Exporting FAQs

GETTING STARTED

Q: How do I begin my export activities?

A: Establishing your product or service in the global marketplace is a serious and expensive endeavor. Before deciding that exporting is a good choice for your company, you need to ask yourself the following:

Is my company is in a position to commit to this project substantial resources including time, personnel, and most importantly, money?

If you can answer “yes” the next step is to identify which product and/or service to export and where to export (your target market).

Experts suggest you choose one country at a time. This will allow you to focus your resources and effectively establish a presence. Later you can expand your export activities to new countries.

Q: How do I select the right country for my product?

A: Selecting the best prospective market for your country is a complicated decision. You may wish to begin by identifying a group of countries and then narrowing it down to a single country or region. You will want to gather the following information:

• Specific country/market information
• Specific product information for your targeted markets (Is your product currently sold in your target market? Is your product currently manufactured in your target market?
• Who are your major competitors in the country and what price are they charging for their products?
• U.S. export data on your type of product for at least three years in various markets. To do this, you will need to first identify your product’s SIC code (Standard Industrial Classification) or HTS code (Harmonize Tariff System).
• What distribution channels offer the best mechanism to sell your product?
• What makes my product unique or especially suited for export?
• How much after-sales service does my product require?
• Will this product create further business for me in that market in the future?
• Will your product require major modifications to make it acceptable to foreign standards or cultural norms?
• How much inventory do I have/need for domestic sales and will I have enough to meet the needs in both markets and/or the resources to make sure I have enough?
• What tariffs, taxes, and other costs will you face when exporting to the market?
• What regulatory issues may affect your market entry?
• Are there U.S. or foreign government incentives for exporting this product?
• How can you obtain materials and resources for your industry, including trade journals, associations, and industry trade shows and events?

FINDING INTERNATIONAL PARTNERS

Q: What is the best way to find international partners?

A: Washington state has overseas representative offices in Japan, China, South Korea, Taiwan, Mexico, Germany, France and the UK. Our offices are experts in helping our clients find distributors, representatives and end-users. In addition, CTED’s International Trade Business Unit works in close cooperation with other trade/commercial organizations to help clients connect with international partners that hold the best potential for long-term trade relationships.

Q: Will one distributor effectively cover the entire country I have chosen to export to?

A: In rare cases, one distributor/representative will be able to effectively market your products to an entire country. However, if by law your company is required to sign an agreement with only one distributor/representative in a country or region, then we recommend working with one that is well established and effective in the major market in that country or region.

Q: How can I locate qualified trade leads?

A: CTED's International Trade staff, in coordination with our overseas representatives, work to identify and match qualified trade leads with Washington State companies. In addition, there are a number of commercial and government resources devoted to providing trade leads. A comprehensive collection can be found at http://tradeinfo.doc.gov/

Q: How can I be sure that a potential partner is reliable and qualified?

A: Checking the reliability of a company can be done through public and private channels such as banks, the International Trade Administration, and credit reporting agencies. In addition, CTED overseas offices assist in screening your potential partners and/or clients.

MARKET INTELLIGENCE

Q: Once I decide which markets I will be targeting, how can I get general information on them?

A: CTED staff works in close cooperation with our overseas offices in China, South Korea, Taiwan, Japan, Mexico and Western Europe to prepare individualized market reports for our clients. This information is primarily used to help our clients decide which markets offer the best opportunities for their products and/or services.

You can also visit http://www.export.gov/mrktresearch/index.asp and go to the Country Commercial Guides.

INTERNATIONAL MARKETING INTELLIGENCE

Q: Do I need to translate my marketing materials for promotional purposes in the overseas markets?

A: Key information should be translated into the language of the country where you are marketing your products. Generally a one or two page summary of the product or service will suffice for promotional purposes. Best translation practices include obtaining a “back translation.” This is the process of taking your foreign language translation to a different translator to have it translated to English. Comparing your original English version with the “back translation” will reveal any problems in nuance.

Q: Should we translate our website?

A: Today web marketing is as important as print collateral. We strongly recommend you target your clients/audience via the web. Consider designing a web page with content localized for the particular markets you are targeting. This will clearly demonstrate to your clients and partners that you are ready and committed to doing business with them.

Q: When I travel to these countries, will I need an interpreter?

A: It is a good idea to have the capacity to communicate with potential partners/customers in their native language. If you do not have a speaker in-house, then it is important to hire an interpreter. This will reduce errors due to miscommunications and help to focus attention to the important selling points that you want to convey.

EXPORT FINANCING

Q: How can I ensure that I will be paid?

A: We strongly encourage Washington State companies to seek payment terms that will enable them to get paid in advance. To maximize your chances of being paid, you should consider using an irrevocable letter of credit through a prime bank, a credit card payment or cash advance. If the buyer is recommending other types of payment methods or if it appears that another method will be the only way to get the deal done, we highly recommend that you first consult with the Export Finance Assistance Center of Washington. This service is free to Washington companies. Local contact: Mr. Tim Schipke at (206) 441-2280 or by email: tim.schipke@efacw.org

EXPORT DOCUMENTATION

Q: What products require an export license?

A: Certain commercial items which could also have military applications (dual use exports) require an export license. The Department of Commerce, Bureau of Industry and Security (BIS) is the primary licensing agency for dual use exports. Other departments and agencies have regulatory jurisdiction over certain types of exports and re-exports. For example, the State Department licenses the export defense articles and services, while certain nuclear materials and equipment are licensed by the Nuclear Regulatory Commission.

