Thursday, August 28, 2008

Exports Are NOT The Opposite of Imports

For importers and others who are new to exporting, the first thought might be that exporting is the opposite of importing. Thus, if a product is sent out of the country, that shipment constitutes and export. While that statement is correct, it is incomplete because an export can occur without a product leaving the U.S. territory. How does that happen?

Export is defined in the Export Administration Regulations (EAR) 734.2 (b)(1) as an actual shipment or transmission of items subject to the EAR out of the United States, or the release of technology or software subject to the EAR to a foreign national within the United States. Section 120.17 of the International Traffic in Arms Regulations (ITAR) defines export as the disclosure (including oral or visual disclosure) or transfer of technical data to a foreign person, whether in the United States or abroad. Those definitions sound simple, assuming we know what constitutes a foreign national and the “release” of technology or software.

First, let’s define foreign national or person. A foreign national is:

· Someone who is NOT a U.S. citizen or permanent resident alien (green card holder)
· A foreign corporation, business associations, partnership, trust, society or any other foreign entity or group that is not incorporated or organized to do business in the United States.
· An International Organization
· A foreign government and any agency or subdivision of foreign governments or foreign corporations
· Foreign persons in the U.S. on limited work visas or student visas

When trying to determine if someone is a foreign national, it is important to know that whether someone is a “foreign” person under the export regulations is not the same as whether the individual is in the country legally, entitled to work, a good person, etc. Checking an individual’s social security card or driver’s license will not be sufficient to make the determination.

Now that we have a better idea of what constitutes a foreign person, let’s explore what constitutes the “release” of technology and software. Release includes visual inspection by a foreign national of U.S. origin equipment and facilities, oral exchanges of information in the U.S. or abroad. Some of the typical situations in which an export “release” of technology or software could occur within the U.S. include:

· Sending an email or fax that contains technical information to a foreign person
· Talking on the phone with a foreign person
· Holding technical data discussions within earshot of foreign nationals not licensed to receive information
· Viewing information on a laptop
· Foreign national visit U.S. facilities for tours and meetings
· Trade shows, seminars and conferences
· Company Intranet
· Presentations

This concludes our brief lesson for those who are new to exporting. Knowing that an export can occur without shipping a tangible product is a very important lesson to learn early in your career in exports.

No comments: