1. U.S. Commercial Service Top 11 Factors to Consider When Entering Foreign Markets for “Exports, the New Buzz” May 15, 2008

2. An Overview Export Classification Code Export Licensing Foreign Language Marketing Channels of Distribution Export Pricing & Payment Incoterms Marking and Labeling Standards Documentation Foreign Corrupt Practices Act Intellectual Property

3. 1. Schedule B Export Classification Code Look up code on http://www.census.gov/foreign- trade/schedules/b/index.html or ask freight forwarderhttp://www.census.gov/foreign- trade/schedules/b/index.html 10 digits for Census purposes, 6 for worldwide duty rates Use code to locate top export markets (http://dataweb.usitc.gov/scripts/user_set.asp) Shipper’s Export Declaration (SED) over $2500 SED internet filing: www.aesdirect.gov Call 1-800-USA-Trade to determine duty rate Do not change code if requested by importer

4. 2. Export Administration Regulations/Licensing Compliance is crucial Review Commerce Control List/Country Chart Export Commodity Control Number (ECCN) – different from Schedule B “Know your customer” and use the “Lists to Check” –Entity List, Denied Persons, Specially Designated Nationals, etc. Be wary of “Deemed exports” Watch out for “RED FLAGS” Bureau of Industrial Security (www.bis.doc.gov)www.bis.doc.gov Office of Foreign Assets Control - embargoed countries

5. 3. Foreign Language Marketing Keep English language materials short and to the point –Provide conversion to metrics Have your materials translated –If you have a good agent/distributor, they should assist in translation to avoid local variations –Written in local terminology and dialect

6. 4. Channels of Distribution Choose the right partner the first time –Ask for references/Conduct background check Make sure you know the agent termination laws; Consult attorney –Even if you do not sign a contract, you may have locked into an agreement that you can’t get out of –Termination may be costly and time consuming Your int’l banker and U.S. Commercial Service can provide guidance and conduct background checks (ICP) U.S Commercial Service can help in your initial search for Partners-IPS/Gold Key Service

7. 5. Export Pricing & Payment Terms Cash in Advance is the NOT the standard L/Cs may be secure, but they are expensive Offering Favorable Payment Terms will increase your competitiveness (EXIM Export Credit Insurance) Remember to discount for your agent’s/distributor’s profit margin

8. 6. Shipping Terms & Incoterms 2000 FOB Factory under US law does not mean the same under ICC law. –FOB, FAS, CFR, CIF, DES, DEQ are all vessel ONLY –www.iccwbo.org/incotermswww.iccwbo.org/incoterms –Incoterms do not assign title or ownership –They assign responsibility and liability

9. 7. Marking & Labeling Country of Origin (“Made in USA”) Weight marking (in pounds and in kilograms) Number of packages and size of cases (in inches and centimeters) Handling Marks (int’l pictorial symbols) Cautionary markings, such as “This Side Up” (in English and the language of the country of destination) Port of Entry Labels for hazardous material (universal symbols)

10. 8. Standards US standards are NOT universally accepted May need to register with Foreign Ministries (i.e. Ministry of Health); Good importer can assist. Various Foreign government/industry standards –CE Mark (“European Passport” to trade) more info at: www.export.gov/cemark –CCC (China) –NOMs (Mexico) –ISO (industry standard)

11. 9. Documentation Every country has different requirements –Certificates of Origin (NAFTA, Chile, Australia, Israel, Jordan, Singapore, Morocco) –Canada Customs Invoice –Authentication of documents (Middle East) Softwood packaging requirements ATA Carnet - temporary exports (i.e. trade shows)

12. 10. Foreign Corrupt Practices Act & Anti- Boycott FCPA It may be a tax write off in another country, but it is still illegal for US companies –There is a provision for “facilitating payments for routine governmental action” Anti-Boycott You can NOT participate in foreign boycotts and must report any requests (i.e. Israel)

13. 11. Intellectual Property IP is territorial -U.S. patents, trademarks and copyrights only good in the U.S. Analyze IP and determine which is critical Develop strategy to protect your IP Consider international filings American Bar Association has free 1 hour consultations on IP for China www.stopfakes.gov

14. SERVICES EXPORTS Travel and Tourism Transportation Services Architecture Construction and Engineering Education and Training Banking, Financial and Insurance Entertainment Information Services Professional Business Services

15. CHALLENGES Intangibility-communicating a service offer is much harder than a product offer Customer involvement-service needs to be tailored to customer needs, requiring direct customer participation Greater cultural sensitivity is required No collateral makes financing more difficult

16. MARKETING STRATEGIES Follow the path of complementary product exports Service support for U.S. clients operating internationally, such as manufacturers Seek affiliation with foreign firm in your market segment- agent, representative or joint venture. The Commerce Department can help you find these agents and partners.

17. How to contact us Shakir Farsakh, Director Long Island U.S. Export Assistance Center Tel: 646-722-0182 Email: Shakir.Farsakh@mail.doc.govShakir.Farsakh@mail.doc.gov Jonathan Heimer, Commercial Officer Tel: 631-935-2388 Email: Jonathan.Heimer@mail.doc.gov www.buyUSA.gov/longislandwww.export.gov