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IMPORTING/EXPORTING
Evaluating
Opportunities
Newcomers
to the United States know exactly what products
are available in their home countries. They know
the desires and financial make-up of consumers
in their own countries. They are in an excellent
position to evaluate whether a product that is
available in the USA has export potential.
Newcomers’
knowledge of product availability and cost, both
in the foreign country and in the USA, enables
them to evaluate import opportunities from their
home countries.
This
position of understanding two global markets provides
newcomers with special opportunities in the import/export
markets.
Export
services are provided through the US
Department of Commerce
who also provide numerous services to US businesses.
The
basics of importing/exporting
Shipping Records
It is very important
to maintain shipping records. These include bills
of lading, commercial invoices, certificates of
origin, inspection certificates, dock receipts,
and insurance receipts.
The “bill
of lading” is one of the most crucial documents
to understand when starting an import/export company.
A bill of lading is a document that is signed
by a ship’s captain or owner of the vessel
as evidence that the goods have been shipped.
The bill of lading is both a receipt for the goods
and a contract to deliver the goods
A “commercial
invoice” represents the agreement and terms
of the trade transaction such as names and addresses
of shipper, seller and buyer, date of order, shipping
date, delivery and payment terms and a description
of the goods.
A “certificate
of origin” states where a good originated.
This is important due to various tariffs assessed
and health concerns relating to goods from different
countries.
An importer/exporter
will also want to have an “inspection certificate”
created verifying the quantity and quality of
the goods shipped.
The “dock
receipt” is another important document.
This document is needed by your customs broker.
Finally, it is
a good idea to get an “insurance certificate”.
This document will state that marine insurance
has been provided for the cargo and states what
type of insurance coverage exists.
Payment
and Settlement
The risk most investors
are concerned with in the import/export business
is payment. How can one be sure to receive payment
on goods sold in a foreign country? There are
several well-accepted and secure methods to ensure
payment for all import/export transactions.
One manner that
is commonly used for small transactions, and transactions
where there is high demand for a certain product,
is cash up front. This is where the buyer pays
the seller prior to receipt of any goods or services.
Obviously, there is substantial risk for the buyer
in this arrangement. The flip side of this arrangement
is credit on an open account for the buyer. This
arrangement allows the buyer to receive the goods
and then send payment at a later point in time.
This type of arrangement is risky for the seller.
Letter of Credit.
The most popular method of payment in the international
sale of goods is the Letter of Credit. The Letter
of Credit equally distributes the risk in the
transaction between both buyer and seller. The
Letter of Credit operates when a buyer contacts
his local bank and applies for a Letter of Credit.
The buyer’s bank then contacts a bank in
the country of the seller. The two banks act
as intermediaries to the transaction. The buyer’s
bank then identifies a host of documents needed
from the seller in order for the seller’s
bank to release payment to the seller. These
documents include, a bill of lading, a packing
list, an invoice and marine insurance documents,
among others. Once the documents are verified
by the seller’s bank the seller is paid and
buyer can accept deliver of the shipped goods.
Essential, title to the goods is separated from
the actual goods and passed in the form of the
documents from the seller to seller’s bank.
Seller’s bank then passes the documents to
the buyer’s bank. Finally, the buyer’s
bank passes the documents to the buyer, who may
accept delivery of the goods. This process is
very successful and used by most import/export
companies.
Working
with a Freight Forwarder and Customs Broker
Transportation
and Customs. The final piece to an import/export
business is finding a reliable freight forwarder
and customs broker. Since the defining element
of an import/export business is international
travel, a new business must feel comfortable with
the transportation.
A freight forwarder
is someone who owns or rents ships, trains, trucks
or airplanes to transport goods around the globe.
A freight forwarder will quote a price and time
frame to ship your goods anywhere in the world.
All of the logistical aspects of international
trade are conducted by freight forwarders.
A customs broker
is another essential part of international trade.
Once merchandise crosses an international border,
customs laws and regulations are activated. Each
country has the right to impose a tariff on any
good entering its territory. It is the job of
a customs broker to know the rate of each tariff
for all goods and comply with all other custom
related aspects of international trade. A customs
broker must classify a good, determine the rules
of origin, conduct a valuation on the good and
comply with the applicable country’s customs
laws and regulations. All customs brokers will
consult the Harmonized Tariff Schedule (HTS) to
determine a good's rateable duty. The HTS is
a codified index of all tariff rates for all goods
that are shipped around the world.
List
of Import and Export Resources
American Association
of Exporters and Importers
11 W. 42nd
Street, 30th Floor
New York,NY 10036
(212) 944-2230
International
Union of Commercial Agents & Brokers
Herengracht 376, 1016 CH
Amsterdam, The
Netherlands
International
Chamber of Commerce
New York, NY 10010
(212)
206-1150
U.S. Department
of Commerce
International
Trade Administration
Washington, D.C. 20230
(202) 482-2000
Export-Import
Bank of the United States
811 Vermont Street, N.W.
Washington, D.C. 20571
(202) 565-3900
U.S. Small Business
Administration
409 3rd Street, S.W.
