FREQUENTLY ASKED QUESTIONS – “How to Start Exporting in Illinois?”

I. WANT TO START EXPORTING?

A. Who Can Help in Illinois?

There are various local resources available to help your company get ready to export.

  • Illinois Department of Commerce and Economic Opportunity – Office of Trade & Investment - DCEO’s mission is to raise Illinois’ profile as a global business leader. To achieve this, Illinois has a network of professionals focused on improving Illinois’ competitiveness in the global economy. With its headquarters in Chicago and 11 foreign offices around the world, DCEO’s Office of Trade and Investment (OTI) provides services in the following areas: Exporting, Foreign Direct Investment-Business Attraction, Sister State/City/River/Lake Agreements, Memorandums of Understanding and International Delegation Protocol. Contact Adam Pollet, Adam.Pollet@illinois.gov at 312-814-3116.
  • SCORE - Counselors to America’s Small Business – Offers free assistance from successful, retired executives that will help you develop a business plan http://www.score.org/index.html. Contact the Chicago office at (312) 353-7724.
  • SBA - Small Business Administration – Offers aid and protection to help your business start, grow, and succeed http://www.sba.gov/6. Discover how to manage your business, expand your business with programs and services, increase your knowledge and productivity, and support your business with a team of experts. Contact your local Chicago office; John Nevell john.nevell@sba.gov, (312) 353-8065.
  • WBDC - Women's Business Development Center in Chicago - Works with women to launch new businesses and strengthen existing businesses in the Chicago area. WBDC services are available in Spanish and English, and include business assessments, loan packaging, public and private sector procurement assistance, classes/workshops, and individualized counseling on all aspects of business development, management, and strategy www.wbdc.org.
  • Illinois SBDC International Trade Centers - Small Business Development Center ITC trade specialists can: Assess export readiness and foreign market potential for new-to-export firms; Conduct one-on-one counseling and educational seminars on international trade and NAFTA issues; Locate financial assistance for export ventures; Illinois ITC locations: http://ildceo-loc.custhelp.com/cgi-bin/ildceo_loc.cfg/php/loc/enduser/loc.php
  • Illinois Business Service Provider Directory- Looking for private sector help? Visit Commercial Service Illinois' directory of companies offering export-related services your company can take advantage of: http://export.gov/illinois/businessserviceprovidersdirectory/index.asp
  • TIC - Trade Information Center in Washington D.C. - Call 1-800-USA-TRADE (872-8723), Monday through Friday 8:30 a.m. until 5:30 p.m. EST. A Trade Specialist can help provide foreign tariff and fee information, schedule B numbers, country and regional market information. http://www.export.gov/exportbasics/ticredirect.asp.

B. Where to Export?

  • Find National and State import/export statistics for your product or service at http://tse.export.gov/.
  • Identify potential key foreign markets for your products. Discover the best prospects for success in our Market Research Report Library. Reports written by US Dept of Commerce Commercial Specialists all over the world. Learn your product’s potential in a given market: http://www.export.gov/static/doc_exp_mr_getting_started.asp.
  • Export Yellow Pages. The Export Yellow Pages contains comprehensive U.S. business product and supplier information, and is designed to promote and connect small and medium-sized companies, solve language barriers, improve market visibility, and simplify sales sourcing. http://www.exportyellowpages.com/.
  • For export-ready Illinois-based companies, the best place to start is at Commercial Service Illinois. Click here for a Staff Directory: http://export.gov/illinois/contactus/eg_us_il_023117.asp.

C. What License?

A relatively small percentage of total U.S. exports and re-exports require a special export license from USDOC's Bureau of Industry and Security. License requirements are dependent upon an item's technical characteristics, the destination, the end-user, and the end-use. You, as the exporter, must determine whether your export requires a license. For more information please visit, https://www.bis.doc.gov/licensing/exportingbasics.htm.

The first step in determining your license requirements under the EAR is to classify your product by determining its Export Control Classification Number (ECCN) on the Commerce Control List (CCL). More information on Commodity Classifications is at: http://www.bis.doc.gov/Licensing/facts2.htm, or if questions remain, please call the Commercial Service Chicago at 312/353-8040.

D. Minnesota District Export Council Webinars:

The Minnesota District Export Council offers a variety of downloadable webinars that cover many exporting topics. Learn everything from the basics of exporting to country and industry specific opportunities. These pre-recorded webinars are available free of charge at http://exportassistance.com/counseling-a-finance/export-training.

II. HOW CAN I PROTECT MYSELF AGAINST SCAMS?

The risk of fraud in international transactions is always a reality. Make sure that you are continually well informed to protect yourself and your company from bad actors. The U.S. Commercial Service provides an array of services structured to inform and protect U.S. exporters through our networks of domestic and international offices. We have additional resources to protect you from fraud originating in Singapore, Nigeria, China and beyond.

Current Example - REAL THREAT

(Update) December 2, 2009.

Scam Alert: Singapore

Small American e-tailers and exporters remain a primary target for credit card fraud schemes using Singapore as the purported ordering point and shipping destination. Detailed information on these fraud schemes can be found at http://www.buyusa.gov/singapore/en/warning_credit_card_fraud.htm.

The orders normally range from US $5,000 to US $30,000. The "buyer" places the order via telephone or Internet email correspondence. The "buyer" either splits the total purchase price between several cards or makes several attempts (using multiple credit card numbers) to complete the transaction. Once the transaction/credit card number(s) are accepted, the "buyer" requests immediate air shipment. Not aware of the fraud that has just occurred; the merchant complies with the customer’s request of an expedited shipment to a legitimate freight forwarder in Singapore. The merchant will then receive a charge back from the credit card company after the card is reported stolen. By that time the goods have been transshipped out of Singapore and are unrecoverable.

The FBI is working with the Singapore Police and other law enforcement agencies in the region to combat this crime. If you suspect that you are in receipt of a fraudulent order and would like to verify its legitimacy, please contact your International Trade Specialist or the Commercial Service at email: Office.Chicago@trade.gov. We are happy to assist you in verifying the bona fides of the transaction.

Commercial Service (Chicago)
Phone: 312-353-8040

III. FAQS - EXPORTING TO CHINA

A. Domain Name

I received an offer to register my Domain Name in China. What do I do?

If yes, then here is info you should know before doing anything. http://www.stopfakes.gov/pdf/Domain_Name_Guidance_to_Rights_Holders.pdf.

You can either register your domain name yourself, at www.cnnic.net.cn/22, or work with a credible service provider.

For a partial list of companies who will register your domain name for a fee, see this listing: http://www.internic.net/alpha.html.

B. Scams

This sales opportunity sounds too good to be true. Is it?

It is always prudent to be cautious and diligent when initiating a sales relationship with a company abroad. Please review the following indicators as they may be signs of a possible scam when dealing with Chinese companies.

  • The Chinese company contacted you via the web
  • The Chinese company has "Import/Export" in their name
  • They want to purchase a very large volume of goods
  • They insist that your senior executive travel to China immediately to sign the contract with them in person
  • They request money prior to the trip to pay for a reception in your honor, and/or, once in China, they request money or goods to "grease the wheels" with local officials
  • They have been in business for less than one year
  • They can provide no verifiable references
  • For an additional reference you may consult “Seven Signs of a Possible Scam” (provided by GLOBIS, http://www.glo-bis.com).

Also, you may contact the Commercial Service directly with any concerns or uncertainties when contemplating export activities to China. Please contact us if you feel you may be the target of a scam.

Commercial Service (Chicago)
Phone: 312-353-8040
Email: Office.Chicago@trade.gov

C. Will My Intellectual Property Rights Be Protected in China?

The issue of Intellectual Property Rights (IPR) is of serious concern to all companies, regardless of their size. Understanding local IPR laws and norms is ESSENTIAL.

BEWARE: Your U.S. Trademark does NOT protect your product in China.

Therefore, preparation and oversight are critical to your protection and success. Here are three guides to help you understand how to protect your IP:

D. Looking for more information on China?

Here are 3 U.S. Dept of Commerce websites to help:

E. New China Business Handbook

Receive your copy of the newest U.S. Commercial Service handbook produced in partnership with China-based experts for the latest opportunities/trends in China including: sectors to watch, setting up operations, the Chinese middle class, best industry sectors, and insightful case studies. To request a hard copy (for U.S. exporters only) at chinabic@trade.gov.

IV. WHEN IS THE NAFTA CERTIFICATE NECESSARY?

A NAFTA certificate is never necessary, but if your product has a reduced tariff under NAFTA, it is in your interest to go through the NAFTA certification process. Since we have Most Favored Nation trading status with both Mexico and Canada, your tariff rate might already be 0%, without having to go through NAFTA certification. If your products are used by other US manufacturers who export to Canada and Mexico, they may request that you certify your goods so that they can in turn get preferential tariff treatment under NAFTA.

