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. 2022, InterMart, Inc. All Rights Reserved. A comprehensive Export Compliance Program reduces the chance of violating export regulations. In addition to identifying the correct Harmonized System (HS) number for your products (a number that is used to determine how much duty you must pay for the goods), you need to be aware of other types of import controls for your products, including import licenses and permits, various certificates, absolute and tariff rate quotas, and anti-dumping and countervailing duties. 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. An AES filing is also required for rough diamonds (classified under HS subheadings 7102.10, 7102.21 and 7102.31) regardless of value or destination. Even the smallest U.S. businesses that send their products to customers outside the country are subject to a variety of export regulations and could face substantial penalties for violating these rules. 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. Not only will Shipping Solutions save you time, it will improve the accuracy of your export paperwork by reducing typos and inconsistencies that slow shipments and delay payments. 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. These problems often occur because you have entered inconsistent information on the documents. 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. Resources> An Introduction to Incoterms> Free webinar: Incoterms 2020 In Practice> Incoterms 2020 for Importers and Exporters> Incoterms 2020 Rules: Chart of Responsibilities and Transfer of Risk. Depending on where you are exporting your goods and their country of origin, they may be eligible for reduced or no duties upon import. The first step for deciding whether or not a product requires an export license is to check the EAR. You also need to be willing to take action against those who infringe on your marks. These certificates of origin usually require a seal from a chamber of commerce in the originating country. Recordkeeping Requirements >Chapter VIII. By using them, you not only increase the marketing value of the marks, it makes ownership of the marks clear. 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. A Basic Guide to Exporting covers the options available and the information you need to know in order to purchase insurance. The U.S. currently has signed 14 free trade agreements with 20 different countries. That includes items sent by regular mail or hand carried on an airplane; documents transmitted by fax; software or specifications downloaded from the internet; and technology transmitted by email or shared in a phone conversation. Usually the sellers bank will send the bank draft and related documents via the freight forwarder to the buyers bank. To submit a request, fill out the commodity jurisdiction form on the DDTC website. hbspt.cta._relativeUrls=true;hbspt.cta.load(361415, 'fa1e1855-8d57-435c-b868-7dd554650e90', {"useNewLoader":"true","region":"na1"}); For a more complete explanation of these and other export documents, download the free white paper: The Beginners Guide to Export Forms. 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. Youre looking for someone you feel comfortable with, someone with whom you have a good rapport, and someone you can trust. Is the demand in the foreign market elastic or inelastic? For example, some export documentation requirements mandate five years from the date of export versus five years after the export is complete versus five years after an export license has expired. Most commercial items dont have an ECCN. 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. The Export Administration Regulations (EAR), which cover most exports that don't fall under the jurisdiction of the U.S. State Department, defines the types of records that must be retained, including: Export control documents as defined in Part 772 of the EAR, Restrictive trade practice or boycott documents and reports (read more about anti-boycott compliance here), Notification from BIS of an application being returned without action, being denied, or being reviewed, Other documents pertaining to the transaction. Thats a pretty good reason new exporters should make sure theyre avoiding potential problems when they prepare their export shipping crates. BIS cites the example of a South African businessman who tried ordering several dozen replacement switches for a medical imaging machine. You can establish partnerships with local companies. (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.). hbspt.cta._relativeUrls=true;hbspt.cta.load(361415, '03010b04-cb40-4469-b0ab-296b50136c26', {"useNewLoader":"true","region":"na1"}); Once your international buyer accepts the terms on the proforma invoice and places their order, you need to prepare your goods for shipping, including the paperwork required to accompany the goods. > Incoterms 2020 for Importers and Exporters, > Incoterms 2020 Rules: Chart of Responsibilities and Transfer of Risk, > 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. The first step in the export compliance processdetermining who has jurisdiction over your exportswill determine whether the rest of the process goes smoothly. 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. If youre shipping dangerous goods, read What You Need to Know about Shipping Dangerous Goods. When the buyer authorizes payment for the goods, the bank releases the documents to the buyer and transfers the funds to the sellers bank. 