Starting an Import/Export Business involves understanding key regulations and processes for both importing and exporting. For importing, businesses must understand regulations from Customs and Border Protection around documentation, duties, and tariffs. Key import documentation includes commercial invoices, certificates of origin, and letters of credit. For exporting, businesses must understand regulations from the Department of Commerce around export licensing, the shipper's export declaration, and the automated export system. Both importing and exporting require understanding pricing, marketing, distribution networks, and cultural considerations for foreign markets.

1. Starting an Import/Export Business Week Two Presented by Clarence Light, MS, CPA, CGFM

2. Importing and Exporting Basics Two sides of the coin Similar approaches—Pricing, marketing, agency, distribution Regulation Importing—Customs and Border Protection Exporting—U.S. Department of Commerce

3. Importing Basics Preexisting distribution network and contacts Limited marketing (family members) Shipping and Regulations Establishing import activities Agents Marketing Distribution Shipping and Regulations

4. Importing Basics Find a product Find the best source Obtain samples Cost the product the samples represent Present the sample at trade shows Order stock based on the demand from the trade shows How Small Business Trades Worldwide, (Spears, 2001)

5. Import Information Sources Internet Example—Thomas Register www.thomasnet.com Agents for wholesalers and retailers Regulations Importing into the United States www.cbp.gov Informed Compliance Publications What Every Member of the Trade Community Should Know About: ……..

6. Import Information Sources Agents for wholesalers and retailers Examples www.oneworldsourcing.com www.alibaba.com www.tradekey.com www.fita.org

9. Import Regulation Basics U.S. Bureau of Customs and Border Protection (CBP) Previously U.S. Dept. of Treasury Currently U.S. Dept. of Homeland Security Specialized Documentation

10. Import Regulation BasicsImport Process Entry Evidence of right to make entry Surety (bond) Examination of Goods and Entry Documents Classification and Value Assessment of Duty Payment of duty and release of bond Release of shipment to importer of record

11. Import Regulation Basics Tariffs International Trade Commission Injury determinations (Antidumping cases) Harmonized Tariff System Quotas Absolute Tariff-Rate

12. Import Regulation Basics Harmonized Tariff System Complexity rivals the Income Tax Code 2,959 pages 99 chapters 10,523 separate tariff lines Interactive Tariff and Trade Database

21. Import Documentation Commercial Invoice Certificate of Origin Letter of Credit Sight Draft

23. Source: Import/Export, Nelson, p. 28

24. Mail Shipments Advantages Ease in clearing shipments through CBP Savings on shipping charges Smaller, low-valued packages may be sent less expensively through the mail

25. Mail Shipments Duties ≤ $2,000 collected by carrier No formal entry required on duty-free merchandise ≤$2,000 No need to personally clear shipments if < $2,000 in value

26. Export Basics Similar issues as importing—marketing, agency, distribution Political and cultural considerations U.S. Department of Commerce Export Licensing Documentation Shippers Export Declaration (SED) Automated Export System (AES)

27. Export Marketing Potential unfamiliar markets High incentives from U.S. Government Trade deficit Government resources International Trade Administration U.S. Commercial Service Foreign Commercial Service Small Business Administration

29. Export Regulations Export controls Limited to extensive Military applications, drugs, nuclear material Export Administration Regulations (EAR) U.S. Department of Commerce Commerce Control List (CCL) Export licensing Less than 4% of U.S. manufactured products require an export license (Nelson, 2000)

30. Shipper’s Export Declaration Required for most shipments out of the borders of the United States Basically for statistical requirements Exceptions US to Canada (unless export license required) US Virgin Islands to US US Virgin Islands to Puerto Rico US/Puerto Rico to Other US Possessions Other US Possessions to US