EXPORT-IMPORT PROCEDURES AND DOCUMENTION

EXPORT LICENSING

Prepared by: Clarinda Fernandes

Roll No.07 S.YBMS

Introduction
An export license is a document issued by the appropriate licensing agency after which an exporter is allowed to transport his product in a foreign market. The license is only issued after a careful review of the facts surrounding the given export transaction. Export license depends on the nature of goods to be transported as well as the destination port. So, being an exporter it is necessary to determine whether the product or good to be exported requires an export license or not. While making the determination one must consider the following necessary points:

What are you exporting? Where are you exporting? Who will receive your item? What will your items will be used?

Definition

An export license is a document indicating that a government has granted a licensee the right to export specified goods to specified countries. A license issued to exporters by governments to permit them to export certain goods to certain countries. Such goods may be of strategic importance, or simply in short supply, or are controlled to comply with foreign agreements A license that a government issues to an exporter granting permission to sell certain goods to a given country. Because countries have different trade agreements with other governments, and sometimes do not allow any trade with some nations, export licenses ensure that exporters are adhering to all applicable laws.

Canalisation
Canalisation is an important feature of Export License under which certain goods can be imported only by designated agencies. For an example, an item like gold, in bulk, can be imported only by specified banks like SBI and some foreign banks or designated agencies.

Export License Information

Federal licensing is required for some export businesses. In some countries, export companies are required to have a federal license only if exporting a regulated product, such as food, fuel or pharmaceuticals. The export product determines which government agency has jurisdiction and it is the exporter's responsibility to determine license necessity.

General o In general, the amount of export transactions requiring a government license is small. Export products regulated are those which may impact public health, issues of national

security and controlled substance laws, such as food, pharmaceuticals and firearms. It is

the exporter's responsibility to do all research concerning the purchaser's intended end-use of the product exported. Products considered "dualuse" are heavily regulated, as they may have both commercial and military uses and implications. Many computer-related products fall into this category. 2. Specifics
o

To determine whether or not a license is needed to export your product, consider whether or not the product is regulated within the country. The government's licensing process examines the following criteria: product characteristics, the item's destination and the intended end-use of the product. You then have to apply with the appropriate agency, which will deny or grant a license. Starting points for the license process are Export.gov and the Department of Commerce, Bureau of Industry and Security.

3. Other Considerations
o

According to the federal governments export information website, Export.gov, there are certain particulars to know about when conducting export business. An exporter must have knowledge of the importing laws of the country where they are doing business. Legal issues are common and you should be aware

of the Foreign Corrupt Practices Act as well as boycott situations and anti-dumping practices

Application for an Export License

To determine whether a license is needed to export a particular commercial product or service, an exporter must first classify the item by identifying what is called ITC (HS) Classifications. Export license are only issued for the goods mentioned in the Schedule 2 of ITC (HS) Classifications of Export and Import items. A proper application can be submitted to the Director General of Foreign Trade (DGFT). The Export Licensing Committee under the Chairmanship of Export Commissioner considers such applications on merits for issue of export licenses. Applying for an Export License All goods and services leaving the country require some form of export licensing. An export license is essentially an authorization from the government for you to export your products. Through the granting of export licenses, the country controls exports and reexports of goods to protect national security, foreign policy, and short supply. The Bureau of Export Administration (BXA) regulates and controls the export of most types of products through the Export Administration Regulations (EAR). The Regulations control the movement of dual-use commodities, software, and technology. Dual-use products are those that are not specifically designed for military purposes, but may be used for such applications.

What type of license do you need? The Export Administration Regulations (EAR) identifies two types of export licenses: the general license and the validated license. The general license is a broad grant of authority, or an umbrella license, issued for certain types of products to particular destinations. There is no application to complete and no document is issued. Still, you must verify for certain that your product requires a general license. The validated license is a specific grant of authority, issued on a case-by-case basis. These licenses explicitly permit the export or re-export of particular goods or technology, from one party to another for a particular end use. You must complete an application and receive documentation and a license number to ship under a validated license. Exports Free unless regulated The Director General of Foreign Trade (DGFT) from time to time specifies through a public notice according to which any goods, not included in the ITC (HS) Classifications of Export and Import items may be exported without a license. Such terms and conditions may include Minimum Export Price (MEP), registration with specified authorities, quantitative ceilings and compliance with other laws, rules, regulations.

How to Get an Export License in India?