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. EAR classification is the exercise of understanding where a product falls in the Commerce Control List (CCL). If completed properly, a proforma invoice will look a lot like your final commercial invoice. register for a free, private demo of the software. Different departments and agencies define export records differently. Determine if the destination country requires an export license. These forms need to be completed by someone who has been trained to handle dangerous good shipping. This chart can help: In addition to the people involved, there are a wide variety of terms that relate to the process of moving goods through a supply chain. The United States Patent and Trademark Office (USPTO) has a number of resources available for domestic and international IP protection on their website. In addition, Shipping Solutions makes it easy to file your export information through the Automated Export System (AES) by prompting you to enter all the required fields. Research to see if your products qualify for any free trade agreements (FTA). Principal Parties in Interest (USPPI), Foreign Principal Parties in Interest (FPPI), and authorized agents such as freight forwarders. What type of marketing positioningalso known as customer perceptiondoes your company want to convey through its pricing structure? Embargoed countries are countries you are not allowed to do business with. You can sell directly to end users. Munitions List (USML). See Export Invoice vs. Accounting Invoice: Whats the Difference for more detail. If you dont anticipate and include these costs upfront, you may end up with less profit than you were hoping for. Download the free white paper that explains this process: Evaluating Export Markets: Assessing Country and Customer Risks. For more information about international trademark protection, read 5 Strategies for Exporters to Protect their Trademarks Globally. It can be a negotiable or non-negotiable document. The ocean bill of lading is used if your goods are shipping by ocean vessel. The U.S. currently has free trade agreements with 20 countries covered by 14 different treaties. 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 Basic Guide to Exporting has helpful information about planning for direct sales, as well as government agencies that can assist you. Making mistakes can be very costly for a business and is likely to result in criminal offenses. 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. The most current set of those terms, Incoterms 2020, were published by the International Chamber of Commerce. A program for handling compliance problems, including reporting export violations. Alternately, the USPPI can authorize and pay a third partyoften the freight forwarderto do the AES filing. 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. At what price should your company sell its product in the foreign market? 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. Before you can sell and export your products, you need to find people to buy them. Most importantly, they dont replace the need for a sales contract. In a foreign country, these protections may mean little, if anything. To ensure the timely movement of your goods, its important that you accurately complete a set of export documents. They should also know the sticking points regarding letters of credit and any other payment type, and be able to advise you regarding the best payment methods for your exports. You should not participate in the free trade agreement unless you are sureand can provethat the goods qualify. They dont say anything about the price to be paid or the method of payment. The FTR expands that requirement to include all parties in an export transaction including the owners and operators of export carriers, U.S. Goods that are traded at high volumes worldwide are generally not controlled. Watch the free webinar, Why You Should Start Invoicing in Foreign Currencies. Completing your export documentation can be a hassle if you dont have the right tools. It turns out these switches were going to be used as detonators for nuclear bombs. It can serve as both a contract of carriage and a document of title for the cargo. 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. Pricing is a complicated, important aspect of exporting, so make sure you do thorough research to understand how and what to charge. Export Documentation Procedures >Chapter VII. For new exporters, its easy to be so excited to get started that you skim over details and get penalized. 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. 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. 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. 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. That may mean you need to protect your inventions by filing a patent application in countries in which you plan to do business. The inland bill of lading is often the first transportation document created for your export. To avoid them, you need to know which ones they are. People are sometimes surprised by how broadly the term applies. Incoterms 2020 rules that apply to any mode of transport are: Incoterms 2020 rules that apply to sea and inland waterway transport only: Product Classification for Customs Purposes. 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. Check ITAR to see if your product is on the U.S. 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. The five most common methods of payment in international trade are consignment, open account, documentary collections, letters of credit, and cash in advance. Customs formalities have to be properly adhered to for all consignments coming into or leaving Ireland from countries outside the EU. Companies of all sizes need to be aware of their responsibilities as exporters. In addition, U.S. Customs and Border Protection (CBP) uses the data to ensure compliance with U.S. export regulations so that our countrys exports do not fall into the hands of unauthorized parties that may harm the homeland or U.S. interests abroad. A Certificate of Origin facilitates the movement of goods/shipments through customs. Adherence to recordkeeping regulatory requirements. 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.