Business or research groups planning to expand research, manufacturing, sales, or distribution activities beyond the United States should plan for compliance with US and international export and import rules and understand how these rules apply to various technologies. Export and import requirements can be complex and highly technical. Failure to allow for the long lead times needed to frame and implement internal export policies and procedures as well as engage third-party export services can lead to additional expenses, delayed export schedules, financial penalties, and criminal charges. Recent aggressive enforcement of US export laws have resulted in civil penalties amounting to >$100,000 against several companies engaging in unlicensed exports and re-exports.

Initial Considerations

Specialists must plow through lengthy and complex commercial export rules and packing, labeling, and shipping requirements. A general understanding of such rules in the United States (as well as related costs) is essential to determine how, where, and to whom biological materials, chemical substances, technology, data, and services may be exported. To achieve this understanding, you should have a solid grasp of

• the identity and nature of the exported item, technology, data, or services

• the identity and location of the recipient

• the intended use of the exported item, technology, data, or service

• the export license exception (if any) that pertains to the export transaction,

• the relevant packing, shipping, and transport rules

• the ultimate destination country and its import, packing, shipping, and labeling and other requirements

• the transshipment or import requirements of any intermediate county and its packing, shipping, and labeling requirements.

Failure to account for and properly use this information may result in financial and criminal penalties.

Here are some basic concepts, reminders, and traps to consider during export planning. The information here is not complete, nor is it a substitute for detailed, fact-specific planning or implementation. That depends on the specific types of technology, specific regulations, and each exporter's circumstances.

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Oversight

Technology does not always take the form of consumer goods, commodities, parts, or supplies. Biological materials, chemical substances, technology, and technical information, data, and services are subject to various US export laws, foreign government import regulations, and international requirements. The emphasis here is on “various” because there is no one group of statutes, rules, or regulations applicable to all US exports.

In the United States, the Commerce Department's jurisdiction extends to the export and re-export of several commercial items and technical services, including biological items (human, plant, and animal). The US State Department oversees military or defense articles and applications, technical information, data, and services (which should not be assumed to be limited to munitions). US Treasury Department oversight includes exports to certain embargoed destinations. And the State Department and Treasury Department purviews extend to poor export conduct.

Other nations have their own respective laws, regulations, and practices. So cross-border strategic planning is incomplete without identifying the countries intended as the ultimate and intermediate destinations for exports. Such planning also should include integrating related specific requirements into internal export planning, policies, and procedures.

Because biological materials and chemical substances are subject to various special packing, labeling, and shipping rules, their export and shipment must comply with other US regulations (such as those imposed under the Toxic Substance Control Act [www.epa.gov/lawsregs/laws/tsca.html] and by the Department of Transportation [www.dot.gov]) in specific cases. Such exports also must comply with United Nations guidelines for shipping hazardous materials in domestic and international transport.

Export transactions require disclosure of a sales price or value of the exported item or service. Even though the exported items or services are not being sold to the recipient, the export paperwork requires an invoice containing the name and address of exporter and recipient, a value and description of the exported item or service, and the intended use of the item or service (the reason for the export).

Export recordkeeping and compliance requirements are complex, detailed, and massive. Third-party export service providers (such as freight forwarders) and appropriate software should be considered to shorten lead time and cost of hiring and training internal staff. Nevertheless, there is no substitute for a strong internal knowledge base and consistent compliance.

EXPORT PLANNING



Allow substantial planning and lead time to

• become familiar with all import, export, and transshipment basics and apply them to an exporter's specific circumstances

• educate and train internal research, business development, sales, and manufacturing groups about specific US export rules; labeling, packing, and shipping rules; and destination country requirements pertaining to an exporter's specific activities

• plan for the time and costs to obtain required export licenses or comply with conditions of export license exceptions and to prepare and maintain the required export records

• develop relationships with experienced service providers to provide information or training and to handle certain export activities (no need to re-invent the wheel).