Trade Compliance Considerations. April 13, 2016

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Elmer Robinson
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1 Trade Compliance Considerations April 13, 2016

2 Notice The following information is not intended to be written advice concerning one or more Federal tax matters subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230. You (and your employees, representatives, or agents) may disclose to any and all persons, without limitation, the tax treatment or tax structure, or both, of any transaction described in the associated materials we provide to you, including, but not limited to, any tax opinions, memoranda, or other tax analyses contained in those materials. The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 2

associated materials we provide to you, including, but not limited to, any tax opinions, memoranda, or other tax analyses contained in those materials.

3 Why are we talking to you today? Cost Compliance Competitors

4 Cost Considerations Trade & Customs considerations can result in significant savings, promoting cash flow benefits and a competitive advantage through: Trade Agreement Usage Duty Deferral/Suspension Regimes Export Control & Sanction Reform Ask yourself: Where am I importing from? What is my duty exposure? Will I be selling domestically or exporting my products? Is my product controlled for export purposes? 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. NDPPS

Will I be selling domestically or exporting my products? Is my product controlled for export purposes?

5 Compliance Considerations Trade & Customs processes help to mitigate risk of supply chain disruption and create a competitive advantage, because: Trade violations can be expensive and prohibit trade activities The Aerospace Industry Association (AIA) is progressively releasing trade compliance standard for suppliers - These standards are intended to become requirements during bid processes Undertaking certain trade activities (related party importations, trade agreements, regimes) can require compliant processes to be demonstrated Ask yourself: Am I working with export controlled products? Will I be seeking business through competitive bids? Will I be working with military technology? Am I importing from related parties? 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 5

Undertaking certain trade activities (related party importations, trade agreements, regimes) can require compliant processes to be demonstrated Ask yourself: Am I working with export controlled

6 Competitive Considerations Competitors are seeking cost effective measures to reduce overhead and establish efficient and compliant processes to increase competitiveness. This is accomplished through: Understanding the industry resources available to support you in your journey - American Association of Importers and Exports - Aerospace Industries Association - US Customs Centers of Excellence (CEEs) Ongoing evaluating of your in/outbound supply chains, contracts and agreements Maintaining current with trade related developments and evaluating how to maximize such opportunities - New Trade Agreements - Sanctions developments 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 6

Customs Centers of Excellence (CEEs) Ongoing evaluating of your in/outbound supply chains, contracts and agreements Maintaining current with trade related developments and evaluating how to maximize

7 We Can Help Below are some of our key service offerings which may help enable companies to drive a best in class global trade and customs function and enhance savings, compliance and competitiveness: Duty planning and cost saving Bonded Warehouses Zones Customs compliance Export Compliance Audit Defense Transfer Pricing for customs valuation Assistance with valuation planning Detailed analyses of global trade operations to identify opportunities for savings related to duty planning and supply chain efficiency Implementation of duty drawback and tariff reengineering programs Supply chain cost efficiency program Assessing financial and operational feasibility Coordinating the application process Developing operational process and procedures manuals Assisting with training and compliance reviews Company-wide, multi-country customs compliance reviews Establishing global trade compliance policies and procedures Security program enrollment assistance Assistance with meeting the requirements of a wide range of government agencies Conducting Export Assessment Reviews Performing export control classifications Assisting with Military and Dual Use export compliance Performing transaction screening for restricted parties Developing export management systems, technology control plans Negotiations with Customs Authorities Planning for prior disclosure and penalty mitigation Assisting with Customs Audits preparation Assisting with Customs inquiries and responses Drafting policies, procedures and internal reviews Conducting customs-transfer pricing studies Obtaining customs and tax authority approval Assisting in declaration of postimportation price adjustments 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. 7

global trade operations to identify opportunities for savings related to duty planning and supply chain efficiency Implementation of duty drawback and tariff reengineering programs Supply chain cost

8 Thank you Heidi Mustonen Managing Director, Trade & Customs E: O: C:

9 kpmg.com/socialmedia The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. NDPPS The KPMG name and logo are registered trademarks or trademarks of KPMG International.

the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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Learn. Share. Achieve. More Effective Data Analytics for Trade Miami Beach, Florida May 6, 2014 2014 U.S. Cross-Border Tax Conference Notices ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN