The U.S. Foreign Trade Regulations hold you, the exporter, liable for the accuracy of the information that is filed through AESeven if you are paying a third party to file on your behalfso its best to handle it yourself. Does the price reflect your products quality? Make sure your bank can help you. These problems often occur because you have entered inconsistent information on the documents. The CCL describes dual-use items (items that may be used for both commercial and military purposes). However, the only sure way to know is to check the Commerce Control List (CCL) in the EAR. It is also inconvenient for the foreign buyer, who is then saddled with high shipping costs and doesn't get to use your product for an extended amount of time. For example, companies may not export to certain entities involved in the proliferation of weapons of mass destruction (e.g., nuclear, biological, chemical) and the missiles to deliver them without specific authorization, no matter what the items are. Just as with freight forwarders, make sure youre asking questions, not just partnering with the first company you meet. Incoterms 2020 rules identify when the responsibilities for the goods transfer from the seller to the buyer, as well as when the liability for the goods transfers. You simply enter your information one time, and the software automatically formats and places the data in the right places on all your exporting documents. Are weights and measures stated in the local units? The air waybill is required for shipments by air. Unless a business is absolutely certain of its determinations, the business would be advised to submit an application to DDTC to determine the jurisdiction of the item. BIS publishes a list of red flags that could indicate a product may be destined for a prohibited use. See NAFTA vs. BIS has published a book, Don't Let This Happen to You, which outlines exporters' compliance responsibilities and includes real-life examples of penalties they have recently issued against individuals and businesses. The BIS considers that a strong mitigating factor when determining penalties. Once youve done your background research, use our Export Controls Wizard to find out more about your specific products requirements. Five years is the standard for most agencies that have a hand in exporting, including the Bureau of Industry and Security (BIS), U.S. Census Bureau, U.S. Customs and Border Protection (CBP), the State Departments Directorate of Defense Trade Controls (DDTC), the Office of Foreign Asset Controls (OFAC), and other agencies. Part 762 of the Export Administration Regulations, maintain export documentation for at least five years, the types of records that must be retained, read more about anti-boycott compliance here, International Traffic in Arms Regulations (ITAR), > 5 Reasons to Invest in Export Documentation Software, > 10 Time-Saving Tips for Creating and Organizing Your Export Documents. Shipping Solutions Product Classification Wizard. Unfortunately for many small- and medium-sized businesses, company personnel may not know about these requirements until it's too late. Companies are responsible for knowing how their products will be used once they leave the country. But these terms arent valid for your international shipments, because most of the world relies on a set of shipping terms called Incoterms. They are the voluntary, authoritative, globally accepted, and adhered-to rules for determining the responsibilities of buyers and sellers for the delivery of goods under sales contracts for international trade. That makes creating your export forms up to five times faster. This strategy helps you obtain the broadest possible protection. The Irish market for almost any product or service is so small that, if you want to grow a business of any significant scale, you will need to look for markets and customers outside Ireland.To do this you will have to know how to prepare export documents and apply for licenses where required. That includes determining how you will support your productsa critical factor if you want to be a successful exporter with a good reputation. hbspt.cta._relativeUrls=true;hbspt.cta.load(361415, '932e45e9-f648-4cb7-ac2f-e98c00463ee0', {"useNewLoader":"true","region":"na1"}); Some countries require a certificate of origin to identify the appropriate duty rates to apply to the goods upon import clearance. Check ITAR to see if your product is on the U.S. The free Beginners Guide to Export Forms white paper explains more than 20 of the most common export forms and the typical information required on each. What Is an Export? A classification will determine whether an export license is required based on the destination of the product. The jurisdiction sets the stage for the actions you can and cant take, and determines what type of export restrictions or licensing requirements you may face. An item is also considered an export if it is leaving the U.S. temporarily, or if it is being returned to a foreign country. Partnering with such a company can make entering a new market easier and lessen the cost and pain of setting up infrastructure in another country. Even if they do have the necessary experience and training, export personnel may not have the support of senior management, who are often totally unaware of U.S. export regulations. There are several reasons the U.S. government prevents exports to certain countries without an export