markets. At the same
time, individual chambers of commerce publish their own trade directories for each of their
respective communities.

5.1.9.6 Distribution
Foreign companies are not allowed to engage directly with commercial activities in Saudi Arabia.
As a result, they are forced to deal with local agents and/or distributors for distribution. These
local agents and/or distributors are required to have distribution agreements with the Ministry of


                                             76
Commerce. In addition, some foreign suppliers have gone as far as detailing a sales person to
their Saudi distributor. This is in an effort to promote products and provide training with
technical support.

5.1.9.7 Ports
The major commercial ports are Jeddah, Gizan, Damman, and Yanbu. The industrial ports are
Yanbu and Jubail, with the oil port being Ras Tanura. The major airports are King Aba al-Aziz
International, King Khalid International, and King Fahd International Airport.

5.1.9.8 Free Trade Zones
There are no free trade zones in Saudi Arabia, with two exceptions being the enrepots at Jeddah
and Dammam.

5.1.9.9 Entry and Warehousing
All imported goods are placed into Saudi Government Custom‟s warehouses or at other locations
within the port area. Private warehouses do not exist. Goods deposited are the responsibility of
the shipper until customs takes possession and at no time will customs assume responsibility for
the goods. Any goods not claimed are subject to a public auction.

5.1.9.10 Transit
The re-export of goods is officially discouraged.

5.1.9.11 Documentation Required
The following highlights and addresses all shipments into Saudi Arabia regardless of value
and/or mode of transportation. Listed below is key documentation and related processes needed
in order to properly transport and account for imported cargo.

      Commercial Invoice: Three copies of the commercial invoice are required, and should
       be prepared on company‟s letterhead. They should show the country of origin. Also
       requested on the commercial invoice is relevant information such as trademarks, quantity,
       unit price, total value, net and gross weights, and other related information. The invoice,
       as well as other shipping documents, must be presented to the Saudi Arabian Consulate
       for legalization.

      Certificate of Origin: Three signed copies of the certificate of origin are required. The
       certificate of origin must be certified by the country of origin to be true and correct before
       certification by the appropriate chamber of commerce, and prior to legalization by the
       Saudi Consulate.

      Packing List: A copy of the packing list must be submitted with the customs declaration
       when the agent or consignee clears the shipment. This list briefly describes the content of


                                              77
       the container(s), gives the net and gross weight, number of packages and contents,
       number of containers, number of seals, and if available, the number of the letter of credit.

      Bill of Lading: An air waybill can replace a bill of lading on air shipments. All bills of
       lading should agree with other shipping documents provided and should match the
       container‟s markings.

      Export Information Sheet: An export information sheet must be filled out. It should be
       signed by an official of the exporting company and presented to the Saudi Arabian
       Consulate. It is presented with all other shipping documentation, but is not required to be
       legalized.

      Special Documents: Special documents such as insurance certificates, steamship
       company certificates, health certificates, phytosanitary certificates, radiation certificates,
       consumer protection certificates, free-sale certificates and certificates of conformity fall
       into this category. Additionally, inspection certificates are required for seeds, foodstuffs,
       and meat (two certificates).

      Standards and Special Requirements: Certain regulated products are subject to special
       certification. They are electronics, chemical goods, automobiles, automotive parts,
       chemicals, and various other products. Special documents may be required for
       conformity purposes.

      Labeling: A conspicuous indication of the country of origin must appear on all imported
       goods unless the size or nature of the goods does not make it possible. Anything that may
       be harmful needs to be mentioned on the container. Indecent pictures and crosses are not
       consistent with Islamic morals and are prohibited.

      Marking: Gross weight should be marked on all containers. Two or more containers
       need to be numbered and need to show the country of manufacture.

      Packing: The exporter needs only to consider the matter of packing for safe delivery and
       rough handling. Consideration should also be given to extreme heat and high humidity,
       as well as providing protection against pilferage.

5.1.10 Turkey
In 1987, Turkey submitted its formal application to join the EU. Turkey is now taking steps
forward to conform to the current EU policies. Imports from the United States are subject to
most-favored-nation treatment, and import duties are paid in liras at the official rate of exchange.
Categories that are generally exempt from duties are personal effects, household goods, imports
for national defense, and goods imported in support of tourist trade.

