{"id":10871,"date":"2021-08-11T16:31:07","date_gmt":"2021-08-11T23:31:07","guid":{"rendered":"https:\/\/www.qad.com\/blog\/?p=10871"},"modified":"2023-01-18T16:31:57","modified_gmt":"2023-01-19T00:31:57","slug":"3-minute-explainer-export-management","status":"publish","type":"post","link":"https:\/\/www.qad.com\/blog\/2021\/08\/3-minute-explainer-export-management","title":{"rendered":"3 Minute Explainer: Export Management"},"content":{"rendered":"

[vc_row][vc_column][vc_single_image image=”10872″ img_size=”full”][vc_column_text]Selling your goods globally means you must adhere to a number of rules and regulations. In this 3 Minute Explainer, we look at the basics of export management.<\/span><\/i><\/p>\n

The trade in physical goods is one of the cornerstones of the global economy. Everyday countless items travel make their way from Point A to Point B.<\/span><\/p>\n

Despite our reliance on global trade, items cannot always travel freely. There are many laws governing the movement of goods. This is true for all types of companies and all types of export transactions. Whether you ship raw materials or finished goods, or to consumers or businesses, you must comply with foreign trade regulations.<\/span><\/p>\n

It is illegal to contravene international trade regulations. Companies that do so can face fines and other penalties. These could be serious, including loss of export privileges and even jail time. Let\u2019s take a look at some of the most important export management regulations.<\/span><\/p>\n

Restricted Parties, Sanctions and Embargoes<\/span><\/h2>\n

Companies engaged in foreign trade must adhere to sanctions and embargoes. Nor may companies engage in trade with restricted or denied parties.<\/span><\/p>\n

Almost every day, countries announce new sanctions against countries or individuals. These may include total shipping bans on countries like Iraq. However, there are also more complex sanctions. For example, hybrid sanctions allow certain commercial activities, but not others.<\/span><\/p>\n

Furthermore, governments may ban trade with people or groups involved in organized crime, terrorism and other serious offenses.<\/span><\/p>\n

Around the world, governments and international organizations compile ‘denied party lists” (DPLs). These are groups, entities and individuals with whom it is illegal to trade.<\/span><\/p>\n

Depending on what you ship and where you ship to, you must ensure your trading partners are not on these DPLs. Exporters need to perform <\/span>restricted party screening<\/span><\/a> before shipping. That is, check their orders against DPLs. Restricted party screening is also known as denied party screening; or sanctioned party screening.<\/span><\/p>\n

Manually screening against all necessary DPLs takes time. For high volume exporters this becomes almost impossible to manage. However, despite these challenges, global trade law requires shippers to do so.<\/span><\/p>\n

For manufacturers of controlled goods, this is even more crucial. Failure to do so can result in fines, loss of export privileges or even jail.<\/span><\/p>\n

Licenses and Permits<\/span><\/h2>\n

Governments around the world require licenses and permits to legally export certain goods. These include dual use items. Dual use items are goods that have a potential military application as well as a commercial one. These licensing controls can apply to goods that may seem innocuous, such as a life jacket.<\/span><\/p>\n

Exporters need to manage licenses by date, quantity and\/or value. They need to know how many licenses they have used and where, as well as how many are available.<\/span><\/p>\n

Export licensing restrictions may also apply to technology developed in another country.<\/span><\/p>\n

Consider a manufacturer in Germany. This manufacturer uses US technology or intellectual property in a finished product. As a result, the manufacturer must also abide by US export control laws when shipping to a third country.<\/span><\/p>\n

Certain licenses have recipient restrictions. This means you may only ship them to specific named individuals. So, it is illegal to hand over the delivery to another person if the recipient is not available.<\/span><\/p>\n

Getting the Paperwork Right<\/span><\/h2>\n

If goods get \u201cstuck in Customs\u201d chances are, this is because some crucial paperwork is missing.<\/span><\/p>\n

Along with the necessary transportation paperwork, internationally shipped goods require export documentation. This could include:<\/span><\/p>\n