Dave McGuire Senior Manager, International Trade Global Logistics

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Dave McGuireSenior Manager, International
TradeGlobal Logistics

• Import Licensing for Information Technology
  Products
• July 16, 1999

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Nortel NetworksGlobal Trade Activity

• Export to more than 160 Countries
• Many ITA Signatory Countries
• Manufacture in 10 Countries
• 1998 Revenues US18b

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INFORMATION TECHNOLOGY AGREEMENTPHASE I

• Nortel Endorses the ITA
• Encourage other Countries to Participate
• Duty Reduced to Zero by Year 2000
• Lower Costs to Importer and Consumers
• Encourage other Initiatives Intended to Ensure
  Smooth Delivery of Goods to Customers

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IMPORT LICENSING

• Required by some Countries prior to Import
• May be Reviewed by Many Government Departments
  Prior to Approval
• Administrative Burden
• Adds to Delivery Time
• Clerical Errors Delay Delivery
• No value seen by Importer or Exporter

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IMPORT LICENSING

• Tariff Classification Required on License
• H.S. Code based on Product Description
• Buyers Interpretation may be Different from
  Sellers Description
• Classification Interpretation not Consistent in
  all Countries
• LAN/WAN Equipment
• Results in Delays if the is a Discrepancy
• License must be amended
• Goods remain in Storage ()

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IMPORT LICENSING

• Product Descriptions
• Marketing Brochure, Purchase Order, Engineering
  Description, Customs Description, Import License
  Description.
• Inconsistent Description Leads to
  Misinterpretation and Delays
• Adds Costs not Value

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IMPORT LICENSING

• Customs Clearance
• Seller may make Partial Shipment
• Delay in Release While Import License is Matched
  to other Customs Documents
• No Customs Release if License does not Match
• Storage Charges Incurred While License is
  Corrected
• Adds Cost not Value

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IMPORT LICENSINGRECOMMENDATION 1

• Eliminate Import License Requirement for ITA
  Eligible Goods
• Reduced Administrative Burden
• Simplifies the Import Process
• Demonstrates the spirit of the ITA
• Open Market for Technology Products

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IMPORT LICENSINGRECOMMENDATION 2

• Simplify Import License Requirement for ITA
  Eligible Goods
• Eliminate Multiple Department Review
• Reduce the Number of Reporting Fields
• Permit Flexibility in Modifying License to
  Correct Errors