Turkey formed a customs union with the European Union on January 1, 1996. In conjunction
with this, Turkey adopted a new import regime, which applies the EU's Common External


                                              78
Customs Tariff (CCT) for most third country imports and provides zero duty rates for non-
agricultural items of European Union/European Free Trade Agreement (EU/EFTA) origin. The
new import regime is organized in eight chapters that list about 18,000 items, identified with 8 to
12 digit harmonized system numbers. Turkey's Mass Housing Fund has been eliminated for
almost all manufactured imports.

The Turkish Government estimates that because of customs union accession, the average duty
rate has dropped from 10.8 percent to 3.6 percent for third country imports, including the United
States. However, Turkey has reserved some exempted categories for sensitive products; tariffs
on these items will generally remain much higher than the CCT. As part of harmonization,
Turkey will phase in EU duty rates for these items over the next three to five years. One such
category is for products included in the European Coal and Steel Agreement, to be covered by a
separate agreement. Another is for domestically produced motor vehicles and furniture.

Turkey is a member of General Agreement on Trade and Traiffs/World Trade Organization
(GATT/WTO) and regulates its customs practices in line with GATT requirements. In 1989,
Turkey, along with the United States, converted to the new GATT Harmonized System. Trade
with the United States is based on the Treaty of Commerce and Navigation of 1929. It provides
for the mutual, unconditional most-favored-nation treatment in the application of all import and
export duties and restrictions.

5.1.10.1 Tariff Structure
Turkey has adopted the Harmonized Commodity Description and Coding System of tariff
classification.

5.1.10.2 Import Duties
Certain duties may be waived, reduced, or deferred as part of the Turkish investment incentive
scheme. Examples of such duties are investment goods, spare parts, electrical equipment, and
tools for industry.

5.1.10.3 Levy of Duties
Duty rates on imports from the European Free Trade Agreement are reduced under an agreement
between Turkey and the EFTA. Turkey also signed agreements with Albania, Armenia,
Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russia, and the Ukraine. The
agreements are designed to promote trade and economic cooperation.

Turkey is also a member of the Regional Cooperation for Development (RCD), along with Iran
and Pakistan. The RCD hopes to widen economic cooperation between the countries.

5.1.10.4 Customs Surcharge and Indirect Taxes
Import duties are calculated exclusively on CIF prices. Importers are also responsible for paying
the VAT. The VAT is calculated on a CIF basis and has a ceiling of 23 percent; however, most


                                              79
industrial products are charged at a rate of 15 percent. VAT is also charged for locally produced
goods. Capital goods, some raw materials, imports by government agencies and enterprises, and
products for investments with incentive certificates are exempted from import fees.

5.1.10.5 Import Channels
Imports into Turkey are divided into four categories. They are freely imported goods, those that
require government approval, those reserved to specific agencies, and prohibited goods.
Prohibited goods include weapons and narcotics. It is generally recognized that the country from
which the goods are received, the country of origin, the country where payment is to be
transferred, and the importer's name must be placed on the import permission certificate.

Payment for imports may be made against letters of credit, documents, or goods or by way of
acceptance credits. Partial prepayments are also authorized under certain conditions.

5.1.10.6 Distribution
Government procurement in Turkey is generally conducted through the issuance of public
tenders. Most countries interested in trading with Turkey and successfully bidding a Turkish
government contract obtain the services of an experienced Turkish agent. Special attention is
paid to both technical and administrative specifications, as well as the required procedures that
relate to various government organizations.

5.1.10.7 Ports
Turkey has six major ports at this time with four new ports now under construction. Turkey also
has three international airports with a new airport scheduled for construction.

5.1.10.8 Free Trade Zones
There are free trade zones in Turkey and goods may be imported into the zones without payment
of duties. Goods may be stored, assembled, repaired, tested, or repackaged for export in the free
trade zones.

5.1.10.9 Entry and Warehousing
All imported merchandise must be cleared through customs within four months or declared for
warehousing, transit, or re-export. A separate import permission certificate is required for each
eight-digit customs tariff code product that must be cleared through customs. Goods that remain
in port past the allotted period of time are confiscated and sold at auction. Goods may also
remain stored in private, bonded warehouses for up to five years.

5.1.10.10 Transit
Packages and pertinent bills of lading in transit through Turkey must be marked "In Transit."



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5.1.10.11 Documentation Required
The following highlights and addresses all shipments into Turkey regardless of value and/or
mode of transportation. Listed below is key documentation and related processes needed in order
to properly transport and account for imported cargo.

      Commercial Invoice: A completed commercial invoice is prepared in triplicate and
       must contain a complete description of goods and all required payment terms. The
       invoice must be notarized, certified by a county clerk or recognized chamber of
       commerce, and legalized by the Turkish Consulate.

