Wednesday, April 27, 2011
INTERNATIONAL TRADE: EXPORT CONTROLS
INTERNATIONAL TRADE: EXPORT CONTROLS: "Published by Norka M. Schell Part 1 of 10 BACKGROUND The restriction by one country of its trade with another has been an instrument ..."
EXPORT CONTROLS
Published by Norka M. Schell
Part 1 of 10
BACKGROUND
The restriction by one country of its trade with another has been an instrument of policy throughout history. For a long time, such restrictions were imposed only episodically, in times of conflict or strained relations.
The forebear of the principal United States export control legislation was the 1949 Export Control Act. Export Control regulations are federal laws that prohibit the unlicensed export of certain commodities or information for reasons of national security or protection of trade. These two concerns we soon reflected in the establishment by NATO allies of a mechanism, which came to be known as CoCom (for Coordinating Committee) designed to prevent diversion to the East of resources for the reconstruction of Europa and counter the perceived Soviet military threat.
The year after the enactment of the Export Control Act, President Truman made use of the 1917 Trading With the Enemy Act (TWEA) in cutting off trade with China and North Korea at the time of the 1950 entrance of Chinese forces into Korean conflict. This set a pattern that has continued: using the successors to the Export Control Act as authority for export control regimes to screen and selectively license certain export; using TWEA and the related 1977 International Emergency Economic Powers Act (IEEPA) as authority for broader trade and financial restrictions, including comprehensive export embargoes, against specific countries.
WHY ARE CERTAIN EXPORTS CONTROLLED?
WHAT IS AN EXPORT?
An export is any oral, written, electronic or visual disclosure, shipment, transfer or transmission of commodities, technology, information, technical data, assistance or software codes to:
WHO CONTROLS EXPORTS FROM THE UNITED STATES?
The Bureau of Export Administration (BXA) of the United States Department of Commerce controls exports from the United Stated of a wide range of products, materials technology and software. These controls are contained in the Export Administration Regulation (EARs).
WHAT IS SUBJECT TO THE EARS?
The involvement of the U.S. -origin content or technology can make some foreign-origin items "subject to the EAR."
This universe is significantly narrowed by several exclusions in the EARs, including:
That which is subject to the EARs may require a license for export or reexport. There is usually a lengthy processing time period of currently three months. Denial is possible and aapproval may contain restrictions.
License requirements are dependent upon an item's technical characteristics, the destination, the end-user, and the end-use. An exporter must determine whether s/he requires a license. When making that determination s/he should consider what, where, who, and what.
WHAT IS BEING EXPORTING?
A key in determining whether an export license is needed from the Department of Commerce is knowing whether the item you intend to export has a specific Export Control Classification Number (ECCN). The ECCN is an alpha-numeric code, e.g., 3A001, that describes the item and indicates licensing requirements.All ECCNs are listed in the Commerce Control List (CCL) which is available on the Government Printing Office website. The CCL is divided in to ten broad categories and each category is further subdivided into five product groups.
WHERE IS IT BEING EXPORTED TO?
Exports to embargoed countries and those designated as supporting terrorist activities such as Cuba, Iran, North Korea, North Sudan, and Syria are more restricted. However restrictions varies from country to country.
WHO WILL RECEIVE THE ITEM?
Certain individuals and organizations are prohibited from receiving U.S. exports and others may only receive goods if they have been licensed, even items that do not normally require a license based on the ECCN and Commerce Country Chart or based on an EAR99 designation.
WHAT WILL THE ITEM BE USED FOR?
A relative small percentage of total U.S. exports require a license, while some end-uses are prohibited.
Next week I will write about the "prohibitions."
_____________________
The information extacted from Authors
Cecil Hunt - Export Controls, 639 International Trade for the Nonspecialist, Second Edition by Paul H. Vishny
Bureau of Industry and Security U. S. Department of Commerce website last visited on May 27, 2011
The University of Tennessee website
Part 1 of 10
BACKGROUND
The restriction by one country of its trade with another has been an instrument of policy throughout history. For a long time, such restrictions were imposed only episodically, in times of conflict or strained relations.
