The Export Tutorials section is intended for businesses looking to begin export operations and for students who want to learn about export readiness and the basics of export. The 5 Q&A sub-sections below provide basic information on export readiness, regulations, finance, sales & marketing, and logistics along with a plethora of useful links to other export-related resources.

Export Readiness

There are various resources on globalEDGE that allow you to assess your company’s readiness to export. These tools help you to understand what constitutes “Export Readiness” for a firm and how your company can move toward that goal:

  • globalEDGE Diagnostic Tool--CORE™ - This automated 70-question self-assessment tool allows you to determine your company's readiness to expand its operations internationally and ascertain its ability to export a particular product.
  • MEDC Export Readiness Assessment - This manual 20-question self-assessment offered by the Michigan Economic Development Corporation is a short questionnaire that helps companies assess their overall export readiness.
  • globalEDGE Developing An Export Strategy Module- Based on the second chapter of A Basic Guide to Exporting, this module covers:
    • The impact of exporting on overall company strategy
    • Questions to ask before exporting
    • Creating an Export Plan
    • A case study on the company Mykytyn Enterprises Incorporated

For additional information about determining export readiness, the following sites may be helpful:

  •’s “Assessment for New Exporters” Questionnaire - This questionnaire highlights characteristics common to successful exporters. Many of these questions will guide you into areas of the homepage where you can obtain more information on exporting. Upon completion, you will receive a score that will help you to assess your export readiness, as well as identify areas of your business needs in order to strengthen and improve its export activities.
  • TradePort’s Global Trade Tutorial: Getting Started - This tutorial explains factors that determine whether or not a company’s export activities will be successful. It provides feedback on whether a company or a product is ready to export. The tutorial includes case studies and success stories as examples for companies to relate to while trying to move into international sales.

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Government Regulations

Before taking any steps to obtain export licenses or permits, it is imperative to identify which governmental entity has jurisdiction over the particular good or service. To identify the relevant commodity jurisdiction for a product, visit the Bureau of Industry and Security Commodity Jurisdiction site.

If the product falls under the jurisdiction of the Department of Commerce, the license to export is contingent upon the following:

  • What are you exporting?
  • Where are you exporting?
  • Who will receive your item?
  • What will your item be used for?

After answering these four questions, the Bureau of Industry and Security’s Introduction to Commerce Department Export Controls provides step-by-step instructions to determine the regulation surrounding your export.

During this step-by-step process, the following items must be completed:

  1. Identify the Export Control Classification Number (ECCN) for the product.
  2. Use the Commerce Country Chart to discover the country-specific regulations related to the export destination.
  3. Review the Entity List, the Unverified List and the Denied Persons List to determine if it is legal to sell the product to the country and customer, with or without a license

If a license is required to export the particular product, an application for an export license must be completed.

For additional information about exporting goods that fall under Department of Commerce jurisdiction, the following site may be helpful:
Department of Commerce Bureau of Industry and Security (BIS) Homepage - The main site of the BIS contains additional information and links about various aspects of BIS’s operations and regulations.  Annual reports, seminars, training and BIS-related news updates are also located on this site.

A product can also fall under the jurisdiction of additional government agencies, as listed below:

The Export Administration Regulation database may indicate that a particular product is subject to the jurisdiction of one of the above agencies.  However, to ensure that the product is within the regulatory limits, review the requirements of any agency which may have oversight of the product being exported.

  • Nuclear Regulatory Commission regulates the export of:
    • Nuclear Reactors
    • Uranium Enrichment Facilities
    • Spent Fuel Reprocessing Plants
    • Uranium and Plutonium Conversion Plants
    • Heavy Water or Deuterium Production Plants
    • Nuclear Fuel Fabrication Plants
    • Lithium Isotope Separation Facilities
    • Equipment, Component Parts, and Assemblies that are especially designed or prepared for exclusive use in any of the aforementioned facilities
    • Special Nuclear Material (e.g., Plutonium, Enriched Uranium, Uranium-233)
    • Source Material (e.g., Natural and Depleted Uranium, Thorium)
    • Byproduct Material
    • Deuterium (Heavy Water)
    • Nuclear Grade Graphite for Nuclear End Use

Dependent upon the product and country, either a general export license or a specific export license must be obtained:

  1. General Export License: No application submission is required, but the product is still subject to various regulations of the Nuclear Regulatory Commission.
  2. Specific Export License: An application to the Nuclear Regulatory Commission is required.
  3. Both licenses require additional fees, based upon the type of product being exported and destination.
  • Food and Drug Administration (FDA) regulates the export of Unapproved, Adulterated or Misbranded Products and can also issue FDA Export Certificates.  In certain cases, drugs that are unapproved in the United States may be exported to other countries that meet a specific list of requirements.  FDA Export Certificates are not required by the United States Government for exports, but may be required by the destination country of your export.  Consult the General Guidance on FDA Export Certificates or the specific information on the export of food or the export of drugs and biologics.
  • Food Safety and Inspection Service (FSIS) issues export certification for Meat, Poultry and Processed Egg Products.  Much like the FDA Export Certificates, FSIS Export Certificates help to meet the certification requirements of the destination country.  The Food Safety and Inspection Service offers an Export Certification Checklist with very explicit steps and links to move users through the export certification process.