      Certificate of Origin: Two copies of the certificate of origin are required with no
       erasures or corrections permitted. The certificate must be notarized, certified, and
       legalized by the Turkish Consulate.

      Packing Lists: Turkish customers can provide information needed for any special
       packing requirements.

      Bill of Lading: Bills of lading should beprovided in duplicate and customarily show the
       name of the shipper, name and address of the consignee, port of destination, description
       of goods, listing of the freight and other charges, number of bills of lading in the full set,
       and the date and the signature of the carrier's official acknowledging receipt on board of
       the goods for shipment. The information found on the bill of lading should correspond
       with the information found on the invoices and the packages.

      Special Documents: Special health certificates are required for the import of plants,
       seeds, animals, and animal products.

      Labeling: Special markings may be needed to ensure that products are not harmful.
       Operating and maintenance instructions must accompany each vehicle, engine, piece of
       machinery, and equipment.

      Marking: All cases and packages must bear shipping marks, numbers, dimensions, and
       the gross weight of the merchandise. Packing cases should have distinct markings. There
       are no stipulations on how packages are to be marked, and common shipping practices
       should be followed.

      Packing: Special packing requirements are provided by Turkish customers.

5.1.11 Panama
Panama is an important trading partner with the United States and has an international trade and
transportation reputation, much of which comes from the Panama Canal. The Panama Canal
handles more than 13,000 ships per year, and accounts for around $500,000,000.00 for the
Panamanian economy. Although the United States and Panama have had tense relationships at
times (e.g., Operation Just Cause), ties between the two countries remain strong. With the


                                              81
Panama Canal scheduled to revert to Panamanian control in December 1999, Panama will need
to review and update its trade policies for continued economic growth.

5.1.11.1 Tariff Structure
Panama has adopted the Harmonized Commodity Description and Coding System of tariff
classification which replaces the Customs Cooperation Council Nomenclature.


5.1.11.2 Import Duties
Duties are paid in either balboas or dollars.

5.1.11.3 Levy of Duties
Panama has eliminated special duties for most imports. Duties are assessed based on the cost of
the goods in the country of origin, plus all charges incidental to delivery of the goods in Panama.
Panama has treaties with the Central American Common Market whose members include Costa
Rica, El Salvador, Honduras, and Nicaragua.

5.1.11.4 Customs Surcharge and Indirect Taxes
There is a general surcharge of 7.5% on the FOB value of most products. A 3.5 % applies to
food stuffs and 2.5% to pharmaceutical products. There is also a customs fee of $70.00 levied on
all imports valued at $2,000.00 or more.

5.1.11.5 Import Channels
Items imported into Panama must be cleared through customs. A customs declaration must be
submitted which covers the imported goods, accompanied by a certified consular invoice and a
bill of lading, as well as proof that Panamanian income taxes have been paid on the goods.
Merchandise not removed from the customs warehouses within 24 hours after payment of duties
is subject to storage fees. Exceptions for clearing customs are made for certain imported goods
that are consigned to national and municipal governments, imported by foreign diplomats, for
sale to authorities within the canal zone and to vessels transiting the canal.

5.1.11.6 Distribution
Panama does not have a central procurement office. Panama City accounts for two thirds of the
sales of consumer goods in Panama with the remaining one third distributed among the other
major cities of Panama. Agents and distributors are the main points of contact for importing
goods into Panama.




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5.1.11.7 Ports
The principal ports of Panama are Cristobal and Balboa on the Atlantic and Pacific sides of the
Panama Canal. Several new ports are now under construction. Panama's main international
airport is Tocumen, close to Panama City.

5.1.11.8 Free Trade Zones
There are free trade zones in Panama and goods may be imported into the zones without payment
of customs. Goods may be stored, assembled, repaired, tested, or repackaged for export in the
free trade zones.

5.1.11.9 Entry and Warehousing
All imported merchandise must be cleared through customs with exceptions being made for
items that are duty free. For customs clearance of merchandise, a customs declaration must be
submitted accompanied by a certified consular invoice and a bill of lading, as well as legal proof
that the importer has paid Panamanian income taxes. Goods not removed from customs
warehouses within 24 hours after payment are subject to storage fees. The government of
Panama maintains bonded warehouses in Panama City and Colon. Customs warehouses are also
available by private companies.

