can u do it 1.Your firm is contemplating exporting high tech electronic goods ma

Question

can u do it

1.Your  firm is contemplating exporting high tech electronic goods made in the USA  to France, Venezuela and Nigeria. Research  the following:

a) major import requirements/regulations;

b) currency and documentation requirements.

If the risks in any or all countries is severe, what alternatives should you explore in order to do business in these countries?

2.Compare and contrast US export financing program with that of another country. You are free to select any country of your choice.

3.What is your assessment of US export administration regulations. Does it impose burdensome requirements on US exporters.

4.What is the transaction value of a shipment invoiced at $100,000 if the terms of sale are delivered duty paid (DDP),the ocean freight paid is $6,000, the insurance paid is $850, the duty rate is 6.5 percent, and harbor maintenance fee and merchandise processing fee are paid at 0.125 and 0.21 percent respectively?

Explanation / Answer

1) a)major import requirements/regulations to France are

i)Import duties and taxes are due for any firm exporting from US to any of these countries.Duty rates in France can range from anywhere from 0% to 17% while Duty rates are much higher for Nigeria at 0% to 35%.Tariffs for Venezuela can range from 5 to 20% on ad-valorem basis, while custom service tax is 1%.

ii)There is Vat rate of 20% on the goods imported into France and can go lower.There is a minimum threshold below which duty is not payable but the Vat are always payable.Vat in Nigeria is levied at a constant rate of 5% and there are no minimum thresholds.VAT for Venezuela is from 8% to 16.5%.

iii)There are import restrictions which can be product specific and trade specific.There are license requirements for specific products and trades.

b)currency and documentation requirements

i)There should be clear written contract between buyer and the seller including details of what goods are delivered.

ii)Specific documents may be needed to get goods through customs and to work out the right duties and charges and other things as licensing requirements.

iii) Documents related to the the Agreement in transaction,intellectual property rights and settlement of disputes.

iv)Documents related to commercial invoice,bill of lading,declaration of customs.

v)A transaction for doing import in France should be recorded in Euro however a transaction can be recorded in other currency without translating to euro as required by business.Tthe balance of account recording the transaction is to be translated in to euro at the end of the financial year.In Venezuela all the foreign currencies need to inter mediated by the Central bank.Legality of all transactions is enforced under Exchange control law.

Various alternatives needed to be explored to do business in these countries which includes first by setting up subsidiaries in these countries that can eliminate completely the import restrictions.Second standards for the products with the country to which export is made can be harmonised so to avoid disputes.Third firms can lobby so that US govt can negotiate with any of the govt. so that the import restrictions can be made less severe.

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