The forebear of the principal United States export control legislation was the 1949 Export Control Act. Export Control regulations are federal laws that prohibit the unlicensed export of certain commodities or information for reasons of national security or protection of trade. These two concerns we soon reflected in the establishment by NATO allies of a mechanism, which came to be known as CoCom (for Coordinating Committee) designed to prevent diversion to the East of resources for the reconstruction of Europa and counter the perceived Soviet military threat.
The year after the enactment of the Export Control Act, President Truman made use of the 1917 Trading With the Enemy Act (TWEA) in cutting off trade with China and North Korea at the time of the 1950 entrance of Chinese forces into Korean conflict. This set a pattern that has continued: using the successors to the Export Control Act as authority for export control regimes to screen and selectively license certain export; using TWEA and the related 1977 International Emergency Economic Powers Act (IEEPA) as authority for broader trade and financial restrictions, including comprehensive export embargoes, against specific countries.
WHY ARE CERTAIN EXPORTS CONTROLLED?
- National Security
- Proliferation of chemical and biological
- Nuclear Nonproliferation
- Missile Technology
- Anti-Terrorism (Cuba, Iran, North Korea, Lybia, Suddan and Syria)
- Crime Control
- High Performance Computer
- Regional Stability
- Short Supply
- U.N. Sanctions
WHAT IS AN EXPORT?
An export is any oral, written, electronic or visual disclosure, shipment, transfer or transmission of commodities, technology, information, technical data, assistance or software codes to:
- Anyone outside the United States including a U. S. citizen
- A non-U.S. individual wherever they are (deemed export)
- A foreign embassy or affiliate
WHO CONTROLS EXPORTS FROM THE UNITED STATES?
The Bureau of Export Administration (BXA) of the United States Department of Commerce controls exports from the United Stated of a wide range of products, materials technology and software. These controls are contained in the Export Administration Regulation (EARs).
WHAT IS SUBJECT TO THE EARS?
The involvement of the U.S. -origin content or technology can make some foreign-origin items "subject to the EAR."
This universe is significantly narrowed by several exclusions in the EARs, including:
- Items that are exclusively controlled for export or reexport by specified agencies of the United States Government
- Publications, informational material and "publicly available techonology and software
- Foreign made items having U.S. -origin content that is below de minimis levels specified in the EARs.
That which is subject to the EARs may require a license for export or reexport. There is usually a lengthy processing time period of currently three months. Denial is possible and aapproval may contain restrictions.
License requirements are dependent upon an item's technical characteristics, the destination, the end-user, and the end-use. An exporter must determine whether s/he requires a license. When making that determination s/he should consider what, where, who, and what.
WHAT IS BEING EXPORTING?
A key in determining whether an export license is needed from the Department of Commerce is knowing whether the item you intend to export has a specific Export Control Classification Number (ECCN). The ECCN is an alpha-numeric code, e.g., 3A001, that describes the item and indicates licensing requirements.All ECCNs are listed in the Commerce Control List (CCL) which is available on the Government Printing Office website. The CCL is divided in to ten broad categories and each category is further subdivided into five product groups.
- A. Systems, Equipment and Components
- B. Test, Inspection and Production Equipment
- C. Material
- D. Software
- E. Technology
WHERE IS IT BEING EXPORTED TO?
Exports to embargoed countries and those designated as supporting terrorist activities such as Cuba, Iran, North Korea, North Sudan, and Syria are more restricted. However restrictions varies from country to country.
WHO WILL RECEIVE THE ITEM?
Certain individuals and organizations are prohibited from receiving U.S. exports and others may only receive goods if they have been licensed, even items that do not normally require a license based on the ECCN and Commerce Country Chart or based on an EAR99 designation.
WHAT WILL THE ITEM BE USED FOR?
A relative small percentage of total U.S. exports require a license, while some end-uses are prohibited.
Next week I will write about the "prohibitions."