Many of the product types listed above have minimal export regulations, however, it is still important to review information relevant to the product being exported.  This will help to determine U.S. Export requirements, as well as import requirements of the destination country. provides an overview and links to the most common categories of foreign regulations and certification requirements, including:

For additional information about determining foreign regulations or certification requirements, the following sites may be helpful:

  • globalEDGE Preparing Your Product for Export Module - Based on chapter eight of the Basic Guide to Exporting, this module covers:
    • Adapting your product to meet government regulations
    • Country conditions, or preferences
    • Modifying your product, labeling and packaging
    • A case study on the company Falcon Waterfree Technologies
  • The National Institute of Standards and Technology (NIST) website contains information about standards and technical regulations that have been agreed upon as part of various trade agreements.  This information can be found within the site’s exporting section.
  • Notify U.S. is a free, web-based e-mail subscription service that offers U.S. entities (citizens, industries, organizations) an opportunity to review and comment on proposed foreign technical regulations that can affect their businesses and their access to international markets.

The United States Department of the Treasury’s Office of Foreign Assets Control maintains the list of current and past United States Trade Sanctions.  Specific sanctions are grouped by country, region, or sanction purpose.  Within each sanction, you will find specific information about that sanction, including an overview, forms and licensing information, information on enforcement, and the regulation surrounding the sanction.

globalEDGE maintains a list of pertinent Regional Trade Agreements, complete with a description of each site along with a classification based on world region.  The world region classifications are based on the region of the countries in the agreement.  For example, if you are exporting from the United States, it may be helpful to begin with the resources categorized as “North America” or “United States.”  The Office of the United States Trade Representative website also includes a link to an extensive list of the United States Free Trade Agreements.

For information on the impact of the various United States free trade agreements, visit the International Trade Administration Website’s Free Tree Agreement section. This page offers an analysis of each free trade agreement’s effects on states and industries, as well as a link to the United States Trade Representative information for that particular agreement.

For additional information on Free Trade Agreements, the following sections may be helpful:

  • globalEDGE's Trade Bloc section
    • Profiles of major trade blocs
    • Member countries and related agreements
    • Resources
    • Trade statistics
  • globalEDGE Regionalization and Trading Blocs Module- This module provides one with information on:
    • What globalization means, its impact on business, and the forces that are driving it
    • The advantages and disadvantages of globalization
    • What the World Trade Organization (WTO) and the General Agreement on Tariffs and Trade (GATT) are, how they work, and what their history is
    • The history and purpose of some of the world's largest and most influential Regional Agreements: NAFTA, MERCOSUR, ASEAN, and the EU
    • The basic premises of the Free Trade Area of the Americas (FTAA) that is currently under negotiation in North, South, and Latin America
    • A case study on CAFTA
  • globalEDGE North American Free Trade Agreement (NAFTA) Module- This module provides information pertaining to:
    • The historical origins of NAFTA
    • Facts of NAFTA and member states
    • Canada's role in NAFTA; Mexico's role in NAFTA
    • Future developments towards regional integration
    • In depth information on the economic effects of NAFTA and the future possibilities that NAFTA holds
    • A case study on the U.S.-Canadian software lumber dispute

According to the U.S. Department of Homeland Security, a customs broker is defined as “…private individuals, partnerships, associations or corporations licensed, regulated and empowered by U.S. Customs and Border Protection (CBP) to assist importers and exporters in meeting Federal requirements governing imports and exports. Brokers submit necessary information and appropriate payments to CBP on behalf of their clients and charge them a fee for this service.”

Custom brokers can be employed by or affiliated with freight forwarders. They can also be independent businesses or employed by shipping lines, importers, exporters, trade authorities and customs brokerage firms.

You can easily find the names and contact details of customs brokers who are licensed by CBP by choosing the relevant port from the CPS’s Locate a Port of Entry website and checking the ‘Brokers’ link for that particular port.

The Export Legal Assistance Network is a program in which attorneys and private law firms provide free initial consultations to businesses looking to begin exporting.

The National District Export Council is an organization with the mission of leveraging local trade professionals to help businesses navigate the challenges of exporting.  A typical council is comprised of experienced, high-level professionals including attorneys, CEOs, and government representatives.  This resource is especially useful to novice exporters who are seeking guidance on developing and executing an export strategy.

  • World Intellectual Property Organization: The World Intellectual Property Organization (WIPO) is a specialized agency of the United Nations and is one of the most prominent sites for information about international property rights is a specialized agency of the United Nations.
  • also maintains a resource with information on protecting intellectual property rights abroad, which includes:
    • Information about a comprehensive anti-piracy campaign
    • Background on obtaining and protecting an international patent, trademark or copyright
    • Ways to file an intellectual property right infringement

For additional information about international intellectual property rights, the following sites may be helpful:

  • globalEDGE Trade Law Resources Section- In this section of the globalEDGE website, there are a number of resources listed that deal specifically with Trade Law, including information about intellectual property rights.  Sites may be general, such as the Compendium of Trade Laws site, or more region-specific, such as China/Hong Kong/Singapore: Global Sources Trade Law.  To find the sites that are most applicable to intellectual property rights, simply enter “intellectual property” in the “Search” box.
  • On the globalEDGE site, users may view all of a country's government resources in the Global Insights section. This can be done by searching a country and selecting the resources tab on the left side of the screen. Here you will find links to official government pages, statistical offices, central banks, international chambers of commerce, economic foundations, foreign trade offices, and more.

Most of the export documentation is routine for freight forwarders and customs brokers, but the exporter is ultimately responsible for the accuracy of all documents. Since each country has different import regulations, the number and kind of required documents varies depending on the destination of the shipment.

Documents Prepared Before the Shipment

  • Commercial Invoice/Consular Invoice

Commercial invoice is the itemized list of goods shipped and the exporter must prepare a commercial invoice after the pro forma invoice is accepted. The description of the goods on the commercial invoice must correspond exactly to the description in the letter of credit or other method of payment. The customer needs the commercial invoice, since it is often used by customs authorities to assess duties.

As a common practice, the commercial invoice is prepared in both English and in the language of the country of destination. In some countries, the commercial invoice must be prepared on a special form known as a “customs invoice”. A customs invoice is a document used to clear goods through customs in the importing country by providing evidence of the value of goods.

