video case analysis

A. GOVERNMENT SUPPORT (OF U.S. EXPORTS)

1. US International Trade Administration (ITA)

a. Division of US Dept of Commerce

b. Purpose:

i. to promote trade and investment

ii. ensures fair trade by enforcing US trade laws and agreements. 

c. Three divisions:

i. Overseas Offices a/k/a Foreign Commercial Service/U.S. Commercial Service

· Offices in 80 countries

· Help introduce US business persons to local business and government leaders

· Offer business services including

· trade leads

· financial counseling

· export opportunities

· political and credit risk analysis

· analysis of local laws

ii. Headquarters Offices

· Country analysis using desk officers

· Desk Officers (2 categories)

· Market Access and Commercial Policy

· Specialists assess a country’s economic climate, trade policy, political climate

· Trade information/Trade development

· Specialists who assess industry characteristics (products/services) opportunities, etc.

iii. Domestic Offices

· operating through Export Assistance Centers (EACs) in the US

· Offers services of US Comm’l Services, EXIM Bank, SBA in single location

2. District Export Councils

a. Organizations of local/regional business leaders

b. Appointed by Secretary of Commerce

2. District Export Councils (continued)

c. Work as volunteers alongside EACs

d. Services include

i. “How-to” international trade seminars and workshops

ii. Public awareness of Dept of Commerce trade assistance programs

OMIT: “Small Business Development Centers” and “Service Corps of Retired Executives” p. 171

3. Office of Export Trading Company Affairs (OETCA)

a. Allows US businesses to join together to export using Export Trading Companies

b. Administered through the ITA

c. Issues Export Trade Certificate of Review

i. allows exporters to avoid antitrust legislation

ii. enables firms to work together to reduce export costs and risks while developing new export business opportunities

OMIT: From “INFORMATION SOURCES” p. 172 to middle of p. 179

B. FREIGHT FORWARDING

1. Freight Forwarder

a. Defined as: private company licensed to support shippers and the movement of their goods.

b. Provides advice on

i. Export/import documentation

ii. Freight costs/shipping rates

iii. Consular fees

iv. Insurance

v. Packing

c. Types include:

i. Ocean freight forwarder

· Must be licensed by Federal Maritime Commission

ii. Air cargo agents

· Certified by Cargo Network Services (U.S.) through International Air Transportation Association (IATA)

2. Shipper

a. Any company may ship its own goods but cannot receive compensation without license

C. EXPORT CONTROLS

1. Export license

a. Defined as: a grant of authority from a government issued to a particular exporter to export a designated item to a designated country

b. Features:

i. Issued on a case-by-case basis

ii. Issued for single transaction or multiple transactions within a specified period of time

2. U.S. Export license/control

a. Jurisdictional control of licenses

i. Dept of Commerce/Bureau of Industry and Security (BIS) – most items exported

ii. Other departments:

· Dept of State - Arms, ammunition, etc.

· Dept of Justice/DEA – dangerous drugs, narcotics

· Nuclear Regulatory Commission – nuclear materials

· Dept of Agriculture – meat, poultry, etc

b. BUREAU OF INDUSTRY AND SECURITY (BIS)

i. Administers the Export Electronic Information (EEI) (formerly the Shipper’s Export Declaration (SED) Form 7525-v)

· EEI required for all exports needing export license

· EEI indicates to US Customs type of export authorization used (e.g. dangerous good, etc.)

· Used to compile trade statistics for US Census

ii. Interprets the Export Administration Regulations (EAR)

iii. Types of licenses

· “Dual Use” – term for goods having both commercial and military applications

· Validated license – issued for items usually under control of a US government agency/dept (i.e. CCL) and requires a license (e.g. arms shipment)

· License Exception – on CCL, needs license

CONTINUED

iii. Types of licenses (continued)

· No License Required (NLR)

· items subject to EAR but not listed on CCL under a specific ECCN

· on CCL but no license needed

· EAR99

· Items not on CCL

· generally no license required

· vast majority of goods shipped from US.

· EXCEPTION – Item is not going to embargoed country, prohibited end user or prohibited end use.

iv. COMMERCE CONTROL LIST (CCL) and EXPORT CONTROL CLASSIFICATION NUMBER (ECCN)

· Classifications of lists of controlled items

· ECCNs are listed in the Commerce Control List (CCL)

· Commerce Control List categories

0 = Nuclear materials, facilities and equipment (and miscellaneous items)

1 = Materials, Chemicals, Microorganisms and Toxins 2 = Materials Processing 3 = Electronics 4 = Computers 5 = Telecommunications and Information Security 6 = Sensors and Lasers 7 = Navigation and Avionics 8 = Marine 9 = Propulsion Systems, Space Vehicles, and Related

Equipment

Five Product Groups (subset of CCL)

A. Systems, Equipment and Components B. Test, Inspection and Production Equipment C. Material D. Software E. Technology

OMIT: “EXPORTER’S OBLIGATIONS” p. 183 to end of chapter