Managing exports navigating the complex rules controls barriers and law

Managing Exports Managing Exports Navigating the Complex Rules, Controls, Barriers, and Laws Frank Reynolds JOHN WILEY & SONS, INC This book is printed on acid-free paper ࠗ ∞ Copyright © 2003 by Institute of Management and Administration All rights reserved Published by John Wiley & Sons, Inc., Hoboken, New Jersey Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-750-4470, or on the web at www.copyright.com Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, 201-748-6011, fax 201-748-6008, e-mail: permcoordinator@wiley.com Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose No warranty may be created or extended by sales representatives or written sales materials The advice and strategies contained herein may not be suitable for your situation You should consult with a professional where appropriate Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages For general information on our other products and services, or technical support, please contact our Customer Care Department within the United States at 800-762-2974, outside the United States at 317-572-3993 or fax 317-572-4002 Wiley also publishes its books in a variety of electronic formats Some content that appears in print may not be available in electronic books For more information about Wiley products, visit our web site at www.wiley.com Library of Congress Cataloging-in-Publication Data: Reynolds, Frank, 1942– Managing exports : navigating the complex rules, controls, barriers, and laws / Frank Reynolds p cm ISBN 0-471-22173-2 (Cloth : alk paper) Exports—Management Export controls Export marketing— Management Foreign trade regulation Exports—United States— Management Export controls—United States Export marketing—United States—Management Foreign trade regulation—United States I Title HF1414.4 R49 2003 658.8'48—dc21 2002014017 Printed in the United States of America 10 To Kitty and Bob, who, as usual, helped make it happen Contents Preface xiii Acknowledgments xv Chapter The Whole Export Who Is Who? Who Is Involved? What Is Involved? Evolution Linkages Meet in the Middle Don’t Forget the Buyer Don’t Forget the Other Trading Partners Don’t Forget the Facilitators Linkages Endnotes 2 13 16 16 19 19 Chapter Export Control Who Is Involved? Bureau of Industry and Security Overview Export Administration Regulations Subject to the EAR? Some Useful EAR-Related Definitions Ten General Prohibitions Classification under the EAR EAR99 Export Control Classification Numbers Export Control Classification Number Entry Unique Control Procedures Commerce Country Chart Summary 20 20 23 23 23 24 26 28 28 28 30 31 32 34 vii viii Contents Country Groups List-Based License Exceptions Transaction-Based License Exceptions Summary of License Exceptions Prohibited End-Users, End-Uses, and Enhanced Proliferation Control Initiative Deemed Exports “Bad Guy” Lists, Knowing Your Customer, and “Red Flags” BIS Export License Application Antiboycott Export Reporting and Clearance Record Keeping Export Control Compliance System Linkages Endnotes 35 35 37 44 46 48 50 51 52 53 53 55 Chapter The Product Product Characteristics Product Design Product Presentation Packing Preshipment Inspection ISO Standards Country-Specific Product Standards Intangible Products Intellectual Property Linkages Endnotes 56 56 58 60 63 64 65 68 76 77 79 80 Chapter Export Channels Indirect Exports Direct Exports Nonexport Channels Linkages Endnotes 81 81 91 102 104 105 Chapter Export Marketing Where in the World 106 106 44 46 Contents ix Who in the World How in the World Supporting Trading Partners Voluntary Standards Certification Potpourri Linkages Endnotes 112 120 125 126 128 128 129 Chapter Export Pricing Costs Export Cost Analysis Markup Export Price Lists Currency Fine-Tuning Things To Avoid Preferred Duty Treatment NAFTA Countertrade Linkages Endnotes 130 130 138 140 142 143 144 145 147 148 151 153 154 Chapter Terms of Sale What Incoterms Are Limitations of Incoterms Simplified View of Tasks The 13 Incoterms 2000 Incoterms and Payment Terms Incoterms and Selection of Service Providers Incoterms and the Uniform Commercial Code Incoterms and U.S Exports Linkages Endnote 155 157 160 163 164 174 175 175 177 178 178 Chapter Insurance Surety Credit Insurance Cargo Insurance Inland Marine Insurance 179 180 183 184 186 338 • Keeping Current Export Credit Agencies, the Unsung Giants of International Trade and Finance, Quorum Books www.greenwood.com Forfaiting for Exporters: Practical Solutions for Global Trade Finance, International Thomson Business Press http://b2bcatalogue.thomsonlearning.com Global Trade Financing, John Wiley & Sons, Inc www.wiley.com International Credit and Collections: A Guide to Extending Credit Worldwide, John Wiley & Sons, Inc www.wiley.com Letters of Credit: Commercial and Standby Letters of Credit—Bankers and Trade Acceptances, Matthew Bender, Division of Lexus Nexus http:// bookstore.lexis.com Opinions of the ICC Banking Commission, ICC Publishing SA www iccbooksusa.com The Changing Role of Export Credit Agencies, International Monetary Fund www.imf.org The Handbook of Country Risk, Coface www.coface-usa.com The Handbook of International Credit Management, Ashgate www.ashgate com Exporting Building an Import/Export Business, 2nd Edition, John Wiley & Sons, Inc www.wiley.com Export/Import Procedures and Documentation, American Management Association www.amacombooks.org Exporting: A Managers Guide to the World Market, International Thomson Business Press http://c-catalogue.thomsonlearning.com Exporting: From Start to Finance, McGraw-Hill www.mcgraw-hill.com How to Succeed in Exporting and Doing Business Internationally, John Wiley & Sons, Inc www.wiley.com Import/Export: How to Get Started in International Trade, McGraw-Hill Inc www.mcgraw-hill.com International Marketing Resource Guide, Braddock Communications www.bradcom.com Rules of Origin of Goods, World Customs Organization www.wcoomd.org The CIM Handbook of Export Marketing: A Practical Guide to Opening and Expanding Markets Overseas, Butterworth-Heinemann www.bh.com Trade Secrets, The Export Answer Book for Small and Medium Sized Exporters, Michigan Small Business Development Center at Wayne State University stateoffice@misbdc.wayne.edu World Directory of Trade Promotion Organizations and Other Trade Support Institutions, U.N International Trade Center (UNCTAD) www.intracen.org Reference Points • 339 General Reference Alphabetical Index to the Harmonized Commodity Description and Coding System, World Customs Organization www.wcoomd.org Business Guide to the World Trading System, U.N International Trade Center (UNCTAD) www.intracen.org Explanatory Notes to the Harmonized Commodity Description and Coding System, World Customs Organization www.wccomd.org Going Global: Getting Started in International Trade, American Management Association www.amacombooks.com Handbook of World Trade, ICC Publishing SA www.iccbooksusa.com Harmonized Commodity Description and Coding System, World Customs Organization www.wccomd.org The Business Travel Survival Guide, John Wiley & Sons, Inc www.wiley.com The Economist Desk Companion, John Wiley & Sons, Inc www.wiley.com The Only Math Book You’ll Ever Need, Facts On File, Inc www.factsonfile com • Insurance Marine Insurance Compendium—A Complete Reference Guide, MS Publications www.centretrade.com The Law and Practice of Marine Insurance and Average, Cornell Maritime Press Purchase through Amazon www.amazon.com • Legal Complying with the Foreign Corrupt Practices Act: A Guide for U.S Firms Doing Business in the International Marketplace, American Bar Association www.abanet.org Fighting Bribery, ICC Publishing SA www.iccbooksusa.com ICC Model Commercial Agency Contract, ICC Publishing SA www iccbooksusa.com ICC Model Distributorship (Sole Importer-Distributor) Contract, ICC Publishing SA www.iccbooksusa.com ICC Model International Agency & Distributorship Contracts (short forms), ICC Publishing SA www.iccbooksusa.com ICC Model International Franchising Contract, ICC Publishing SA www iccbooksusa.com ICC Model International Sale Contract, ICC Publishing SA www.iccbooksusa com ICC Model Occasional Intermediary Contract, ICC Publishing SA www iccbooksusa.com 340 • Keeping Current International Commercial Transactions, ICC Publishing SA www.iccbooksusa com International Contracts, World Trade Press www.worldtradepress.com The Business of Shipping, Cornell Maritime Press www.cornellmaritimepress com The Sale of Goods Carried by Sea, Butterworths www.butterworths.co.uk Transfer of Ownership in International Trade, ICC Publishing SA www iccbooksusa.com Transportation Bes’ Chartering & Shipping Terms, Barker Howard Ltd (Note:The 11th edition is out of print, and the 12th is promised soon.) www.newyorknautical com Intermodal Freight Transportation, Eno Transportation Foundation, Inc and Intermodal Association of North America www.enotrans.com and www intermodal.org International Logistics: A Problem-Based Approach to Learning, Kendall/ Hunt Publishing www.kendallhunt.com NCBFAA Study Manual Series Cargo Transportation Basics, National Customs Brokers and Forwarders Association of America, Inc www.ncbfaa.org NCBFAA Membership Directory, National Customs Brokers and Forwarders Association of America, Inc www.ncbfaa.org LINKAGES It is apropos that this, the last section in the book, should be the easiest Just find everything in your specialty Readers who have patiently followed the Linkages preaching throughout this book and who feel a little heroic should pick up a title or website in another export-related specialty Caution: this only if you aren’t particularly interested in the way things work, otherwise you may become as addicted as this writer Index A1, A2, A3, A4 country groups, 35 AAEI See American Association of Importers and Exporters Acceptance, 316 Account Party, 299 Acknowledgments: collection, 314 order, 217 Actual total loss, 187 Additional Permissive Reexports (APR), 