Similar to a commercial invoice, a consular invoice is required by certain countries. It’s a document showing exact information about the consignor, consignee, value and description of shipment. It is used for customs clearance and other purposes, and must be prepared in the language of the destination country. It can be obtained from the consulate of the country to which you are exporting, and it often must be “consularized” or authenticated/certified. Consularization is most common in South America and the Middle East. Consularization requirements vary by country. The United Arab Emirates (UAE), for example, require that shipping documents be authenticated by the U.S. Department of State.

You can visit the U.S. Department of State for a list of Consuls and Embassies in the U.S.

  • Export License

Export controls are based on the type of goods being shipped and their ultimate destination. Although most exports do not require a license, it is the exporter’s legal obligation to seek an official determination from the Bureau of Industry and Security (BIS).

In general, most exports are shipped under a “No License Required” (NLR) classification, which is a self-certification that a license is not required. If the exporter’s particular export is subject to export controls, a validated license must be obtained. A validated license is a document issued by the U.S. Government authorizing the export of commodities for which written export authorization is required by law.

In order to determine whether your product needs an export license, you must have the Export Commodities Classification Number (ECCN) for your product. An ECCN is assigned to products that require a license at their ultimate destination or due to the nature of the product itself–for example, if the product has dual use as a civic and military item.

  • Electronic Export Information (EEI)

This information was previously known as the Shipper's Export Declaration or SED.  Since the paper form is no longer accepted, the data must be transmitted electronically now.

EEI is a form required by the U.S. Treasury Department and completed by a shipper showing the value, weight, consignee, destination, etc., of export shipments, as well as Harmonized Schedule B identification number. It’s required for all shipments of a single commodity in amount over $2,500 (except to Canada) and for any shipment that requires an export license. The EEI enables the Bureau of the Census to monitor the kinds of products being exported from the United States, for statistical purposes.

The form must be filed electronically at Automated Export System (AES). AES is the central point through which export shipment data required by multiple agencies is filed electronically to Customs and Border Protection (CBP).

  • Export Packing List

An export packing list is needed for transport and includes the number and kinds of items that are being shipped. It’s much more detailed and informative than a standard domestic packing list.

The list is used by the shipper or forwarding agent to determine the total shipment weight and volume, and whether the correct cargo is being shipped. In addition, U.S. and foreign customs officials may use the list to check the cargo.

  • Certificate of Origin

A certificate of origin, known as “C of O”, declares the country of origin for a good in a particular international shipment. Even though the commercial invoice usually includes a statement of origin, some countries require that a separate certificate of origin be completed. Customs offices will use this document to determine which duty rate to assess on the products being imported.

Often, “C of O”s are required by importers to avoid paying import tariffs and they have become especially common due to a number of free trade agreements (FTA) that the United States has negotiated with other countries.

As an example, a NAFTA (North American Free Trade Agreement) certificate of origin should be used for products exported to Canada or Mexico only if they meet the NAFTA rules of origin for production.

The United States currently has 11 FTAs in force with 17 countries.

  • Insurance Certificate

An insurance certificate is used to assure the consignee that insurance will cover any loss of, or damage to, the cargo during transit. Typically, marine insurance coverage equal to 110% of the commercial invoice amount must be obtained for export shipments.

  • Inspection Certificate

Inspection certificates often are required by foreign customs or businesses for certain regulated products. These are typically related to agriculture, health, or the environment. Inspection certificates also may be required to ensure that vessels or crates are free of contaminants before entering certain ports, or that the products met the specifications outlined in a contract or purchase order.

Depending on the product, certificates may be issued by various government agencies—such as the U.S. Department of Agriculture, the Food and Drug Administration, the Environmental Protection Agency, or by third-party inspection companies.

Documents Used during Inland Movement of Goods

  • Shipper’s Instructions

Shipper’s instructions contains the necessary information regarding exporter’s shipment and help the goods to move free of problems. It’s the exporter’s responsibility to provide the full instructions to the freight forwarder.

  • Inland Bill of Lading

Inland bills of lading document the transportation of goods between inland points and the port at which the export will arrive/depart. Rail shipments use “waybills on rail” and truck shipments use “pro forma” bills of lading.

  • Delivery Instructions

It’s a document prepared by the freight forwarder that provides information for the trucking or railroad company as to where the goods are to be delivered.

  • Dock Receipts

A dock receipt transfers shipping obligations from the domestic to the international carrier. It goes into effect when the shipment reaches the terminal.

  • Bill of Lading/Air Waybill

Marine bills of lading are evidence of title (ownership) of the goods; an air waybill is not. However, both set forth the international carrier’s responsibility to transport the goods to their named destination.

There are two types of marine (or “ocean”) bills of lading used to transfer ownership:

  1. Straight (nonnegotiable) Bill of Lading: Provides for delivery of goods only to the person named in the bill of lading and must be marked “non-negotiable”
  2. Shipper’s Order (negotiable): Provides for delivery of goods to the person named in the bill of lading, or anyone else who is designated. provides a list of common export documents, including brief descriptions of the documents and samples of certain documents.

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Financial Considerations

As explained on Tariffs and Import Fees page, there are two key steps to determine the importing regulations applied to a particular good in foreign countries:

  1. Determine the Harmonized System (HS) or Schedule B Number for the product(s).
  2. Determine the tariff rates, based on the product’s HS or Schedule B Number and destination country.  To help you do this, provides several links to resources that can help you look up products.

