Your international sales are on the upswing, and you want to make sure your exports arrive on time to customers whether they’re in Austria or Australia. There are plenty of details to manage when exporting, but it doesn’t have to be overwhelming. Numerous resources exist to help you export right.
When done correctly, exporting can ultimately save you time and money and grow your business. Get off to a good start by understanding the importance of regulatory compliance and how to avoid potential snags.
Benefits of Compliance
When you follow export rules and regulations, your company wins. It’s critical to be proactive about the laws related to shipping goods overseas because:
- Doing it right the first time is cheaper than having to go back and fix it later.
- Demonstrated compliance results in fewer cargo exams, information requests, penalties and delays, which means cost savings.
- Less cost, coupled with shorter customs processing time, equals a competitive advantage for your company.
Potential Stumbling Blocks
Even experienced companies can stumble when it comes to export compliance. Plenty of obstacles can keep you from following all of the rules and regulations, including:
- New personnel referencing outdated documentation.
- Staff overwhelmed by orders and processing.
- Export manager out on vacation or medical leave.
- Lack of communication with sales staff or foreign distributor.
- Absence of written policies or an export management compliance program (EMCP).
An EMCP goes a long way toward keeping you on top of your exports. An optional but effective system, an EMCP establishes checks and safeguards at every step of the export process.
It also promotes a best-practices business environment that gives you tighter controls over sales, order entry, traffic, logistics, carriers and vendors — all tailored to your company’s unique requirements. Your EMCP advises employees on how to handle red flags or bumps in the road. Then when there’s an issue with training, a customer or customs officials, employees know exactly what to do.
Another way to ensure export compliance is to ask six questions before you process any international shipment.
1. What agency has jurisdiction over the export? Multiple entities regulate exports across U.S. borders to keep sensitive goods out of the most dangerous hands. It could be Homeland Security’s Customs & Border Protection or the Commerce Department’s Bureau of Industry and Security, for example.
2. What is it? Your exports require an Export Control Classification Number (ECCN), which regulatory agencies use to categorize and identify items. This will determine whether you need a license to ship your items.
3. How many uses does it have? Items (such as vacuum pumps and heat exchangers) that can be used for one or more purposes are closely monitored and regulated. If any components can be considered “dual-use” items, they might require an export license and may be controlled under International Traffic in Arms Regulations.
4. Where is it going? The ultimate destination may also affect whether you require a license. Plus, some countries are banned from receiving shipments, including Syria, Cuba, North Korea and Iran. Other countries have different levels of restrictions based on the product being shipped.
5. Who will receive it? It’s crucial for officials to know the ultimate end user to ensure the person or entity isn’t on their list of restricted parties.
6. What will they do with it? Make sure you’re not shipping to a middleman or exporting a controlled item with a prohibited end user.
Clearly there are myriad details to manage when it comes to exporting. To learn more about the process, view the FedEx webinar on compliance, “Growing Your Business Internationally.”
Suzy Frisch is a Twin Cities–based freelance writer. She’s covered business, politics, law and many other topics for a range of publications, including Twin Cities Business magazine, the Star Tribune and the Chicago Tribune.
Note: The opinions expressed in this article are those of the author and do not necessarily reflect the views of FedEx.
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