Get an Export License in India To export in India, you must first obtain an export license. Before submitting your application, you should consult the latest import and export procedures and policies, which list all the regulations for obtaining an export license in India. Before you receive a license, a careful review will be conducted of the factors surrounding your intended export transactions. Licensing is determined by the goods to be exported and the port of export. Instructions:
o

1. Determine the business structure.

You need to decide whether your export business will operate as a sole proprietorship, partnership or a public limited company. This is determined by a number of factors, such as the size of the business, its capital requirements, ability to bear risk and the regulatory framework that you need. A sole

proprietorship is not subject to complex government controls. A partnership is formed under the Indian Partnership Act. Choose to form a limited company if you want to start a large export business. Register the company at the registrar of companies in the state where you intend to operate.
o

2. Export goods in containers.

Choose from the four modes of operation. If you operate as a buying agent, your company will acquire goods on behalf of the buyer and charge a commission. A merchant exporter buys products from the market and sells them to foreign buyers. A sales agent acquires goods on behalf of the seller and charges a commission for services provided. An export manufacturer manufactures goods and exports them.
o

3. Classify the goods you will be exporting.

Only certain entities are allowed to export certain commodities. For instance, only specified banks are allowed to export gold in bulk. To identify whether you can export your goods, you will need to carry out ITC (HS) Classifications. Goods that are allowed to be exported in India are found in ITC (HS) Classifications 2. You can determine this by applying to the Director General of Foreign Trade. The Export Licensing Committee will then determine if your application for an export license in India is viable.
o

4. Just like a car your expert business will need a license

Apply for the export license. Submit your application for a grant of export license, accompanied by the required documents, to the director general of foreign trade in the region in which you intend to operate. You will receive an import-export code number that will allow you to conduct your export activities in India.

Export Licensing Unit Guidelines and Procedures

Applying for a dual-use export license Applicants must complete an application form. In certain cases, an end-use certificate may be required. All export licence applications are thoroughly examined. In some cases, the Department of Foreign Affairs is consulted on the application. If an application is refused, an exporter may appeal. Any appeal should be lodged with the Licensing Unit within 28 days of the refusal, together with any information that was not available to the Licensing Unit when the original decision was made. The appeal will be assessed in the context of the new information provided. Applying for a global export license In circumstances where an unusually large number of licences are required for the export of dual-use items, the Department of Enterprise, Trade and Innovation will consider granting a global licence to prevent the creation of an undue administrative burden for the exporter. A global licence lists specific countries to which a category of Dual-Use items may be imported. These licenses are valid for a period of six months and

granted on the strict understanding that the exporter will comply with the following conditions:

Global licenses are not valid for military or security-related end users;

A global licence is valid only for the items and destinations listed - dual-use items and destinations not listed are subject to individual licensing requirements; A global license is valid for a period of six months; and An exporter who has been granted a global licence must submit, on a three monthly basis, details of the consignees to whom the items listed on the licence were exported.

Applying for a military export licence Applicants must complete an application form. All export licence applications are thoroughly examined and the Department of Foreign Affairs is consulted. An end-use certificate must be submitted with all military export licence applications. International import certificates are accepted for exports destined for another EU Member State. Using the CGEA To avail of the CGEA an exporter must notify this Department within 30 days of the date of the first shipment of goods covered by the licence and to

inform the Department of where the records for those exports will be held. The exporter must also comply with the conditions for use of the general licence, which will be specified therein. The CGEA entitles exporters to export non-sensitive dual-use goods to Australia, Canada, Czech Republic, Hungary, Japan, New Zealand, Norway, Poland, Switzerland and the US.

The Catch-All Clause An export authorization may be required for the export of non-listed dual-use items if the exporter is aware or has been advised by the Irish authorities that his products may be intended, in their entirety or part, for use in connection with weapons of mass destruction or the production of missiles capable of delivering such weapons, as parts or components of military goods illegally exported. The same would apply for the export of non-listed dual-use items for military end-use, in their entirety or in part, if the purchasing country or country of final destination is subject to an arms embargo. Criteria used in deciding applications All export licence applications are thoroughly examined. The factors that are taken into account when deciding if a licence should be granted include; the reputation of the exporter - exporters not known to Department of Enterprise, Trade and Innovation are

required to submit a profile of their company before an application will be considered. The company profile should provide details of the exporter's activities, the products it exports and names of personnel authorized to sign export licence applications;

the sensitivity of the product intended for export; the end-user; the country of final destination with particular reference to its membership of non-proliferation regimes, its respect for human rights, and the existence of any internal or external conflict;

Obligations under sanctions imposed by the UN Security Council or agreed in other international organizations. national foreign and security policy, including those covered by the European Code of Conduct on Arms Transfers; considerations about intended end-use and the risk of diversion;

Suspension, Revocation, etc. The Licensing Unit, may annul, suspend, modify or revoke a dual-use export authorization which has already been granted. Applications for permission to export to countries where restrictions are in place due to UN, EU or OSCE trade sanctions Where such restrictions are in place the Unit must either submit applications for approval to a UN

Committee or apply the terms of the relevant EU Regulations. In neither case does the Unit have any real discretion over whether an application is to be granted or refused.