How US Companies Can Benefit from NAFTA
http://export.gov/FTA/nafta/index.asp

How to Complete NAFTA Certificate
http://export.gov/logistics/eg_main_018131.asp

Downloadable NAFTA Certificate
http://forms.cbp.gov/pdf/CBP_Form_434.pdf

Getting Paid by Your Latin American Buyer
http://buyusainfo.net/docs/x_1197802.pdf

To speak with a local Trade Specialist regarding NAFTA, please contact Christian.Koschil@trade.gov, 312-353-3749.

V. WHAT ASSISTANCE IS AVAILABLE FOR EXPORTERS OF FOOD AND AGRICULTURAL PRODUCTS? STATE OF ILLINOIS DEPT. OF AGRICULTURE
Website: http://www.agr.state.il.us/marketing/intmrkt.html

For Food and Beverage Products:

Mr. Tim Hamilton
Director, Food Export – Midwest
Food Export Association of the Midwest USA
309 West Washington, Suite 600
Chicago, IL 60606 USA
Phone 312.334.9200
www.foodexport.org

thamilton@foodexport.org

Mr. Jim Mackey, Int'l. Marketing Rep.
P.O. Box 19281
Springfield, IL 62794-9281
Telephone: 217-782-2581, Fax: 217-782-5809
Email: jim.mackey@illinois.gov

For livestock, feed and feed ingredients, livestock equipment and anything pertaining to the livestock industry:

Mr. Bobby Dowson, Int'l. Marketing Rep.
P.O. Box 19281
Springfield, IL 62794-9281
Telephone: 217-782-4755, Fax: 217-782-5809
Email: bobby.dowson@illinois.gov

For grain, grain equipment, and anything related to grain industry:

Mr. Terry English, Int'l. Marketing Rep.
P.O. Box 19281
Springfield, IL 62794-9281
Telephone: 217-785-0115, Fax: 217-782-5809
Email: terry.english@illinois.gov

The Illinois Department of Agriculture supports international market development and product promotion for the state's food and agribusiness sectors. Headquartered in Springfield, the department maintains offices in Hong Kong and Mexico City to promote Illinois products worldwide. The department maintains close contacts with the U.S. Department of Agriculture's Foreign Agriculture Service to help Illinois firms gain access to federal marketing programs. Illinois' Agriculture Department is a member of the Food Export Association of the Midwest USA (formerly MIATCO). The Mid-America International Agri-Trade Council (MIATCO) a private, non-profit association assisting food and agricultural product companies to promote international sales. Chicago area contact is Teresa Miller, Telephone: 312-334-9200, tmiller@miatco.org. For a full description of their program and services, please refer to their website.

U.S. Department of Agriculture - Foreign Agricultural Service (FAS)
Website: www.fas.usda.gov

U.S. Dept of Agriculture – Foreign Agricultural Service
Ms. Pamela Sherard

USDA/FAS/Trade Services Staff
Telephone: 202-720-7409, Fax: 202-690-0193
Email: Pamela.Sherard@fas.usda.gov

FAS offers export programs to help U.S. exporters develop and maintain markets overseas for hundreds of food and agricultural products, from bulk commodities to brand-name items. They also provide U.S. agricultural exporters with short- and intermediate-term commercial financing support through Commodity Credit Corporation (CCC) export credit guarantee programs as well as access to FAS offices around the world.

Food Export Assoc. of the Midwest USA
Ms. Brandy Erwin, Business Development Specialist

309 W. Washington, Suite 600
Chicago, IL 60606
Telephone: 312-334-9228
Email: berwin@foodexport.org
Website: http://www.foodexport.org

A variety of programs and services to help exporters of processed food products begin or expand their international sales. For a list of services available to assist U.S. exporters in Exporter Education, Market Entry and Market Promotions, please refer to their website.

VI. WHEN DO I USE THE AUTOMATED EXPORT SYSTEM?

AES is the online delivery system for the old Shipper’s Export Declaration, or SED. As of July 2, 2008, the paper-and-pen SED application process was formally replaced by AES. Exporters still using paper SEDs have a 90-day grace period to begin implementing AES. This period ends on September 30, 2008, at which time all exporters must file their export information using only AES. AES can be accessed several different ways. Perhaps the simplest way is through AESDirect, the U.S. Department of Commerce’s online filing system.

Information on AESDirect can be found at http://www.aesdirect.gov/ or using AESPcLink at https://www.aesdirect.gov/aespclink/aboutpclink.html.

