The TradeLaw Q&A column addresses your questions concerning the import and export regulations of the United States.
I am a small company who is thinking of expanding my product market to customers abroad. What are some of the government requirements I should consider before moving forward?
Great question at a great time! It is critical for companies to consider the export issues involved prior to accepting purchase orders from foreign customers for its products. No one wants to accept a purchase order, manufacture a product, and prepare the documents for export only to discover that the product requires an export license or may be destined to a customer on one of the government “denied parties” lists or to a country with which we have an embargo.
First and foremost, companies need to review their product and determine if it is in fact controlled by the government. There are a number of agencies that may have specific controls on products, with the primary agencies being the Department of State who has jurisdiction of products intended for military applications and the Bureau of Security and Industry who has jurisdiction over non-military products. Sometimes it may be a gray area and companies are prudent to seek guidance from the agencies involved by requesting a Commodity Jurisdiction.
For non-military application products, the Commerce Control List, found in the Export Administration Regulations, 15 CFR part 740-774 should be reviewed to determine if your product falls within any of the Export Commodity Classification Numbers. If so, then it may require an export license depending upon the country of ultimate destination. An export license is not obtained overnight, thus the review should be done well in advance of the intended shipment.
In addition, companies need to screen their customers to ensure they do not appear on any of the government lists such as the denied parties list, the entity list, etc. If so, then the company would not be able to ship to the customer without an export license.
Also, keep in mind that the U.S. does have embargos against a number of countries and exporting to those countries is not permissible without approval from the Office of Foreign Assets Control.
Paula Connelly is principal in the Law Offices of Paula M. Connelly and has over 25 years of experience in Customs law and related import and export matters. She works with businesses of all sizes providing advice on all aspects of international trade law. She can be reached at paula@connellycustomslaw.com or 781-897-1771.
Disclaimer – Material presented in this column is intended for information purposes only. It is not intended as legal advice and should not be construed as such.
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