It doesn’t matter if you are an experienced exporter or if the only overseas business you do is from the occasional inquiry from another country: Knowing your responsibilities as an exporter can save you from making costly mistakes.
While there are many duties and responsibilities to discuss, here are a few worth noting as we start the new year.
Find Out If You Are The Principle Party
Do you have a domestic client that takes care of exporting your products to other countries? What do you do if a foreign buyer says they’re taking care of logistics and paperwork for you? Do you think your freight forwarder is legally responsible if any export mistakes arise? Export compliance can get complicated, but you can save yourself a lot of trouble by understanding what a principal party is and what’s expected of them.
Here’s what you need to know. If you receive the primary benefit for an export, you are considered the U.S. Principal Party In Interest, according to the Foreign Trade Regulations. If you are the principal party, or USPPI, you are responsible for making sure export transactions are legal, regardless of the sale’s terms. You must also:
- Determine your commodity jurisdiction and classify your products to determine whether you need an export license.
- Perform due diligence on the end user and the intended end use of your products.
- Classify your products for statistical purposes (Schedule B)
- Report your Electronic Export Information (EEI) to the U.S. Census Bureau through their Automated Export System (AES).
- Provide freight forwarders with complete and accurate information for the export transaction.
- Maintain shipment records for five years.
What If You’re Not The Principal Party?
Even if you aren’t the principal party, manufacturers and suppliers can still be held liable if their goods end up in a country or in the hands of a foreign individual that has been banned by the U.S. Government. If you suspect your domestic clients are selling your products to other countries, familiarize yourself with key export controls and basic export compliance.
Export Compliance Resources
For more information about performing due diligence on the end user and the intended end use of your products, read our blog on export licenses here. For more information about classifying products, read our blog on filing shipments through the AES here.
You can also check out this USPPI fact sheet and check list from the National Customs Brokers and Forwarders Association or read these case studies. The U.S. Commercial Service’s website also has information on a variety of export related topics.
We also have a Key Export Controls Webinar on January 20, 2022 at 9:30 a.m. Consider attending to continue your education on your responsibilities as an exporter.
Get 1-On-1 Exporting Advice
If you prefer to speak to someone directly, the West Virginia Department of Economic Development’s international trade representatives are available to answer your questions. Contact us today!
By Jesús Velasco Espín
International Trade Manager
A native of Mexico City, Mexico, Jesús is a graduate of West Virginia State University, where he earned a degree in Business and Economics. He’s currently finishing his MBA at the University of Charleston. He is fluent in Spanish and English and will be the primary Export Promotion Program contact for companies in Barbour, Brooke, Cabell, Calhoun, Doddridge, Gilmer, Hancock, Harrison, Jackson, Lewis, Marion, Marshall, Mason, Monongalia, Ohio, Pleasants, Preston, Ritchie, Roane, Taylor, Tyler, Wayne, Wetzel, Wirt and Wood counties. Contact Jesús at Jesus.Velasco@wv.gov.