license. They provide services such as consolidation, handling, packing, storage, picking anddistribution of goods. If completed properly, a proforma invoice will look a lot like your final commercial invoice. Exports are subject to the various U.S. export regulations that govern the movement of goods, and you can face substantial penalties for violating those regulations. The answers to your questions about freight forwarders will help you identify if your relationship is as functional and profitable as it could be. For example, companies should be reasonably suspicious when orders are inconsistent with the needs of the purchaser; when a customer declines installation and testing that is included in the sales price or is normally requested; or when requests for equipment configurations are incompatible with the stated destination. You should also re-file your application every time you make a substantive change to your invention during the development cycle. All countries have various levels of risk associated with them. Shipping Solutions Professional export documentation and compliance software, Simplified Network Application ProcessRedesign, > What You Need to Know About Export Compliance, > Export Compliance: Understanding Restricted Party Screening, > EAR99 Isnt a Free Pass for Export Compliance, > Export Compliance: The Importance of Knowing End Use and End Users, > How to Determine If You Need an Export License. It can serve as both a contract of carriage and a document of title for the cargo. This includes identifying the market potential, learning how to properly (and legally) export your products or services to that market, identifying sales channels, and more. The U.S. currently has free trade agreements with 20 countries covered by 14 different treaties. Companies are required to file electronically using a system called AESDirect, which is accessed through the Automated Commercial Environment (ACE). This is an expensive option. Companies of all sizes need to be aware of their responsibilities as exporters. Certain agencies and departments date the documentation differently. If a government agency requests information pertaining to a particular export shipment before the five-year period is up, you must continue to keep all the records related to that shipment until you have written authorization to destroy them. Its used to move your goods to the ocean port or airport for transport out of the country to the buyers destination. >Chapter II. Items subject to the EAR that are not elsewhere specified are designated by the number EAR99. Once youve completed all of the above steps, youve still got a way to goyou now need to fill out the documentation and supporting paperwork that will accompany your goods on their export journey. In most cases, the filing must be done from one to 24 hours prior to the actual export of the shipment depending on the method of transportation. Export Documentation Procedures >Chapter VII. Your freight forwarder may use the information to create the necessary bills of lading. Explore all your options to find the most economical and efficient combination. It needs to include a lot of the details discussed in earlier chapters of this guide, including the Incoterms 2020 rule you agreed upon with the buyer; the proper product classifications; export license requirements, if any; and letter of credit or other banking information you need to get paid. Most exporters are familiar with the Harmonized System (HS) or Schedule B codes used to classify products for duty, quota and statistical purposes. Some of these end uses are prohibited while others may require an export license. By using them, you not only increase the marketing value of the marks, it makes ownership of the marks clear. Many exporters dont realize the importance of protecting and enforcing their intellectual property (IP). ECCNs specifically identify items that are subject to U.S. export control regulations, and may require an export license. You can also import orders from your accounting or ERP software so the data comes through exactly how it is stored in your ERP system. Additionally, companies like CARGOpak can help you get effective hazmat and dangerous goods training through on-site DOT Hazardous Materials (hazmat) compliance training classes and seminars. The U.S. does not use HTS or Schedule B codes for export control purposesinstead, there are two specific classification types that deal with export compliance: Export Control Classification Number (ECCN) and U.S. According to the Census Bureau, electronic filing of the export information improves the governments ability to monitor and prevent exports of critical goods and technologies that may threaten our national security and significantly improves the quality and timeliness of export statistics. For example, a Low Value exception may mean you dont need to apply for an export license if the value of the export is below a certain dollar threshold. The export forms included with Shipping Solutions software are kept up to date and follow industry best practices. This site is managed by the Directorate-General for Taxation and Customs Union, Follow the European Commission on social media, Buying goods and services online for personal use, Central Electronic System of Payment information (CESOP), Online services and databases for Customs, Online services and databases for Taxation, Economic Operators Registration and