43 ADR See Alternative dispute resolution Adventure, 187 Adverse Selection, 187 Advising bank, 299 AES Direct, 257 Affreightment See Vessel charter African Growth and Opportunities Act, 132 Agents, 93 See also EEC Directive 86/653 on agents, 95–98 Ag Export Action Kit, 115 AGR See Agricultural Commodities Agricultural Commodities (AGR), 44 Agriculture Department See also Ag Export Action Kit, Buyer Alert, Rural Business Cooperative Service, Trade Assistance and Promotional Office export finance, 319 testing export products, 68, 285–287 AIB See Association for International Business Air freight, 233–237 Air freight consolidator, 224 Air transportation, 233–237 Air waybill, 233–237 Aircraft and Vessels (AVS), 43 Airport (port) to airport (port), 223 All risk (London Institute Clauses A), 189–190 Alternative dispute resolution, 208 AMCHAMS See United States Chamber of Commerce Amendment, 299 American Association of Exporters and Importers (AAEI), 327 American Association of Railroads, 270 American Conditions See Free of Particular Average (FPA) Andean Trade Preference Act, 132 Antiboycott: Commerce Department, 50–51 sales contracts, 205 Treasury Department, 51 Antiterrorism (AT), 30 Applicant, 299 APR See Additional Permissive Reexports Arbitrary, 241 Arbitration, 208 Assailing thieves, 187 Assignment of proceeds, 310 Association for International Business (AIB), 118–119, 327–328 Assured, 194 AT See Antiterrorism Automotive Products Trade Act, 132 Average, 187 AVS See Aircraft and Vessels B country group, 35 BAG See Baggage Baggage (BAG), 42 Bank, buyer’s, 303 Bank, seller’s: credit information, 293 export promotion, 119 job description, operations versus lending, 18 Bareboat charter, 249 Barratry, 187 Barter, 152, 321 Basic export references, 330 Beneficiary, 299 Berth terms See Liner terms 341 342 Beta test software, 38 Bid bonds, 180–181 BIS See Bureau of Industry and Security Bisnis Bulletin, 111 Bolero, 320 Both-to-blame clause, 190 Bulk cargo, 239 Bureau of Industry and Security (BIS), 21, 23 See also Export Administration Regulations Buyback, 152, 321 Buy USA, 113 Buyer: concerns, 3, loyalty and retention, 15 need to be kept informed, 14, 15 role in export control compliance, 54, 205 role in sales contracts and purchase orders, 201–220 role in terms of sale, 178 Buyer Alert, 116 BXA See Bureau of Industry and Security C-TPAT See Customs-Trade Partnership Against Terrorism CAF See Currency adjustment factor Canada See North American Free Trade Agreement Canadian harmonized tariff numbers, 262 Capital goods, 108 Cargo insurance, 184–197 Cargo security, 252–254 Caribbean Basin Economic Recovery Act, 132 Carnets, 182–183 Carriage contract, 221 Carriage and Insurance Paid (CIP), 170 Carriage of Goods by Sea Act of 1936 (COGSA), 238 Carriage Paid To (CPT), 169 Carrier, 221 export credit, 321 insurance, 198 selection under Incoterms 2000, 175 Case of need, 314 Cash against documents, 297, 314–315 Casualty insurance, 179 CB See Chemical and Biological Weapons CC See Crime control CCC mark See Chinese standards CCEWeb, 320 Index CCL See Commerce Control List CE mark See Conformite Europeen mark Certificate of origin: generic, 272–274 North American Free Trade Agreement, 274–277 U.S.-Israel Free Trade Agreement, 277–280 CFR See Cost and Freight Charter See Vessel charter Charterparty (Charter party), 249 Chemical and Biological Weapons (CB), 30 Chemical Weapons Convention (CW), 30–31 Chinese standards, 75–76 CIF See Cost, Insurance, and Freight CIP See Carriage and Insurance Paid CISG See United Nations Convention on Contracts for the International Sale of Goods Civil End-Users (CIV), 36 CIV See Civil End-Users Claim, insurance, 195–197 Clean drafts, 297–298 Clean report of findings, 281–285 Clean transport document, 157 clearance, export, 51–52 CMI See Comite Maritime International Co-insurance, 197 COGSA See Carriage of Goods by Sea Act of 1936 Comite Maritime International (CMI), 238 Commerce Control List (CCL): definition, 24 finding entries, 29 Commerce Country Chart, 26, 32–34 Commerce Department See Bisnis Bulletin, Bureau of Industry and Security, Buy USA, Commercial News USA, Export Assistance Centers, Flexible Market Research, Gold Key Service, International Buyer Program, International Partner Search, Matchmaker Trade Delegations, My Exports, National Marine Fisheries Service, National Oceanic and Atmospheric Administration (NOAA), Office of Textiles and Apparel, Office of Trade and Economic Analysis, Overseas Trade Missions, Patent and Trademark Office, Permanent Exhibition Centers, Product Literature Centers, Top Market Opportunities for Small Business, Top Index Targets for Trade Promotion, Trade Development Industry Officers, Trade Fairs and Exhibitions Program Commercial invoice, 259–263 Commercial News USA, 113 Commercial risk, 290–291 Compliance Department: job description, role in documentation, 287 role in export control compliance, 53 role in export marketing, 129 role in export pricing, 153–154 role in product