International Trade Blog

Dear Cathy,

I found an article online that you wrote regarding the value on a commercial invoice titled Repaired Goods: Import and Re-Export. I am a transportation coordinator for my current employer, and there has always been a question in my mind that I'm not sure how to answer.

Many times we ship items to customers free of charge as an incentive for a bulk order or just as samples for them to try out. I've always thought that their actual value must be listed on the commercial invoice whether we charge the customer or not. Usually when I do that, however, I always make a notation on the commercial invoice stating there was no charge to the customer. The value was for customs use only.

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“All squares are rectangles, but not all rectangles are squares.”

That idea really confounded me as a child learning geometry. How could one belong to another, yet the inverse not be true? As my teacher explained, the difference lies in specificity.

A similar concept applies in exporting: If you’re new to exporting, the difference between Harmonized System (HS) numbers and Schedule B codes may be vexing. You may be wondering, are they the same? Can they be used interchangeably? What’s the difference?

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If you import or export, you may be familiar with the terms foreign trade zone and free trade zone, both of which are frequently abbreviated as FTZ. These terms are often used interchangeably to refer to a class of government-run duty-free zones, but they actually mean slightly different things.

Free trade zone is a more general, universal term. Customs authorities representing governments across the globe have established free trade zones. Free trade zones are areas in which commodities can be manufactured, modified or stored under specific customs regulations and generally not subject to customs duties.

According to U.S. Customs and Border Protection (CBP), foreign trade zones are the United States’ version of free trade zones. FTZs are designated areas within the United States that are legally located outside of the customs territory of the United States, meaning that goods that reside within an established FTZ haven’t yet cleared customs.

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Incoterms 2020 rules are the latest revision of international trade terms published by the International Chamber of Commerce (ICC). They are recognized as the authoritative text for determining how costs and risks are allocated to the parties conducting international transactions.

Incoterms 2020 rules outline whether the seller or the buyer is responsible for, and must assume the cost of, specific standard tasks that are part of the international transport of goods. In addition, they identify when the risk or liability of the goods transfer from the seller to the buyer.

In this article, we’re discussing the Incoterm CFR, also known as Cost and Freight.

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Shipping Solutions export documentation and compliance software added the ability to hide or display the Schedule B Code on the Commercial and Proforma Invoices in Version 9.15 and 8.15 of the software. If you have upgraded from a previous version of Shipping Solutions, please double-check the setting before printing your paperwork.

Most of the time, exporters will want to include the Schedule B or Harmonized System number (these codes are not the same) of their items on their Commercial and Proforma invoices. However, there are some situations where you shouldn't include HS numbers on your invoices. To accommodate all situations, an option was added to Shipping Solutions export software to allow you to display or not display the codes.

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May is World Trade Month in the United States, and to coordinate the plethora of events scheduled for May 2020, the World Trade Month Association has published a new website: WorldTradeMonth.com. This website will serve as a directory of international trade-related events held during May 2020 across the country and on the web.

The theme for this year's World Trade Month website is "Growing exports in uncertain times," a reflection of the challenges facing companies during a period of trade wars, a reexamination of free trade agreements, and questions about future economic growth.

Individuals may register on the website to receive notifications of World Trade Month events they may wish to attend.

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Incoterms 2020 rules are the latest revision of international trade terms published by the International Chamber of Commerce (ICC). They are recognized as the authoritative text for determining how costs and risks are allocated to the parties conducting international transactions.

Incoterms 2020 rules outline whether the seller or the buyer is responsible for, and must assume the cost of, specific standard tasks that are part of the international transport of goods. In addition, they identify when the risk or liability of the goods transfer from the seller to the buyer.

In this article, we’re discussing the Incoterm FOB, also known as Free On Board.

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Where should you place your international trade compliance office within your importing or exporting organization? Should it be part of sales, accounting, shipping, legal, purchasing or supply chain?

My answer may seem flippant, and among readers of this blog, it may even seem controversial.

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When I first talk to exporters frustrated by the amount of time it takes to complete their export documentation, they often tell me they can spend two hours or more on every single shipment. If they have multiple export orders to ship, the time they have left to do any other part of their job is virtually nil.

A typical export shipment can require five or more documents including a commercial invoice, a packing list, a shipper’s letter of instruction, a bill of lading, and a certificate of origin. On top of that, a shipment valued at more than $2,500 per Schedule B code needs to be filed electronically through the Automated Export System (AES). And, of course, every shipment, regardless of value, needs to be screened against U.S. export regulations.

It’s easy to see why it can take so long!

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You’ve just found a buyer in a foreign country and you’re preparing to close the sale—great! But there’s one thing you should keep in mind that is easy to overlook: the end use and end users.

You will need to determine the end-use (how will the product ultimately be used) and the end-user (who will ultimately use the product). To ensure that you are compliant with the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR) of the United States, you must be sure that you are not shipping goods to a prohibited end-user or for a prohibited end-use.

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