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Questions about Export Laws and Rules

To export means to sell and ship products or services out of one country to another country. There are many rules and regulations when dealing with exports. These rules and regulations may vary from country to country. The export business is an important aspect of economic balance in the U.S. and plays a large role in international trade. Below are a few of the more commonly asked questions about exports.

Do I need to include any clauses regarding export laws in software license agreements?

Usually, export laws are used as a means of restricting technology from reaching hostile foreign powers for military or political purposes. You should contact an expert who is familiar with export compliance before you attempt to do something that could possibly be used by a hostile nation in a negative manner. You need to study and understand the U.S. Export Administration regulations before you export. You could unknowingly have software that has encryptions that cannot be broken even with the use of supercomputers used by the federal government. This could cause you some serious issues.

I export cars to Russia. The people that I sold a car to committed fraud with a Russian client. I was unaware of this. Will I now have problems in the US?

You shouldn't have an issue in the U.S., unless you knowingly assisted in the fraudulent act. Even if you had a part in the fraud, the crime was committed in Russia and not in the U.S. You should account for all profits made from the exports to avoid any issues with inconsistent tax returns. The IRS is very interested in the export businesses and audits these businesses more than others.

If I have an office in Costa Rica and all products will be purchased and shipped from this location, do I need an International License? Will I be required to pay US taxes?

Your business will be governed by Costa Rica and any import/export, tax laws, etc. Any personal income that you earn through the business needs to be reported to the IRS. Usually federal law allows tax credits to companies who pay taxes to a foreign government. As far as needing an "international license", this does not exist.

You need to be familiar with import/export laws for every country that you ship to or receive from. The best option would be to hire an import/export broker who can assist you in making the initial shipments and help with any issues that might arise. Usually, after the first shipment, you will have caught on to the process and continue without the broker.

You need to be careful by complying with all import/export laws, particularly when dealing with technology. You could possibly face criminal charges for exporting high end technology such as computers and certain software. Generally, your broker can help you avoid any high risk items but the regulations and compliance laws can sometimes be tough for even the professionals to understand. This leaves room for issues, so you may consider not handling anything technology related.

I want to set up a business to export wine from the US. What are the steps I need to take to register the business?

The first thing you will need to do is get a California license to deal in wine. Depending on what you plan to do with the wine will determine the type of license you will need. If you are buying, selling or just brokering wine, you will need certain licensing. To learn more about licensing, follow this link: http://www.abc.ca.gov/permits/licensetypes.html

This will help you determine what licensing is required for you specific need. Here is a link that explains the wine export process: http://www.ttb.gov/itd/exporting_alcohol.shtml. You will require more insight and knowledge of the export business that what you will find on the link, but it is a good starting point. You should retain an attorney to assist you with state and federal laws, as well as becoming familiar with the import/export laws of every country that you plan to ship your wine to.

I am offering software as service through the internet. Do I need an export license? We are not selling off the shelf products.

Usually, you are not going to need an export license to sell products. However, this will depend on the type of product and where you are shipping the product to. For example, if you were selling software on how to build the perfect military weapon, you will probably find that there will be strict restrictions and regulations on the product as well as where the product could be shipped. However, if your software is typical software, you will not be required to have an export license. If you want to see what type of license you are required to have or want to know if your product has restrictions, you can check the U.S. Department of Commerce website: http://www.bis.doc.gov/licensing/exportingbasics.htm

Exports play a large role in the economy of every country. With every important role there are important rules to follow. Exports are no exception. If you have questions or doubts about the export rules and laws, you should contact an Expert who can assist you in making the right choices for your individual needs.
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