development, 80 role in terms of sale, 178 role in transportation, 255 Compliance system, export control, 53 Computers (CTP), 37 Confirming bank, 299 Confirming house, 5, 89 Conformite Europeen mark (CE), 69 Self-certification option, 72 Seven Steps to Qualify, 70 Consignee, 221 Consignor, 221 Constructive total loss, 187 Consumable product export marketing, 106–108 Consumer products export marketing, 106–107 Container rental surcharge, 241 Containerization, vessel, 239 Contingency insurance, 187 Contract: carriage, 221 sales contract formation, 208–209 sales contract provisions, 202 Cost and Freight (CFR), 168–169 Cost cutting measures, 11–13, 135–138, 197 Cost, Insurance, and Freight (CIF), 169 Counterpurchase, 152, 321 Countertrade, 151–153, 321 Country groups, 35 Country risk, 292 CPT See Carriage Paid To Credit Department: job description, role in documentation, 287 role in export channels, 104 role in export control compliance, 54 role in export credit, 289–323 role in export marketing, 129 343 role in insurance, 200 role in terms of sale 178 role in transportation, 255 warning about supply problems, 15 Credit information sources, 292–295 Credit insurance, 183–184 Credit risk See Commercial risk and Country risk Crime Control (CC), 30 CTP See Computers Currency adjustment factor (CAF), 241 Current information, 324–340 Customs of port and trade, 162 Customs Service: bond requirement, 181 export clearance, 51 export control, 22 Customs-Trade Partnership Against Terrorism (C-TPAT), 253 CW See Chemical Weapons Convention D1, D2, D3, D4 country groups, 35 DAF See Delivered At Frontier Data Freight Receipt, 244 Date Draft, 316 DDP See Delivered Duty Paid DDU See Delivered Duty Unpaid DEA See Drug Enforcement Administration De minimis, export control, 27 Debarred Parties List, 47 Deductible, 197 Deemed export, 20, 46 Del credere agent, 94 Delay clause, 190 Delivered At Frontier (DAF), 170–171 Delivered Duty Paid (DDP), 172–174 Delivered Duty Unpaid (DDU), 172 Delivered Ex Quay (DEQ), 171–172 Delivered Ex Ship (DES), 171 Demise charter See Bareboat charter Denial order, 26 Denied Persons List, 47 General Prohibition Four, 27 Department of Homeland Security, 253 DEQ See Delivered Ex Quay DES See Delivered Ex Ship Desiccant, 63 Destination country, 32 Development (export control), 26 Direct collection letter, 314 344 Direct costs, 131–132 Direct exports, 91–102 Direct investment, 104 Direct mail promotion, 120–124 Direct sales to end-user buyers, 91–93 Disappearing deductible See Franchise DISC See Domestic International Sales Corporation Discounts, 144–145 Discrepancy, 299, 311–312 Dispute resolution 207–208 District Export Councils, 325 Dock receipt, 241–244 Document, 299 Documentary collections, 313–317 Documentary letter of credit, 297, 302–308 Documentary time drafts, 297, 316–317 Documentation, 257–288 Seminars, 329 Domestic-only costs, 133 Domestic merchandise (Shipper’s Export Declaration), 270 Domestic International Sales Corporation (DISC), 133 Domestic trade (compared to export), Door to door, 222 Door to port (airport), 223 Draft, 314 Documentary collections, 313–317 Letter of credit, 302–306 Drawback, 131 Drawee, 314 Drawer, 314 Drug Enforcement Administration (DEA), 21 Dumping, 147 E1, E2 country groups, 35 EAR See Export Administration Regulations EAR99, 28 ECCN See Export Control Classification Number EI See Encryption Items Electrics, product design, 58 Embargoed Destinations, General Prohibition 6, 27 EMCs See Export Management Companies ENC See Encryption Commodities and Software Encryption Commodities and Software (ENC), 43–44 Index Encryption Items (EI), 30 Endangered species, 21 Energy Department, 21 English conditions See Free of Particular Average (FPA) Enhanced Proliferation Control Initiative (EPCI), 46 Enhanced export markup, 141–142 Entity List, 47 Entry level pricing, 140 Environmental Protection Agency (EPA), 287 EPA See Environmental Protection Agency EPCI See Enhanced Proliferation Control Initiative Error and omission insurance, 199 ETCs See Export Trading Companies European Union: Conformite Europeen mark, 69–73 Consumer Goods Product Warranty Directive, 73 EEC Agency Directive 86/653, 95–98 Evolution of a company’s exports, 5–6 Ex works (EXW), 164–165 Exclusivity: Export management company, 90 Export merchant, 90–91 Export trading company, 90 Sales representative (overseas), 93–99 Importing distributor, 99–102 EXIM Bank See Export Import Bank of the United States Expiration date, 299 Export: basic process, channels, 81–105 clearance, 51 compared to domestic trade, compliance system, 53 control, 20–55 control definition, 20 cost analysis, 138–140 cost cutting measures, 11–13, 135–138, 197 credit, 289–323 credit insurance, 318 documentation, 257–288 evolution, 5–6 marketing, 106–129 pricing, 130–154 proforma invoices, 201–220 purchase orders, 201–220 record keeping, 52–53 Index reporting, 51–52 sales contracts, 201–220 seminars, 328–329 terms of sale, 155–178 transportation, 221–256 Export Administration