Export

EXPORT/IMPORT

PROCEDURES

and

DOCUMENTATION

FIFTH EDITION

DONNA L. BADE

American Management Association

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Library of Congress Cataloging-in-Publication Data

Bade, Donna L.

Export/import procedures and documentation / Donna L. Bade. — Fifth edition.

pages cm

Revised edition of Thomas E. Johnson’s and Donna L. Bade’s Export/import procedures and

documentation, 4th edition, published in 2010.

Includes bibliographical references and index.

ISBN 978-0-8144-3475-8 (hardcover : alk. paper)

ISBN 0-8144-3475-4 (hardcover : alk. paper)

ISBN 978-0-8144-3476-5 (ebook)

ISBN 0-8144-3476-2 (ebook)

1. Export marketing—United States. 2. Exports—United States—Forms. 3. Imports—United States—

Forms. 4. Foreign trade regulation. 5. International trade. I. Johnson, Thomas E., 1948-Export/import

procedures and documentation. II. Title.

HF1416.5.J64 2015

658.8’4—dc23

2014033738

© 2015 Donna L. Bade.

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Printing number

10 9 8 7 6 5 4 3 2 1

Contents

Preface

Acknowledgments

About the Author

Part I

Organizing for Export and Import Operations

Chapter 1. Organizing for Export and Import Operations

A. Export Compliance Department

B. Import Department

C. Combined Export and Import Departments

D. Manuals of Procedures and Documentation

E. Record-Keeping Compliance

F. Software

G. Federal, State, International, and Foreign Law

Part II

Exporting: Procedures and Documentation

Chapter 2. Exporting: Preliminary Considerations

A. Products

B. Volume

C. Country Market and Product Competitiveness Research

D. Identification of Customers: End Users, Distributors, and Sales

Agents

E. Compliance With Foreign Law

1. Industry Standards

2. Foreign Customs Laws

3. Government Contracting

4. Exchange Controls and Import Licenses

5.Value-Added Taxes

6.Specialized Laws

F. Export Controls and Licenses

G. Patent, Trademark, and Copyright Registrations and Infringements

H. Confidentiality and Non-Disclosure Agreements

I. Antiboycott Compliance

J. Employee Sales Visits to Foreign Countries—Immigration and

Customs Compliance

1. Carnets

K. Utilization of Freight Forwarders and Foreign Customs Brokers

L. Export Packing and Labeling (Hazardous Materials)

M. Terms of Sale

N. Consignments

O. Leases

P. Marine and Air Casualty Insurance

Q. Methods of Transportation; Booking Transportation

R. Country of Origin Marking

S. Foreign Warehousing and Free Trade Zones

T. Export Financing and Payment Insurance

U. Tax Incentives

V. Export Trading Companies, Export Trade Certificates of Review, and

Export Management Companies

W. Translation

X. Foreign Branch Operations, Subsidiaries, Joint Ventures, and

Licensing

Y. Electronic Commerce

Chapter 3. Exporting: Sales Documentation

A. Isolated Sales Transactions

1. Importance of Written Agreements

2. Email Orders

3. The Formation of Sales Agreements

4. Common Forms for the Formation of Sales Agreements

a. Price Lists

b. Requests for Quotations

c. Quotations and Costing Sheets

d. Purchase Orders

e. Purchase Order Acknowledgments, Acceptances, and Sales

Confirmations

f. Pro Forma Invoices

g. Commercial Invoices

h. Conflicting Provisions in Seller and Buyer Sales

Documentation

i. Side Agreements

B. Ongoing Sales Transactions

1. Correlation with Documentation for Isolated Sales Transactions

2. Important Provisions in International Sales Agreements

a. Selling and Purchasing Entities

b. Quantity

c. Pricing

d. Currency Fluctuations

e. Payment Methods

f. Export Financing

g. Security Interest

h. Passage of Title, Delivery, and Risk of Loss

i. Warranties and Product Defects

j. Preshipment Inspections

k. Export Licenses

l. Import Licenses and Foreign Government Filings

m. Governing Law

n. Dispute Resolution

o. Termination

C. Export Distributor and Sales Agent Agreements

1. Distinction Between Distributor and Sales Agent

2. Export Distributor Agreements

a. Territory and Exclusivity

b. Pricing

c. Minimum Purchase Quantities

d. Handling Competing Products

e. Effective Date and Government Review

f. Appointment of Subdistributors

g. Use of Trade Names, Trademarks, and Copyrights

h. Warranties and Product Liability

3. Export Sales Agent Agreements

a. Commissions

b. Pricing

c. Shipment

d. Warranties

e. Relationship of the Parties

D. Foreign Corrupt Practices Act Compliance

E. U.S. Export Control Laws

Chapter 4. Exporting: Other Export Documentation

A. Freight Forwarders

B. Shipper’s Letters of Instructions

C. Commercial Invoices

D. Bills of Lading

E. VOCCs and NVOCCs

F. Packing Lists

G. Inspection Certificates

H. Marine and Air Casualty Insurance Policies and Certificates

I. Dock and Warehouse Receipts

J. Consular Invoices

K. Certificates of Origin

L. Certificates of Free Sale

M. Delivery Instructions and Delivery Orders

N. Special Customs Invoices

O. Shipper’s Declarations for Dangerous Goods

P. Precursor and Essential Chemical Exports

Q. Animal, Plant, and Food Export Certificates

R. Drafts for Payment

S. Letters of Credit

T. Electronic Export Information

U. Freight Forwarder’s Invoices

V. Air Cargo Security and C-TPAT

1. Air Cargo Security

