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Check Export Requirements. Department of Commerce, Bureau of Industry & Security (formerly Bureau of Export Controls) http://www.bxa.doc.gov What types of products have restrictions: primarily weapons, technology, defense related U.S. boycotts: Iran, Iraq, Cuba, Libya Rwanda, Angola.
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Check Export Requirements • Department of Commerce, Bureau of Industry & Security (formerly Bureau of Export Controls)http://www.bxa.doc.gov • What types of products have restrictions: • primarily weapons, technology, defense related • U.S. boycotts: • Iran, Iraq, Cuba, Libya • Rwanda, Angola
Check on Import Restrictions Tariffs - taxes/duties levied against imported goods. Exchange Permits - due to rationing of host country currencies; permit allows exchange for U.S. $ Quotas - limits quantity of goods allowed in the host country Import Licenses - like quota, but on a case-by-case basis Boycotts - U.S. law prohibits U.S. firms from complying with unauthorized boycotts of certain countries Standards - health, quality, safety; protects citizens Voluntary Agreements - reciprocal limits between 2 countries to avoid penalties Other Restrictions - e.g.., language laws, product labels, religious conventions, etc..
Boycotts, Embargos, Sanctions • Boycotts • ban on all goods associated with a particular company and/or country • Embargos • Prohibits all business deals with the target country; affects third parties • Sanctions • Punitive trade restrictions applied by a country or group against another country for noncompliance
Facilitators of International Trade • International Trade and Economic Development Organizations • Government Organizations • Other Institutions and Procedures Facilitating International Trade
International Trade/Development Organizations • World Trade Organization • Group of Seven (Eight) – G7 (G8): Canada, France, Germany, Italy, Japan, United Kingdom, United States – and Russia • International Monetary Fund (IMF) • Development Banks – e.g., World Bank • United Nations Organizations
Government Organizations • United States Agencies • US Agency for International Development (USAID) • US Department of Commerce • Export-Import Bank of the United States • State and Local Government Agencies • Department of State • Small Business Administration • Department of Agriculture
Other Organizations • Commercial banks • Export intermediaries • Chamber of commerce and trade associations • American chambers of commerce abroad • International trade consultants and other advisors
Other Privileged Trade Positions • Customs-Privileged Facilities • Products are brought into an in-bond area, manipulated (processed, repackaged, assembled), and re-exported to country where products originated • Most-Favored-Nation Status • Preferential tax treatment on imported products from countries that are not part of a US trade agreement
Free Trade Zones • Firm benefits from using an FTZ: • Foreign goods are exempt from duties as long as they do not enter the country • Goods can be stockpiled (tariff free) in FTZ when quotas are filled or while waiting for better market conditions. • Goods can be assembled without paying tariffs on foreign parts. • Firm can use the FTZ for breaking bulk • Tax-free area not considered part of the country in terms of import regulations
Free Trade Zones, continued • Firm benefits from using an FTZ, cont.: • No duty paid on damaged, scraped and obsolete merchandise • Safer than most ports of entry – bonded warehouse & increased security reduces insurance costs • Products can be labeled as manufactured in the foreign trade zone country when it has a positive country-of-origin image.
Puerto Rico FTZ • Puerto Rico has the largest, noncontiguous Foreign Trade Zone (FTZ) system in the USA. The system allows companies to obtain significant financial savings, since raw material, components and packaging can be transported tax free through these zones and items shipped abroad after processing are exempt from U.S. taxes. Benefits of the FTZ in Puerto Rico include: • • Deferment of federal customs duties• Deferment of Puerto Rico excise tax• No payment of Municipal License Taxes on exports outside the USA.• No duty paid on damaged, scraped and obsolete merchandise• U.S. Customs duties are not owed on labor, overhead and profit attributed to production operations in a FTZ.• Reduction of time and effort in the activation process.