You can use globalEDGE’s online training module Tariffs, Quotas and Non-Tariff Barriers to reach additional information. The Tariffs, Quotas, and Non-tariff Barriers module outlines the following components of international trade law:

  • Basics behind tariffs and quotas, including under what circumstances the WTO/GATT prohibits tariffs and quotas
  • Types of non-tariff barriers that countries use to restrict imports
  • The impact of the General Agreement on Tariffs and Trade (GATT) on the creation of non-tariff barriers
  • Different types of subsidies and countervailing duties
  • The purpose and importance of the Harmonized Tariff Schedule
  • Basics of U.S. customs law
  • Methods used by customs to determine an imported good's value when assessing tariffs
  • A case study on the recent disagreement between the U.S. and the EU over bananas

Types of Trade Finance

Working Capital Loans
Working capital loan programs are normally associated with pre-shipment financing which covers the operating costs related to a sales order or contract. Loan proceeds are commonly used to finance labor, materials and inventory.

The U.S. Small Business Administration (SBA) provides export loan guarantee programs to help small businesses sell products or services overseas:

  • Export Express is the simplest export loan product offered by the SBA which provides streamlined financing up to $500,000.
  • Export Working Capital Program (EWCP) is another type of product that The Export-Import Bank (Ex-Im Bank), the official export credit agency of the United States, and SBA offer in order to help businesses obtain private sector loans to meet their transaction financing needs through short-term working capital. EWCP provides financing up to $5,000,000.

International Trade Loan Program
The SBA International Trade (IT) Loan Program assists small businesses that are engaged in exporting, prepared to engage in exporting or adversely affected by competition from imports. Under this program, SBA can guarantee as much as $1.25 million in combined working capital and facilities and equipment loans.

Trade Finance Products

Once a product has been shipped, that inventory is converted to an Account Receivable (A/R). A list of all Accounts Receivable is maintained on an aging report while the exporter waits for final payment. If there is a need for immediate cash, it's possible to sell the A/R at a discount. This solution is called Factoring.
Factors typically provide 70% of the face value with 3-5 working days, and assume responsibility for collection from the buyer. After final payment, the Factor will pay the remaining 30% - less a service fee of 4% - 5%.

Forfaiting is the selling, at a discount, of longer term accounts receivable or promissory notes of the foreign buyer. These instruments may also carry the guarantee of the foreign government. Both U.S. and European forfaiting houses, which purchase the instruments at a discounted price, are active in the U.S. market.

Grants, such as the two examples below, are available for export from time to time:

  • Emerging Markets Program: The purpose of this program is to provide funding to aid U.S. agricultural businesses in expanding their exports to eligible emerging markets overseas.
  • Foreign Investment Financing: This program provides direct federal loans to projects sponsored by private American businesses to aid in the economic and social development of developing countries, as well as help the U.S. economy by creating jobs and increasing exports.

For more information about factoring and forfaiting please visit

For additional information about export financing, the following sites may be helpful:

  • globalEDGE Financing Export Transactions Module- Based on chapter fifteen of the Basic Guide to Exporting, this module covers:
    • Factors to consider in making financial decisions
    • Private sources of financing
    • Government sources of financing
    • A case study on the company JQ American
  • United States Department of Agriculture Foreign Agricultural Service’s Export Credit Guarantee Programs - The U.S. Department of Agriculture administers export credit guarantee programs for commercial financing of U.S. agricultural exports.
  •’s “How can I find export financing?” page provides brief overviews of each of the primary export financing organizations within the US government.

There are a number of flexible payment forms for exporters:

  • Cash-in-advance payment takes shape in three different methods: wire transfer, credit card and check.  With this method, the exporter avoids credit risk as the payment is received by the exporter prior to shipment of merchandise.  However, this is the least attractive option for the buyer because it can create cash flow problems.  Further, the burden of risk lays on the shoulders of the buyer insomuch that he or she trusts that the seller will in fact ship the product.
  • A letter of credit is one of the most secure payment methods and can take many different forms including irrevocable, revocable, confirmed, or special (transferable, revolving or standby).  A letter of credit is a commitment by a bank, on the behalf of the buyer that a payment will be made as long as the terms and conditions have been met.  A letter of credit is useful when reliable credit information about a buyer is difficult to obtain, but the credit information about the buyer’s bank is satisfactory.  Ialso protects the buyer because there is no payment made until the goods have been shipped or delivered as promised.
  • A documentary collection is a transaction in which the exporter entrusts the collection of a payment to the exporter’s bank, who then sends documents to the importer’s bank along with various instructions for payment.  Documentary collections require that the importer pay the face amount.
  • Open account is a transaction in which the goods are shipped and delivered to the buyer before the payment is due.  This is the most beneficial payment method for the importer due to the delayed payment, but is the riskiest for the exporter.
  • Consignment Sales follow the same basic procedures as in the United States. The goods are shipped to a foreign distributor, who sells them on behalf of the exporter. The exporter retains title to the goods until they are sold, at which point payment is sent to the exporter. The exporter has the greatest risk and least control over the goods with this method. Also, receiving payment may take a while.
  • For more information on each payment form as well as detailed descriptions, visit the page on Methods of Payment.

globalEDGE has an online training module, Methods of Payment, where you can find more detail about the export payment methods. The module covers following topics:

  • Payment methods
  • Selection of a payment method
  • Currency issues and payment problems
  • A case study on Lulu's Dessert

Foreign exchange risk has an important role on doing business overseas.  It may appear in many different ways:

  • Transaction Risk: Change in the exchange rate during a transaction between the seller and buyer may result in loss for one of the parties. Companies may use hedging techniques to overcome this risk.
  • Economic Risk: Over time, seller may become non-competitive due to movements in the exchange rate. One way of mitigating this risk is to diversify sales markets potential through sourcing and manufacturing locations.
  • Translation Risk: This type of risk is related to the loss resulting from restating the values of assets and liabilities on the balance sheet. Companies may use nettings and swap techniques to prevent this risk.
  • Risk of non-payment (Credit Risk):When buyers default on their payment obtaining the monies due can be difficult and expensive.  Negotiating with buyers requires patience, understanding and flexibility to resolve conflicts in the least costly manner.  If negotiations fail and the amount of money lost is significant, the bank, legal counsel and the U.S. Commercial Service should be contacted to help with this issue.
  • Political and economic risk: Foreign governments have been known to restrict or prohibit commercial payments because of problems with the economy or political instability.

To eliminate some financial risk associated with not receiving payments, the U.S. Government offers insurance for risk associated with political instability.  For more information on this insurance please visit the Insurance and Risk Mitigation section on

Generally international prices should be calculated in the same manner as domestic prices.  Determine the fixed and variable costs for producing the product and the delivery services overseas and calculate the final landed cost.  It is important to remember that international marketing expenses should be factored into pricing the product as well.

There are two models that you may use for your international pricing:

1. Cost-Plus Method

The cost-plus method is based on your domestic costs, “plus” additional exporting costs associated with international sales and promotion, product modification, etc. This method allows you to maintain your domestic profit margin percentage and set a suitable price. Any costs not applicable, such as domestic marketing costs, are subtracted from the overall cost prior to markup to arrive at your selling price. The cost-plus method does not take local market conditions into account.

2. Marginal-Cost Method

The “marginal-cost” method will likely provide a more realistic means of determining the true cost of producing your product for export. To use the marginal-cost method, determine the fixed costs of producing an additional unit for export. Any additional costs of producing products for export are termed variable costs.

For more information on pricing you may see the globalEDGE Pricing, Quotations & Terms training module. The online module discusses below issues:

  1. Determining the best price for your product internationally
  2. Handling requests for quotation
  3. Defining the terms of sale
  4. A case study on Home Instead Senior Care

Choice of payment method is the easiest way to mitigate risks of nonpayment:

  • The cash-in-advance payment method eliminates all risk of not getting paid, but few foreign buyers are willing to use this method of payment.
  • A letter of credit is another payment option that is secure for the exporter and is more widely accepted by buyers because banks guarantee payments.  Other options also help to decrease the risk for both the buyer and seller.
  • Another way of mitigating the risk of payment problems is to purchase export insurance through the U.S. Government.

Even exporters who take precautions occasionally experience payment problems. Following three options may be considered if you experience payment problems:

  1. Try to negotiate directly with the customer.
  2. Work with your bank, legal counsel and the U.S. Commercial Service; particularly if negotiations fail and the sum involved is large.
  3. Try arbitration through the International Chamber of Commerce if other means fail. This route is often faster and less costly than legal action.

You can find more about the payment problems and how you can deal with them in this document.

Foreign exchange risk is the exposure to potential financial losses due to the devaluation of a foreign country’s currency against the U.S. dollar.  The exposure can be eliminated by only selling products and services in U.S. dollars; however this method could result in losing some potential buyers due to more flexible currency terms offered by competitors.

The following are the most common ways of hedging:

  1. A forward hedge is the most direct method of hedging foreign exchange risk.  It enables the exporter to sell a given amount of foreign currency at a pre-agreed exchange rate, with a delivery date ranging from 3 days to one year into the future.  This method is beneficial because the exchange rate will be locked in for the set amount of money, and not be affected by the fluctuation in currency.
  1. An option hedge is a good choice if there is some doubt as to whether a sale will be completed or collected by a specific date.  The exporter (option holder) has the right, but not the obligation, to deliver an agreed upon amount of foreign currency to the lender, in exchange for dollars at a specific rate on or before the expiration date of the option.  If the value of the foreign currency goes down, the exporter is protected from the loss; however if the value of the foreign currency rises, the exporter can either sell the option back to the lender or let it expire by selling foreign currency on the market earning more dollars than originally expected with the option .  An option hedge is much more flexible than other hedging options.  High fees make an option hedge the most expensive choice to protect against foreign currency fluctuation.

For more information on foreign exchange risk management and other international finance topics, view the U.S. Department of Commerce Trade Finance Guide.

You can reach the websites of various banks all over the world simply by going to globalEDGE Country Insights listing and searching for a specific country. Information about the banks of that country is listed under both the “Corporations” and “Resources” links.  The banks’ websites will have information regarding the investment and banking practices of specific countries.

Country Commercial Guides are available through the Market Research Library.  Most guides are free of charge and provide users with country trade regulations and investment practices, as well as present a comprehensive look at the commercial environment in a given country. Foreign investment information is also often available on the individual websites of U.S. embassies and consulates.

Duties and taxes are fees imposed on goods shipped from one country to another. It's the responsibility of the shipper to calculate them and for the buyer to pay them. has a video about international taxation and introduces users to online tools that help with calculating these fees for more than 100 different countries.

If the products you export contain components or raw materials that were originally imported into the U.S., you may be able to obtain a refund on the import duties paid when the components or materials were imported. This type of refund is known as Duty Drawback.

It’s also good to know that, unlike the U.S., most foreign countries have some form of national sales tax. They are commonly referred to as Value-Added Taxes (VAT) or national consumption taxes.

You may find more information, news, and alerts about international taxation at the Deloitte International Tax Source (DITS). DITS is an online database featuring tax rates and information for 65 jurisdictions worldwide.

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Sales and Marketing

U.S. Commercial Services offers an International Partner Search service that works to find suitable partners in over 80 countries. It provides users with complete contact information on key officers at each potential partner interested in your company along with information on their size, sales, years in business, number of employees. The information also includes a statement from the each potential partner on the marketability of your product or service.

globalEDGE features a number of resources specifically for finding trade leads. In the Trade Leads section of the globalEDGE resource desk, a number of sites for finding trade leads are listed, along with a brief description of each site. Depending on the product you intend to export, or the region to which you intend to export, you may be able to find a trade lead site tailored to your specific product or region. Additionally, the site descriptions indicate whether a particular site is a free service, or if there is a fee associated with use.

  • TradeStats Express provides U.S. trade statistics at both national and state levels. Users can retrieve, visualize, analyze, print and download trade data. The website is updated regularly as new trade information becomes available.
  • U.S. Census Bureau- Foreign Trade Division provides general U.S. trade information such as Trade Highlights, Balance by Partner Country, Country/Product Trade, and State Trade Data. The Foreign Trade Division also produces electronic and CD-ROM copies of detailed reports which are available on a subscription basis.
  • USA Trade Online is available on a subscription basis; however users can download a free demo of the program before purchasing. This source provides statistics on United States exports and imports to countries around the world. In order to use the program, users must be familiar with the Harmonized System (HS) and the North American Industry Classification System (NAICS).
  • The U.S. International Trade Commission (USITC) provides U.S. import and export statistics on a self-service and interactive format. The USITC DataWeb returns user-defined queries which allow both expert and non-expert users to create and save customized data.

Finding potential markets for your product can be done through primary or secondary market research:

  • Primary market research is collecting data directly through the market place through interviews, surveys or direct contact with representatives and potential buyers. This research provides you with more specific and direct information; however, this method can be expensive and time consuming. The U.S. Commercial Service can collect primary market information and analyze it for a fee and can also help you locate intermediaries with specific market expertise. Here are some steps to take to conduct primary market research:
    • Obtain advice from experts, such as those from governmental agencies, or attend seminars or workshops put on by experts.
    • Hire an international trade or marketing consultant.
    • Talk to exporters of similar products.
    • Contact trade and industry associations.
  • Secondary market research is data collection from various sources, such as trade statistics for a specific country or product. It is less expensive than primary market research; however some data may be outdated or too broad to make an accurate conclusion. There are many sources and ways to approach secondary market research:
    • Analyzing trade and economic statistics provide information on the trade of products over specific time periods as well as other demographics that are helpful in determining the market potential of a specific product.
    • globalEDGE, created by the Michigan State University International Business Center, provides easy access to thousands of resources on international business, including profiles for over 200 countries and 20 industry sectors. Resources are organized by category and each listing includes a description of the recommended site.
    • Sources recommended by A Basic Guide to Exporting are the following:
      • Tradestats Express: maintained by the U.S. Commerce Department’s Office of Trade and Industry Information.
      • Statistical Yearbook: published by the UN, data on more than 550 commodities for more than 200 countries and territories on economic and social subjects.
      • World Bank Development Indicators: provides demographics, GDP and average growth rates for every country. WDI contains economic and social indicators for countries.
      • CIA World Factbook: country data on demographics, economy, communications and defense.
      • International Financial Statistics: statistics on exchange rates, money and banking, production, government finance, interest rates; available in print, on CD-ROM or an online subscription.

Another smart thing to do while engaging in market research is to stay up-to-date with world events because they have potential to impact the international marketplace, which could in turn impact your product. Some good international business news sources are as follows:

For additional information about finding potential markets, the following sites may be helpful:

  • U.S. Government Market Research Library - This site contains current information on country and industry specific markets.
  • globalEDGE Finding Qualified Buyers Module- Based on the sixth chapter of the Basic Guide to Exporting, this module covers:
    • U.S. Commercial Service programs to help you find buyers
    • Department of Commerce agencies to assist you with your exporting needs
    • State and local government assistance
    • A case study on the business SCIFIT Systems Incorporated

Obtaining market research on specific countries and regions is essential to an overall marketing plan for introducing a product abroad. There are many online resources, as well as print resources, available to aid in market information in specific countries and regions. The globalEDGE website contains many sources that can aid with this market research.

  • globalEDGE Multi-Country page is a listing of resources that may assist you with market research in various countries and regions around the world.
  • globalEDGE Statistical Data Sources page is a listing of country or region specific statistical database resources that can aid in market research. 
  • globalEDGE Market Potential Index (MPI) is a ranking of countries classified as emerging markets (by the Economist Magazine). The MPI ranks countries and eight different dimensions: market size, market growth rate, market intensity, market consumption capacity, commercial infrastructure, economic freedom, market receptivity and country risk.
  • globalEDGE Country Insights contain information and statistical data for 201 countries around the world, including Country Commercial Guides, World Bank Doing Business Indicators, and other country profile data.

In addition to the globalEDGE sections, A Basic Guide to Exporting recommends the following resources:

  • Export USA is a catalog-magazine available free of charge through U.S. Embassies/Consulates and worldwide trading partners. It is estimated that the magazine has 400,000 readers in 176 countries. Exporters are able to advertise their products and services by calling Associated Business Publications International (1-800-581-8533), by visiting their website, or by contacting local Department of Commerce U.S. Export Assistance Centers.
  • The International Catalog Exhibition Program is available through the U.S. Commercial Service. Trade specialists will translate your company profile into the local language, display marketing materials, collect sales leads from possible buyers and assist you with any follow-up activities. For more information and access to the service you can contact Export Promotion Services at (202) 482-3973.
  • The globalEDGE Shows & Events section lists various trade shows and events.  All events can be filtered to show global, country specific or regional specific trade events.
  • The Export.Gov trade events section helps U.S exporters network and promote their company. There is also a searchable trade list that includes all official trade missions and events sponsored by the International Trade Administration of the U.S. Department of Commerce. Users are able to search the trade list by country, state, industry, event type and date.

The first step in researching a particular industry or product is to determine the appropriate classification. This will allow you to search market research databases for your product or industry, based on a standardized classification system. Two distinct systems have been created to standardize the classifications of products and industries within and across multiple countries that do business with the United States:

  • The North American Industry Classification System (NAICS) is the standardized system for industry categorization. On the NAICS page, enter a keyword in the NAICS search box to retrieve a list of possible industries for your business. From this list, you may select the industry that most closely describes your business, and click on that industry’s NAICS code for a more detailed description.
  • The Harmonized System (HS) is the standardized system for product classification. The “Harmonized System” page describes the system, its uses, and how to obtain both your HS and Schedule B numbers.

Once you have determined your industry and product classification, there are a number of sites available for further research. The globalEDGE site contains many valuable resources to aid in finding some industry and product-specific information:

The industry profiles page on globalEDGE has background information, resources, trade statistics and more information on the following industries:

  • Aerospace and Defense
  • Agriculture
  • Apparel and Textiles
  • Business Services
  • Chemicals
  • Construction
  • Consumer Products
  • Energy
  • Financial Services
  • Food and Beverage
  • Healthcare
  • Hospitality and Travel
  • Industrial Manufacturing
  • Media and Communications
  • Mining, Minerals, Metals
  • Pharmaceuticals
  • Public Services
  • Retail
  • Technology
  • Transport Manufacturing

globalEDGE industries product search (shown on the right side of the page) prompts users for an HS code and provides related globalEDGE sectors, as well as general industry statistics.

In addition to the globalEDGE resources A Basic Guide to Exporting recommends the following resources:

  • Textile and Apparel Database: The database includes information on overseas markets, in addition to rules and regulations affecting U.S. exports. It also provides specific country profiles.

For more information about researching a specific industry and/or product, the following site may be helpful:

  • IBISWorld – This site has many reports available organized by industry and product.
  • Yahoo! Finance Industry Center – The center provides information the daily top and worst performing industries, news on the different industries, industry top performers and other industry information.
  • Trade Leads section of the globalEDGE resource desk lists a number of sites for finding trade leads, along with brief descriptions. Several of the included sites offer information about government contract postings. Additionally, the descriptions indicate whether a site is a free service, or fee-based.
  • B2GMarket.Com is a fee-based service that offers a searchable database of bidding opportunities on a state, federal and international level. You may register for a free week trial of the service before choosing to pay for a subscription.
  • Building Resources maintains a list of web resources to help companies find information about the building codes, licensing and financing options of every state.
  • The U.S. Commercial Service provides customer lists as well as business matching services through embassies and consulates across the globe.

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Incoterms (International Commercial Terms) are shipping and trade terms that cover issues such as control of goods and financial responsibilities such as payment of cargo insurance and freight and they were published by the International Chamber of Commerce (ICC).

There are eleven Incoterms which fall into two main categories organized by modes of transport.

Group 1. Incoterms that apply to any mode of transport are:

  • EXW: EX Works
  • FCA: Free Carrier
  • CPT: Carriage Paid To
  • CIP: Carriage and Insurance Paid to
  • DAT: Delivered at Terminal
  • DAP: Delivered at Place
  • DDP: Delivered Duty Paid

Group 2. Incoterms that apply to sea and inland waterway transport only:

  • FAS: Free Alongside Ship
  • FOB: Free On Board
  • CFR: Cost and Freight
  • CIF: Cost, Insurance and Freight

Below is some information regarding the commonly used incoterms:

    Term Definition        Risk            Cost Include on the Quotation
EXW - Ex Works Buyer arranges for pick-up of goods at the seller's location - Seller is responsible for packing, labeling, and preparing the goods for shipment on a specified date or time frame Buyer assumes all risk Buyer pays all transportation costs N/A
FCA - Free Carrier Seller is responsible for costs until the buyer's named freight carrier takes charge Seller and Buyer Split N/A
FAS - Free Alongside Ship (over water only) Buyer arranges for the ocean transport - Seller is responsible for packing, labeling, preparing the goods for shipment, and delivering the goods to the dock Seller: until the goods reach the dock - Buyer: from dock to destination Buyer: all ocean transport costs - Seller is responsible for costs associated with transporting the goods to the dock Cost of transporting goods to the dock
FOB - Free On Board (over water only) Seller arranges for ocean transport of the goods, preparing the goods for shipment, and loading the goods onto the vessel - The goods ship ocean freight collect Buyer: once the items are on board Seller: wharfage (charges to load the goods onto the ship) and freight forwarder fees Costs, until on board
CFR - Cost and Freight (over water only) Seller has the same responsibilities as when shipping FOB, but shipping costs are prepaid by the seller, instead of shipping collect Seller: until the shipment reaches the overseas dock. Seller: costs of freight fees up to destination Add Freight to cost of product
CIF - Cost, Insurance, and Freight (over water only) Seller has the same responsibilities as when shipping CFR with the addition of including a marine insurance policy Seller: until the shipment reaches the overseas dock Seller: insurance and freight forwarder fees Insurance, freight, and costs of goods

Export insurance typically covers shipments against loss, damage and delay in transit.  Insurance coverage is usually 110% of the CIF (Cost, Insurance, Freight) or CIP (Cost and Insurance paid to) value; however sellers and buyers can agree to different components.

In general export insurance:

  • Reduces exporter’s risk of receiving payment from buyers
  • Reduces borrower’s risk to lender to enhance borrowing capacity
  • Mitigates risk for exporters with Letters of Credit in case of political or economic crisis in foreign market

Ex-Im Bank works with small businesses at the local level through its five regional offices and a nationwide network of nearly 40 city/state partners. Distribution channels also include 120 delegated authority lenders in 28 states that can directly commit Ex-Im Bank’s guarantee on working capital loans. Insurance brokers in every state can assist with Ex-Im Bank’s export credit insurance applications. In addition, Ex-Im Bank participates in approximately 20 trade shows and sponsors more than 20 exporter seminars every year, including events involving small exporters as well as exporters of environmentally beneficial goods and services. You can check out their Event Schedule.

For more specific information it is advised that exporters consult with international insurance carriers or freight forwarders.

A freight forwarder is an agent who arranges for the transport of goods around the world.  Freight forwarders specialize in rules and regulations, documentation and shipping methodology.  For more information on Freight Forwarders, visit the National Customs Brokers and Freight Forwarders Association of America

Goods shipped for export require substantially greater handling than domestic shipments. You must pack the goods to ensure that:

  • Weight and measurements are kept to a minimum;
  • Breakage is avoided;
  • The container is theft proof; and
  • Goods do not suffer from the stresses of ocean shipment, such as excess moisture.

In addition to proper packing, you should be aware that certain markings are necessary on goods transported internationally.

Typical required markings are:

  • Country of origin: Some countries require that the country of origin be marked on the outside of the container, and may even have regulations as to how the mark of origin should appear.
  • Labeling: Food and drugs often must carry special labeling as determined by the laws of the country of destination.
  • Weight and dimensions: These should be visible and any special instructions should be shown; you may wish to include translations of these instructions in the language of the importer’s country.

If your business is not equipped to package your goods for export, there are export packaging companies that can perform this service for you. Your international freight forwarder should be able to provide a list of export packaging companies in your area.

There are several considerations for preparing to ship your product overseas. These include requirements for certain products, such as hazardous materials, and regulations depending on your method of shipping, whether by air, sea, rail or truck. You can learn more at U.S. Small Business Administration (SBA)’s Transportation and Logistics page.

You also can visit for information on Shipping Your Product Overseas.

For more information you can also visit the globalEDGE Preparing Your Product For Export module.

Carnets are “Merchandise Passports”.  A Carnet or ATA Carnet (pronounced kar-nay) is an international customs and export-import document. It is used to clear customs in 71 countries and territories without paying duties and import taxes on merchandise that will be re-exported within 12 months.

Carnets facilitate temporary imports into foreign countries and re-importation in the U.S. By presenting an ATA Carnet document to foreign customs, you pass import duty free and import tax free into a carnet country for up to one year. ATA Carnets also serve as the U.S. Certificate of Registration (CBP 4455) upon re-importation.

In the U.S., two types are issued: ATA and TECRO/AIT Carnets:

  1. ATA Carnets ease the temporary importation of commercial samples (CS), professional equipment (PE), and goods for exhibitions and fairs (EF). They facilitate international business by avoiding extensive customs procedures, eliminating payment of duties and value-added taxes (minimum 20% in Europe, 27% in China), and replacing the purchase of temporary import bonds. 
  1. TECRO/AIT Carnets, used between the U.S. and Taiwan only, appear similar to, and serve the same function as the ATA Carnet. TECRO/AIT Carnets result from a bilateral agreement between the US and Taiwan, covering only commercial samples (CS), and professional equipment (PE).  Merchandise entering countries in addition to Taiwan may also be accompanied by an ATA Carnet.

Benefits of Carnets

Carnets save time, effort, and money.  They:

  • May be used for unlimited exits from and entries into the U.S. and foreign countries (Carnets are valid for one year)
  • Are accepted in over 75 countries and territories
  • Eliminate value-added taxes (VAT), duties, and the posting of security normally required at the time of importation
  • Simplify customs procedures. Carnets allow a temporary exporter to use a single document for all customs transactions, make arrangements in advance, and at a predetermined cost
  • Facilitate reentry into the U.S. by eliminating the need to register the goods with U.S. Customs at the time of departure

Be aware that Carnets do not exempt holders from obtaining necessary licenses or permits.

Merchandise Covered by Carnets are:

  • Virtually all goods, including commercial samples, professional equipment, and items for tradeshows and exhibitions, including display booths.
  • Ordinary goods such as computers, tools, cameras and video equipment, industrial machinery, automobiles, gems and jewelry, and wearing apparel.
  • Extraordinary items, for example, Van Gogh Self-portrait, Ringling Brothers tigers, Cessna jets, Paul McCartney's band instruments, WorldCup class yachts, satellites, human skulls, and the New York Philharmonic.

Merchandise Not Covered by Carnets are:

  • Consumable or disposable goods (e.g., food and agriculture products)
  • Giveaways
  • Postal traffic
  • Goods subject to repair

More information about the Carnet countries and the fees can be found in the United States Council for International Business (USCIB) website.

Sellers are often requested to submit a proforma invoice with or instead of a quotation. Proforma invoices are not for payment purposes but are essentially quotations in an invoice form.

These invoices serve as models the buyer can use when applying for a license or arranging funds. You will need to detail your invoice carefully, since your buyer may construe the information within it as a legally-binding offer you make. As a matter of good business practice, you should ensure your buyer can calculate all costs from the proforma. Another consideration to take into account is variances in requirement demanded by the destination country. You should include a proforma invoice with any international quotation, regardless of whether it has been requested.

NOTE: Invoices should be conspicuously marked "Proforma Invoice."

Below are the proforma invoice field definitions:

  • FROM: The address and phone number of the seller
  • DATE: The date the invoice was prepared and sent
  • Reference No.: The buyer's reference number on the letter of inquiry
  • Payment Terms: How the buyer is required to pay for the goods. Consider the risks associated with each term before choosing one
  • Country of Origin: Country where goods are produced and sold
  • Estimated Date of Shipment: Usually 45, 60, or 90 days from the date the order is placed or the letter of credit is received
  • Product Description: A specific and detailed description of the item so that the buyer knows exactly what they will be receiving. Include cubic volume in your description
  • Unit Price: The price of one unit of the item

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