Standard Individual Export Licenses (SIELs)

Standard Individual Export License (SIEL) conditions and amendments You should adhere to all the terms and conditions of your license. Permanent SIELs Holders of Standard Individual Export Licenses (SIELs) must follow standard conditions. Your license can be revoked if you do not comply. Standard SIEL conditions include the following:

 producing the license to HM Revenue & Customs (HMRC) officers with shipping documents when goods are presented for exportation

for exports to European Community (EC) member states, you must produce the license to HMRC officials and specify a place for the goods to be inspected at least three days before exportation

a copy of the license must accompany the goods to an EC destination

for exports by post, the license must be included in a separate envelope attached to the package; photocopies are acceptable for sequential postings of technology

for electronic transfer, the exporter must keep detailed records of the type of technology, dates and end users

Temporary SIELs

You may need a temporary SIEL if you are exporting goods for demonstration, exhibition, or repair and maintenance purposes (along with associated minimum electronic transfer required to undertake such tasks). In the case of incidental electronic transfers, temporary SIELs are intended for cases where a UK exporter might, for example, be exhibiting overseas and need to email the minimum technology required to maintain, repair, install or operate the goods listed on the license. A temporary SIEL is not intended for cases where a UK exporter passes technology to an overseas customer by email and subsequent download. Such transfers require a permanent SIEL. In the case of temporary SIELs, you must return the goods to the UK before your license expires and advice or send the License Reception Unit within the Export Control Organization (ECO) any expired licenses. If you don't use your license at all, you should return it to the unit with a cover letter of explanation.

Goods exported on a temporary license must not be disposed of abroad, unless the ECO has given specific permission for this to happen. Nor should you allow the goods to remain abroad beyond the expiry date without first contacting the ECO. You should not assume that such permission is necessarily granted. Such cases are considered on a case-by-case basis against the Consolidated EU and National Arms Export Licensing Criteria. Often such cases need to be

referred to advisory government departments before reaching a decision.

Failure to comply with any condition attached to a temporary license may lead to forfeiture of the goods or to prosecution by HMRC.

Application for an Export License:

An application for grant of export license in respect of items mentioned in Schedule 2 of ITC (HS) Classifications of Export and Import items may be made in the form given in Appendix-18A or 18B or 18C, as the case may be, to the Director General of Foreign Trade and shall be accompanied by the documents prescribed therein. The Export Licensing Committee under the Chairmanship of Export Commissioner shall consider such applications on merits for issue of export licenses special High Powered Licensing Committee under the Chairmanship of Director General of Foreign Trade shall consider applications for export of dual purpose chemicals and for special materials, equipment and technologies, as specified in Schedule 2 Appendix 5 and Schedule 2 Appendix 6 respectively of the book 7 3 titled ITC(HS) Classifications of Export and Import items on the basis of guidelines issued in this regard from time to time. Export of Canalised Items: An application for export of canalised items mentioned in ITC (HS) Classifications of Export and Import items may be made to the Director General of Foreign Trade. Trade Fairs/Exhibitions: Any Indian wishing to organize any Trade Fair/Exhibition in India or abroad, would be required to obtain a certificate from an officer of the rank not below that of an Under Secretary to the Government of India, in the Ministry of Commerce, or an Officer of India Trade Promotion Organization, duly authorized by its chairman in this behalf, to the effect that such exhibition, fair or as the case may be, similar show or display, has been approved or sponsored by

the Government of India in the Ministry of Commerce or the India Trade Promotion Organization and the same is being held in public interest. Gifts/Spares/Replacement Goods: For export of gifts, indigenous/imported spares and replacement goods in excess of the prescribed ceiling/period, an application may be made to the Director General of Foreign Trade. Export through Courier Service: Import/Exports through a registered courier service is permitted as per the Notification issued by the Department of Revenue. However, importability/exportability of such items shall be regulated in accordance with the policy.

Export Documents
This section covers documents that are commonly used in exporting, but specific requirements vary by destination and product. It is divided into the following subsections: common export documents, transportation documents,export compliance documents, certificates of origin, other certificates for shipments of specific goods, other export-related documents, and temporary shipment documents. Learn more about export documentation. For additional assistance with country-specific documentation requirements, please email the Trade Information Center.

COMMON DOCUMENTS Commercial Invoice A commercial invoice is a bill for the goods from the seller to the buyer. These invoices are often used by governments to determine the true value of goods when assessing customs duties. Governments that use the commercial invoice to control imports will often specify its form, content, number of copies, language to be used, and other characteristics. Export Packing List Considerably more detailed and informative than a standard domestic packing list, an export packing list lists seller, buyer, shipper, invoice number, date of shipment, mode of transport, carrier, and itemizes quantity, description, the type of package, such as a box, crate, drum, or carton, the quantity of packages, total net and gross weight (in kilograms), package marks, and dimensions, if appropriate. Both commercial stationers and freight forwarders carry packing list forms. A packing list may serve as conforming document. It is not a substitute for a commercial invoice. In addition, U.S. and foreign customs officials may use the export packing list to check the cargo. Pro Forma Invoice A pro forma invoice is an invoice prepared by the exporter before shipping the goods, informing the

buyer of the goods to be sent, their value, and other key specifications. It also can be used as an offering of sale or price quotation.

Thank you!!!