For help with AES, call 1-800-549-0595 or for online help go to http://www.aesdirect.gov/support/phone.html.

In addition, the following AES FAQ gives guidance on issues that may be relevant to your firm. Provided by: Christina Farr, Foreign Trade Division, Regulations, Outreach, and Education Branch, U.S. Census, Phone: (301) 763-6978

a. My company has typically asked our freight forwarder to file the AES transmission for us in the past. Is it required that my company get an account or can we continue to ask our freight forwarder to file on our behalf? We've been told that if the freight forwarder doesn't file in time or makes a mistake and they are fined, we will be fined as well because we are the USPPI. Is this true?

You can continue to have your forwarder file the AES for you as long as your company is providing them with a proper Power of Attorney or written authorization to do so. If you chose to file on your own, you may register with AES and do so. To register, go to www.AESdirect.gov.

With the new regulations, all parties to the transaction are subject to fines and penalties when there is a violation of the FTR. Enforcement will look at each party's role and responsibility to the export transactions. In addition, it is required to maintain all documentation for a five year period.

b. If the AES transmission is not filed in the timeframe required by the mode of transport, who is responsible? My freight forwarder (who is filing on my behalf) or my company, I'm worried about fines and penalties in case this happens.

It is the responsibility of the USPPI to provide the Freight forwarder with the necessary information to file in a timely manner.

c. What if we decide to file AES as a company and I don't know some of the mandatory information required when I am involved in a routed transaction?

I can't get this information from the customer's freight forwarder, so how do I handle this? I'm worried about filing within the timeframe required for the transport mode. Many times I don't even know how the shipments will be consolidated or how they will be transported.

In a routed export transaction, the Foreign Principal Party in Interest (FPPI) is controlling the movement of the goods and hires a forwarder to facilitate the movement of the cargo and file the AES. The FPPI's responsibility is to provide the Power of Attorney or written authorization to the forwarder in order to file the AES. Your responsibility as the USPPI in a routed export transaction is to provide your customer's forwarder with the necessary export information including your EIN in order to complete the AES. The forwarder will supply the transportation information.

d. My company is involved in routed transactions. I'm worried about my liability if I give the customer's freight forwarder the pieces of information required in a routed transaction and they don't report it correctly. Is my company responsible for fines and penalties or will these fines be directed to the freight forwarder who didn't report the correct information?

With the new regulations, all parties to the transaction are subject to the fines and penalties when there is a violation. What enforcement will look at is each party to the transactions role in the export transaction. Make sure you keep all of your paperwork related to your transactions. Upon request from the USPPI, the forwarder in a routed export transaction is required to provide you with proof, in a mutually agreed upon format, that they have filed your information so that you can make sure it is accurate and complete. I suggest keeping a copy of what you provided them as well. If there is ever any issue, Customs will see that you had all your paperwork and made efforts to make sure your information was correct. If you have problems getting your information back from the forwarder, please contact our office and we will help you to resolve the problem.

e. If I have a drop shipment for another U.S. company, who is the USPPI?

I assume that this question means that a U.S. company purchased goods from your company here in the U.S. and instructs you to ship them to a destination in a foreign country. If this is the case, then the U.S. company that purchased the goods from you, domestically, is the USPPI.

VII. WHAT IS THE DIFFERENCE BETWEEN A SCHEDULE B AND HTS NUMBER?

All import and export codes used by the U.S. are based on the worldwide Harmonized Tariff System (HTS). The HTS assigns 6-digit codes (known as the HS number) for general categories that are used worldwide. These 6-digit codes are broken down by Chapter (2 digits), Heading (4 digits) and Sub-heading (6 digits). Countries that use the HTS are then allowed to further define their commodities at a more detailed level, usually 8-10 digits, but still using the universal 6-digit number to start with. The United States uses this system as a foundation for determining both Schedule B numbers and the Harmonized Tariff Schedule of the United States (HTSUS), which are nearly identical. The Schedule B number (reported on your SED) is used by Department of Commerce's Foreign Trade Statistics office to generate export statistics. The HTSUS number is used by U.S. Customs in the import process. Click here to obtain your HS number http://www.census.gov/foreign-trade/faq/sb/sb0008.html

VIII. FOREIGN TRADE DIVISION - EXPORT TRAINING VIDEOS

There are twelve videos ranging from about three to five minutes, each cover the basics of export compliance and AES reporting. Click on the following to view.


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