BUYUSA.GOV -- U.S. Commercial Service

Midwest

Frequently Asked Questions

1. Want to Start Exporting?

A. How to Evaluate Your Company’s Export Potential

B. Who Can Help?

There are various local resources available to help your company get ready to export. 

  • SCORE - Counselors to America’s Small Business – Offers free assistance from successful, retired executives that will help you develop a business plan http://www.score.org/index.html.  Contact the Chicago office at (312) 353-7724.
  • SBA - Small Business Administration – Offers aid and protection to help your business start, grow, and succeed http://www.sba.gov/.  Discover how to manage your business, expand your business with programs and services, increase your knowledge and productivity, and support your business with a team of experts.  Contact your local Chicago office; John Nevell john.nevell@N0SPAM.sba.gov , (312) 353-8065.
  • WBDC - Women's Business Development Center in Chicago - Works with women to launch new businesses and strengthen existing businesses in the Chicago area. WBDC services are available in Spanish and English, and include business assessments, loan packaging, public and private sector procurement assistance, classes/workshops, and individualized counseling on all aspects of business development, management, and strategy. www.wbdc.org 
  • Illinois SBDC International Trade Centers - Small Business Development Center ITC trade specialists can:  Assess export readiness and foreign market potential for new-to-export firms; Conduct one-on-one counseling and educational seminars on international trade and NAFTA issues; Locate financial assistance for export ventures; Illinois ITC locations International Trade Center (128KB).
  • Illinois Business Service Provider Directory- Looking for private sector help?  Visit Commercial Service Illinois' directory of companies offering export-related services your company can take advantage of: http://www.buyusa.gov/midwest/211.html
  • TIC - Trade Information Center in Washington D.C. - Call 1-800-USA-TRADE (872-8723), Monday through Friday 8:30 a.m. until 5:30 p.m. EST. A Trade Specialist can help provdie foreign tariff and fee information, schedule B numbers, country and regional market information. http://www.export.gov/exportbasics/ticredirect.asp

C.  Where to Export?

  • Find National and State import/export statistics for your product or service at http://tse.export.gov/. 
  • You will need a number to classify your product.  The Harmonized Tariff System (HTS) assigns a number to each product that is traded internatinonally.  The United States does this with its Scheduled B System.  Learn more about the system and find out your product’s number http://www.export.gov/logistics/exp_logistics_schedule_b.asp.
  • Identify potential key foreign markets for your products.  Discover the best prospects for success in our Market Research Report Library. Do your homework; plan your market entry the right way.  Reports written by US Dept of Commerce Commercial Specialists all over the world.  Learn your product’s potential in a given market: http://www.export.gov/static/doc_exp_mr_getting_started.asp.
  • How to estimate costs to my destination?  One free tool is UPS Tradeability.  Use it first to find your HS/HTS code, and then to get a landed cost estimate, including the destination country duty and tax. https://wwwapps.ups.com/tradeability
  • Export Yellow Pages  Finding new buyers, sellers and suppliers for your company's products, services, and materials has never been easier. The Export Yellow Pages, which contains comprehensive U.S. business product and supplier information, is designed to promote and connect small and medium-sized companies, solve language barriers, improve market visibility, simplify sales sourcing, and provide you with the very best of global trade resources in a single location http://www.exportyellowpages.com/.

  • For export-ready Illinois-based companies, the best place to start is at Commercial Service Illinois. Click here for a Staff Directory: http://www.buyusa.gov/midwest/useac.html. 

D.  What License?

A relatively small percentage of total U.S. exports and reexports require a special export license from USDOC's Bureau of Industry and Security. License requirements are dependent upon an item's technical characteristics, the destination, the end-user, and the end-use. You, as the exporter, must determine whether your export requires a license.  For more information please visit, https://www.bis.doc.gov/licensing/exportingbasics.htm.

The first step in determining your license requirements under the EAR is to classify your product by determining its Export Control Classification Number (ECCN) on the Commerce Control List (CCL). More information on Commodity Classifications is at: http://www.bis.doc.gov/Licensing/facts2.htm, or if questions remain, please call the Commercial Service Chicago at 312/353-8040.

2. What assistance is available for exporters of food and agricultural products?

Food Export Assoc. of the Midwest USA
Ms. Brandy Erwin, Business Dev. Specialist
309 W. Washington, Suite 600
Chicago, IL 60606
Phone 312-334-9228
Email berwin@N0SPAM.foodexport.org
Website: http://www.foodexport.org

A variety of programs and services to help exporters of processed food products begin or expand their international sales. For a list of services available to assist U.S. exporters in Exporter Education, Market Entry and Market Promotions, please refer to their website.

Illinois Dept. of Agriculture    
Ms. Kim Hamilton, Int'l. Marketing Rep.
P.O. Box 19281
Springfield, IL 62794-9281
Phone 217-782-5809
Email kim.hamilton@N0SPAM.illinois.gov
Website: http://www.agr.state.il.us

The Illinois Department of Agriculture supports international market development and product promotion for the state's food and agribusiness sectors. Headquartered in Springfield, the department maintains offices in Hong Kong and Mexico City to promote Illinois products worldwide. The department maintains close contacts with the U.S. Department of Agriculture's Foreign Agriculture Service to help Illinois firms gain access to federal marketing programs. Illinois' Agriculture Department is a member of the Food Export Association of the Midwest USA (formerly MIATCO), which helps coordinate market development programs for processed food products. The department also works in partnership with many commodity organizations' market development programs. For a full description of their program and services, please refer to their website.

U.S. Department of Agriculture - Foreign Agricultural Service (FAS)

Website www.fas.usda.gov 

FAS offers export programs to help U.S. exporters develop and maintain markets overseas for hundreds of food and agricultural products, from bulk commodities to brand-name items. They also provide U.S. agricultural exporters with short- and intermediate-term commercial financing support through Commodity Credit Corporation (CCC) export credit guarantee programs as well as access to FAS offices around the world.

3. FAQs - Exporting to China

A.  I received an offer to register my Domain Name in China.  What do I do?

Domain Name: Have you been contacted with an offer to register you Domain Name in the PRC?  Then here is info you should know before doing anything. http://www.stopfakes.gov/pdf/Domain_Name_Guidance_to_Rights_Holders.pdf                                                                                                      You
You can either register your domain name yourself, at www.cnnic.net.cn/, or work with a credible
service provider.  

For a partial list of companies who will register your domain name for a fee, see this listing: http://www.internic.net/alpha.html

B.  This sales opportunity sounds too good to be true.  Is it?

  • Scams: Have you been contacted by an unknown buyer: Read this before you do anything: China Advisory - Business Scams (39KB)
  • Seven Signs of a possible scam (provided by GLOBIS, http://www.glo-bis.com):
  • The Chinese company contacted you via the web  
  • The Chinese company has "Import/Export" in their name
  • They want to purchase a very large volume of goods
  • They insist that your senior executive travel to China immediately to sign the contract with them in person
  • They request money prior to the trip to pay for a reception in your honor, and/or, once in China, they request money or goods to "grease the wheels" with local officials
  • They have been in business for less than one year
  • They can provide no verifiable references

C.  Intellectual Property Rights: Did you know that your U.S. Trademark does NOT protect your product in China?

D.  Here are three guides to help you understand how to protect your IP

E.  Looking for more information on China?  Here are 3 U.S. Dept of Commerce websites to help:

4. When Do I Use the Automated Export System?

AES is the online delivery system for the old Shipper’s Export Declaration, or SED.  As of July 2nd, 2008, the paper-and-pen SED application process was formally replaced by AES.  Exporters still using paper SEDs have a 90-day grace period to begin implementing AES.  This period ends on September 30, 2008, at which time all exporters must file their export information using only AES.  AES can be accessed several different ways. Perhaps the simplest way is through AESDirect, the U.S. Department of Commerce’s online filing system.

Information on AESDirect can be found at http://www.aesdirect.gov/ or using AESPcLink at https://www.aesdirect.gov/aespclink/aboutpclink.html 

For help with AES, call 1-800-549-0595 or for onling help go to http://www.aesdirect.gov/support/phone.html.

In addition, the following AES FAQ gives guidance on issues that may be relevant to your firm.  Provided by: Christina Farr, Foreign Trade Division, Regulations, Outreach, and Education Branch, U.S. Census, Phone: (301) 763-6978

1.  My company has typically asked our freight forwarder to file the AES transmission for us in the past.  Is it required that my company get an account or can we continue to ask our freight forwarder  to file on our behalf?   We've been told that if the freight forwarder doesn't file in time or makes a mistake and they are fined, we will be fined as well because we are the USPPI.  Is this true?

You can continue to have your forwarder file the AES for you as long as your company is providing them with a proper Power of Attorney or written authorization to do so.  If you chose to file on your own, you may register with AES and do so.  To register, go to www.AESdirect.gov .

With the new regulations, all parties to the transaction are subject to fines and penalties when there is a violation of the FTR.  Enforcement will look at each party's role and responsibility to the export transactions.  In addition, it is required to maintain all documentation for a five year period.

 2. If the AES transmission is not filed in the timeframe required by the mode of transport, who is responsible?  My freight forwarder (who is filing on my behalf) or my company, I'm worried about fines and penalties in case this happens.

It is the responsibility of the USPPI to provide the Freight forwarder with the necessary information to file in a timely manner. 

3.  What if we decide to file AES as a company and I don't know some of the mandatory information required when I am involved in a routed transaction?

I can't get this information from the customer's freight forwarder, so how do I handle this?  I'm worried about filing within the timeframe required for the transport mode.  Many times I don't even know how the shipments will be consolidated or how they will be transported.

In a routed export transaction, the Foreign Principal Party in Interest (FPPI) is controlling the movement of the goods and hires a forwarder to facilitate the movement of the cargo and file the AES. The FPPI's responsibility is to provide the Power of Attorney or written authorization to the forwarder in order to file the AES.  Your responsibility as the USPPI in a routed export transaction is to provide your customer's forwarder with the necessary export information including your EIN in order to complete the AES.  The forwarder will supply the transportation information.

 4.  My company is involved in routed transactions.  I'm worried about my liability if I give the customer's freight forwarder the pieces of information required in a  routed transaction and they don't report it correctly.  Is my company responsible for fines and penalties or will these fines be directed to the freight forwarder who didn't report the correct information?

With the new regulations, all parties to the transaction are subject to the fines and penalties when there is a violation.  What enforcement will look at is each party to the transactions role in the export transaction.  Make sure you keep all of your paperwork related to your transactions.  Upon request from the USPPI, the forwarder in a routed export transaction is required to provide you with proof, in a mutually agreed upon format, that they have filed your information so that you can make sure it is accurate and complete.  I suggest keeping a copy of what you provided them as well. If there is ever any issue, Customs will see that you had all your paperwork and made efforts to make sure your information was correct.  If you have problems getting your information back from the forwarder, please contact our office and we will help you to resolve the problem.

 5.  If I have a drop shipment for another U.S. company, who is the USPPI?

I assume that this question means that a U.S. company purchased goods from your company here in the U.S. and instructs you to ship them to a destination in a foreign country.  If this is the case, then the U.S. company that purchased the goods from you, domestically, is the USPPI.

5. When is the NAFTA Certificate Necessary?

A NAFTA certificate is never necessary, but if your product has a reduced tariff under NAFTA, it is in your interest to go through the NAFTA certification process. Since we have MFN trading status with both Mexico and Canada, your tariff rate might already be 0%, without having to go through NAFTA certification. If your products are used by other US manufacturers who export to Canada and Mexico, they may request that you certify your goods so that they can in turn get preferential tariff treatment under NAFTA. Click here for more info on NAFTA: http://www.export.gov/fta/nafta/index.asp

6. What is the Difference between a Schedule B and HTS number?

All import and export codes used by the U.S. are based on the worldwide Harmonized Tariff System (HTS). The HTS assigns 6-digit codes (known as the HS number) for general categories that are used worldwide. These 6-digit codes are broken down by Chapter (2 digits), Heading (4 digits) and Sub-heading (6 digits). Countries that use the HTS are then allowed to further define their commodities at a more detailed level, usually 8-10 digits, but still using the universal 6-digit number to start with. The United States uses this system as a foundation for determining both Schedule B numbers and the Harmonized Tariff Schedule of the United States (HTSUS), which are nearly identical. The Schedule B number (reported on your SED) is used by Department of Commerce's Foreign Trade Statistics office to generate export statistics. The HTSUS number is used by U.S. Customs in the import process.

7. Benefits of Exporting - - Why Consider Exporting?

  • 95 percent of the world's consumers live outside of the United States, so if a U.S. business is only selling domestically, it is reaching just a small share of potential customers.
  • Exporting enables companies to diversify their portfolios and to weather changes in the domestic economy.
  • Exporting helps small companies grow and become more competitive in all their markets.
  • Free trade agreements have opened up markets in Australia, Chile, Singapore, Jordan, Israel, Canada, Mexico, and Central America, creating more opportunities for U.S. businesses. The Central American Free Trade Agreement (CAFTA) involving Costa Rica, Honduras, Guatemala, El Salvador, Nicaragua, and the Dominican Republic will open even more opportunities for U.S. firms.

The Economic Impact of Exporting

  • In the past 25 years, U.S. exports increased five-fold from $224 billion to more than $1.1 trillion in 2004.
  • About one of every five factory jobs—or 20 percent of all jobs in America's manufacturing sector—depends on exports. Workers in jobs supported by merchandise exports typically receive wages higher than the national average.
  • Small businesses create 70 percent of the new jobs in America.

The Number of Small Business Exporters is Growing …

  • Small and medium-sized firms account for the vast majority of growth in new exporters.
  • Small and medium-sized companies account for almost 97 percent of U.S. exporters, but still represent only about 30 percent of the total export value of U.S. goods.
  • Because nearly two-thirds of small and medium-sized exporters only sell to one foreign market, many of these firms could boost exports by expanding the number of countries they sell to.
  • More than two-thirds of exporters have fewer than 20 employees.