International Trade Blog

In my previous blog post, I described how to determine if you need an export license by identifying the reasons for control and checking the Commerce Country Chart. In this article I will describe how to determine if there are any export license exceptions available and how to use these exceptions.

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In my role at Shipping Solutions, I am privileged to talk with people from many different kinds of companies involved in international trade. As you might expect, I receive a lot of questions!

Today’s blog post compiles some of the most frequently asked questions that I hear. I hope that by the time you reach the end of this article, you will have a better understanding of some of the most common issues relevant to international trade.

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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 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 may seem overwhelming. 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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When you first venture into international shipping, it’s easy to get overwhelmed by unfamiliar terms.

As an exporter, understanding the parties involved in international logistics and using the correct language is key to understanding everyone's role in the export process. It will facilitate clear communication so that you, your customer, and your logistics partners are on the same page, ensuring your shipment gets where it needs to be on time—and that you get paid on time!

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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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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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