5.1.11.10 Transit
All goods that transit through Panama must be marked, “PANAMA IN TRANSIT” on the
outside container. All accompanying documents should indicate goods are in transit.

5.1.11.11 Documentation Required
The following highlights and addresses all shipments into Panama regardless of value and/or
mode of transportation. Listed below is key documentation and related processes needed in order
to properly transport and account for imported cargo.

       Commercial Invoice: Four copies of the commercial invoice are required. Commercial
        invoices must be issued by the manufacturer or seller, and not by brokers or agents.
        They can be prepared in English or Spanish. The commercial invoice should contain the
        name and address of the firm or person selling the goods; name and address of the
        purchaser or consignee; kind, quality, and description of goods, which must be classified
        separately according to their value; partial price; and total price invoiced. Unit price of
        each item must also be shown. The value to be shown is FOB.

      Consular Invoice: The consular invoice is no longer required.

      Packing Lists: Panamanian customers provide information needed for any special
       packing requirements.




                                             83
      Bill of Lading: Three copies of the bill of lading are required. Only one mark per
       shipment is allowed on the bill of lading. The bill of lading customarily shows the name
       of the shipper, name and address of the consignee, port of destination, description of
       goods, listing of the freight and other charges, number of bills of lading in the full set, and
       the date and the signature of the carrier's official acknowledging receipt on board of the
       goods for shipment. The information found on the bill of lading should correspond with
       the information found on the invoices and the packages. The air waybill replaces the bill
       of lading on air cargo shipments.

      Special Documents: Special sanitary certificates are required for all shipments of meat
       and meat products.

      Labeling: All goods sold in Panama must show on their containers, covers, labels, or
       packages a statement of their contents, ingredients, physical-chemical properties, lot
       number, expiration date, and place of manufacture. They must also bear, in a visible
       place, their net weight or quantity.

      Marking: There are no stipulations about how shipments must be marked. Any
       common shipping practice may be followed. Generally, all cases and packages should
       bear shipping marks, numbers, dimensions, and the gross weight of the merchandise.
       Packages may be marked with either brush or stencil.

      Packing: Special packing requirements are provided by Panamanian customers.

5.2 Summary of Existing Commercial Procedures, Requirements, and Interfaces
Many countries have the same requirement for the labeling, packing, and marking of imported
goods and materials.

Storage facilities and duration of storage differs from country to country based upon their
respective laws. Differences appear to be in the stated time goods are allowed to remain in
storage, as well as customs control and oversight while those goods are stored. Some counties
require their customs officials to play a major role both in inspection and storage of imported
goods, while other countries have their customs officials playing a reduced role or more
specifically, that of inspectors.

In almost all instances, agents and/or distributors are used to facilitate the transfer and
distribution process for imported goods. Some agents and/or distributors are regulated by their
respective governments, while others act independently either with or without required licenses.
It is also understood that personal and professional exchange still plays an important part in the
import and distribution process. This is especially true in countries like Japan.

All countries share standard import requirements for what is called commonly used or domestic
goods. Exceptions are made when special items such as food, animals, chemicals, cosmetics,
hazardous materials, luxury items, pharmaceuticals, and alcohol are imported. Special


                                               84
documents, as well as special processing requirements, exist to facilitate the import of these
special items.

Similar forms and import documentation are used to facilitate the transfer of goods into all
countries researched. Forms and/or documentation such as commercial invoices, certificates of
origin, packing lists, bills of lading, and other shipping documentation is standard for each
country researched. Difference exists only in the number of original and/or copies needed of
each document and/or certificate to successfully process items through customs. Additionally,
differences exist from country to country as to whether respective shipping documents and
certificates need to be legalized.

In recent years, regional trade associations and unions have helped to standardize shipping
practices, as well as to facilitate free trade zones and international transfer of goods. Larger
countries are helping smaller developing countries through the use of exceptions and reduced
rates on imports.

Finally, the United States is clearly seen as the world‟s leader in this area and many countries are
now modeling our success as well as our processes.




                                              85
                                        REFERENCES

[1] DoD, Defense Transportation EDI Program Implementation Plan, February 1996.

[2] DoD, Military Standard Transportation and Movement Plan, October 1988.

[3] DoD, Defense Intransit Visibility Integration Plan, February 1995.

[4] DoD, Air Mobility Master Plan, January 1997.

[5] (1997) Military Traffic Management Command Homepage.                   [On-line].     Available:
Http://144.101.8.52/.

[6] (1996) Military  Sealift      Command         Homepage.          [On-line].           Available:
http://www.msc.mavy.mil/.

