Topic History of: Export License
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Tomas P.
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U.S. EXPORT REQUIREMENTS
The U.S. government requires export documentation for all exports in order to comply with national security, product controls, and to compile statistics among other things.
U.S. Export Licenses. Four U.S. Government agencies have primary export licensing responsibilities: the Department of Commerce (DOC), Energy, State and the Treasury. In order to determine if a license is required for the exportation of a certain item, you must first determine which U.S. agencies monitors and control the respective items. Export licenses grant permission to conduct certain type of export transaction. For pharmaceutical drugs, the Food and Drug Administration (FDA) (which is part of the DOC) is the controlling authority. The FDA is responsible for protecting public health by assuring the safety, efficacy, and security of human and veterinary drugs, biological products, medical devices, our nation’s food supply, cosmetics, and products that emit radiation. The FDA is also responsible for advancing the public health by helping to speed innovations that make medicines and foods more effective, safer, and more affordable; and helping the public get the accurate, science-based information they need to use medicines and foods to improve their health.
According to published materials by the FDA if you intend to export pharmaceutical drugs and they are currently approved by the FDA, then there are no additional FDA export requirements on the drugs. However, if the drugs are currently unapproved by the FDA, then there is a slew of requirements that must be satisfied before you can export them.
Export Control Classification Number (ECCN). Another way to determine if a license is required to export your product is to obtain an export control classification number for the product. This is a five digit alpha numeric number. After this number is obtained, match the number with the Commerce Control List and the County List (contained in the Export Administration Regulations) to find out if a product requires a license or if an exception applies. Please note: The producer of the product may already have/know the ECCN for the product; or check at www.bis.doc.gov.
Export Certificates Requested by the Foreign Government. Foreign Governments and possibly foreign customers may request that the U.S. exporter submit an Export Certificate when they ship FDA-regulated products such as pharmaceutical drugs or medical devises. The FDA may issue an export certificate under Section 801(e)(4) of the Federal Food, Drug and Cosmetic Act (FDCA) (21 U.S.C. 321). The fees for the Export Certificates vary depending on the type, but will not exceed$175.00. The following types of Export Certificates are likely to be required by the FDA before exportation of generic pharmaceutical drugs are permitted:
1. The main document required by the U.S. government is the Shipper’s Export Declaration (SED). You can electronically file this at www.aesdirect.gov. This is used by the U.S. Census Bureau to compile statistics and to prevent illegal exports. Shipments to Canada do not require a SED unless an export license is required.
2. Certificate of Free Sale (COF): This is for food, including dietary supplements, and cosmetic products. Requests for COF are furnished in approximately four to six weeks.
3. Bill of Lading: This is used by commercial stationers and freight forwarders.
4. Insurance Certificates: Obtained by the freight forwarder.
5. Certificate of a Pharmaceutical Product: This certificate conforms to the World Health Organization format and is said is sought from the importing countries. A separate application must be made for each drug. A sample container label and packaging insert is required to be furnished. Applications must be sent to:
Food and Drug Administration
Center for Drug Evaluation and Research (CDER)
Certification Program
HFD-310
7520 Standish Place, Room 166
Rockville, MD 20855
Phone: 301-594-3150
6. Certificate to Foreign Government: This is for the export of human drugs and biologics, animal drugs, and devises.
7. Inspection (or Export) Certificates.
Each country has different requirements regarding the documentation that accompanies any given import shipment. Importing countries require these documents for the administration of their import laws, assessment of taxes, and protection from hazardous pests and diseases. Some of the more frequently required documents are: commercial invoice, bill of lading, phytosanitary certificate (for plants or plant products), veterinary health certificate (for animals or animal products), packing list, and certificate of origin. Other import regulations that may affect a shipment are packaging and labeling requirements and recycling laws. Most countries require a Certificate of Origin declaring that goods in a particular international shipment are of a certain origin.
