U.S. Commercial Service
Top 11 Factors to Consider When
Entering Foreign Markets
for “Exports, the New Buzz”
May 15, 2008
An Overview
• Export Classification Code
• Export Licensing
• Foreign Language
Marketing
• Channels of Distribution
• Export Pricing & Payment
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Incoterms
Marking and Labeling
Standards
Documentation
Foreign Corrupt Practices
Act
• Intellectual Property
1. Schedule B Export
Classification Code
• Look up code on http://www.census.gov/foreigntrade/schedules/b/index.html or ask freight forwarder
• 10 digits for Census purposes, 6 for worldwide duty rates
• Use code to locate top export markets
(http://dataweb.usitc.gov/scripts/user_set.asp)
• Shipper’s Export Declaration (SED) over $2500
• SED internet filing: www.aesdirect.gov
• Call 1-800-USA-Trade to determine duty rate
• Do not change code if requested by importer
2. Export Administration
Regulations/Licensing
• Compliance is crucial
• Review Commerce Control List/Country Chart
• Export Commodity Control Number (ECCN) – different from
Schedule B
• “Know your customer” and use the “Lists to Check”
– Entity List, Denied Persons, Specially Designated Nationals, etc.
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Be wary of “Deemed exports”
Watch out for “RED FLAGS”
Bureau of Industrial Security (www.bis.doc.gov)
Office of Foreign Assets Control - embargoed countries
3. Foreign Language
Marketing
• Keep English language materials short and to the
point
– Provide conversion to metrics
• Have your materials translated
– If you have a good agent/distributor, they should assist in
translation to avoid local variations
– Written in local terminology and dialect
4. Channels of Distribution
• Choose the right partner the first time
– Ask for references/Conduct background check
• Make sure you know the agent termination laws; Consult
attorney
– Even if you do not sign a contract, you may have locked into an
agreement that you can’t get out of
– Termination may be costly and time consuming
• Your int’l banker and U.S. Commercial Service can provide
guidance and conduct background checks (ICP)
• U.S Commercial Service can help in your initial search for
Partners-IPS/Gold Key Service
5. Export Pricing &
Payment Terms
• Cash in Advance is the NOT the standard
• L/Cs may be secure, but they are expensive
• Offering Favorable Payment Terms will increase
your competitiveness (EXIM Export Credit
Insurance)
• Remember to discount for your agent’s/distributor’s
profit margin
6. Shipping Terms &
Incoterms 2000
• FOB Factory under US law does not mean the same
under ICC law.
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FOB, FAS, CFR, CIF, DES, DEQ are all vessel ONLY
www.iccwbo.org/incoterms
Incoterms do not assign title or ownership
They assign responsibility and liability
7. Marking & Labeling
• Country of Origin (“Made in USA”)
• Weight marking (in pounds and in kilograms)
• Number of packages and size of cases (in inches and
centimeters)
• Handling Marks (int’l pictorial symbols)
• Cautionary markings, such as “This Side Up” (in English and
the language of the country of destination)
• Port of Entry
• Labels for hazardous material (universal symbols)
8. Standards
• US standards are NOT universally accepted
• May need to register with Foreign Ministries (i.e.
Ministry of Health); Good importer can assist.
• Various Foreign government/industry standards
– CE Mark (“European Passport” to trade) more info at:
www.export.gov/cemark
– CCC (China)
– NOMs (Mexico)
– ISO (industry standard)
9. Documentation
• Every country has different requirements
– Certificates of Origin (NAFTA, Chile, Australia, Israel,
Jordan, Singapore, Morocco)
– Canada Customs Invoice
– Authentication of documents (Middle East)
• Softwood packaging requirements
• ATA Carnet - temporary exports (i.e. trade shows)
10. Foreign Corrupt
Practices Act & AntiBoycott
FCPA
• It may be a tax write off in another country, but it is
still illegal for US companies
– There is a provision for “facilitating payments for routine
governmental action”
Anti-Boycott
• You can NOT participate in foreign boycotts and
must report any requests (i.e. Israel)
11. Intellectual Property
• IP is territorial -U.S. patents, trademarks and
copyrights only good in the U.S.
• Analyze IP and determine which is critical
• Develop strategy to protect your IP
• Consider international filings
• American Bar Association has free 1 hour
consultations on IP for China
• www.stopfakes.gov
SERVICES EXPORTS
• Travel and Tourism
• Transportation Services
• Architecture Construction
and Engineering
• Education and Training
• Banking, Financial and
Insurance
• Entertainment
• Information Services
• Professional Business
Services
CHALLENGES
• Intangibility-communicating a service offer is much
harder than a product offer
• Customer involvement-service needs to be tailored
to customer needs, requiring direct customer
participation
• Greater cultural sensitivity is required
• No collateral makes financing more difficult
MARKETING STRATEGIES
• Follow the path of complementary product exports
• Service support for U.S. clients operating
internationally, such as manufacturers
• Seek affiliation with foreign firm in your market
segment- agent, representative or joint venture.
• The Commerce Department can help you find these
agents and partners.
How to contact us
Shakir Farsakh, Director
Long Island U.S. Export Assistance Center
Tel: 646-722-0182 Email: Shakir.Farsakh@mail.doc.gov
Jonathan Heimer, Commercial Officer
Tel: 631-935-2388 Email: Jonathan.Heimer@mail.doc.gov
www.buyUSA.gov/longisland
www.export.gov