International Trade Blog

If you are involved in shipping or logistics, you've probably heard of a master bill of lading and a house bill of lading. But if you're like many of us, you might not understand the difference between the two.

Before we unpack the difference between these two types of bill of lading, it is important to understand what a bill of lading is in general.

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Shipping products seems simple, right? You simply package the product and send it to your customer. But did you know there are different types of shipment?

Depending on the size of your shipment, it may be considered parcel, less-than-load (LTL), or a full truckload (FTL) shipment. Your shipment may be too small for certain carriers, or conversely, if you have a large shipment, you may have to rely on a carrier certified to be able to ship large containers. There are also unique considerations depending on the mode of transport—whether you’re shipping via air, sea, road, or rail.

The wide variety of terms that relate to the process of moving goods through a supply chain can seem overwhelming. But understanding the different types of shipment and related terms is crucial to ensure your goods get shipped on-time, within compliance, and in good shape.

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The U.S. Bureau of Industry and Security (BIS) has announced that license exception CIV (Civil End-Users) has been eliminated effective June 29, 2020. BIS also announced a related expansion of military end-use and end-user controls.

An export license exception allows you to export certain items that may be controlled by the U.S. Export Administration Regulations (EAR) without first obtaining an export license from the Commerce Department. For a more detailed explanation of export license exceptions, read my article: A Beginner's Guide to Export License Exceptions.

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As an exporter, you will no doubt become familiar with the Automated Export System (AES) if you aren’t already. This is the system that the United States uses to collect data on exports out of the country as outlined in the Foreign Trade Regulations (FTR).

The U.S. Census Bureau uses this data, which they call Electronic Export Information (EEI), to compile statistics on economic indicators and the Gross Domestic Product (GDP) of the United States. U.S. Customs and Border Protection (CBP) uses this data to ensure that exporters are following regulations and that exports do not end up in the hands of restricted parties who may pose a threat to the national security of the United States.

All exporters should know if, how and when they are expected to file their export information through AES.

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Those of us who’ve worked in exporting for a while are aware that government regulations on exports are primarily administered by either the Commerce Department’s Bureau of Industry and Security (BIS) via the Export Administration Regulations (EAR) or the State Department’s Directorate of Defense Trade Control (DDTC) via the International Traffic in Arms Regulations (ITAR).

BIS governs commercial and dual-use items, while DDTC governs military items. Successful, compliant organizations need to understand and abide by those regulations.

In addition, the U.S. Census Bureau, also part of the Commerce Department, administers the Foreign Trade Regulations (FTR), which require the reporting of electronic export information through the Automated Export System (AES). (You can learn more about the three primary sets of export regulations by reading: The Three R’s of Export Compliance: FTR, EAR and ITAR.)

That was my take on things. For a while. But I talk to more and more people whose exports (and imports) are controlled by other U.S. agencies.

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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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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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The Bureau of Industry and Security (BIS), which is part of the U.S. Commerce Department, is responsible for implementing and enforcing the law that "regulates the export, reexport and certain transfers of most commercial items as well as some less-sensitive military items" that are subject to the Export Administration Regulations (EAR).

While there are many other agencies in other departments that regulate certain items, BIS has jurisdiction over most items—commodities, software and technology—created for commercial use.

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There are many reasons the U.S. government has decided some goods should require a second look before they can be exported to certain countries.

In my previous article I explained what these various reasons for control are as they appear in the Commerce Department’s Export Administration Regulations (EAR). And I explained why exporters would need to apply for an export license from the U.S. government based on the particular Reason for Control and the destination country.

Even if one or more reasons might apply to a product going to a specific country, the EAR also provides exceptions to the export license requirement.

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In a previous article I explained the export license determination process for exports of dual-use items controlled by the U.S. Department of Commerce under the Export Administration Regulations (EAR).

We walked through how exporters must first find the correct Export Control Classification Numbers (ECCNs) of their products and then determine if an export license is required based on what reasons for control apply to the export and whether or not any license exceptions are available.

Today’s article gives a summary of each EAR reason for control.

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