Identification number (EORI), Online services and databases for Customs - REDIRECTION, Customs Transit: ATA - Temporary admission, Customs Transit: NATO and other military activities, Customs Transit: Post including parcel post, TIR (Transports Internationaux Routiers, International Road Transport). Its important that you create accurate export forms, or else your goods could get stuck in customs, you may have difficulty getting paid on time, and you could be violating export and import regulations, which could result in fines or other penalties. Ideally, you should register your trademarks in every country where you want your mark protected. If you have any questions or doubts, apply for a commodity jurisdiction request to help you understand jurisdiction. Could be classified as a defense article or defense service. It is a program that can be established to manage export-related decisions and transactions to ensure compliance with the EAR.. An AES filing is also required for all exports that require an export license from the U.S. Commerce or State Departments regardless of value. While there is absolutely nothing wrong with outsourcing the export functions, companies must realize they cannot outsource their liabilities. You can sell to distributors who purchase goods from you (often at a discount) and resell them for a profit. If you have a product that is selling well in the United States, its not unusual to attempt to sell that same product or products in other markets as well. Twenty years ago, it took some effort to become an exporter. In a foreign country, these protections may mean little, if anything. Sign up for a free online demo at www.shippingsolutions.com/demo-request. When the buyer authorizes payment for the goods, the bank releases the documents to the buyer and transfers the funds to the sellers bank. Alternately, the USPPI can authorize and pay a third partyoften the freight forwarderto do the AES filing. Part 746 of the EAR describes embargoed destinations and refers to certain additional controls imposed by the Office of Foreign Assets Control (OFAC) of the Treasury Department. Understand and correctly apply Hazmat requirements if appropriate. Furthermore, Incoterms dont deal with the transfer of ownership of the goods, breach of contract, or product liability; all these issues need to be considered in the contract of sale. What options are available if your firms costs increase or decrease? An Export Compliance Programgives you a clear plan of how to audit your company's procedures and processes yourself, so you can identify and address any potential violations before they even surface. However, if half of it is of foreign origin and half domestic origin, then you do not need to file because the items by Schedule B number and by origin are only valued at $2,000 each. This documentation can be used to demonstrate compliance with the EAR or, in case violations are found by the U.S. government, be used as evidence of a good-faith effort to comply, which could result in reduced penalties. Small- and medium-sized businesses may think they lack the time or money to train personnel in export regulations, and downplay the necessity of compliance screening. Pricing is one of the most difficult challenges for exporters, even experienced ones. Principal Parties in Interest (USPPI), Foreign Principal Parties in Interest (FPPI), and authorized agents such as freight forwarders. While the following six steps are by no means all-inclusive, they should provide companies with a starting point for implementing an export compliance plan. If suspicion has been raised, a company should refrain from carrying out the transaction until an export license application has been submitted to and issued by BIS. The FPPI can authorize their U.S.-based agent (typically the freight forwarder) to prepare and file the EEI. If you dont anticipate and include these costs upfront, you may end up with less profit than you were hoping for. Making mistakes can be very costly for a business and is likely to result in criminal offenses. (If you dont know much about intellectual property protection, you may want to start by reading: 10 Terms You Need to Know about Intellectual Property. As a general rule (outlined in Part 762 of the Export Administration Regulations), export regulations require you to maintain export documentation for at least five years after an export transaction is complete. You can hire existing local service facilities or create an office to provide service in-country. But limiting your exporting to only your fastest selling products in the U.S. may be limiting your export potential. Screen all parties in your export transaction. >Chapter I. While there is no requirement that companies check every export against these various restricted party lists, it is a violation of export regulations to export to anyone on the U.S. lists. Your bankers need to know the details about each type of document and supporting information you need in order to facilitate a smooth letter of credit. International Commercial Terms (INCOTERMS)provide globally recognised rules for the interpretation of the most commonly used trade terms. The basic purpose of each INCOTERM is to clarify how functions, costs and risks are split between the buyer and seller in connection with the delivery of the goods, as required by the sales contract. Customs formalities have to be properly adhered to for