This is a basic rundown of everything to know before you begin exporting your products.
Trillions of dollars per year are funneled into the export industry. The United States exported more than two trillion dollars in products to international companies in 2018. There are several US corporations that export millions upon millions of dollars in goods every year. But small businesses also contribute to the total export value of the country.
Large corporations tend to have vast legal teams and strong compliance procedures in place. But smaller businesses might not have these resources. In fact, small business owners might not know anything about federal export regulations. This especially goes for hobbyists, artists, and other people without a strong background in business leadership.
Many people assume that their company won’t need to comply with regulations. But you’d be surprised. More companies need to comply with export regulations than you’d think. With that said, it is true that there are some companies that can ship products internationally without being considered a global exporter.
How Is Exporting Defined?
Federal law has very specific definitions of “exporting.” Whenever an item is physically shipped outside of the United States border, this is considered an export. In addition, whenever a digital, written, or oral file is transmitted to a client in an international country, this is also considered an export. Even if no actual product crossed the border, the transfer of files across the electronic borders counts.
This can include tangible things like gas, oil, and books. It can also include intangible things like music, programming, software code, e-books, and other intellectual property.
Companies can export products internationally in several ways.
The first is to ship a product to someone in another country. Usually this involves the use of a third-party mail service. People may use the USPS international shipping capabilities, or they may use mail carriers like UPS and FedEx.
The second is to carry the product physically across the border. If a company has its employee travel to the country and bring the merchandise with them, they may need to comply with certain regulations. It’s important to note that carrying electronics with you may have implications for export control laws, even if you don’t intend to sell them while out of the country.
The third is to transfer or transmit data to an international country. This is done through file sharing, email, fax, phone, and other network-based means. The transfer of data may be required to have federal oversight.
The fourth is to re-export an exported product. This means that after you send a product or file to a recipient in another country, they send it to someone in yet another country. You are required by law to follow the product to its final destination after the first recipient receives it.
Exports can be extremely varied in their circumstances. This makes export law complicated. Depending on the parties and products involved, any of these actions might be required to comply with federal regulations:
- Shipping your product to another country
- Shipping supplies, materials, and plans to another country
- Giving at least one individual in a foreign country access to intellectual property, software code, or other information
- Transmitting company proposals or sending marketing information to foreign recipients
- Doing collaborations with employees in other countries or business partners in other countries
- Traveling with business-related supplies, even if you have no intention of selling them
- Providing foreign nationals with any kind of “defense” service
Not every export needs to be pre-approved by the US government. But basically every export needs to comply with certain laws. It’s important to talk to an attorney about how to make sure your business is compliant with the relevant export regulations.