International Trade Blog

In today's global supply chain, it's rare for a product to come entirely from one place. Unless you’re a farmer who’s planting seeds grown in the U.S. and harvested from your own land or a miner who's extracting elements from the earth, it’s likely that your goods contain parts from multiple countries or that you make a part that is one piece of a larger good.

For this reason, it’s crucial that you determine which of your parts and finished goods are subject to U.S. export regulations. These regulations might make it illegal for your products to be shipped to certain individuals and organizations or to certain countries. In other cases, you may be required to obtain an export license before you, or another party, can ship the goods to a certain destination.

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One of the most basic components of export compliance is often one of the most overlooked: antiboycott regulations. These regulations prohibit U.S. companies from acknowledging or complying with requests from foreign entities to boycott Israel and certain other countries.

Not only do these regulations prohibit U.S. companies from complying with these requests, in some circumstances they require companies to report these requests.

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One of my favorite aspects of working with our customers is getting their feedback about the export processes and systems they use and love. However, there are some instances when I hear things that make me cringe.

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In many ways, exporting is like hiring a marketing firm to represent you. With marketing, you have several options: You can do all of your work in-house with your own staff, you can hire freelancers, you can hire an agency, or you can do a combination of all of them.

Exporting works similarly—you can do everything yourself, you can hire vendors like freight forwarders to take care of parts of the process for you, or you can do a combination of both. The goal, of course, is to find resources that can help you do it efficiently.

But there’s something you must remember about both of these partnerships. No matter how you do it, you have to actively manage all the pieces of the process.

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When exporters think about their company’s export compliance—if they think of it at all—they think about it on the back end of the export process. They probably check out the restricted parties lists and, hopefully, find out if a license is needed for shipping their goods.

But this isn’t good enough. To really be efficient and strategic, company staff need to be involved with compliance from the very beginning of the process.

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At Shipping Solutions, we talk to dozens of exporters each week who are looking for information and help to grow their exports. These people typically recognize that something in their export process is broken, and they want to find a way to fix it.

But too often these people become frustrated by the pushback they get from their company leadership, their co-workers, or even their freight forwarders or customers when they try to implement changes. It reminds me of a well-known anecdote about collective behavior that illustrates how difficult change can be:

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As an exporter, you must be concerned with the proper classification of your goods and products.

I hear from many exporters who are confused about the Export Control Classification Number (ECCN) classification for their product and the Harmonized System (HS), Harmonized Tariff Schedule (HTS), and Schedule B numbers of their products.

First, it’s critical to understand that these classification systems have different purposes.

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If you are an exporter who submits your electronic export information through the Automated Export System (AES) on the Automated Commercial Environment (ACE), you've already set up an ACE account.

But if your companies relies on a third party like your freight forwarder to handle the ACE filings for your exports, you probably haven't bothered to set up an account.

While there's no requirement to set up an ACE account if you aren't doing your own AESDirect filings, you are missing an opportunity to use the ACE platform to help ensure your company is complying with U.S. export regulations.

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Restricted party lists (also called denied party lists) include names of organizations, companies or individuals that various U.S. agencies—and other international organizations and foreign governments—have identified as parties that one cannot do business with.

There are several reasons why a person or a company may be added to a restricted party list, which we’ve outlined in the article, Export Compliance: Understanding Restricted Party Screening. Essentially, they may be a terrorist organization or affiliated with such an organization, they may have a history of corrupt business practices, or they may otherwise pose a threat to national security.

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While it’s possible for importers and exporters to manually do all the work required for compliance, it can be a difficult task.

In addition to requiring deep knowledge of the regulations, manual compliance processes also demand constant, thoughtful attention to the import-export universe—including regulatory changes, product classification revisions, updates and additions to denied party and sanctions lists, and more.

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