all consignments coming into or leaving Ireland from countries outside the EU. Do the product content and country of origin need to be included? After all, 95% of the worlds consumers are located outside the U.S. And many areas of the world, like Asia, have a rapidly growing middle class. In addition, companies like International Business Training offer a variety of books, webinars and seminars on export rules and procedures. Thousands of successful exporters use Shipping Solutions to complete their export forms up to five-times faster than preparing them by hand or by using Excel or Word templates. They dont say anything about the price to be paid or the method of payment. You can establish partnerships with local companies. Also, Incoterms cant override any mandatory laws. However, exporters are often less aware of the requirement that they determine whether or not their products are controlled for export by the Department of Commerce or the Department of State. The Directorate of Defense Trade Controls (DDTC) has a decision tool that can help exporters identify the steps they need to follow when reviewing the U.S. Resources> What You Need to Know About Export Compliance> Export Compliance: Understanding Restricted Party Screening> EAR99 Isnt a Free Pass for Export Compliance> Export Compliance: The Importance of Knowing End Use and End Users> How to Determine If You Need an Export License> 3 Epic Fails in Export Compliance. Your company trademarks and trade names are an important asset in the global business economy. the U.S. Commercial Service can help you find and select distributors, United States Patent and Trademark Office (USPTO), Determining which of your products are subject to export regulations is one of the first. You can either visit them in a local office, or you can check out the country guides on the International Trade Administration website. If the buyer, called the Foreign Principal Party in Interest (FPPI) under the FTR, is responsible for shipping the goods out of the United States, this is called a routed export transaction. Using one tool for all your exporting needs shows that youre serious about becoming a successful exporter, not an accidental one. You can do this manually via the Federal Register, but be aware that the number of lists to be checked is large. Today, primarily due to the internet, you can market your products and services around the globe without even trying. Your potential new customer may need a proforma invoice to arrange for financing, open a letter of credit, or apply for an export license. Determine if the destination country requires an export license. While most companies use a variant of FOB as the trade term of choice within the U.S., there are currently 11 different trade terms, called Incoterms 2020, that are used internationally. individuals, businesses and other organizations that have been identified as engaging in activities, answers to your questions about freight forwarders, you and the employees who will be dealing with these goods are thoroughly trained, An Introduction to Shipping Dangerous Goods, download PDF samples of the export documents. If the CCL indicates that an export license is required, companies should check the ECCN in the EAR to see if a license exception may be available. Interview several bankers from multiple banks. Your company must be registered with the State Department, and you must apply for an export license through the State Department. But just because its as easy for someone in Tunisia to order your products online as it is for a person in Topeka, it doesnt mean youre ready to be a successful exporter. A well written Export Compliance Program can substantially reduce penalties if your company violates export regulations, as long as you can document that you regularly follow the written Export Compliance Program procedures. The seller attaches the various required documents to the bank draft and presents it to the bank to get paid. People are sometimes surprised by how broadly the term applies. Munitions List (USML). To ensure the timely movement of your goods, its important that you accurately complete a set of export documents. Each of the 14 different agreements have different rules of origin for determining whether or not your product qualifies under the agreement. This is crucial to your success, because any errors (even simple typos) in your paperwork could delay shipments and your payday. Do I need a dedicated account representative? Whos Who in Your Export Journey >Chapter III. Youre looking for someone you feel comfortable with, someone with whom you have a good rapport, and someone you can trust. Pricing is a complicated, important aspect of exporting, so make sure you do thorough research to understand how and what to charge. Depending on where you are exporting your goods and their country of origin, they may be eligible for reduced or no duties upon import. For example, under the Incoterms 2020 rule Carriage Paid To (CPT), the seller is required to arrange and pay for the cost of delivering the goods to a designated location on the buyers side of the international transport, but liability for the goods passes to the buyer when the goods are made available to the carrier before the international journey takes place. The commercial invoices you prepare for your export shipment will probably include a lot more detail than the invoices you create from your accounting