Regulations (EAR): antiboycott, 50–51 Bad guy lists, 46–47 BIS license application, 48–50 classification, 28 Commerce Control List entry, 29–30 Commerce Country Chart, 32–34 Country groups, 35 deemed exports, 46 definition, 23 domain, 23–24 EAR99, 28 Export Control Classification Numbers, 28 knowing your customer, 47–48 list based license exceptions, 35–37 prohibited end users, end uses, and Enhanced Proliferation Control Initiative, 44–46 record keeping, 52 red flags, 48 related definitions, 24–26 Ten General Prohibitions, 26–27 transaction based license exceptions, 37–44 unique control procedures, 31–32 Export Alert, 69 Export Assistance Centers, 113 Export compliance: cost, 134 system, 53 Export Control Classification Number (ECCN): composition, 28–29 definition, 26 description of entry, 30–31 Export Directory of U.S Food Distributor Companies, 116 Export Import Bank of the United States (EXIM), 318–319 Export license: application, 48–50 definition, 26 exception: list based, 35–37 transaction based, 37–44 Export Management Company (EMC), 87–88 345 Export merchants, 88–89, 289–290 Export packing See Packing Export price lists, 142–143 Export Trading Company (ETC), 81–87, 289–290 Exporter, EXW See Ex Works Factoring, 321 FAF See Fuel Adjustment Factor FAS See Free Alongside Ship FC See Firearms Convention FCA See Free Carrier FCL See Full containerload FCPA See Foreign Corrupt Practices Act Federal tax treatment, 133 Federation of International Trade Associations (FITA), FILO See Free In, Liner Out FIO See Free In and Out Firearms Convention (FC), 31 FITA See Federation of International Trade Associations Flexible Market Research, 110 FOB See Free On Board FOB/FAS clause, 190 Food and Drug Administration: export control, 21 testing export products, 68, 287 Foreign aid, 109 Foreign Corrupt Practices Act (FCPA), 205 Foreign currency invoicing, 143–144 Foreign exchange forward contracts, 144 Foreign exchange forward options, 143 Foreign merchandise (Shipper’s Export Declaration), 271 Foreign Periodicals, 120 Foreign products of U.S technology, General Prohibition 3, 27 Foreign Sales Corporation (FSC), 133 Forfaiting, 297, 312–313 Form Design, 258–259 Fortuitous, 179 Forwarder: error and omission insurance, 199 export promotion, 119 income, 17 industry consolidation, 17 information required of shipper, 18 job description, 3, 16, 224–226 selection, 16, 119 seller-forwarder relationship, 17 346 Forwarder (Continued) Shipper’s Export Declaration filing, 18 size, 17 4PL See Lead logistics provider FPA See Free of Particular Average Franchise, insurance, 197 Franchising, 103–104 Free Alongside Ship (FAS), 166–167 Free Carrier (FCA), 165–166 Free In, Liner Out (FILO), 250 Free In and Out (FIO), 250 Free of capture and seizure, 190 Free of Particular Average (FPA, London Institute Clauses C), 189 Free On Board (FOB): Incoterms 2000, 167–168 Uniform Commercial Code, 175–176 Freight costing: air, 234 marine, 240–241 Freight forwarder See Forwarder FSC See Foreign Sales Corporation FSC Repeal and Extraterritorial Income Exclusion Act, 133 Fuel Adjustment Factor (FAF), 241 Fulfillment (order), 218–219 Full containerload (FCL), 247–248 GBS See Shipments to Country Group B General average, 187 General Software Note “Mass Market” Software, 42 Generalized System of Preferences (GSP), 132 GFT See Gift Parcels and Humanitarian Donations Gift Parcels and Humanitarian Donations (GFT), 40–41 Gold Key Service, 114 Goods, 221 GOV See Governments, International Organizations and International Inspections Under the Chemical Weapons Convention Government bond requirements, 181 Governments, International Organizations and International Inspections Under the Chemical Weapons Convention, 40 Green clause credit, 309 GSP See Generalized System of Preferences Index HAB (HAWB) See House air waybills Hague Rules of 1924, 238 Hague-Visby Rules of 1968, 238 Hamburg Rules, 238 Harmonized System, 52 seminars, 329 Hazardous materials (HAZMAT), 251–252, 329 HAZMAT See Hazardous materials Health insurance, 199 High Performance Computers (XP), 31 House air waybill, 233 Hypothecation letter, 314 ICAO See International Civil Aviation Organization ICC See International Chamber of Commerce IMO See International Maritime Organization Importing distributors, 99–102 Inchmaree clause, 191 Inconvertible currency, 314 Incoterms 2000, 155–178 seminars, 329 Indirect costs, 132–134 Indirect exports, 81–91 Inherent vice, 187 Inland marine insurance, 186 Instructions (product presentation), 60–61 Insurable interest, 179, 185 Insurance, 162–163, 179–200 Insurance certificate, 188 Insured party See Assured Intangible product, 76 Intellectual property, 77–79 Interior Department, 21 International Buyer Program, 114 International Chamber of Commerce (ICC): Incoterms 2000, 155–178 information source, 328 International Court of Arbitration, 208 Paction, 209 Rules for Arbitration, 208 International Civil Aviation Organization (ICAO), 251 International Maritime Organization (IMO), 251 International