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Documentary Requirements Exporting involves a lot of paperwork. All required documentation must be fully and precisely completed. Even slight discrepancies or omissions could nullify a transaction. Given the burden and risk, most exporters use freight forwarders to handle required documentation.
The following documents are most often required in exporting, either for each export shipment or for certain products (for sample documents, see Transportation Documentation and Appendices indicated below):
- U.S. Shipper's Export Declaration (Appendix F2).This document is required by the U.S. to control exports and compile trade statistics. It must be prepared and submitted to the U.S. customs agent for mail shipments valued above $500 and for all other shipments valued above $2,500. Other countries may use a comparable document for these purposes.
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- Export Packing List (Appendix F3). An Export Packing List is more detailed and informative than a standard domestic packing list. It itemizes the material in each individual package and indicates the type of package: box, crate, drum, carton, and so on. It shows the individual net, legal, tare, and gross weights and measurements for each package (in both U.S. and metric systems). Package markings should be shown along with the shipper's and buyer's references. The packing list should be attached to the outside of a package in a waterproof envelope marked "Packing List Enclosed." The list is used by the shipper or forwarding agent to determine the total shipment weight and volume and whether the correct cargo is being shipped. In addition, customs officials (both U.S. and foreign) may use the list to check the cargo.
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- Ocean Bill of Lading and Air Waybill (Appendix F4, 5). Bills of lading are contracts between the owner of the goods and the carrier. Bills of lading come in two types. A straight bill of lading is non-negotiable. A negotiable, or shipper's order, bill of lading is used for letter-of-credit transactions and can be bought, sold, or traded while goods are in transit. The customer usually needs the original or a copy as proof of ownership to take possession of the goods.
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- Dock Receipt and Warehouse Receipt (Appendix F6). These receipts are used to transfer accountability when the export item is moved by the domestic carrier to the port of embarkation and left with the international carrier for export.
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- Insurance Certificate (Appendix F7).If the seller provides insurance, the insurance certificate states the type and amount of coverage. This instrument is negotiable.
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- Consular Invoice (Appendix F8). Some countries require a consular invoice used to control and identify goods. The invoice must be purchased from a local consulate of the destination country and usually must be prepared in that country's language.
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- Certificate of Origin (Appendix F9). Some nations require a signed statement as to the origin of the export item. Such certificates are usually obtained through a semiofficial organization such as a chamber of commerce. A certificate may be required even though the commercial invoice contains the information.
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- Inspection Certification (Appendix F10). Some purchasers and countries may require a certificate of inspection attesting to the specifications of the goods shipped. A third party prepares this certificate. Inspection certificates are often obtained from independent testing organizations.
Regulatory Requirements All countries control their exports and imports in some form. Exporters need to comply not only with their own country’s export regulations, but also the procedural requirements imposed by the importing countries.
Export controls are generally less burdensome, because most countries want to encourage, not discourage exports. Export controls are mainly used to prevent “denied” persons and unfriendly countries from getting certain products (strategic controls), or to prevent depletion of precious or scarce resources (short-supply controls).
Export controls are typically administered through a licensing process. U.S. export control regulations and forms, for example, are spelled out in the Department of Commerce's Export Administration Regulations (EAR). Although all U.S. exports are technically subject to control, a formal export license (Appendix F1) is required for a small minority of total U.S. goods exported. The licensing requirement can be satisfied for most U.S. products simply by entering "NLR" (no license required) on the Shipper's Export Declaration. For U.S. export control purposes, a product’s Export Control Classification Number (ECCN) determines whether and what type of license is required. U.S. exporters may ask the Department’s Bureau of Export Administration (BXA) for advice on whether a license is required, or is likely to be granted for a particular end-use, end-user, and/or destination. This type of request, along with requests for guidance regarding other interpretations of the EAR, are commonly referred to as "Advisory Opinions".
Import controls. Foreign trade regulations vary widely by country. Each country has its own policies, laws, regulations, and business practices that may or may not be import-friendly. Some countries are virtually free of restrictions, such as Hong Kong and Singapore. The U.S. and most industrialized countries have relatively open markets. Less developed countries tend to have higher import duties and more restrictive non-tariff barriers, such as import quotas and licensing and exchange controls.
Import duties and taxes. Governments impose duties and taxes on most imported goods to generate revenue and/or to protect local industries against foreign competition. The levies normally must be paid before the goods are released from customs. The duty and tax amount may be based on:
- Commodity value
- Trade agreements
- Country of manufacture
- Use of the article
- Commodity HS number
Duty and tax rates are generally published by the Customs agency in each country. Free Internet sources of country-specific import duties include:
- Harmonized Tariff Schedule of the United States
- Canadian Tariffs
- FTAA Tarif Database (import duty rates in 28 Western Hemisphere countries)
- European Union Tariff Schedule (common external tariff for all 15 EU countries)
- APEC Tariff Database (import duty rates in 21 Pacific Rim countries
- African Import Tariffs (import duty rates in 19 COMESA countries)
- WTO Tariff Schedules (import duties on agricultural products in all countries)
- Foreign Tariff, Taxes and Customs Information (additional on-line sources of country-specific import duties)
Non-tariff barriers.You should research potential trade restrictions in each country and seek counsel from an international law firm if needed. Useful Internet sources of trade regulations by country and product include:
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Country Commercial Guide (CCG) chapters on "Trade Regulations and Standards" and "Investment Climate" examine each country’s trade regulations and investment practices.
- FAS Country Import Regulations provide country-specific requirement for agricultural imports.
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- Country Reports on Economic Policy & Trade Practices and National Trade Estimate Reports on Foreign Trade Barriers are annual surveys of trade barriers by country.
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- Market Access Sectoral and Trade Barriers Database can be searched by country, industry or barrier type to find barriers that apply to specific products in specific countries.
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- International Legal Resources provides links to web sites that specialize in international trade laws and regulations by topic and country.
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