Exporting and Trading info

How to Gain Relief from Unfair Import Practices Remaining competitive in world markets is an internal management problem. The underlying elements are quantity, quality, and price. Nevertheless, government intervention is sometimes necessary when you learn about foreign firms who are not competing on what has become known as a "level playing ground." Copies of the United States International Trade Commission's (ITC) Rules of Practice and Procedure, which set forth the procedures for the filing and conduct of investigations, are available from the Secretary, United States International Trade Commission, 701 E. Street NW, Washington, DC 20436 (telephone 202-252-1000). The ITC Representative can investigate the following allegations: • Countervailing duties imposed by a foreign country • Antidumping • General investigations of trade and tariff matters • Investigations of costs of production • Alleged unfair practices in import trade • Investigations of injury...

TAX INCENTIVES FOR EXPORTING A prominent tax attorney once said, "Business in America? It's all about taxes." International business is no exception. Taxes on income derived from international trade are in accordance with current laws for other income except that tax incentives for exporting are substantial. No tax incentives apply on imports. Tax incentives for exporters amounts to approximately a 15% exclusion of the combined taxable income earned on international sales. The tax law provides for a system of tax deferrals for Domestic International Sales Corporations (DISCs) and Foreign Sales Corporations (FSCs). Prior to December 31,1984, the DISC was the only medium for distributing export earnings. DISCs don't require a foreign presence, and, in fact, are legal entities established only on paper. The Revenue Act of 1971 created the DISC incentive and provides for deferral of federal income tax on 50% of the export earnings allocated to the DISC, with the bal...

Hot Tips to Avoid Export Control Violations • Determine whether you must have a validated export license. When in doubt, contact the Exporter's Services Staff, Office of Export Administration for assistance (202-377-4811). • Fully describe commodities or technical data on export shipping documents. • Use the applicable destination-control statement on commercial invoices, air waybills, and bills of lading, as required by Section 386.6 of the Export Administration Regulations. • Avoid overshipments by maintaining an accurate account of the quantity and value of goods shipped against a validated export license. • Be mindful of the expiration date on validated export licenses to avoid shipments after the applicable license has expired. • Enter the applicable validated export license number or general license symbol on the Shipper's Export Declaration (SED). • Make certain that shipping documents clearly identify the exporter, intermediate consignee, and ultimate consigne...

EXPORT CONTROLS Another area in which exporting differs from importing is the licensing required to control exports. The history of export controls in the United States is based on the presumption that all exported goods and technical documentation are subject to regulation by the government. This presumption is fundamentally different than most nations, which often presume the freedom to export unless there is an explicit statement of a need to control. Therefore, the public regulation of international sales in America is often more onerous than elsewhere. The exercise of controls by the United States varies from nonexistent (as is the case with Canada) to total embargoes (as are the cases of North Korea, Cuba, and Vietnam). Several departments have legal authority to control exports. The Department of State licenses arms, ammunition, implements of war, technical data relating thereto, and certain classified information. The Department of Justice licenses narcotics and dangerous d...

Shipper Any person whose primary business is the sale of merchandise may, without a license, dispatch and perform freight-forwarding services on behalf of their own shipments, or on behalf of shipments or consolidated shipments of a parent, subsidiary, affiliate, or associated company. You may not, however, receive compensation from the common carrier. A large manufacturer usually has its own shipping department which serves as its own freight forwarder, but smaller manufacturing firms and small importers/exporters seldom have the staff or the time to make their own arrangements. Often an exporter calls upon a freight forwarder to help him put together the final price quotation to a distributor. For example, when quoting C.I.F., in addition to the manufacturer's price and the commission, the forwarder can provide information on dock and cartage fees, forwarder's fees, marine insurance, ocean freight costs, duty charges, consular invoice fees, and packing charges. It's n...

Freight Forwarder A freight forwarder is a private service company licensed to support shippers and the movement of their goods. These specialists in international physical distribution act as an agent for the exporter (shipper) in moving cargo to an overseas destination. They are familiar with the following: • The import rules and regulations of foreign countries • The methods of shipping • The United States government export regulations • The documents connected with foreign trade From the beginning, freight forwarders can assist with the order by advising on such things as freight costs, consular fees, and insurance costs. They can recommend the degree of packing, arrange for an inland carrier, find the right airline, and even arrange for the containerization of the cargo. They quote shipping rates, provide information, and book cargo space. These firms are invaluable because they can handle everything from the factory to the final destination, including all documentati...

Other Sources of Export Information Besides the products offered by the Department of Commerce, several excellent books are on the market—government books and private-sector books. U.S. Government Books.  This catalog annotates almost 1,000 popular government publications organized into subject areas. You can order it at no charge from any of the 24 bookstores operated by the Government Printing Office (GPO) all around the United States. (See Appendix F for the bookstore addresses and telephone numbers.) A Basic Guide to Exporting. The United States Department of Commerce publishes this guide. You can obtain it by writing the Superintendent of Documents, United States Government Printing Office, Washington, DC 20402, telephone number: (202) 783-3238 or by contacting any of the bookstores listed in Appendix F. The government has designed this booklet to show step-by-step how to expand an existing manufacturing business into the international marketplace. It is also an excel...

Understanding United States Foreign Trade Data This data explains the different foreign trade classifications and valuation systems and other factors that complicate the understanding of United States foreign trade data. It is available at a cost of $7.50 from the Superintendent of Documents. Monthly FT 410 Data A Shipper's Export Declaration (SED) must accompany every export valued over $1000.00. This declaration is the document that you or your freight forwarder present to customs as the shipment leaves. When Customs is finished with the document, it is sent to the Department of Commerce's Bureau of Census in Anderson, Indiana, where it is entered into a computer data base. Every month, the bureau publishes a book titled U.S. Exports, Schedule E, Commodity by Country or the "Monthly FT 410." In minutes, you can learn a great deal from simple analysis of this data. HOW TO USE THE FT 410 SMOKE DETECTORS—A CASE STUDY • 43,535 smoke detectors valued at $750,0...

EXPORT INFORMATION SOURCES Information needed for exporting is easier to obtain than for domestic sales. Probably more information is available than one could digest in a lifetime, and the United States Department of Commerce has made it easy to acquire. For example, the Foreign Trader's Index and Trade Opportunities files are available in printed form and up-to-the-minute computer-resident data bases. If you are planning to contact the federal government about a business matter but have no idea where to begin, the Office of Business Liaison (OBL) is a good place to start. Ask for a copy of Business Services Directory at the following address: U.S. DEPARTMENT OF COMMERCE Office of Business Liaison Room H5898C Washington, DC 20230 202-377-3176 Government Sources Your nearest Department of Commerce, ITA office, or the Trade Information Services Office at Commerce Department headquarters in Washington, DC offers the following information services to United States exporters. C...

GOVERNMENT SUPPORT Exporting and importing seldom are treated as equals by any country. Though governments support the import of needed raw materials, they generally place heavier emphasis on exporting, because it brings needed foreign exchange and stimulates job expansion. So it is in the United States. The United States government strongly supports exports through the International Trade Administration (ITA) of the Department of Commerce. Approximately 75% of the Department's budget is focused on this function. ITA is the major division of Commerce, and it is organized basically into external and internal arms. The external arm is called the Foreign Commercial Service (FCS). Overseas, the FCS maintains offices in 120 major foreign cities in the 63 countries that are the United States' principal trading partners. More than 180 commercial offices, supported by over 500 Foreign Service Nationals, provide a full range of business, investment, and financial counseling services...