Organization for Standardization (ISO) See ISO standards International Partner Search, 113 Index International Standby Practices (ISP98), 301–302 International Traffic in Arms Regulations (ITAR), 21 Internet, 101 Irrevocable credit, 299 ISO standards: 9000 series, 65–67 14000 series, 67 publication, 67–68 ISP98 See International Standby Practices Israel See United States – Israel Free Trade Agreement Issuing bank, 299 ITAR See International Traffic in Arms Regulations Japan External Trade Organization (JETRO), 117 JETRO See Japan External Trade Organization Jordan See United States – Jordan Free Trade Agreement Key Management Infrastructure (KMI), 37–38 KMI See Key Management Infrastructure Knowing your customer, 47–48 Known shipper rule, 252 L/C See Letter of credit Labeling, product presentation, 61–62 LASH See Lighter Aboard Ship Law: applicable law, 203–205 Incoterms, relation to, 203–204 seminars, 329 LCConnect, 320 LCL See Less-than-containerload Lead logistics provider (4PL), 232 Legalized documents, 281 Less-than-containerload, 247–248 Letter of credit (L/C), 298–312 License exception: definition, 26 list based exceptions, 35–37 shown on commercial invoice, 262 terms and conditions, 27 transaction based exceptions, 37–44 License terms and conditions, General Prohibition 9, 27 347 Licensing, 102–104 LIFO See Liner In, Free Out Lighter Aboard Ship (LASH), 239 Liner in, Free Out (LIFO), 250 Liner terms, 239 Linkages, 6–9 List based license exceptions, 27, 35–37 Litigation, 207–208 Logistics, 221–256 seminars, 329 London Institute clauses See All risk, With particular average, Free of particular average LVS See Shipments of Limited Value MAB See Master air waybill Main carriage, 157, 222 Manufacturer, Manufacturing Department: job description, role in documentation, 287 role in export control compliance, 54 role in export credit, 323 role in product development, 80 MARAD See Maritime Administration Marine cargo insurance, 187–197 Marine extension clause, 191 Marine transportation, 237–251 Marine transportation document, 244–247 Maritime Administration (MARAD), 21–22 Markup, 140–142 Mass Market Software See General Software Note Mass Market Software Master air waybill (MAB), 233 Matchmaker Trade Delegations, 115 Material cost, 131 Materials, export marketing, 107–108 Mediation, 208 Metrics, product design, 59 Mexican NOMS, 74 Mexico See North American Free Trade Agreement Military merchandise (for Shipper’s Export Declaration), 271 Minimum cover See Free of Particular Average Minimum order charges, 145 Missile Technology (MT), 31 Mixed credits, 309 Moisture barriers, 63 MT See Missile technology 348 Multiple export channels, 102 MyExports.com, 113 NAM See National Association of Manufacturers NP See Nuclear Proliferation NAFTA See North American Free Trade Agreement National Association of Manufacturers (NAM), 326 National Council on International Trade Development (NCITD), 327 National Customs Brokers and Forwarders Association of America (NCBFAA), 327 National Marine Fisheries Service, 68 National Motor Freight Traffic Association, 270 National Oceanic and Atmospheric Administration (NOAA), 287 National Security (NS), 31 NCBFAA See National Customs Brokers and Forwarders Association of America NCITD See National Council on International Trade Development Negative certification, antiboycott, 51 Negotiating bank, 299 Negative checking, marketing, 109 Negotiable marine transportation document See Order NOAA See National Oceanic and Atmospheric Administration NOMS See Mexican NOMS Non confirming purchasing agents, 89 Non delivery, 188 Non export channels, 102–104 Non operating carrier, 224 Non-negotiable marine transportation document, 244 Non-Vessel-Operating-Common-Carrier (NVOCC), 224 Normal markup, 140–141 North American Free Trade Agreement: certificate of origin, 274–277 duty phaseout, 149 eligibility criteria, 150–151 export costing, 132 export pricing, 148–151 need for correct classification, 150 product design, 59–60 treaty, 150 NRC See Nuclear Regulatory Commission Index NS See National Security Nuclear Proliferation (NP), 31 Nuclear Regulatory Commission (NRC), 21 NVOCC See Non-Vessel Operating Common Carrier Ocean bill of lading (B/L) See Marine transportation document Ocean Cargo Handbook, 200 Ocean Cargo Claims Handbook, 200 Ocean Transport Intermediary (OTI), 224 Ocean transportation See Marine transportation OFAC See Office of Foreign Assets Control Offer and acceptance, 201 Office of Defense Trade Controls, 21 Office of Foreign Assets Control (OFAC), 21 Office of Textiles and Apparel, 110 Office of the Coordinator for Counterterrorism, 47 Office of Trade and Economic Analysis, 110 Offset, 152, 321 Omnimodal, 159 On-carriage, 157, 222 Open account, 298 Open marine cargo policy, 188 Opening bank, 299 Operation technology and software, 41 Order, consignment for negotiable marine transportation document, 244 Order entry, 218 Origin, 59–60 OTI See Ocean Transport Intermediary Over invoicing, 146 Overhead, 132 Overseas