_____________________
The information extacted from Authors
Cecil Hunt - Export Controls, 639 International Trade for the Nonspecialist, Second Edition by Paul H. Vishny
Bureau of Industry and Security U. S. Department of Commerce website last visited on May 27, 2011
The University of Tennessee website
Friday, January 21, 2011
EXPORT-IMPORT BANK OF THE UNITED STATES
Posted by: Norka M. Schell
The Export-Import Bank of the United States (Eximbank) is a United States government-chartered facility to promote the sale abroad of American goods, services, and commodities through insurance and finance programs.
Eximbank offers insurance, financing, and guaranties to exporters, their lenders, and the foreign buyers of American exports. Its numerous programs fit into four major categories:
1. Export credit insurance,
2. Direct loans,
3. Loans guaranties, and
4. Working capital guaranties.
Eximbank has greatly simplified its credit insurance program in recent years. As currently structured, the program provides foreign credit risk coverage to United States exporters and financing institutions.
Coverage is available for both political and commercial risks of default in payment. Political risks include adverse host government action, such as intervention in a transaction or license cancellation, and events beyond the buyer's control, such as war. Commercial risk covers a buyer's inability to meet a payment obligation due to financial difficulties. Political risk coverage may be purchased alone, but commercial risk coverage is available only in conjunction with political risk coverage.
Eximbank offers "single buyer" policies, covering a sale or sales to only one foreign buyer, and "multi-buyer" policies that extend coverage to a number of buyers in several countries. Under a multi-buyer policy, the U.S. party is required to insurer a reasonable spread or all of its export credit sales with Eximbank.
On short-term transactions (with repayment periods less than 180 days), the gross invoice value of the sale is insured. For longer terms, only the financed portion of the contract is covered. See International Trade, Second Edition by Paul H. Vishny
The Export-Import Bank of the United States (Eximbank) is a United States government-chartered facility to promote the sale abroad of American goods, services, and commodities through insurance and finance programs.
Eximbank offers insurance, financing, and guaranties to exporters, their lenders, and the foreign buyers of American exports. Its numerous programs fit into four major categories:
1. Export credit insurance,
2. Direct loans,
3. Loans guaranties, and
4. Working capital guaranties.
Eximbank has greatly simplified its credit insurance program in recent years. As currently structured, the program provides foreign credit risk coverage to United States exporters and financing institutions.
Coverage is available for both political and commercial risks of default in payment. Political risks include adverse host government action, such as intervention in a transaction or license cancellation, and events beyond the buyer's control, such as war. Commercial risk covers a buyer's inability to meet a payment obligation due to financial difficulties. Political risk coverage may be purchased alone, but commercial risk coverage is available only in conjunction with political risk coverage.
Eximbank offers "single buyer" policies, covering a sale or sales to only one foreign buyer, and "multi-buyer" policies that extend coverage to a number of buyers in several countries. Under a multi-buyer policy, the U.S. party is required to insurer a reasonable spread or all of its export credit sales with Eximbank.
On short-term transactions (with repayment periods less than 180 days), the gross invoice value of the sale is insured. For longer terms, only the financed portion of the contract is covered. See International Trade, Second Edition by Paul H. Vishny
Thursday, November 11, 2010
TRADE POLICY AND AGREEMENTS
Trade Policy and Programs advances the United States Trade Policy objectives by opening new export opportunities for American businesses, farmers, ranchers and workers through global, regional and bilateral trade initiatives - including free trade agreements.
Free Trade Agreements have proven to be one of the best way to open up foreign markets. The United States has agreements in force with 17 countries: Australia, Bahrain, Canada, El Salvador, Guatemala, Honduras, Nicaragua, Oman, Peru, and Singapore.
Free Trade Agreements have proven to be one of the best way to open up foreign markets. The United States has agreements in force with 17 countries: Australia, Bahrain, Canada, El Salvador, Guatemala, Honduras, Nicaragua, Oman, Peru, and Singapore.
GLOBAL OFFSHORING SUPREMACY
In next ten years Brazil has a very legitimate chance to become one of the top leaders in offshore outsourcing globally. To achieve this objective, six national software associations met for the first time this year in Brazil to plan their agendas.
By 2020 Brazil hope to be one of the world's top four in offshore IT, turning over US$20 billion, alongside the U.S., India and China, said Ediluza Soares on Thursday, 11/4/2010.