Of those exports and re-exports subject to the Export Administration Regulations (EAR), a relatively small percentage require the submission of a license application to the Department of Commerce. License requirements are dependent upon an item’s technical characteristics, the destination, the end-use, and the end-user, and other activities of the end-user. You will need the following five facts to determine your obligations under the EAR: What is the item you intend to export or re-export; Where is it going; Who will receive it; What will they do with it; and, What other activities are they involved in?

The first step in determining your license requirements under the EAR is to classify your product by determining its Export Control Classification Number (ECCN) on the Commerce Control List (CCL).

For additional information, visit the Bureau of Industry and Security licensing facts site.

Q: What is a Certificate of Origin?

A: A Certificate of Origin is a document signed by the exporter and witnessed by a designated agency, such as a Chamber of Commerce, required by certain foreign countries for tariff purposes.

The Certificate of Origin declares that the goods in a particular international shipment are of a certain origin. Even though the commercial invoice usually includes a statement of origin, some countries require that a separate certificate be completed. Customs offices in the importing country use the Certificate of Origin to determine whether or not a preferential duty rate should be granted to the products being imported. Proof of origin is critical when you export to countries with which the US has a reciprocal trade agreement (such as North American Free Trade Agreement - NAFTA). Exporters must prove that the goods they are exporting are entitled to receive the preferential tariff reduction or elimination.

Q: How do I know if I need a Certificate of Origin?

A: A freight forwarder or foreign consulate office of the importer’s country can provide advice on the need for a Certificate of Origin. Or you may contact the Trade Information Center at 1-800-USA-TRADE (1-800-872-8723).

Some countries require Certificates of Origin for all products; others require them only for certain types of products. Almost all Middle Eastern countries require Certificates of Origin, while most Latin American and European countries only require a certificate for certain products, such as textiles. Certificates of Origin are less commonly required in Asia, and African nations run the gamut of requirements.

Q: How can I obtain a Certificate of Origin?

A: First seek the advice of your freight forwarder or foreign consulate office to determine the type of documentation required. In most cases, you will be able to use a basic form witnessed by your local Chamber of Commerce. The Chamber may charge a fee for providing this service.

The Washington State Department of Community, Trade and Economic Development does not handle Certificates of Origin.

Q: Which form do I use?

A: There are several different types of Certificates of Origin.

You need to know the specific requirements for your product in your target market to determine which form to use. Most Certificates of Origin are simple forms filled out by the shipper and stamped by your local Chamber of Commerce.

Forms are available at office supply or stationary stores or on the Internet (see Web resources below). You will need to indicate such information as: the type of product being exported, date and origin of shipment, gross and net weight, the number of packages, the components that make the product, mode of transportation, and an address for the seller and buyer. The certificate will also include a brief statement as to the origin of the goods.

A few countries require specialized, unique certificates of origin that might include more detailed information and/or require a specific wording or documentation from a government agency. For example, certain seafood exports require a certificate issued by the US NOAA stating that the fish are from the US.

WEB RESOURCES FOR CERTIFICATE OF ORIGIN

The US Department of Commerce Trade Information Center maintains country documentation requirements on the Internet at http://www.export.gov/tic. From this page, under Country Information, click on the region of interest. Then click on View All Documents to get a country listing. Once you have selected your particular market, look for an entry labeled either Documentation or Certificate of Origin.

Q: How does NAFTA work for me and how can I obtain a NAFTA certificate?

A: The North American Free Trade Agreement establishes special preferential tariff treatment for goods "originating" in and traded among NAFTA countries. However, the NAFTA Certificate of Origin is not a required entry document for shipments between the United States and Mexico or Canada and should only be prepared if the product qualifies under the NAFTA Rules of Origin for preferential tariff treatment. The exporter must first determine if the product qualifies and whether a Certificate of Origin is needed.

Completion of a NAFTA Certificate of Origin is an affirmation that the party signing the document has researched the terms of the NAFTA and has determined that the goods covered by the certificate are "originating", as defined in the agreement. Preparation of this certificate imposes certain legal rights, obligations and liabilities on the party signing the document and should be based on a careful inquiry into the terms of the NAFTA as they apply to each product.

INTELLECTUAL PROPERTY RIGHTS

Q: Will my product be protected (patent, intellectual property) in the specific market that I choose?

A: Patent and intellectual property protections vary from country to country. It is important for companies to protect themselves in the countries where they are doing business through appropriate filing processes. You should strive to develop a relationship with a partner who has a stake in ensuring that others do not infringe on the patent or intellectual property. Washington state overseas offices can provide insight and guidance for companies. You may also wish to seek legal counsel from a law firm specializing in international intellectual property rights.

Q: Where can I go for specific questions regarding imports, tariffs, and duties?

A: Imports are handled by U.S.Customs at www.customs.ustreas.gov

Tariff schedules for APEC countries can be found on the home page of the APEC Tariff Database at http://www.apectariff.org/.

For additional basic exporting information please visit “Basic Guide to Exporting”: http://www.unzco.com/basicguide/index.html. This site provides detailed information on topics including how to export, developing an export strategy, export documentation, and identifying joint ventures.

For further assistance with your Washington business requirements, please visit Learn about Doing Business in Washington.

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Last Updated 5/12/2008