system for your domestic orders. This is called a deemed export, for which companies must follow the same procedures outlined in steps #1 through #4 above. Once they know why their products are controlled, exporters should refer to the Commerce Country Chart in the EAR to determine if a license is required. Creating an Export Compliance Program for your company does require some work, but it is absolutely worth it for the health of your company. Munitions List (USML). You can find out more about embargoed countries and export regulations in our articles, Six Basic Steps for Export Compliance and The Three Rs of Export Compliance. It turns out these switches were going to be used as detonators for nuclear bombs. It is the job of the Office of Export Enforcement within the U.S. Department of Commerce and U.S. Customs and Border Protection within the Department of Homeland Security to investigate and enforce these rules. You may also want to consider pricing your exports in the local currency. Finally, releasing technology or data to a foreign national located in the U.S. is also deemed to be an export. To learn what each term means, use our glossary of international shipping terms. The Ear and ITAR require that these records be maintained for five years from the expiration of the export license or from the date of the transaction when using an export license exemption. Before you dive deep into the Commerce Departments Export Administration Regulations (EAR) or the State Departments International Traffic in Arms Regulations (ITAR), you should know which set of regulations you need to be concerned with and which agencys guidelines you must follow. Businesses that are already exporting or planning to start exporting need to follow some basic steps to ensure they comply with U.S. export regulations. See also, The Importance of an Export Packing List for Your International Shipments. Make sure you understand the risk factors in potential new markets. Items designed for military use most likely fall under the jurisdiction of the U.S. State Departments Directorate of Defense Controls (DDTC) and the International Traffic in Arms Regulations (ITAR). Shipping SolutionsA Division of InterMart, Inc.1400 Corporate Center CurveSuite #130Eagan, MN 55121Phone: 651-905-1727Fax: 651-905-1827Toll Free:888-890-7447, Export Procedures and Documentation: An In-Depth Guide. The appropriate Schedule B description of commodities; The appropriate quantity and unit of measure; The appropriate export control classification number (ECCN) or enough technical information to determine the ECCN. Whos Who in Your Export Journey, Chapter IV. To make sure you get paid, you need to find an international banking partner and understand your payment options. These documents will make sure the people transporting your goods know where they are going. It should serve as a starting point for creating a more comprehensive, written export compliance plan. Just as there may be restrictions on exporting your goods from the United States, there may be limits or prohibitions about importing goods into your chosen market(s). If you dont see your product on the USML, then it may be under the jurisdiction of the U.S. Department of Commerce'sBureau of Industry and Security (BIS); these items require EAR classification prior to export. (To make it easier to stay in compliance and save precious time, try our Restricted Party Screening Wizard for free, so you can be sure that you are accessing the most current information available.). Be carefulfive years isnt quite as straightforward as it sounds. Appropriate corrective actions in response to export violations. Shipping Solutions Professional export documentation and compliance software includes an Export Compliance Module that tell you if an export license is required or a license exception is available based on the products ECCN code and the destination country. The EAR also identifies the dozens of records that are exempt from recordkeeping requirements. Understanding the different types of shipments and related terms is crucial to ensure your goods get shipped on-time, within compliance, and in good shape. Freight forwarders can ensure speedy and successful customs clearance, calculation of VAT and Customs duty and prompt payment to Customs and Excise, thus avoiding extra costs or penalties. Unfortunately for many small- and medium-sized businesses, company personnel may not know about these requirements until it's too late. A misstep here could very well lead to severe fines, loss of export privileges, and even land you in jail. Here are eight common export documents that may be required for your international shipments: In a typical international sale, the process usually begins with a request from the buyer. use our Export Controls Wizard to find out more about your specific products requirements. Resources> 5 Reasons to Invest in Export Documentation Software> 10 Time-Saving Tips for Creating and Organizing Your Export Documents. The software stores your company, customer and product details, so you dont have to retype them for every shipment. Fingal Dublin Chamber is officially registered by the Department of Trade & Enterprise and Chambers Ireland to issue and certify export documentation such as Certificates of Origin (EU Certs & Arab- Irish Certs), invoices, company documents and additional documentation.
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