There is a general belief among the Information and Communication Brazilian community that Brazil has everything to become the second largest global provider of the IT services after the labor pool. The Brazilian government in partnership with Brasscom will train 4500 professionals per year to attend the demand.
The Brazilian government is encouraging entities to provide industrial training for workers, to offer IT technical courses, and qualify 300,000 IT professionals before 2020 when research indicates that there is already a deficit of 71,000 workers.
What are the chances that Brazil will succeed?
As per Raphael Moreira, there is not a second place in the world in the field of IT outsourcing. China is competing for this position with exports. So, Brazil by creating a skilled user workforce in the programs Cobol, Java, as well in the integration of other technologies, besides being a specialist in software development, has a great chance to win.
According to Moreira's, the best way to compete with countries like India is to develop value softwares for automated banking, e-government and agriculture sectors.
By 2020 Brazil hope to be one of the world's top four in offshore IT, turning over US$20 billion, alongside the U.S., India and China, said Ediluza Soares on Thursday, 11/4/2010.
There is a general belief among the Information and Communication Brazilian community that Brazil has everything to become the second largest global provider of the IT services after the labor pool. The Brazilian government in partnership with Brasscom will train 4500 professionals per year to attend the demand.
The Brazilian government is encouraging entities to provide industrial training for workers, to offer IT technical courses, and qualify 300,000 IT professionals before 2020 when research indicates that there is already a deficit of 71,000 workers.
What are the chances that Brazil will succeed?
As per Raphael Moreira, there is not a second place in the world in the field of IT outsourcing. China is competing for this position with exports. So, Brazil by creating a skilled user workforce in the programs Cobol, Java, as well in the integration of other technologies, besides being a specialist in software development, has a great chance to win.
According to Moreira's, the best way to compete with countries like India is to develop value softwares for automated banking, e-government and agriculture sectors.
Tuesday, October 26, 2010
INTERNATIONAL TRADE: THE LETTER OF CREDIT, PART III
INTERNATIONAL TRADE: THE LETTER OF CREDIT, PART III: "A letter of credit is simply another contract - a promise by Buyer's Bank which runs directly to Seller that Buyer's Bank will pay the sales..."
THE LETTER OF CREDIT, PART III
A letter of credit is simply another contract - a promise by Buyer's Bank which runs directly to Seller that Buyer's Bank will pay the sales contract amount to Seller, if Seller produces the documents required by the sales contract (i.e., a negotiable bill of lading). Letter of credit my be revocable or irrevocable, but in a documentary sales transaction it is customarily understood that an irrevocable one is required. Letters of credit may also be either confirmed or not. A confirmed letter of credit includes a promise from Seller's Bank to Seller that Seller's Bank will pay the contract amount to Seller if Seller produces the required documents evidencing shipment of the goods. Thus, under a confirmed letter of credit, Seller has a promise from a local bank, before shipment of the goods, of payment if the goods are shipped.
To obtain a letter of credit, the buyer goes to its bank and request it to issue a letter of credit in favor of the seller. The buyer has done business with this bank for many years, and it knows buyer's financial position, so no additional bank investigation is needed. However, if buyer was a stranger to the issuing bank, that bank would investigate buyer's credit standing, or even require it to provide the Bank with a copy of its purchase orders or with Seller's invoice, so that the bank will know what documents are required by the contract. The buyer's bank then informs its correspondent bank advising the latter that it has opened a letter of credit in favor of buyer, and stating all the details of the letter of credit contract.
To obtain a letter of credit, the buyer goes to its bank and request it to issue a letter of credit in favor of the seller. The buyer has done business with this bank for many years, and it knows buyer's financial position, so no additional bank investigation is needed. However, if buyer was a stranger to the issuing bank, that bank would investigate buyer's credit standing, or even require it to provide the Bank with a copy of its purchase orders or with Seller's invoice, so that the bank will know what documents are required by the contract. The buyer's bank then informs its correspondent bank advising the latter that it has opened a letter of credit in favor of buyer, and stating all the details of the letter of credit contract.
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