Export Compliance and Documentation Procedures in the US

Today, starting an export business is very easy, but it does not mean that regulations have been reduced or compliance has become easier.  The wide spread availability of internet has ensured that it is easy to find products,buyers, clearing & forwarding agents, etc. Every country has strict regulations that need to be followed by every exporter and the US is no different. Every exporter, irrespective of the quantity and value of goods/services being exported has to adhere to the rules & regulations. Lack of knowledge of the same can not be claimed as a reason for being non-compliant.

Fines for violations in administrative cases can be greater than USD 250,000 and that in a criminal case can be up to $1 million accompanied by imprisonment. So, protecting your business against any such violations by being compliant is extremely vital for the survival of your business.

Classifying the Products

Accurately classifying your products will help you understand if you require an export license in the US. You can familiarize yourself with  the  Harmonized Systems (HS) or B codes used to classify the products. Exporters also need to check if the product has an Export Control Classification Number (ECCN). If it does,  then the product falls under the control list and will require an export license. This can be checked by referring to the U.S. Export Administration Regulations (EAR). Classifying the product will empower you to

understand more about the compliance and documentation requirements of the product being exported.

Screen all parties

It is essential to screen all parties in the export transaction against the denied party list. The US government issues a  Denied  Party list which includes businesses or organisations that are involved in terrorism, drug trafficking, or pose danger to the security of the nation. Exporters need to screen every party involved in their transaction so as to not be involved with any such entity. Doing business with such parties could have severe legal ramifications. Exporting even a single consignment to anyone on this list is in violation of US export regulations.

Document compliance

New exporters are usually not clear about the documents required to export and may inadvertently violate the regulations. You should note that each export is different and would require different documents. For any international shipment,you may require a  Proforma  Invoice,  Commercial  Invoice,  Packing list,Certificate of Origin, Shipper’s letter of instruction, Bill of lading, Dangerous goods form, and a Bank draft. The list of required documents will vary and it is best that you hire a professional or use an exports

documentation management software to ensure that you remain totally compliant.

Red flags

As an exporter, you are also required to take into account the use of your products in the exported country. You are also liable for the usage of your products once they leave the country. Chemicals or biological materials could be used to create weapons of mass destruction. So, if there are any suspicions or the number of orders is inconsistent, it should raise a red flag. If you have any suspicion, you should not proceed with the order and consult an expert to look into it.

Final Word

While   exporting may be a lucrative business, it  requires a high  level   of compliance since two countries are involved in the trade. Violations can lead to huge fines and legal troubles which could even land you in prison. The best way to deal with compliance and document procedure is to allow an expert to handle it. If you wish more autonomy, using exports management software that takes care of all the documentation can also be used.

Get in  touch with our Executives to know more about the export management software suitable for your business.

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