Washington, D.C. 20416
(202) 205-7701
U.S. Department
of Agriculture
Foreign Agriculture Service
14 and Independence Avenue
Washington, D.C. 20250
(202) 720-9445
U.S. Customs
Service
1301 Constitution Avenue, N.W.
Washington, D.C. 20229
(202) 927-6724
BUSINESS
OPPORTUNITY LAWS
Twenty-three states
have business opportunity laws. Most of these
laws prohibit sales of business opportunities
unless the seller gives potential purchasers a
pre-sale disclosure document that has first been
filed with a designated state agency.
State business
opportunity laws typically cover every imaginable
type of business opportunity that might be offered.
If a business opportunity seller is not required
to provide pre-sale disclosures by the Franchise
Rule, these disclosures will almost always be
required by the laws of the states listed below.
The disclosures
required by state business opportunity laws differ,
and usually provide more abbreviated information
than the Franchise Rule requires. However, most
of these laws provide important rights and remedies
for business opportunity investors, including
required security bonds to cover investor losses.
If you are considering
purchasing a work-at-home or other business opportunity,
and reside in a state with a business opportunity
law, we encourage you to find out more about the
protection provided by your state statute before
you invest.
Contact
Information
California (filing
required)
Consumer Law Section
Attorney General's Office
1515 "K" St.
Sacramento, CA 92101
(916) 445-9555
Connecticut (filing
required)
Department of Banking
Securities Division
44 Capitol Avenue
Hartford, CT 06106
(203) 566-4560 ex8322
Florida (filing
required)
Dept. Agri. & Consumer Services
Room 110 - Mayo Building
Tallahassee, FL 32301
(850) 488-2221
(800) 342-2176 (in-state only)
Georgia (no filing
required)
Office of Consumer Affairs
No. 2 - Martin Luther King Dr.
Plaza Level, East Tower
Atlanta, GA 30334
(404) 656-3790
Illinois (filing
required)
Illinois Securities Department
Lincoln Tower
520 S. Second St. Suite 200
Springfield, IL 62701
(217)782-2256
Indiana (filing
required)
Consumer Protection Division
Attorney General's Office
219 State House
Indianapolis, IN 46204
(317) 232-6331
Iowa (filing required)
Securities Bureau
Second Floor
Lucas State Office Building
Des Moines, IA 50319
(515) 281-4441
Kentucky (filing
required)
Attorney General's Office
Consumer Protection Division
209 St. Clair
Frankfort, KY 40601
(502) 573-2200
Louisiana (bond
filing req'd)
Office of the Attorney General
Consumer Protection Division
2610-A Woodale Blvd.
Baton Rouge, LA 70804
(504) 342-7900
Maine (filing
required)
Banking Bureau
Securities Division
State House - Station 121
Augusta, ME 04333
(207) 624-8551
Maryland (filing
required)
Attorney General's Office
Securities Division
200 St. Paul Pl. - 20th Floor
Baltimore, MD 21202
(301) 576-6360
Michigan (notice
required)
Consumer Protection Division
Dept. of the Attorney General
670 Law Building
Lansing, MI 48913
(517) 373-7117
Minnesota (filing
required)
Department of Commerce
Registration Division
133 East 7th Street
St. Paul, MN 55101
(651) 296-6328
Nebraska (filing
required)
Dept. of Banking & Finance
P.O. Box 95006
Lincoln, NE 68509
(402) 471-2171 or
(402) 471-3445
New Hampshire
(filing required)
Attorney General's Office
Consumer Protection Div.
State House Annex
Concord, NH 03301
(603) 271-3641
North Carolina
(filing req'd)
Department of Justice
Consumer Protection Division
P.O. Box 629
Raleigh, NC 27602
(919) 733-3924
Ohio (no filing
required)
Attorney General's Office
Consumer Fraud & Crime Section
25th Floor, State Office Tower
30 East Broad Street
Columbus, OH 43266-0410
(614) 466-8831
800-282-0515 (in-state only)
Oklahoma (filing
required)
Oklahoma Department. of Securities
Suite 860, First National Center
120 N. Robinson
Oklahoma City, OK 73102
(405) 280-7700 (voice)
(405) 280-7742 (fax)
Internet Site: http://www.securities.state.ok.us
South Carolina
(filing req'd)
Secretary of State's Office
P.O. Box 11350
Columbia, SC 29211
(803) 734-2169
South Dakota (filing
required)
Division of Securities
910 E. Sioux Avenue
Pierre, SD 57501
(605) 773-4013
Texas (filing
required)
Secretary of State's Office
Statutory Documents Section
P.O. Box 13563
Austin, TX 78711
(512) 475-1769
Utah (filing required)
Consumer Protection Division
160 East 300 South
Salt Lake City, UT 84111
(801) 530-6601
Virginia (no filing
required)
Consumer Affairs Office
101 North 8th Street
Richmond, VA 23219
(804) 786-0594
(800) 451-1525 (in-state only)
Washington(filing
required)
Department of Financial Institutions
Securities Division
P.O. Box 9033
Olympia, WA 98507-9033
(206) 753-6928
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