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	Have You Got a License for that Thing? Export Licensing – Protective or Obstructive Trade Control Frequently, one of the first questions a new exporter asks is, "Do I need a license to export?" "No" is the simple answer, but naturally with the complexity of international trade "but it depends" usually follows. You may be relieved to know that there is no general "export license" needed to begin exporting. Nevertheless, before the urgency of that first possible foreign sale, companies should determine if an export license is required because of the nature of their products & services or because they may be selling to a country that has export limitations for various political and/or national security reasons. Most countries, like India, have very few restrictions, but the places to be especially concerned with are: Afghanistan, Angola, Cuba, Iran, Iraq, Libya, North Korea, Rwanda, Sudan, Syria, and Yugoslavia (Serbia & Montenegro). This does not mean that nothing can be exported to these countries but there are reasonable controls in place so that companies avoid engaging in a business relationship with someone with questionable intentions. Realistically, the controls are largely administrative to track the buyers and sellers of such goods. Understandably, if a company has never been involved with international trade, it may be completely in the dark, but as the saying goes, "ignorance of the law is no excuse". If you’re considering selling your wares overseas, you should understand the definitions for and risk of "dual-use" items and "deemed exports". "Dual-use items" are goods that have commercial use as well as military use or potentially dangerous applications. A recent case in the news were night vision goggles, but the examples can be as obvious as mechanical controls for jet aircraft or detonating bombs to abstract as a generic integrated circuit board. A "deemed export" typically occurs when there is a technology transfer to a foreign national who may have been exposed to or received training on sensitive information. The assumption is that this individual will be returning overseas and can make use of this intangible expertise to duplicate the application. While it is difficult enough to sell domestically with all manner of government regulations, exporters also have the added responsibility of going through the proper licensing agency. The U.S. Department of Commerce is the primary issuer of licenses for dual-use goods, but the State Department also has its own restraints along with the Departments of Defense, Interior, Treasury, the EPA, DEA, FDA, and Patent & Trademarks, etc., etc., etc. The best course of action is to confer with your freight forwarder and all the agencies that would seem to have jurisdiction over your products, services, or even intended destination. Keep a log of your efforts as proof of due diligence as well as for training purposes. Suffice it to say, a company that has the training and discipline to formulate a good export enforcement procedure is one that will protect its reputation with careful distribution of its products. With there being so many products ands services, hundreds of countries and dozens of government agencies to contend with, international business hardly seems worth the risk. However, if you approach exporting systematically and focus first on U.S. export controls and due diligence, you will be in a better position to deal with issues as they arise. For example, it is helpful to know that the importer is responsible for dealing with its own country’s controls, but the U.S. exporter will be held accountable for conducting reasonable inquiries into the background of the importer and the nature of its intended use of your product. Obviously, if you go through the trouble of getting a license, you don’t want to risk it all because you sold to a company on one of the "Bad Guy" lists. Don’t forget to check the lists: http://www.bis.doc.gov/ComplianceAndEnforcement/ListsToCheck.htm As you get to know your foreign customers, you will learn more about that market which can lead to further exports and help you determine the best target markets for your company. In reality, an export license is required on relatively few items and on those items the majority of license applications are approved for export. Consider that in 2006, defense related exports (armored vehicles, bombs, bullets, clothing, etc.) via Virginia amounted to $67.2 million. For example, below are export licensing statistics for FY2003 on applications to India: Approved: 619 ($57 million) Denied: 72 ($15 million) Returned without Action: 229 ($36 million) Sixty-five percent were returned because the shipments were eligible for export under an exception or no license was required (NLR). TOTAL: 920 applications equaling $108 million in potential exports Average license processing time: 41 days Source: http://www.bis.doc.gov/InternationalPrograms/IndialCoopPresentation.htm Obtaining an export license is not as laborious as it may seem. An application is not required for each shipment, but a license can be obtained for a period of time for a specific item to a specific country. In fact, the whole process has gotten quicker and easier with the introduction of SNAP-R at: http://www.bis.doc.gov/snap/pinsnapr.htm on the Bureau of Industry and Security (BIS) website. SNAP-R will allow you to request a commodity classification and export or re-export licenses. BIS appreciates the difficulty in preparing for export shipments so you can find frequently asked questions on many topics at: http://www.bis.doc.gov/ExportLicensingQandA.htm. Even better you can call the Office of Export Services in DC at (202) 482-4811 for more information. Generally speaking, most governments have a liberal export control policy because they want their industries to benefit from export trade. However, in the event of a tragedy or war, no one wants to see their own products used against them. By and large, the burden of export licensing is mostly in the potential delay of selling rather than in the cost. For more information on Export Licensing, Regulations, & Compliance, see our Fast Facts at: http://www.exportvirginia.org/FastFacts/FastFacts_2006/FF%20Issues%20Export%20Licensing,%20Regulations,%20&%20Compliance%2006.pdf Please visit our website at: www.ExportVirginia.org to learn more about the VEDP. Resources / References: U.S. Department of Commerce, Bureau of Industry and Security: www.bis.doc.gov U.S. Dept of State – Defense Trade Controls http://www.pmdtc.org/reference.htm U.S. Dept of Treasury – Foreign Asset Control http://www.treas.gov/offices/eotffc/ofac/ U.S. Dept of Homeland Security http://www.dhs.gov/xcommtrad/ U.S. Customs and Border Protection http://www.cbp.gov/xp/cgov/export/