Trade Missions, 115, 117 Ownership transfer: relationship to Incoterms 2000, 161–162 sales contracts, 202–203 Packaging, product presentation, 62 Packing, 63 Packing list, 263–265 Paction, 209 Particular average, 188 Patent and Trademark Office: export control, 21 intellectual property, 77 Payment terms See Terms of payment Payment with order, 296–297 Performance bonds, 181 Performing carrier, 224, 233 Index Peril, of the sea, on the sea, 188 Permanent Exhibition Centers, 115 Piers Export Tracking Service, 111 Platinum Key Service, 114 Political Risk Insurance, 198 Port (airport) to door, 223 Port (airport) to port (airport), 223 Port congestion surcharge, 241 Positive certifications, antiboycott, 51 Possession rights: relationship to Incoterms 2000, 162 sales contracts, 203 Pre-shipment inspection: clean report of findings, 281–285 mandatory, 64 optional, 65 Precarriage, 157, 222 Preprinted forms, 258 Presenting bank, 314 Principal, 314 Proceeding, General Prohibition 10, 27 Product, 56–80 Product characteristics, 56–57 Product design: electrics, 58 export control, 59 metrics, 59 origin, 59–60 size, 58 user characteristics, 59 Product liability insurance, 199 Product Literature Centers, 115 Product presentation: instructions, 60–61 labeling, 61–62 packaging, 62–63 Production, Export Administration Regulations, 26 Proforma invoice, 201–220 Prohibited end users, 26–27, 46–47 Prohibited end uses, 26–27, 46–47 Proliferation, General Prohibition 7, 27 Protest, 316 Purchase order, 201–220 attention to incoming order, 14 Purchasing Department: job description, role in documentation, 287 role in export control compliance, 54 role in export pricing, 153 role in insurance, 200 Pure risk, 179 349 Rebating, 145 Record keeping, 52–53 Red clause credits, 309 Red flags, 48 Reexport: Customs and usual definition, 131 export control definition, 20 Regional Stability (RS), 31 Remitting bank, 314 Reporting, export, 51–52 Resources See Supplementary Knowledge Sources Reverse trade missions, 115 Revocable credit, 299 Revolving credit, 309–310 Rider, 188 Risk: credit, 289–292 parties at (insurance), 185–186 pure, 179 RPL See Servicing and Replacement of Parts and Equipment Roll-on, roll-off (Ro-Ro), 239 Ro-Ro See Roll-on, roll off RS See Regional Stability Rural Business Cooperative Service, 116 Sales contracts, 201–220 Sales Department: job description, role in documentation, 287–288 role in export channels, 81–105 role in export control compliance, 54 role in export credit, 322 role in export marketing, 106–129 role in export pricing, 154 role in insurance, 200 role in product development, 79 role in proforma invoices, 219 role in sales contracts, 219 role in terms of sale, 178 role in transportation, 255 Sales representatives, 93–99 Sales technology software, 41 Sales terms See Terms of Sale SBA See Small Business Administration SCAC See Standard Carrier Alpha Code Schedule B, 52, 271 Schedule C Code See United States Customs District Port Code Sea waybill, 244 SED See Shipper’s Export Declaration 350 Self-insurance, 185 See also Co-insurance, Deductible, Franchise Seminars, 328–330 Servicing and Replacement of Parts and Equipment (RPL), 39–40 Ship lines, 238–247 Shipments of Limited Value (LVS), 35–36 Shipments to Country Group B (GBS), 36 Shipper, 221, 223 Shipper’s Export Declaration (SED), 51–52, 265–272 Shipper’s letter of instructions, 226–229 Shore clause, 191 Short Supply (SS), 31 SI See Significant Items Sight draft, documents against payment, 297, 315 Significant Items (SI), 31 Size, product design, 58 Slot chartering, 249 Small Business Administration (SBA), 116, 319 Small Business Development Centers, 113 Software updates, 42 South America clause, 191 Special Comprehensive License, 48–49 Specially Designated Nationals and Blocked Persons List, 47 Split Drafts, 316 SRCC See Strikes, Riots and Civil Commotion SS See Short Supply Standard Carrier Alpha Code (SCAC), 269–270 Standards: Chinese (CCC Mark), 75 Conformite Europeen (CE Mark), 69–73 ISO, 65–68 Mexican NOMS, 74–75 Voluntary certification, 126–128 Standby letter of credit, 297, 300–302 State governments, 116–117 Straight marine transportation document, 244 Strategic Council on Security Technology, 253–254 Strikes, Riots and Civil Commotion (SRCC), 190 Subchartering, 249 Subrogation clause, 191 Sue and labor clause, 191 Index Supplementary Knowledge Sources: books, 336–340 newsletters and magazines, 331–332 plug-in information, 331 websites, 334–336 Surety, 180 Swaps, 152 Switching, 321 Tam Tam, 111 Tangible product, 56 TAPO See Trade Assistance and Promotional Office Tax Reform Act of 1976, antiboycott, 51 Tax treatment of exports, 133 Technology and Software Under Restriction (TSR), 36–37 Technology and Software Unrestricted (TSU), 41–42 Temporary Imports, Exports and Reexports (TMP), 38 Ten General Prohibitions, 26–27 Tenor, 314 Terminal Handling Charge (THC), 241 Terms of Payment: cost, 134 descriptions, 295–317 relationship to Incoterms 2000, 174–175 Terms of Sale, 155–178 