Slide 0Slide 1Slide 2The Exporting ProcessSlide 4Slide 5Slide 6Slide 7Slide 8Slide 9Slide 10Slide 11Slide 12Slide 13Slide 14Who’s Responsible for Costs Under Various Terms?Slide 16Slide 17Slide 18Export Payment Terms Risk/Cost TradeoffExport DocumentsSlide 21Real Physical Distribution Costs Between Air and Ocean Freight - Singapore to the United StatesExporting and LogisticsSpecial Issues for TheSmall BusinessChapter154Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.  Feb. 3 - Trade Show and Order Mar. 3 - Financing Jul. 3 - Import License and Letter of Credit Aug. 1 - Closing The Deal Sep.4 - Production and Shipment Nov. 1 - Submission of Letter of Credit Dec. 12 - Final Inspection of Shipping Schedules Dec. 13 - Test Run Jan. 2 - “It’s on the way”An Export Sale From Show to Installation15-2Irwin/McGraw-Hill4Copyright © 2002 by The McGraw-Hill Companies, Inc. A ll rights reserved. The Exporting ProcessLicensesGeneralValidatedDocumentationExport declarationCommercial invoiceBill of ladingConsular invoiceSpecial certificatesOther documentsLeaving the Exporting CountryPhysical DistributionInternational shipping and logisticsPackingInsuranceEntering the Importing CountryTariffs, TaxesNon-tariff BarriersStandardsInspectionDocumentationQuotasFeesLicensesSpecial certificatesExchange permitsOther barriersIrwin/McGraw-Hill15-34Copyright © 2002 by The McGraw-Hill Companies, Inc. A ll rights reserved. Export Administration Regulations (EAR)1. A new country and commodity classification system has been devised, making it the exporter’s responsibility to select the proper classification number for an item to be exported.2. The exporter must decide if there are end-use restrictions on the items, such as their possible use in the development of nuclear, chemical, and biological weapons. 3. The exporter now has the responsibility to determine the ultimate end customer and ultimate end uses, regardless of who may be the initial buyer, or face the legal consequences of doing business with unauthorized trading partners. 4. A special category for the control of encryption-related products has been established. 15-4Irwin/McGraw-Hill4Copyright © 2002 by The McGraw-Hill Companies, Inc. A ll rights reserved. Typical Commerce Control List (CCL) Description for OA98415-5OA984 Shotguns, barrel length 18 inches (45.72 cm) or over; buckshot shotgun shell; except equipment used exclusively to treat or tranquilize animals, and except arms designed solely for signal, flare, or saluting use; and parts, n.e.s.License Requirement. Reason for Control: CC, FC, UN Control(s)Country ChartFC applies to entire entry. FC Column 1CC applies to shotguns with a barrel length greater than or equal CC Column 1 to 18 in. (45.72cm), but less than 24 in. (60.96 cm) or buckshot shotgun shells controlled by this entry, regardless of end-user. CC applies to shotguns with a barrel length greater than or equal CC Column 2 to 24 in. (60.96 cm), if for sale ore resale to police or law enforcement.CC applies to shotguns with a barrel length greater than or equal to CC Column 3 24 in. (60.96 cm) if for sale or resale to police or law enforcement.UN applies to entire entry. Rwanda; FederalRepublic ofYugoslavia (Serbiaand Montenegro).Irwin/McGraw-Hill4Copyright © 2002 by The McGraw-Hill Companies, Inc. A ll rights reserved. 15-6Typical Commerce Control List (CCL) Description for OA984License ExceptionsLVS: N/AGBS: N/ACIV: N/AList of Items ControlledUnits: $ valueRelated Controls: This entry does not control shotguns with a barrel length of less than 18 in. (45.72 cm). These items are subject to the export licensing authority of the Department of State, Office of Defense Trade Controls.Related Definitions: N/AItems: The list of items controlled is contained in the ECCN heading. 1465Irwin/McGraw-Hill4Copyright © 2002 by The McGraw-Hill Companies, Inc. A ll rights reserved. Export License15-7General LicenseGeneral LicenseValidated LicenseValidated LicenseIrwin/McGraw-HillCommerce Country Chart: Reasons for Control (Selected Countries)15-8Country Chemical & Nuclear Non- National Missle Regional Firearms Crime Anti-Biological Weapons Proliferation Security Tech Stability Convention Control Terrorism CB 1 CB 2 CB 3 NP 1 NP 2 NS1 NS2 MT 1 RS1 RS2 FC 1 CC1 CC2 CC3 AT1 AT2Albania X X X X X X X X X X XArgentina X X X X X X X X XAustralia X X X XCanada XChina X X X X X X X X X X XFrance X X X XIndia X X X X X X X X X X XMexico X X X X X X X X X X X XSudan X X X X X X X X X X X XSyria X X X X X X X X X X X XSource: “Supplement No. 1 to Part 738, Commerce Country Chart,” Export Administration Regulation, January 2001. Available at http//www.access.gpo.gov/hxa/ear/ear_data.htmlIrwin/McGraw-Hill4Copyright © 2002 by The McGraw-Hill Companies, Inc. A ll rights reserved. Innovations Developed to Ease The Acquisition of Export Licenses15-9 Export License Application and Information Network (ELAIN) System for Tracking Export License Application (STELA) Electronic Request for Item Classification (ERIC) Simplified Network Application Process (SNAP)Irwin/McGraw-HillIndicators for Possible Unlawful Diversion15-101. The customer or purchasing agent is reluctant to offer information about the end of a product.2. The product’s capabilities do not fit the buyer’s line of business; for example, a small bakery places an order for several sophisticated lasers.3. The product ordered is incompatible with the technical level of the country to which the product is being shipped. For example, semiconductor-manufacturing equipment would be of little use in a country without an electronic industry.4. The customer has little or no business background.5. The customer is willing to pay cash for a very expensive item when the terms of the sale call