[7] (1997) Army, Air Force Exchange Services.                 [On-line].     Available:       http://
www.aafes.com/pa/doc/corporate.profile.htm.

[8] (1997) Military Transportation Management Command History Homepage.                   [On-line].
Available: http:// 144.101.8.52/hist/history.htm.

[9] (1997) Military Sealift Command Area Commands Homepage.                 [On-line].    Available:
http://www.msc.navy.mil/area_com.htm.

[10] Anderson, D. (1997) Deputy Director of Joint Transportation Movement Office.

[11] Treaties and Other International Acts Series 2846; 4 UST, p. 1792.




                                             86
APPENDIX A: LIST OF ACRONYMS
AAFES       Army Air Force Exchange Service
ACA         Airlift Clearance Authority
ACS         Automated Commercial System
AES         Automated Export System
AFLIF       Air Force Logistics Information File
AIT         Automatic Identification Technology
AMC         Air Mobility Command
AMMP97      Air Mobility Master Plan 97
APOE/APOD   Aerial Port of Embarkation/Debarkation
ASC         Accredited Standards Committee
ASPUR       Automated System for Processing Unit Requirements
ATCMD       Advance Transportation Control and Movement Document
BBP         Break-Bulk Point
BXA         Bureau of Export Administration
CAPS II     Consolidated Aerial Port System II
CBL         Commercial Bill of Lading
CCP         Container Consolidation Point
CCT         Common External Customs Tariff
CFM         MTMC‟s CONUS Freight Management System
CFM-FM      CFM Field Module
CIF         Cost, Insurance, and Freight
CIM         Corporate Information Management
CINC        Commander-in-Chief
CINCTRANS   Commander-in-Chief Transportation
CMOS        Cargo Movement Operations System
CONOPS      Concept of Operations
CONUS       Continental United States
CTX         Corporate Trade Exchange
COTS        Commercial Off-the-Shelf
CXT         Common External Tariff
D/A         Documents against Acceptance
D/P         Documents against Payment
DAAS        Defense Automated Addressing System
DAMMS-R     Department of the Army Movements Management System-Redesigned
DASPS-E     Department of the Army Standard Port System-Enhanced
DBOF-T      Defense Business Operation Fund - Transportation
DC          District of Columbia
DCs         Distribution Centers
DCINC       Deputy Commander-in-Chief
DeCA        Defense Commissary Agency
DFAS        Defense Finance and Accounting System
DISA        Defense Information Systems Agency
DISN        Defense Information Systems Network
DLA         Defense Logistics Agency
DLMS        Defense Logistics Management Standards


                                A-1
DLMSO     Defense Logistics Management Standards Office
DLSS      Defense Logistics Standard System
DM        Data Maintenance
DoD       Department of Defense
DOT       Department of Transportation
DPSC      Defense Personnel Support Center
DQ        Data Quality
DRS       Discrepancy Reporting System
DSS       Distribution Standard System
DTEDI     Defense Transportation EDI
DTMR      Defense Transportation Management Regulation
DTRS      Defense Transportation Payment System
DTS       Defense Transportation System
DTTS      Defense Transportation Tracking System
DWASP     Defense Warehousing And Shipping Papers
EDI       Electronic Data Interchange
EDIFACT   EDI for Administration, Commerce, and Transport
EFT       Electronic Funds Transfer
EFTA      European Free Trade Agreement
ETA       Estimated Time of Arrival
EU        European Union
FACNET    Federal Acquisition Computer Network
FDC       Fashion Distribution Center
FOB       Free On Board
FTS       Federal Telecommunications Services
GATT      General agreement on Trade and Tariffs
GBL       Government Bill of Lading
GCC       Gulf Cooperation Council
GCCS      Global Command and Control System
GDSS      Global Decision Support System
GT        Guaranteed Traffic tenders
GTN       Global Transportation Network
HOST      Headquarters On-line System for Transportation
HQ        Headquarters
IBS       Integrated Booking System
ICP       Inventory Control Point
ICs       transportation Implementation Conventions
IDEF0     Integrated Definition Language 0
IRDs      Interface Requirements Documents
ITTD      Inland Theater Transportation Directorate
ITV       Intransit Visibility
JLSC      Joint Logistics System Center
JMCG      Joint Movement Control Group
JOPES     Joint Operations Planning and Execution System
JTCC      Joint Transportation CIM Center