Terrorist Organizations List, 47 THC See Terminal Handling Charge Third party logistics provider (3PL), 229–233 3PL See Third party logistics provider Time-sight draft, 316 Title transfer See Ownership transfer TMP See Temporary Imports, Exports and Reexports Top Market Opportunities for Small Businesses, 111 Top Targets for Trade Promotion, 111 Trade and Development Agency, Reverse Trade Missions, 115 Trade Assistance and Promotional Office (TAPO), 115 Trade Compass, 118 Trade Development Industry Officers, 110 Trade Fairs and Exhibitions Program, 114 TradeCard, 320 Trademarks, 77–79, 134 Trading partners: Index direct export, 91 need to be kept informed, 16 supporting (promotion), 125 Traffic Department: job description, role in documentation, 288 role in export control compliance, 54 role in export credit, 323 role in product development, 79 role in sales contracts and proforma invoices, 219 role in terms of sale, 178 role in transportation, 221–256 Transportation, 221–256 Transaction-specific costs, 135–138 Transaction based license exceptions, 37–44 Transferable credit, 310 Transportation Department, 251, 253 Transportation Security Administration (TSA), 253 Transshipments: Commerce Country Chart, 32 General Prohibition 8, 27 TSA See Transport Security Administration TSR See Technology and Software Under Restriction TSU See Technology and Software Unrestricted TT Club of London, 221 UCC See Uniform Commercial Code UCP See Uniform Customs and Practices for Documentary Credits UN See United Nations Under invoicing, 146, 206–207 Undercarrier, 224 Uniform Commercial Code (UCC), 175–177 Uniform Customs and Practices for Documentary Credits (UCP), 306–308 Uniform Rules for Collections (URC), 313 Unique Control Procedures, 31–32 See also: Chemical Weapons Convention, Encryption Items, High Performance Computers, Short Supply, Significant Items United Nations (UN): Convention on Contracts for the International Sale of Goods (CISG), 204–205 Convention on the Carriage of Goods by Sea 1978 (Hamburg Rules), 238 351 export control, 31 International Civil Aviation Organization (ICAO), 251 International Maritime Organization (IMO), 251 United States Chamber of Commerce, 327 United States Customs District Port Code, 269 United States Department of Agriculture See Agriculture Department United States Department of Commerce See Commerce Department United States Department of Energy See Energy Department United States Department of the Interior See Interior Department United States Department of State See Office of Defense Trade Controls and Office of the Coordination for Counterterrorism United States Department of the Treasury See Customs Service, Office of Foreign Assets Control, Tax Reform Act of 1976 United States Department of Transportation See Transportation Department United States Food and Drug Administration See Food and Drug Administration United States Government export products testing, 68 United States Maritime Administration See Maritime Administration United States Nuclear Regulatory Commission See Nuclear Regulatory Commission United States person, 26 United States Principal Party in Interest (USPPI), 268 United States Small Business Administration See Small Business Administration United States Trade and Development Agency See Trade and Development Agency United States – Caribbean Trade Partnership, 132 United States – Israel Free Trade Agreement: certificate of origin, 277–280 export costing, 132 export pricing, 147–148 product design, 59–60 352 United States – Jordan Free Trade Agreement: export costing, 132 export pricing, 148 product design, 60 Unrestricted Encryption Source Code, 42 URC See Uniform Rules for Collections Usance credits, 308–309 Use (export control), 26 User characteristics, product design, 59 USPPI See United States Principal Party in Interest Value, insurance, 194 Vessel charter, 249–251 Vessel Insurance Additional Peril (VIAP) 241 Vessel transportation See Marine transportation VIAP See Vessel Insurance Additional Peril Index Vienna Convention See United Nations Convention on Contracts for the International Sale of Goods Voyage charter, 249 Voyage Policy, 188 WA See With Particular Average WAND, 118 War risk, 190 Warehouse to Warehouse clause, 191 Warranted free of, 188 Wassenaar Arrangement, 22 Western Hemisphere Corporation, 133 With Particular Average (London Institute Clauses B), 189 Wood packing, 63 World Trade Center Association, 118, 328 XP See High Performance Computers .. .Managing Exports Managing Exports Navigating the Complex Rules, Controls, Barriers, and Laws Frank Reynolds JOHN WILEY & SONS, INC This book... Frank, 1942– Managing exports : navigating the complex rules, controls, barriers, and laws / Frank Reynolds p cm ISBN 0-471-22173-2 (Cloth : alk paper) Exports Management Export controls Export... who does what and which tools each player has at its disposal As the title of this book implies, we will cover some methods of navigating the complex rules, controls, barriers, and laws found in