That makes creating your export forms up to five times faster. Embargoed countries are countries you are not allowed to do business with. Civil and criminal penalties for failing to file through AES or for filing incorrect information can be up to a maximum of $10,000 per violation. Whether youre looking for a new partner or reviewing your relationship with your current freight forwarder, here are seven questions you should think about before taking action: Do I have a specialized product line or type of export? Screen all parties in your export transaction. The United States Patent and Trademark Office (USPTO) has a number of resources available for domestic and international IP protection on their website. The shippers letter of instruction (SLI) form contains the details of your shipment that the forwarder will use to successfully move your goods. That includes items that are EAR99 or otherwise don't require an export license based on the country of export. Determine if the destination country requires an export license. The five most common methods of payment in international trade are consignment, open account, documentary collections, letters of credit, and cash in advance. According to BIS, An Export Compliance Program analyzes pieces of information and individual decisions and builds them into an organized, integrated system. The U.S. currently has signed 14 free trade agreements with 20 different countries. In other cases, the U.S. restricts companies and individuals from exporting certain products to specific countries for reasons of national security, nuclear nonproliferation, chemical and biological weapons, or one of several other reasons outlined in the EAR. 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. Twenty years ago, it took some effort to become an exporter. We detail the entire process in our white paper, How to Create and Implement an Export Compliance Program. 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. Companies can face fines, lose their export privileges, and, in the most egregious cases, see people go to jail. If your product is not on any of these lists, its EAR99. That includes determining how you will support your productsa critical factor if you want to be a successful exporter with a good reputation. International Commercial Terms (INCOTERMS)provide globally recognised rules for the interpretation of the most commonly used trade terms. The ocean bill of lading is used if your goods are shipping by ocean vessel. 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. Identify how you will support your products. This is a cost-effective, time-saving option for most exporters. When working with a foreign distributor, expect to have fewer responsibilities for support and service; the distributor will take care of these aspects, which can be challenging for new exporters. 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. 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. To make sure you get paid, you need to find an international banking partner and understand your payment options. 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. Typically, the goods are wholly obtained or produced within one of the countries of the agreement, or they are substantially transformed in one of the countries. To avoid them, you need to know which ones they are. The information you file is called Electronic Export Information (EEI). It can be a negotiable or non-negotiable document. Most countries have a first to file system, so you want to file early, perhaps by using a provisional patent application. It is imperative to have accurate export documents. What you think may be the most inexpensive, efficient way to carry your exports may not be. In cases where an export violation may have occurred, due diligence is a strong mitigating factor that could protect you from excessive fines or penalties such as loss of exporting privileges or jail time. Should your prices differ by market segment? 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. In this case, the FPPI must authorize a U.S. agent to prepare and file the electronic export information (EEI) in one of two ways: The FPPI can authorize the USPPI to file the EEI. For example, if you have two items in your shipment with the same Schedule B number valued at $2,000 each for a total of $4,000, and both are of domestic origin or both of foreign origin, you do need to file through AES. An increasing number of companies are foregoing the time and expense of hand-delivering their certificates to a chamber and are relying on electronic certificates of origin (eCO) for their exports. 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. 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. Ideally, you should register your trademarks in every country where you want your mark protected. Thats a huge riskespecially if youve just entered the name of a form in Google and selected the first template you came across! 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. But these terms arent valid for your international shipments, because most of the world relies on a set of shipping terms called Incoterms. When you use Word and Excel for your export documentation forms, you are taking the chance that the template is outdated or missing required information. Alternately, the USPPI can authorize and pay a third partyoften the freight forwarderto do the AES filing. Resources> An Exporter's Guide to Product Classification> The Harmonized Tariff Schedule: Beyond the General Rules of Interpretation> Doing It by the Book: Classifying Your Goods for International Trade> Whos Responsible for Classifying Your Products for Import and Export? One of the first things to confuse new exporters is the difference in the type of trade terms that are commonly used in international trade versus domestic sales. 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. Traditionally, determining proper pricing depends on costs, market demand, and competition. The U.S. government, as well as several other governments and organizations like the United Nations and the European Union, publish lists of restricted parties to whom you can't export without a license. BIS cites the example of a South African businessman who tried ordering several dozen replacement switches for a medical imaging machine. Export Documentation Procedures >Chapter VII. 