2. Customs and Trade Partnership Against Terrorism (C-TPAT)

Chapter 5. Export Controls and Licenses

A. Introduction

B. Scope of the EAR

C. Commerce Control List

D. Export Destinations

E. Customers, End Users, and End Uses

F. Ten General Prohibitions

G. License Exemptions and Exceptions

H. License Applications and Procedures

1. Documentation From Buyer

2. License Application Form

3. Procedures

I. Re-Exports

J. Export Documentation and Record-Keeping

K. Special Comprehensive Licenses

L. Technology, Software, and Technical Assistance Exports

M. Validated End-User Program

N. Antiboycott Regulations

O. Violations and Penalties

P. Embargoes and Trade Sanctions Programs

R. U.S. Munitions and Arms Exports

S. Enforcement

Part III

Importing: Procedures and Documentation

Chapter 6. Importing: Preliminary Considerations

A. Products

B. Volume

C. Country Sourcing

D. Identification of Suppliers

E. Compliance With Foreign Law

1. Foreign Export Controls

2. Exchange Control Licenses

3. Export Quotas

F. U.S. Customs Considerations

1. Utilization of Customs Brokers

2. Importation Bonds

3. Importer’s Liability and Reasonable Care

4. Application for Importer’s Number

5. Ports of Entry

6. Import Quotas

7. Antidumping, Countervailing, and Other Special Duties

8. Classification

9. Valuation

10. Duty-Free and Reduced Duty Programs

11. Column 2 Imports

12. Deferred Duty Programs (Bonded Warehousing and Foreign

Trade Zones)

13. Record-Keeping Requirements

14. Customs Rulings

G. Import Packing and Labeling

H. U.S. Commercial Considerations

1. Prevailing Market Price

2. Buy American Policies

3. U.S. Industry Standards

I. Terms of Purchase

J. Consignments

K. Leases

L. Marine and Air Casualty Insurance

M. Method of Transportation; Booking Transportation

N. Import Financing

O. Patent, Trademark, and Copyright Registrations and Infringements

P. Confidentiality and Non-Disclosure Agreements

Q. Payment

R. Translation

S. Foreign Branch Operations, Subsidiaries, Joint Ventures, and

Licensing

T. Electronic Commerce

Chapter 7. Importing: Purchase Documentation

A. Isolated Purchase Transactions

1. Importance of Written Agreements

2. Email or Internet Orders

3. The Formation of Purchase Agreements

4. Common Forms for the Formation of Purchase Agreements

a. Price Lists

b. Requests for Quotations and Offers to Purchase

c. Quotations

d. Purchase Orders

e. Purchase Order Acknowledgments, Acceptances, and Sales

Confirmations

f. Commercial Invoices

g. Conflicting Provisions in Seller and Buyer Sales

Documentation

h. Side Agreements

B. Ongoing Purchase Transactions

1. Correlation With Documentation for Isolated Purchase

Transactions

2. Important Provisions in International Purchase Agreements

a. Purchasing and Selling Entities

b. Quantity

c. Pricing

d. Currency Fluctuations

e. Payment Methods

f. Import Financing

g. Security Interest

h. Passage of Title, Delivery, and Risk of Loss

i. Warranties and Product Defects

j. Preshipment Inspections

k. Export Licenses

l. Governing Law

m. Dispute Resolution

n. Termination

C. Import Distributor and Sales Agent Agreements

1. Distinction Between Distributor and Sales Agent

2. Import Distributor Agreements

a. Territory and Exclusivity

b. Pricing

c. Minimum Purchase Quantities

d. Handling Competing Products

e. Appointment of Subdistributors

f. Use of Trade Names, Trademarks, and Copyrights

g. Warranties and Product Liability

3. Import Sales Agent Agreements

a. Commissions

b. Pricing

c. Shipment

Chapter 8. Import Process and Documentation

A. Importer Security Filing and the 10+2 Program

B. Bills of Lading

C. Commercial Invoices

D. Pro Forma Invoices

E. Packing Lists

F. Inspection Certificates

G. Drafts for Payment

H. Arrival Notices

I. Pickup and Delivery Orders

J. Automated Commercial Environment (ACE)

K. Entry/Immediate Delivery

L. Entry Summary

M. Other Entries

N. Reconciliation

O. GSP, AGOA—Special Programs

P. NAFTA/Other FTA Certificates of Origin

Q. Specialized Products Import Entry Forms

R. Examination and Detention

S. Liquidation Notices

T. Notices of Redelivery

U. Post Entry Amendment

V. Requests for Information

W. Notices of Action

X. Protests

Y. Record-Keeping

Z. Administrative Summons

AA. Search Warrants

BB. Grand Jury Subpoenas

CC. Seizure Notices

DD. Prepenalty Notices

EE. Penalty Notices

FF. Customs Audits

GG. Penalties

HH. Prior Disclosure

II. Court of International Trade

JJ. Appeals

KK. Offers of Compromise

LL. ITC and Commerce Questionnaires

Part IV

Global Customs Considerations

Chapter 9. Determining the Proper Classification of a Product

A. The Organization of the Tariff Schedules

B. The General Rules of Interpretation

C. Duty Rates

Chapter 10. Determining the Proper Value to Declare

A. Transaction Value

1. Additions to the Transaction Value

2. Deductions from the Transaction Value

3. Related Parties

B. Transaction Value of Identical Merchandise

C. Transaction Value of Similar Goods

D. Deductive Value

E. Computed Value

F. Fall-Back Methodology

1. Unacceptable Methods

G. First-Sale Transactions

Chapter 11. Determining the Proper Country of Origin

A. Preferential Duty Laws

1. Substantial Transformation