The next step is to contact the Ministry of Health Department in that foreign country and find out what requirements the importing country has. Most Middle Eastern countries require a Certificate of Origin (COO) declaring that the goods in a particular international shipment are of a certain origin. Customs offices use this document to determine whether a preferential duty rate applies on the product being imported. COO forms can be obtained from freight forwarders such as UNZ & Co. (1-800-631-3098). Once obtained, the COO must be certified by a local U.S. Chamber of Commerce. Middle Eastern countries require that the COO be certified by the National U.S. Arab Chamber of Commerce (www.nusacc.org).
For more information please contact the Trade Information Center for more details (1-800-USA-TRADE).
FDA Inspections and Packaging. To ensure compliance, the FDA does periodic inspections to ensure that products shipped meet safety, identity, strength, quality, and purity standards of the FDA. Exporters who ship hazardous material are required to use special packaging and bear the ultimate responsibility for the complying with regulations. The Department of Transportation defines hazardous materials as a substance capable of posing an unreasonable risk to health, safety and property. Examples of a hazardous material are:
1. Explosives
2. Compressed gases
3. Flammable liquids or solids
4. Oxidizers or organic peroxides
5. Toxic materials
6. Radio active materials
7. Corrosive materials
8. Miscellaneous.
Prohibited Parties. It’s also required that the exporter ensure itself that the end user of its export is someone with whom it is permitted to do business. Therefore, you should screen all parties involved in the international transaction. And make sure they are not part of a Prohibited Parties Lists. Which Countries can you Export To: The United States severely restricts exports to several countries. Certain exports, however, may be approved with a license. The Office of Foreign Assets Control (OFAC) at the Treasury Department has information about embargoed countries on its website at http://www.treas.gov/ofac, or the office can be contacted at (202) 622-2426. Currently, U.S. persons are generally prohibited from exporting to Cuba, Iran, Iraq, Libya, Sudan, and the United faction in Angola. U.S. persons cannot export mining equipment, military material, petroleum and petroleum products, aircraft and aircraft components, motorized vehicles or watercraft and any related spare parts to Angola other than through certain designated ports.
Penalties for violating export control laws. The civil penalties assessed by the OFAC are $11,000 per prohibited transaction and can exceed $1 million if the transaction involves narcotics kingpins. If there is criminal intent to violate export control laws, then fines and/or imprisonment will be imposed.
OTHER FEDERAL AGENCIES OF IMPORTANCE
The U.S. Department of Agriculture (USDA) and the Foreign Agricultural Service (FAS). The Foreign Agricultural Service (FAS) of the U.S. Department of Agriculture (USDA) works to improve foreign market access for U.S. products, build new markets, improve the competitive position of U.S. agriculture in the global marketplace, and provide food aid and technical assistance to foreign countries.
FAS has the primary responsibility for USDA’s international activities—market development, trade agreements and negotiations, and the collection and analysis of statistics and market information. It also administers USDA’s export credit guarantee and food aid programs, and helps increase income and food availability in developing nations by mobilizing expertise for agriculturally led economic growth.
Export Assistance Centers, U.S. Department of Commerce. The U.S. and Commercial Service (the Commercial Service) of the Department of Commerce has developed and maintains a network of international trade specialists in the United States to help American companies export their products and conduct business abroad. Trade specialists operate offices known as Export Assistance Centers (EACs) located in almost 100 cities in the U.S. and Puerto Rico that assist small and medium-sized companies. EACs are known as "one-stop shops" because they combine the trade and marketing expertise and resources of the Commercial Service along with the finance expertise and resources of the Small Business Administration (SBA) and the Export-Import Bank (Ex-Im Bank). Thus they provide companies with a wide array of services in one location (for a detailed list of these offices, please see http://www.doc.gov). EACs also maximize resources by working closely with state and local government as well as private partners to offer companies a full range of expertise in international trade, marketing and finance.
Trade specialists will counsel your company on the steps involved in exporting, help you assess the export potential of your products, identify markets, and locate potential overseas partners.
