Exporting and Logistics: Special Issues for Business Exporting and Logistics: Special Issues for Business Chapter 15 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved. PowerPoint presentation prepared by: Alfred Lowey-Ball Associate Professor of Marketing UBI-United Business Institutes Brussels, Belgium Chapter Outline • Austin Inc.: Export of a paper converting machine • Export restrictions • Determining export requirements—licenses • Electronic support for export licensing • Import restrictions • Tariffs Standards • Exchange permits Boycotts • Quotas Voluntary restrictions • Import licenses Other restrictions • Terms of Sale • Foreign commercial payments • Letters of credit Open accounts • Bills of exchange Forfeiting • Cash in advance • Export Documents • Packing and marking • Customs-privileged zones • Logistics • Austin Inc.: Export of a paper converting machine • Export restrictions • Determining export requirements—licenses • Electronic support for export licensing • Import restrictions • Tariffs Standards • Exchange permits Boycotts • Quotas Voluntary restrictions • Import licenses Other restrictions • Terms of Sale • Foreign commercial payments • Letters of credit Open accounts • Bills of exchange Forfeiting • Cash in advance • Export Documents • Packing and marking • Customs-privileged zones • Logistics Chapter Learning Objectives 1. How the U.S. government helps exporters 1. How the U.S. government helps exporters 2. Steps necessary to move good across borders 2. Steps necessary to move good across borders 3. How various import restriction are used politically 3. How various import restriction are used politically 4. Reducing import taxes to remain competitive 4. Reducing import taxes to remain competitive 5. Instruments of foreign commercial payments 5. Instruments of foreign commercial payments 6. Export documents and their importance 6. Export documents and their importance 7. The Problems of the physical movement of goods 7. The Problems of the physical movement of goods Introduction Exporting is an integral part of all international business Goods manufactured in one country and destined for export must be moved across borders to enter the distribution system of the target market You must be knowledgeable about the export/import documents, tariffs, quotas, and other barriers required for the flow of goods between countries The rules and regulations that cover export and import are discussed in this chapter The Exporting Process Export Restrictions • Export regulations may be designed to conserve scarce goods for home consumption or to control the flow of strategic goods to actual or potential enemies • Export regulations may be designed to conserve scarce goods for home consumption or to control the flow of strategic goods to actual or potential enemies • To comply with various regulations, the exporter may have to acquire export licenses or permits from the home country • To comply with various regulations, the exporter may have to acquire export licenses or permits from the home country • To alleviate problems of exporting, the Department of Commerce has published a revised set of export regulations known as the Export Administration Regulations (EAR) • To alleviate problems of exporting, the Department of Commerce has published a revised set of export regulations known as the Export Administration Regulations (EAR) Determining Export Requirements • In general, there are three steps to determine the proper Export Control Classification Number (ECCN) for the commodity to be exported as follows: 1. If you are the exporter of the product but not its manufacturer, you can contact the manufacturer or developer to see if they already have an ECCN 2. Compare the general characteristics of the product to the Commerce Control List and find the most appropriate product category 3. The third step is to consult the Commerce Country Chart (CCC), to (Exhibit 15-to determine the reason(s) for control associated with your item • A general license permits exportation of certain products that are not subject to EAR control with nothing more than a declaration of the type of product, its value, and its destination • A general license permits exportation of certain products that are not subject to EAR control with nothing more than a declaration of the type of product, its value, and its destination • A validated license, issued only on formal application, is a specific document authorizing exportation within specific limitations designated under the EAR • A validated license, issued only on formal application, is a specific document authorizing exportation within specific limitations designated under the EAR