QUESTION ON Export License For Selling Via The Web
Do I need an export license if I want to sell merchandise via the web to other countries? I am starting an online store and I intend to sell to a global audience. I want to know if I am required to get an export license to legally operate my ecommerce store in the United States.
One of the great advantages of selling on the Web is your ability to reach the global audience at lesser cost. However, it is important to remember that selling your merchandise via the Web or by any other means is only the marketing process. Shipping the merchandise out would still follow the conventional business ways.
I suggest you first research on the rules governing the sale of your products, and whether an export license is required when selling those items. There are several factors that can trigger the need to get an export license:
- the actual item being exported
- where it is going
- who is going to use it, and
- what they will be using it for
You may also be required to get an export license if you are planning to sell to an embargoed or sanctioned country such as Iran or North Korea or if you are shipping a product with a prohibited end use.
As the government site Export.gov says,
An export license grants permission to conduct a certain type of export transaction. It is issued by the appropriate licensing agency after a careful review of the facts surrounding the given export transaction. Most export transactions do not require specific approval in the form of licenses from the U.S. Government. In fact, a relatively small percentage of all U.S. export transactions require licenses from the U.S. government. It is up to the exporter to determine whether the product requires a license and to research the end use of the product, in other words, to perform “due diligence” regarding the transaction. Exporters should learn which federal department or agency has jurisdiction over the item they are planning to export in order to find out if a license is required.
To determine if the products you will sell online require an export license, you need to check if the product you intend to export has a specific Export Control Classification Number (ECCN). Check with the manufacturer or producer of the item you are selling if the product has a current ECCN for the item.
If your product has an ECCN number, then you will need an export license. All ECCNs are listed in the Commerce Control List (CCL). Some of the transactions that may require an export license include exporting meat, poultry, and egg products, including packaging, labeling and other special conditions. Other products that may require an export license include those dealing with defense, national security, dietary supplements, cosmetic products, computers designed for specific functionalities such as telecommunications or local area network, among others.
As an online seller to buyers from other countries, it is important to understand that international mail is subject to customs examination in the destination country. You need to check if the goods you are selling can be legally imported into that country, and what might the purchaser need to be able to get the product without being stopped or confiscated at the customs. You also need to know what types of custom or postal fees the buyer may need to pay to claim the product they bought from you. You may have a buyer who may not know what it entails to purchase an item online and import to their country, and may find that the duties and charges they need to pay are prohibitive. You may end up losing both the sale and the product.
Selling and shipping internationally can be complicated and governed with myriad rules and regulations. It is your duty to learn and understand them. If you ship out small quantities like one or two at a time via the US Postal Service or the other carriers you may only be required to submit a customs declaration of the item, including description and value. However, if you are shipping our products valued at more than $2,500, check with a customs broker or an export assistance agency to help you navigate the processes required to shipping your products.
I would recommend that you check with the US Customs and Border Protection and the agency governing the types of products that you sell in order that you operate your business with the right guidance and direction. Also talk with your local USPS about the requirements of shipping internationally.
Hope this helps. Good luck!
Also visit our Bookstore for more books on Export/Import
Nach M Maravilla
Recommended Resources on How To Start an Import/Export Business
- Import / Export Kit For Dummies (For Dummies (Business & Personal Finance))
- How to Open & Operate a Finanacially Successful Import Export Business: With Companion CD-ROM
- Export Now: Five Keys to Entering New Markets
- International Marketing and Export Management (6th Edition)
Article originally published in February 2003. Updated February 15, 2015
Category: Q & A