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). And even if they do qualify, there may be times when it makes sense to opt out and not choose to participate. You may also want to consider pricing your exports in the local currency. Formal written export management and compliance program. You can check the USML online. Using Export Software to Increase the Accuracy and Efficiency of Your Export Documentation and Compliance Process. Arab-Irish Certificates of Origin are issued jointly with the Arab-Irish Chamber of Commerce and have to be certified and in some cases legalised by the Joint Arab Irish Chamber of Commerce following certification by Fingal Dublin Chamber. Make sure you understand the risk factors in potential new markets. Exports from the U.S. to Canada dont require an AES filing regardless of the value of the merchandise unless the item is a self-propelled vehicle, or an export license or license exception is required. 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. When the buyer authorizes payment for the goods, the bank releases the documents to the buyer and transfers the funds to the sellers bank. Shipping Solutions export documentation software makes it quick and easy to create accurate export documents by eliminating redundant data entry, properly formatting the correct information on each of the forms, and ensuring consistent information. 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. Figure out a way to service your product locally. For more details about patent protection, read 4 Strategies Exporters Should Use to Protect their Patents Globally. Most exporters are familiar with the Harmonized System (HS) or Schedule B codes used to classify products for duty, quota and statistical purposes. Depending on where you are exporting your goods and their country of origin, they may be eligible for reduced or no duties upon import. People are sometimes surprised by how broadly the term applies. A comprehensive Export Compliance Program reduces the chance of violating export regulations. Today, primarily due to the internet, you can market your products and services around the globe without even trying. For more information about license exceptions, refer to the article, What You Need to Know about Export License Exceptions. However, even EAR99 items require licenses for exporting to embargoed countries, to a restricted party, or in support of a prohibited end use. Self-classification is an important responsibility that you cant take lightly. Implementing Export Compliance Procedures, Chapter VI. In addition, criminal violators may be sentenced to prison for up to 20 years, and administrative penalties may include denial of export privileges. Companies use these reasons to help them determine if they need to apply for an export license based on the countries to which they are exporting. 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. The regulations for shipping hazardous materials and dangerous goods are complicated, which you can learn about here. A bank draft is an important part of getting paid for your exports under a documentary collection. In other words, by reporting your exports to AES, your information is included in the economic indicators and Gross Domestic Product (GDP) of our nations economy. 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. Creating an Export Compliance Program for your company does require some work, but it is absolutely worth it for the health of your company. The export restrictions outlined in the EAR don't just apply to products being shipped outside the U.S. Companies are exporting technology simply by sharing technical data, such as plans and blueprints of products, or by allowing a visual inspection of a product to foreign nationals within the U.S. However, they can only act as an agent for the Principal Shipper, who remains fully responsible for legal requirements, proper documentation, customs clearance and duty payments, etc. If indicated, companies must apply to BIS for an export license through the online Simplified Network Application ProcessRedesign (SNAP-R) before they can export their products. Products that may face growing competition in the U.S. or products that are becoming outdated in this country could find new life in other markets that dont have similar competition or need the very latest technology. Does the price reflect your products quality? Penalties of this size and nature can be especially devastating to small and medium-sized businesses, which represent 97% of the approximately 300,000 U.S. companies that export, according to U.S. Census Bureau statistics. Resources> 5 Reasons to Invest in Export Documentation Software> 10 Time-Saving Tips for Creating and Organizing Your Export Documents. 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. You should also consult with international insurance carriers or freight forwarders for more information about your specific goods. Most exporters never plan on doing something wrong in the eyes of the law. Using your trademarks is an important factor in protecting it. a successful exporter, not an accidental one. If a product has a specific ECCN, the EAR will also list one or more reasons why it is controlled. Depending on what, how and where youre exporting, you may need to prepare several different export forms. If you have any questions or doubts, apply for a commodity jurisdiction request to help you understand jurisdiction. 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. Do the product content and country of origin need to be included? At what price should your company sell its product in the foreign market? 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. Using one tool for all your exporting needs shows that youre serious about becoming a successful exporter, not an accidental one. Like all good compliance programs, your decision-making process should be documented. Even once those five years are up, you still may not be able to toss the records. commodity jurisdiction form on the DDTC website. 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. They dont say anything about the price to be paid or the method of payment. It is a program that can be established to manage export-related decisions and transactions to ensure compliance with the EAR..
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