                                A-2
JTMA          Joint Traffic Management Agency
JTMO          Joint Traffic Management Office
JTTS          Joint Theatre Transportation System
MAGTAF II     Marine Air Ground Task Force War Planning System II
METS II       Mechanized Export Traffic System II
MILSTAMP      Military Standard Transportation and Movement Procedures
MODELS        Modernization of the Defense Logistics System
MRO           Material Release Order
MSC           Military Sealift Command
MTF           Medical Treatment Facilities
MTMC          Military Traffic Management Command
MWR           Morale, Welfare, and Recreation
NACHA         National Automated Clearing House Association
NATAP         North American Trade Automation Prototype
NATO          North Atlantic Treaty Organization
NAVADS        Navy Automated Transportation and Document System
NEO           Noncombatant Evacuation Operation
NEP           Network Entry Point
NEXCEN        Navy Exchange Service Centers
NEXCOM        Navy Exchange Command
OCCA          Ocean Cargo Clearance Authority
OSDP          Overseas Shipment Documents Process
POD           Port of Debarkation
POE           Port of Embarkation
POMCUS        Prepositioning of Materiel Configured to Unit Sets
PPD           Personal Property Directorate
PPSO          Personal Property Shipping Offices
PRAMS         Air Mobility Command‟s Passenger Reservation And Manifesting System
RCD           Regional Cooperation for Development
ROAMS         Replacement Operations Automation Management System
SAIMD         Standard Automated Input Media Device
SC&D          Stock Control and Distribution
SDS           Standard Depot System
SOFA          Status of Forces Agreement
SOW           Statement of Work
STACCS        Standard Theater Army Command and Control System
STEP System   Standard Tender Electronic Processing System
SWG           USTRANSCOM‟s Streamlining Work Group
TALCE         Tanker Airlift Control Element
TAV           Total Asset Visibility
TC ACCIS      Transportation Coordinator-Automated Command and Control Information System
TC AIMS II    Transportation Coordinator‟s Automated Information for Movement System II
TCJ5          USTRANSCOM Command and Control
TCMD          Transportation Control Movement Document
TCN           Transportation Control Number


                                   A-3
TDCC         Transportation Data Coordinating Committee
TERMS        Terminal Management System
TIR          Transit International Routier
TPA          Trading Partner Agreement
TRAC2ES      USTRANSCOM‟s Regulating and Command & Control Evacuation System
TRAMS        Transportation Automated Management System
UCS          Uniform Communications Standard
UIC          Unit Identification Code
ULN          Unit Line Number
USAREUR      U.S. Army Europe
USCS         Unites States Customs Service
USTRANSCOM   United States Transportation Command
VAN          Value-Added Network
VAT          Value Added Tax
WPS          Worldwide Port System
WTO          World Trade Organization
WWMCCS       Worldwide Military Command and Control System




                                A-4
APPENDIX B: LIST OF CONTACTED AND VISITED AGENCIES AND EMBASSIES
AGENCIES CONTACTED TO DATE:

       Defense Information Systems Agency
       United States Transportation Command
       Department of Agriculture
       Department of Commerce
       Department of Defense
       Department of Transportation
       Department of the Air Force
       Department of the Army
       Department of the Navy
       Defense Logistics Agency
       Customs Defense Contract Management Area Operations
       Military Traffic Management Command
       Army Air Force Exchange Service
       United Parcel Service
       Government Accounting Office
       United States Postal Service
       Federal Express International
       Bureau of National Affairs
       Trade Information Center
       British Customs Service
       National Institute of Standards and Technology
       Air Mobility Command
       Military Sealift Command
       Joint Traffic Management Office
       Federal Express International

EMBASSIES CONTACTED TO DATE:

       United Kingdom
       Netherlands
       Germany
       Saudi Arabia
       Hungary
       Spain
       Italy
       South Korea
       Japan




                                     B-1
AGENCIES VISITED TO DATE:

        Department of Commerce
        Department of Defense
        Department of the Air Force
        Department of the Army
        Department of the Navy
        United States Customs Defense Contract Management Area Operations
        United States Customs, Washington, DC
        Defense Information Systems Agency
        United Parcel Service Worldwide Logistics
        United States Postal Service
        Government Accounting Office
        United States Transportation Command
        Defense Logistics Agency
        Pentagon Library
        National Defense University
        United Parcel Service
        Army and Air Force Exchange Services

EMBASSIES VISITED TO DATE:

        Japan
        Korea
        United Kingdom




                                       B-2

				
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