Exports from the United States

To export from the United States, the first hurdle is U.S. domestic regulations. Virtually all products will require an export license. Usually a general license is all that you will need. This is comparatively easy to obtain in most cases since public policy is of course in favor of exports. However, export restrictions apply to high-tech products and weapons as well as exports to certain countries. In such cases, you will need what is called a validated license. As with importing, normally you would consult non-lawyer technical advisors when your product requires such a license.

Another domestic regulatory hurdle is the Foreign Corrupt Practices Act. Violations of this law can be costly and can be violated by the acts of a third-party representative. You must monitor closely the conduct of your representatives abroad and should consult legal counsel on this requirement.

Intellectual property rights - proprietary information, trade secrets, patents, trademarks, copyrights - obtained in the United States may not apply in a foreign country. You must work with your foreign representative to obtain protection abroad.

The heart of legal aspects of exporting are the financial arrangements for obtaining payment and the agreement to distribute or sale your product. The financial arrangements are discussed on the following page. You have a wide choice in export arrangements. But whatever arrangement you enter into, be aware that you usually must first investigate both taxation and foreign laws. These are two important considerations. Taxation plays a large role in international transactions and will drive to a large extent how you will structure any export agreements you enter into. You must investigate the foreign law to determine what obligations it imposes on you. Often foreign law will impose on you requirements beyond what you have agreed to by contract. You must be aware of these impositions so that you can contract around them to the extent possible or at least account for them in the contract.

The import laws of the foreign country must be complied with and should be addressed in any export agreement -- for example, who has the responsibility to obtain licenses and to pay for them.

You have many options in contracting for export. The two main divisions are between domestic international sales arrangements and offshore international sales arrangements. Domestic arrangements are relatively inexpensive and are often used by the beginning exporter. Domestic arrangements include hiring an export agent, forming an export management company, hiring an export merchant, and forming an export trading company.

Offshore international sales arrangements allow you to establish a foreign presence. Such arrangements include hiring an agent, establishing a branch office, hiring a distributor, forming a joint venture with a local company, entering into a licensing agreement, placing a representative in the country, or establishing a subsidiary.

Considerations that should be addressed in any of these arrangements include:

• An arbitration provision designating the place and type of panel, etc.
• An approval provision listing approvals, permits, licenses, etc. each party must obtain and a time table
• Promise to negotiate if cannot perform because in contravention of a local law
• Delivery terms
• Force Majeure
• Governing language
• Governing law
• Buyer's right to inspect goods
• Intellectual property rights
• Scheduling periodic and ad hoc meetings
• Provide suitable operating environment
• Option to purchase additional goods
• Packing an marking of goods
• Payment terms
• Price
• Records and accounting
• Responsibility for expenses
• Royalty payments
• Secrecy
• Technical assistance and training.

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