Imagine a country with few barriers to entry, a familiar legal and corporate framework, sophisticated consumer and industrial sectors, and a straightforward, English-speaking business culture. No, it’s not a dream—it’s Australia! Australia remains an important and receptive market for American goods and services.
In this article, I’ll look at the history of U.S. trade with Australia; the process of exporting to Australia, including documentation and compliance requirements; and the benefits and considerations for U.S. companies looking to break into the Australian marketplace.
- Australia’s distant location from the United States is often cited as the single most significant non-tariff barrier to trade.
- U.S. companies may find that Australian and third-country competitors in Australia have some long-established brands with strong reputations and well-established supplier relationships.
- Australia has ready access to Asian and other low-cost producers. American firms must therefore demonstrate enough added value to overcome the costs of getting the product to market, and to compete.
U.S. Commercial Service Offices
One of the first places to consider are your local and in-country U.S. Commercial Service offices. Commercial Service in-country offices effectively serve as your business partners in Australia—boots on the ground in the country. Commercial service offices also include representation by an agent, distributors or partners who can provide essential local knowledge and contacts that are crucial to your success.
You can learn more about in-country offices in our article, Tapping into the U.S. Commercial Service’s In-Country Offices.
District Export Councils (DECs)
DECs across the country help exporters by supporting trade and services that strengthen individual companies, stimulate U.S. economic growth, and create jobs. DEC members also serve as mentors to new exporters and provide advice to smaller companies.
Sponsored by state and local trade offices as well as commercial service offices, trade missions offer introductions to important contacts and networking opportunities. Check into them.
International Trade Administration
The ITA is an excellent resource to help you combat trade problems. ITA staff members are resident experts in advocating for U.S. businesses of all sizes. They customize their services to help solve your trade dilemmas as efficiently as possible. Plus, the ITA makes it easy to report a problem, allowing you to submit your report online.
Chambers of Commerce
Chambers of Commerce may also be a resource when exporting to Australia. You can learn more about various chambers and how they can help smooth the way for your export activities in our article, The Chamber of Commerce Role in Exporting.
Export Document Requirements for Australia
Accurate export documentation and attention to procedures are as critical in exporting to Australia as they are for exporting to any other country. An import license is not needed to import the majority of industrial goods into Australia, but importers may need to obtain permits to clear the goods.
Export Compliance Issues When Exporting to Australia
It’s important to understand the regulations covering exports to Australia, especially export controls.
Product Classification for Export Controls
The first step in ensuring export compliance is determining who has jurisdiction over your goods: the U.S. Department of Commerce under the Export Administration Regulations (EAR) or the State Department’s International Traffic in Arms Regulations (ITAR).
If your goods fall under the jurisdiction of the Commerce Department—which most products do—you must determine if your export requires authorization from the Bureau of Industry and Security (BIS, part of the Commerce Department). To make that determination, first answer the following questions:
- What is the Export Control Classification Number (ECCN) of the item?
- Where is it going?
- Who is the end user?
- What is the end use?
There are three ways to classify your products for export controls: You can self-classify your products, submit a SNAP-R request for a ruling, or rely on the product vendor to provide the information. Learn about that process in our article, Export Codes: ECCN vs. HS, HTS and Schedule B. By classifying your product correctly, you’ll be protecting yourself from potential fines, penalties and even jail time.
Export License Determination
Next, companies must use the ECCN codes and reasons for control described above to determine whether or not there are any restrictions for exporting their products to specific countries. Once they know why their products are controlled, exporters should refer to the Commerce Country Chart in the EAR to determine if a license is required.
Although a relatively small percentage of all U.S. exports and reexports require a BIS license, virtually all exports and many reexports to embargoed destinations and countries designated as supporting terrorist activities require a license. Countries fitting that bill are Cuba, Iran, North Korea and Syria.
Part 746 of the EAR describes embargoed destinations and refers to certain additional controls imposed by the Office of Foreign Assets Control (OFAC) of the Treasury Department.
Shipping Solutions Professional export documentation and compliance software includes an Export Compliance Module that uses the ECCN code for your product(s) and the destination country to tell you if an export license is required. If indicated, you must apply to BIS for an export license through the online Simplified Network Application Process Redesign (SNAP-R) before you can export your products.
There are export license exceptions, like low-value or temporary exports, that allow you to export or reexport, under stated conditions, items subject to the Export Administration Regulations (EAR) that would otherwise require a license. These license exceptions cover items that fall under the jurisdiction of the Department of Commerce, not items controlled by the State Department or some other agency.
Deemed Exports
Surprise! You may be an exporter without even knowing it! Deemed exports, or the disclosure of information or services rather than an actual product, is an important issue to pay attention to when exporting. A deemed export occurs when technology or source code (except encryption and object source code, which is separately addressed in the EAR, is released to a foreign national within the United States.
Sharing technology, reviewing blueprints, conducting tours of facilities, and other information disclosures are considered potential exports under the deemed export rule and should be handled accordingly. You can learn how to apply this principle here.
Restricted Party Screenings
Restricted party lists (also called denied party lists) are lists of organizations, companies or individuals that various U.S. agencies—and other foreign governments—have identified as parties that one can’t do business with. There are several reasons why a person or company may be added to a restricted party list. For example, they may be a terrorist organization or affiliated with such an organization; they may have a history of corrupt business practices; or they may otherwise pose a threat to national security.
Restricted party screening (or denied party screening) refers to the process in which a company checks a potential customer or business partner against one or more of the restricted party lists to ensure their potential partners are legally accepted. The primary restricted party lists in the United States are published by the Department of Commerce, Department of State, and Department of Treasury. However, several other agencies produce lists as well. These agencies recommend that companies perform restricted party screening periodically and repeatedly throughout the movement of goods in the supply chain.
When exporting to Australia, it’s imperative you check every single restricted party list every time you export because:
- Fines for export violations can reach up to $1 million per violation in criminal cases.
- Administrative cases can result in a penalty amounting to $300,000 or twice the value of the transaction, whichever is greater.
- Criminal violators may be sentenced to prison for up to 20 years, and administrative penalties may include denial of export privileges.
Export Documentation and Compliance Software
If you’re considering exporting to Australia, Shipping Solutions export documentation software can help you quickly create the necessary documents and stay compliant with export regulations. Register for a free demo of Shipping Solutions software to see how it will revolutionize the way you’re currently creating your export paperwork.
This is one in a series of articles exploring exporting to specific countries across the globe—we previously featured China, the United Kingdom, Japan, Mexico, Canada, India, Brazil, Germany, France, the Netherlands, the EU, South Korea, Singapore, Belgium, and Taiwan.
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