EXPORT

EXPORT-IMPORT

FREQUENTLY ASKED QUESTIONS

Q: Where can I get lists of foreign buyers?

A: Here are places to start:

Call the local office of the U.S. Department of Commerce, International Trade Administration, located in most large cities. They have several programs available to help locate potential foreign customers. You can find your nearest office by calling (800) USA-TRADE ((800) 872-8723). Or go to the website www.export.gov

Also contact your state Department of Commerce. When you visit, have a specific product and country in mind in order to make your time worthwhile.

At your public library, there should be an internet-based source called the National Trade Data
Bank with some 70,000 leads available to you, as well as much additional information on exporting.

Q: Where can I get lists of manufacturers and product sources overseas?

A: Contact the Consulate of that country in the United States and ask to speak to the
trade officer. The Consulate can supply you with lists of companies in the home country,
or distribute your name and address to them.

Q: How do I handle freight arrangements on international shipments?

A: Contact a Freight Forwarder, listed under that classification in telephone directories.

Q: How do I handle Customs clearance on an import shipment?

A: Contact a Customs Broker. Lists of licensed Customs Brokers are available from any office of U.S. Customs and Border Protection. (www.cbp.gov)

Q: How are payments handled?

A: Wire transfers, drafts, letters of credits, international bank checks in all major
currencies. Further information can be obtained from an international banking
department. These departments are at the main offices of most large banks.

Q: How does a letter of credit work?

A: The buyer (applicant) applies to his bank (issuing bank) to issue a letter of credit to a
bank (advising bank) in the seller's country made out to the seller (beneficiary). The
funds are payable if and when the seller presents documents showing he has fulfilled the
conditions of the letter of credit within the time permitted.

Q: What about export licensing?

A: For U.S. companies, most export licensing generally involves hi-tech products,
weapons, and goods in short supply. There are also embargoes, denied persons, and
other licensing questions to consider. Export clearance, however still must be obtained
by the exporter, and a declaration must usually be filed. Revised Export Administration
Regulations were effective in 1997, with major changes from the old rules. Information
is available at www.bis.doc.gov (Bureau of Industry and Security, part of the U.S. Department of Commerce). BIS issues an EAR license for export.

Another major export licensing agency is the Directorate of Defense Trade Controls at www.pmddtc.state.gov (Part of the U.S. State Department). The regulations enforced here are ITAR, the International Traffic in Arms Regulations. DDTC issues a DDTC license for export.

OFAC licensing is from the Office of Foreign Assets Controls, at www.ustreas.gov/ofac

Some call these approvals "compliance licensing" but it is properly "export licensing."

Q: What are the EAR, CCL, ECCN?

A: These are the Export Administration Regulations, which are volume 15 of the Code of Federal Regulations. Within the EAR is the CCL, which is the Commerce Control List of articles and technology specifically controlled by the EAR. Each listing is an ECCN, which is an Export Commodity Classification Number. This "Export Number" such as 5A001, are the specific identifier for the controlled article or technology, but is properly called the ECCN.

Q: How does the Shipper's Export Declaration work?

A: Historically, this is a form which a U.S. exporter was responsible for filing with the U.S. government on substantially all shipments valued more than $2500, except to Canada, and all shipments which require an export license, including to Canada.

This system has been replaced by an electronic filing, called "Automated Export System." The electronic filing will be mandatory for all shipments for which filing is required. (Information is at http://www.census.gov/foreign-trade/aes/index.html ) Information on AESDirect, which is free software an exporter can use, is at www.aesdirect.gov.

As a practical matter, most freight forwarders file electronically for their customers, and have been doing so for some time, but the exporter is ultimately responsible that the information is filed correctly. Many exporters continue to use the Shipper's Export Declaration as a worksheet to send the information to the forwarder.

Here is a .pdf copy of the Shipper's Export Declaration: Shipper's Export Declaration

Here is a .pdf copy of the Correct Way to Complete the Shipper's Export Declaration

Q: What is the Harbor Maintenance Fee and how does it affect me?

A: If you are a U.S. exporter by ocean, you were at one time obligated to pay a fee to U.S. Customs equal to .125% (1/8 of one percent) of your invoice value. This has been declared unconstitutional by the U.S. Supreme Court in U.S. Shoe versus United States.

The fee was not contested in court as an import fee and is still collected by Customs on imports by ocean. It is collected with the duty as part of your entry.

The issue before the court was that this was not a fee, but, in essence a duty. Article I of the U.S. Constitution states that the federal government cannot levy an export duty. Import duties are constitutional.

Q: What is the difference between an informal and a formal entry?

A: In the United States, there is a dividing line between the "usual" procedure of a formal
entry which requires a bond, and an "abbreviated" procedure which is called an informal
entry. Generally, shipments with a value of US $2,500 and less can be cleared under an informal
entry and higher value shipments must be cleared under a formal entry. A
Customs Broker (your local US Customs and Border Protection office can give you further
information, or you can do an internet search. You should retain a broker on all import shipments. Entries of
merchandise under import quotas, and some other types of merchandise, must go as
formal entries.

On January 7, 2013 the dividing line was changed from the previous US $$2,000.00, so this threshold is subject to change. The previous change was from $1,250 to $2,000 in 1999.

Q: What is an NVOCC?

A: "NVOCC" stands for "Non-Vessel-Operating-Common-Carrier" which is a
consolidation ocean carrier that does not operate its own steamships. Another acronym
is "OTI" for "Ocean Transportation Intermediary." They buy space wholesale from the
steamship lines and sell it retail to their customers. Many NVOCC's are owned by
parent companies which also operate forwarders and customs brokers. See also pages
108-109 of Export-Import for information on the advantages of using an NVOCC instead of direct-steamship.

Q: What is an Express Release Bill of Lading?

A: An express cargo bill (or seawaybill, or express release bill). The synopsis is: there is no original bill of lading. Or, if you will, the original is in the computer. Everything else is a copy.

After shipment, you can fax the express cargo bill, invoice, and packing list direct to the buyer, and airmail hard copies which should still arrive before the shipment. Should the hard copy express cargo bill not get to destination in time, the destination steamship line or NVOCC can print one out as there is no requirement to protect an original--which doesn't exist, anyway.

Because the buyer can get the shipment without an original bill of lading, this should be used for prepayment or open account, but not for documentary credits or documentary collections.

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Further information on these and many other subjects can be found in Joseph Zodl's book, Export-Import: Everything You and Your Company Need to Know to Compete in World Markets.

For more information, click the book cover: