Why Export

Exporting to expand your consumer and market bases can be great for your business.  Ninety-six percent (96%) of the world’s consumers, and over two-thirds (2/3) of the world’s purchasing power are located outside the United States. [1]  Exporting can diversify your market risk, help you to weather market volatility, increase and prolong demand for your services or products, increase your market share, increase your sales and profits, increase your competitive knowledge, and decrease your per-unit costs. [2]  

You do not have to run a large corporation to export.  Small and medium sized businesses make up approximately ninety-eight percent (98%) of all U.S. exporters. [3]  These same businesses ship roughly ninety-eight percent (98%) of all exported U.S. goods.

Export Help

If you are interested in exporting and need help and guidance, the U.S. Small Business Administration (SBA), the U.S. Export-Import Bank (Ex-Im), or your state Department of Commerce (DOC) can provide information, help you to obtain export-ready financing, and provide other related support.

Export Compliance

If you do start exporting, you will encounter U.S. export controls.  All U.S. exports are subject to export control as a matter of national security.  Any item that is sent in any fashion from the United States to a foreign destination is an export, including but not limited to physical items, items that travel electronically, and items that are transmitted verbally or visually.

Technology and source codes transmitted electronically out of the United States are export items.  Items that leave the United States only temporarily are exports, as are gifts and other items that are not for sale.  Items sent to U.S.-owned foreign subsidiaries are exports.  Items that temporarily stop in or are shipped through the United States are exports.  Items being returned to a foreign destination from the United States are exports.  Certain items transmitted or released within the United States to foreign nationals are “deemed” exports.

Export Shipping Crane.JPG

Most exports are subject to the Export Administration Regulations (EAR), administered by the Bureau of Industry and Security (BIS).  Under the EAR, certain items require export licenses.  The exporter is required to determine whether exported items require licenses, and must comply with all applicable rules and regulations.  Items subject to the EAR that do not require licenses must nonetheless comply with applicable requirements and procedures.

BIS also administers anti-boycott laws that govern applicable international business dealings.

In addition to the rules and controls administered by BIS, other agencies govern particular types of exports.  You must determine whether any export compliance obligations apply to your business.  The Department of State licenses defense services and articles, the Department of the Treasury Office of Foreign Assets Control administers economic and trade sanctions, the Nuclear Regulatory Commission Office of International Programs licenses nuclear material and equipment, the Department of Energy Office of Fuels Programs licenses natural gas and electric power, the Defense Technology Security Administration administers certain technology security policies, the Department of the Interior U.S. Fish and Wildlife Service issues permits for certain protected species, the Drug Enforcement Administration Office of Diversion Control Import-Export Unit oversees controlled substances and certain listed chemicals used to produce controlled substances, the Food and Drug Administration licenses items under their control, the Environmental Protection Agency Office of Solid Waste International and Transportation Branch regulates hazardous waste exports, and the Patent and Trademark Office’s office of Licensing and Review oversees patent filing data sent abroad.

The regulations can be complicated, but may also be worth the compliance effort.  If exporting would be advantageous to your business, an attorney can likely help make you to make sense of it all.

[1] Karen Mills, Administrator for the U.S. Small Business Administration, It’s a Small (Business) World: The Benefits of Exporting, Huffington Post, March 6, 2013, http://www.huffingtonpost.com/karen-mills/small-business-exporting_b_2814446.html.

[2] Nazir Daud, The Benefits of Exporting for Small Businesses, http://ezinearticles.com/?The-Benefits-of-Exporting-For-a-Small-Business&id=1927473.

[3] Id.; ITA U.S. Export Fact Sheet (2013)