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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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