Each EAC can offer information about:
• Services to locate and evaluate overseas buyers and representatives;
• International trade opportunities abroad;;
• Foreign markets for U.S. products and services;
• Foreign economic statistics;
• Export documentation requirements;
• U.S. export licensing and foreign nation import requirements;
• Export trade financing options;
• International trade exhibitions, and;
• Export seminars and conferences.
Overseas Posts, U.S. Department of Commerce. Much of the information about trends and actual trade leads in foreign countries is gathered on site by the commercial officers of the Commercial Service. Commercial Service officers are working in 67 countries (with 127 offices) and have a personal understanding of local market conditions and business practices. The Commercial Service officers overseas provide a range of services to help companies sell abroad: background information on foreign companies, agency-finding services, market research, business counseling, and assistance in making appointments with key buyers and government officials, and representations on behalf of companies adversely affected by trade barriers.
You can access these services by contacting your nearest EAC. EACs can also provide assistance with business travel before departure by arranging advance appointments with embassy personnel, market briefings, and other assistance in cities to be visited.
The Commercial Service overseas posts also cooperate with the trade and economic development agencies of all 50 states. Your state probably has its own representatives overseas, who can help coordinate export promotion efforts with the Department of Commerce.
Trade Development, U.S. Department of Commerce. Trade Development's industry and international trade specialists work directly with individual firms and manufacturing and service associations to identify trade opportunities and obstacles by product or service, industry sector, and market. Trade Development analysts participate in trade policy development and negotiations, identify market barriers, and provide advocacy on behalf of U.S. companies. Trade Development's statistical data and analyses are useful in export development. TD staff also develop export marketing programs and obtain industry advice on trade matters. To assist U.S. businesses in their export efforts, TD's industry and international experts conduct executive trade missions, trade fairs, product literature centers, marketing seminars, and business counseling. Experts are organized into six major industry sectors:
• Technology and Aerospace Industries
• Basic Industries
• Textiles, Apparel, and Consumer Goods Industries
• Service Industries and Finance
• Environmental Technologies Exports
• Tourism Industries
For further information, contact Trade Development, Room 3832, U.S. Department of Commerce, 14th and Constitution Avenue, N.W., Washington, D.C. 20230.
STARTING POINT TO ENSURE COMPLIANCE WITH THE VARIOUS EXPORT REGULATIONS
The country to which a product is to be exported should be considered first. Potential transactions should be checked for compliance with the sanctions administered by the Treasury and Commerce Departments. If a transaction is subject to country-specific sanctions, it may be eligible for a license, depending on the goods involved. Call OFAC at 202-622-2490 with any questions regarding country-specific sanctions and where to apply for a license.
The next step should be to obtain information about a customer and how that customer will use a product. Information about the customer’s location, including complete street address ( P.O. boxes are not enough) and phone number, the nature of its business, ownership and control, and information with regard to the final destination and use of the product is necessary for determining if the export is in compliance with U.S. law. Always check all parties against the Prohibited Parties Lists, including Treasury, Commerce, and State. Don’t forget freight forwarders, banks, shipping lines and insurers.
To determine whether a license is needed to export a particular product or service, an exporter must classify the item by identifying what is called an Export Control Classification Number (ECCN) for the item. View the BIS’s website at http://www.bis.doc.gov to get help with the ECCN and consult the TIC's "Ask the TIC" column online. Products under ECCN# EAR 99, a broad category, normally do not require a license when shipped to most destinations. For information on other categories, the exporter should contact BIS directly at (202) 482-4811. When in doubt about agency jurisdiction, the exporter can also contact BIS, as BIS will route the application to other agencies for a determination.
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bigdaddy
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Each country has somewhat different rules, you have to research what country is the target country to transport to and figure out what rules they have on this topic. Some of the biggies are labeling requirements, some countries are lax, while others are very strict. That is a fairly common barrier to entry, how a product is labeled. For example, Canada is very strict on labeling.
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Samantha
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Client wants to export his food product overseas. What licenses are required in order for him to export? What other rules or laws should we be aware of?
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