Getting an import/export license is an integral part of the international shipping process. Not all products require a license for international trade, but determining which items do, and which federal agencies oversee these licenses is an important part of starting an import/export business.
An import/export license is required to ship certain products in or out of the United States. Determining whether or not a product requires a license involves careful research. If a product does require a license, you must apply for the license through the government agency that has oversight over that product.
Following this quick and easy guide will provide you with the information necessary to determine when and how to obtain an import/export license.
To apply for an import license online, you must first determine whether or not the product you are importing requires. While the CBP puts forth the guidelines for which products require a license or other specific permit, it’s individual federal agencies that actually grant import licenses. Which federal agency is able to grant you a license is determined by the product itself. The CBP maintains a guidebook that classifies various types of products and the federal agency that regulates them.
Some common agencies to check with for licensing requirements include the:
This is by no means an exhaustive list. Due to the great variety of products imported into the United States, a number of federal agencies are involved. At times you may also have to obtain a state or local government license for imports as well.
There are over 300 ports in the United States, each unique and sometimes requiring specific procedures or permits for specific products. Determining your port of entry will play a role in licensing and permit acquisition.
Know your products well and always have the information listed below:
It is important to gather all of this information before the shipping process even begins. This information will also assist in guiding you to the needed agency to apply for an import license.
Reviewing the guidelines put forth by the CBP is one way of finding how your import goods are classified and which federal agency regulates them. If you know which port of entry you will be using to receive your product, you can also contact a CBP import specialist who is assigned to the specific category of goods you plan to import.
A CBP import specialist will know which agency you need to contact to check for specific licensing requirements. An import specialist will likely work closely with an entry specialist who can answer questions specifically related to the paperwork necessary upon the goods’ arrival in port.
In certain instances, an import comes under review. If you are unsure of the import status of your product, you can check on specific review rulings through the Customs Rulings Online Search System (CROSS).
If you are unsure of the process for reviewing the guidelines, contact a Licensed Customs Broker for help. Customs brokers are well versed in reviewing product shipping guidelines and can guide you through the process of correctly applying for an import license.
Even if an import license is not required, all imported goods are subject to some form of regulation. All imports must have an entry form filed with the CBP within 15 calendar days of the shipment’s scheduled arrival in a U.S. port. Import/Export businesses can apply for an importer number to make the process easier when frequent imports are expected.
Some products have a quota regulation that limits how much of the product can enter the United States during a specified time. There are two types of quotas to be aware of. Absolute quotas strictly limit how much of a product can enter the U.S. at a given time.
Tariff-rate quotas allow a specific quantity of product at a reduced duty rate during the quota period. After the quota period, the duty rate goes up. In the import/export business, you need to be aware of these periods to avoid paying higher duty rates unexpectedly, potentially impacting the profit to be made off your product.
Other import regulations to consider include:
As with obtaining an import license, a Licensed Customs Broker will be invaluable in navigating these various regulations. Customs brokers keep up with changes to import regulations and can assist in completing the needed documentation for all your import needs.
The process for obtaining an export license also entails working through specific federal agencies per CBP guidelines. Fortunately, 95% of exports do not require a specific license. For the five percent that do, the number of agencies to apply through is significantly shorter and easily managed through an online application process. The two agencies most involved in exports are the Bureau of Industry and Security (BIS) and the U.S. Department of State’s Directorate of Defense Trade Controls.
The regulations put in place on exports are designed to determine:
While developing your plan to export, you should also consider that the countries you are exporting to may require a separate import permit or license on their end. This may be the case whether the United States requires a license or not. If you know which country you will be exporting to, take the time to determine if you need to apply for such licensing.
Of the small percentage of products requiring a license for export, the majority involve goods, software, or technology that is considered ‘dual-use’. These are products or services with uses in commercial and military or proliferation applications. These products and services are overseen by a section of BIS known as the Export Administration Regulations (EAR).
When a commodity falls under EAR it will appear on the Commerce Control List (CCL) and be assigned an Export Control Classification Number (ECCN). A special designation, EAR99, generally indicates that a product does not require a license. However, it is always better to research ahead of time to determine whether that status is dependent on the product destination, end-user, or end-use.
The CCL also maintains lists of export restrictions for other departments. This includes the:
Other departments which oversee very specialized exports are the Nuclear Regulatory Commission and the U.S. Food and Drug Administration.
All shipments requiring an export license must also have a Destination Control Statement (DSC) which declares that the goods are only being exported to the country or buyer indicated on official shipping documents. Exemptions exist for shipments under License Exemption BAG (Baggage) or Gift Parcels and Humanitarian Donations (GFT).
Considering the nature of the majority of exports requiring licensing, a Licensed Customs Broker will be best qualified to guide you through the application process. A customs broker can review the export regulations that determine which international buyers you can sell to and which countries and foreign markets certain products can be exported to. They can also provide a definitive answer to whether a product requires an export permit or not.
Once you have determined whether or not you need an export license to ship your products, you can complete an export license application online through the BIS. The BIS maintains an online electronic licensing system called SNAP-R which allows registered users to submit export license applications.
Authorization to use SNAP-R is granted by registering with BIS and providing the required information and agreeing to its terms and conditions. You will then be assigned a company identification number (CIN) to use when applying on SNAP-R. The registration process is free and active users are able to manage their account information to keep everything up to date. The individual or company that completes the registration is assigned as the account administrator.
A business can also delegate the registration process. SNAP-R allows for a Third-Party Administrator to submit export license applications on your company’s behalf. To do so, they must be granted Power of Attorney by the exporter and given access to the CIN.
A Third-Party Administrator can also register a business and attain a CIN for them. Any Third-Party Administrators must have their own CIN for the process.
Aside from being a legal requirement for certain imports and exports, licenses are there to protect international trade and the United States’ domestic economy. Within the Department of Commerce, the International Trade Administration works with BIS to ensure export and import guidelines are working to protect and strengthen U.S. industry in general. They maintain fair trade practices and compliance with international laws. Proper administration of licenses is important to maintaining national security, managing short supply, stabilizing regions and crime control, even involving anti-terrorism practices.
For individuals and import/export businesses, these licenses provide protection from legal disputes and potential financial loss. They also ensure that potentially volatile items, substances, or services are managed properly upon entry or exit to keep involved parties as safe as possible.
Navigating the various regulations and departments that oversee import/export license applications doesn’t have to be a hassle. USA Customs Clearance can provide you with the services of a Licensed Customs Broker to make sure your shipments are properly classified and licensed.
Rather than risk having freight stuck in customs and possibly getting seized, speak with licensed import consultants that can guide you through the application process and increase the chances of a successful business. In a 30-minute session, our licensed consultants can work with you 1-on-1 to make each phase of the process clear and concise.
Schedule your time today by calling USA Customs Clearance at (855) 912-0406 and take the guesswork out of applying for import or export licenses.