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Ashley is an attorney. She has taught and written various introductory law courses.
Many U.S. businesses import products. An import is any good or service produced in one country and sold to a buyer in another country. Think of imports as buying something that will be brought into our country. For example, Edward has a beautifully carved wood trunk he bought at a local imports store. The trunk was handmade in India. The imports company bought several trunks from a craftsman in India and imported them to be sold in the U.S.
Imports are strictly governed. There are especially tight import restrictions on goods with a potential to be hazardous. Businesses engaged in importing need to be familiar with the rules and regulations regarding international trade at both the state and federal level.
Generally speaking, all imports to the U.S. must first clear customs border patrol, or CBP. Allowable imports are subject to duties. Duties are import taxes and vary by the type of item and the quantity imported. Other imports may be prohibited or restricted.
For example, there are strict laws in reference to importing alcoholic beverages. Both the type and the amount are restricted by U.S. laws and by the laws of the state in which the shipment first arrives. Some shipments require the recipient to hold a special license.
In order to import items to the U.S., an importer must fill out a U.S. Customs and Border Protection Declaration. The form should contain the name and address of the supplier, a detailed description of the product, the purchase price, the weight and the country of origin.
Now let's take a look at exports. Many U.S. businesses earn profits by exporting, or selling products to clients in other countries. An export is any good or service that a buyer in one country purchases from a seller in another country. Note that exports are shipped out of our country, while imports are products brought into our country.
For example, Edward's company makes and sells screen-printed t-shirts. His designs are popular with teenagers in Japan, so he regularly exports t-shirts to several clothing stores in Japan. Exports are also strictly governed. In the U.S., our Bureau of Industry and Security, or BIS, governs exports. The BIS is part of the U.S. Department of Commerce and has a goal of promoting national security, foreign policy and economic interests.
Like imports, companies involved in exporting must comply with applicable rules and regulations. These are known as the Export Administration Regulations, or EAR. According to EAR, some items simply cannot be exported, some require a special license and others carry restrictions in reference to the type of good, quantity and destination.
For example, consider the longstanding trade embargo the U.S. has against Cuba. Due to strained political relations, Americans are prohibited from trading with, investing in or traveling to Cuba. It's therefore illegal for U.S. companies to export goods to Cuba.
There are several types of international trade laws governing how countries do business with one another. Like U.S. laws governing our imports and exports, other countries also have national laws affecting trade with other countries. Additionally, many countries partake in bilateral trade agreements. These are agreements made between two countries that govern trade only between those countries.
However, most trade regulations made between countries are accomplished through multilateral trade agreements. These agreements set universal rules to be followed by a number of countries. Multilateral agreements are made through organizations, such as the World Trade Organization and the United Nations. The U.N.'s Commission on International Trade Law consists of the U.S., Canada, China, Japan and several more of the world's most prominent traders.
Once this commission reaches an agreement, the agreement must be ratified by each participating nation. In the U.S., ratification by our federal government means the trade agreement becomes a part of our international laws and enforceable against U.S. businesses.
Let's review. Many U.S. businesses engage in trade with other countries. An import is any good or service produced in one country and sold to a buyer in another country. Imports are brought into our country. Imports to the U.S. must clear customs border patrol. Some imports are prohibited or restricted, while others require a special license.
An export is any good or service that a buyer in one country purchases from a seller in another country. Exports are shipped out of our country. The Bureau of Industry and Security governs exports from the U.S. Exports must comply with the Export Administration Regulations.
International trade laws also include bilateral agreements, which are trade agreements made between two countries. Many international trade laws are multilateral trade agreements, meaning they are agreements made between many countries. The World Trade Organization and the United Nations Commission on International Trade Law both facilitate multilateral trade agreements. These agreements become enforceable law once ratified by each country.
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Back To CourseBusiness Law Textbook
23 chapters | 176 lessons