INTRODUCTION

WHAT FOREIGN CONSULAR AND CUSTOMS REGULATIONS MEAN TO THE EXPORTER

CAUSES OF UNPLEASANT "SURPRISES" IN EXPORTING

Exporting needs to be relieved of the unpleasant "surprises which too often appear after the goods have left the hands of the exporter. Too frequently vexatious delays or costly penalties are experienced in the clearance of export shipments at destination, because of a violation-perhaps quite unintentional-of some detail regulation of the receiving country in connection with the documentation or dispatch of the goods. A large part of the discouragements and annoyances in export transactions, particularly those experienced by occasional shippers to a given market, can be traced to failure to anticipate the exact conditions of doing business with the given country, or the lack of full information as to the procedures and regulations of foreign countries regarding the proper preparation of shipments, the handling of shipping documents, the consular requirements and practices at this end, and the conditions of entry at destination.

COMPLEXITY AND DIVERSITY OF REGULATIONS GOVERNING foreign trADE

In part, the frequency of such "surprises" is attributable to the complex and exacting consular and customs regulations of the various countries, and confusing lack of uniformity as between the requirements and practices of the different countries. From the viewpoint of the government of each country, the regulations and procedures developed through the years may seem entirely reasonable and necessary. Each country, however, has developed its own consular and customs régime with little attention to the means by which other countries attain the same essential object-that of identifying import shipments and protecting themselves against fraud; and only rarely has the question been raised as to whether there might not be one "best method" of controlling a given aspect of international trade.

The result has been a most confusing diversity in the conditions of effecting an identical shipment to different countries. An exporter who has occasion to make shipments to any 10 or a dozen countries not only is obliged to deal with as many different systems of documentation, regulations, and procedures, but also encounters an amazing divergence between the apparently simple regulations which some countries find sufficient to control their incoming trade and the highly elaborated, exceedingly exacting system of documentation and regulation that other countries seem to regard as necessary in order to accomplish the very same purpose.

EFFORTS TO SIMPLIFY CONDITIONS OF FOREIGN TRADING

The exacting and varying character of consular and customs regulations of different countries has come to be recognized as one of the so-called "trade barriers" which the International Chamber of Commerce, the League of Nations, the Pan American Union, and other organizations have been studying, in the hope that by international agreement upon simpler and more uniform standards the conduct of trade between all countries might be facilitated, to the advantage of all concerned. The resolutions of the recent Pan American Conference on Consular Procedure (the text of which appears in the appendix) represent one of the most progressive and promising steps in this direction, and are particularly gratifying because they concern the part of the world where the complaints of the hindrances to trade from the present complexity and diversity of regulations have been most common.

DISPATCHING EXPORT SHIPMENTS NOT A ROUTINE MATTER

It must be admitted, however, that the frequency of such difficulties in exporting is due, in part, to the fact that the intimate business of getting goods into foreign markets is too often regarded as a routine aspect of exporting, and too frequently is delegated to a minor employee who may know something about domestic billing or shipping, and may even add a smattering of Spanish or French to his qualifications, but who does not always possess the special knowledge necessary to plan and dispatch an export shipment so as to insure its avoiding the reefs and shoals peculiar to doing business with each particular country involved. The more enlightened export managers have come to realize that their task is not finished when they have made a good sale. They expect to keep informed on the detailed conditions of making shipments to the various countries, and either themselves supervise closely the preparation of export shipments and documents, or see to it that full and up-to-date information is regularly coming to the hands of their subordinates to whom the actual task is delegated.

CHARTING THE CHANNELS IN THE PROGRESS OF AN EXPORT SHIPMENT

It has long been the desire of the Department of Commerce to be able to furnish the American exporter a sort of mariner's chart of the channels of trade with the various foreign countries, telling him what to anticipate, in order that he might so trim his load, set his sails, and plan his entry as to have the goods delivered in the warehouse of his foreign customer safely, promptly, and with the least additional cost or delay.

The countries of Latin America have been chosen as the first group of countries for which an exporting chart is to be drawn, because they are the nearest to the United States and more firms, therefore, first essay those waters. If this first venture be successful, it is hoped to draw similar charts for guidance in exporting to countries of other parts of the world.

The range of questions which the present manual is intended to cover, and the way in which it can be used to utmost advantage, will perhaps be best illustrated by a brief survey of the successive steps

in the actual shipment of goods to the countries of Latin America and the considerations and requirements which need to be kept in mind. at each step. The manual has been planned to answer these questions by giving for each country the information that an exporter needs to know in order to plan and put through his shipment with confidence.

MARKING AND LABELING FOR EXPORT

When goods are being prepared for shipment is the time to ask: "Has the country to which they are going any special marking or labeling requirements applying to my products?

As is well known, a number of British areas insist that goods bearing any marking or labeling in English be accompanied by a counter indication of origin, such as "Made in the U. S. A." The requirement for origin marking has not yet gained much headway in Latin America, but a number of the Latin American Republics do insist that the statement of quantity or contents on the labels of packages be given in kilos, liters, or other units of the metric system. This requirement can usually be satisfied by affixing an additional label bearing the metric equivalent, but, in whatever form, they need to

appear.

Argentina is at present the only one of these countries which requires also that goods bear an indication of country of origin, as well as of the nature of the product and, in some instances, requiring a statement of the quality or component materials. The new Cuban tariff requires an indication of origin on a few specified products, but does not make the requirement general.

These requirements, where they exist, need to be known before the goods are packed, if vexatious delays and possible penalties at the other end are to be avoided.

PACKING FOR LOWEST IMPORT DUTIES

One of the things that foreign concerns often place to the credit of British and German exporters is that they know how to pack for lowest customs duties. Most countries of Latin America, as well as of Europe, have tariffs made up almost entirely of specific duties— so much per unit of weight or quantity. These duties are, in many countries, assessed upon other than the net weight of the goods; either upon the gross weight, which includes even the external casing or baling, or upon the varying bases known as "legal weight," most often meaning the weight of the goods plus that of the immediate container.

In such instances, if the consignee is to be spared the burden of paying the same rate of duty on the case or other wrapping material as upon the product itself, it is well to know just what is the basis of duty assessment in the given country. It may be worth lightening the cartons or outer containers, or following the example of a number of American concerns who have effected substantial economies by shipping the goods themselves in the very lightest packing consistent with safety, and having the wrappers and other containers go forward separately and pay the lower rate of duty applicable to them as manufactures of paper or wood or tin. The saving in duty may, in many instances, more than offset the cost and trouble of having the

product assembled in the country of destination and put up there in the usual form for retail sale.

Certain of the Latin American countries prohibit shipments in the same package of merchandise dutiable at several rates, subject to the penalty of paying upon the whole shipment the rate of duty applicable to the highest-paying article. This objection can be overcome in some instances by having a full and strict itemization of the contents of mixed packages accompany the shipment.

MEETING FOREIGN DOCUMENTARY AND CONSULAR REQUIREMENTS 1

With a shipment properly marked and packed, there arises the question of documentation, consular procedure, and the like.

Documents.-A distinctive feature of export shipments is the requirement of most foreign countries that they be accompanied by special documents, such as consular invoices and certificates of origin, and usually that these be visaed by the consul of the country. These documents vary from country to country; and particularly in shipments to the Latin countries of America do they need to be filled out with scrupulous care in order to avoid possible delays or fines upon arrival at the country of destination. Failure to comply strictly with the requirements regarding export documents is a most prolific source of difficulties in shipping to Latin America. It may be reassuring to know that most of this difficulty is readily avoidable through clear, advance information, and a little more than the average care in complying with the particular requirements for each country.

The present handbook gives full information, for each country, as to the documents required, how they should be made out, how many copies of each, whether or not they require consular certification, and what to do about it in case an error or omission is discovered.

Description of goods.-The point of perhaps the most importance in making out shipping documents to Latin American countries is the description of goods on the consular invoices. The requirements of many countries with regard to describing the shipment are very strict. Even a full commercial description in the current designation of the trade, which should always appear on all invoices, is not entirely acceptable to some countries. Because of the way in which their tariff is built, some of them require an indication of component materials, particularly if the article involved is not a staple which is likely to be definitely specified in the tariff. Some countries go so far as to require declaration of the merchandise in the phraseology of their tariff, a few even insisting on the indication of the item number of their own tariff schedule. Failure to describe the goods precisely in accordance with these requirements makes the shipment liable to heavy penalties.

This handbook covers the information necessary in preparing shipments to all of the American areas south of the United States, whether republics or colonial possessions. The discussion in this introductory chapter will be devoted primarily, however, to the Latin American Republics, whose requirements and practices appear to present the most difficulties to American exporters.

In general, the consular and customs regulations of the colonial areas are much simpier, and are built on the model of the customs systems of their respective mother countries rather than those of adjacent republics. The only important exception to this statement is in connection with the British colonies. Unlike the United Kingdom, which requires no special document, the British West Indies require shipments to be accompanied by invoices of prescribed form, although no consular certification is necessary.

Declaring weights.-Second only to the description of the goods as a pitfall in export documentation is the declaration of weight. Despite the efforts to bring about standardization, the American countries are a long way from uniformity in the definition of what constitutes net weight or legal weight, for example, and the usual definitions in the United States are not always a safe guide in foreign shipments. The tendency is growing for definitions of terms possibly lending themselves to ambiguity to appear at the foot or on reverse of the invoice forms; and many consuls are sufficiently informed and friendly enough to be willing to give information and instructions as to the proper preparation of shipping documents. However, these welcome practices or facilities are as yet by no means universal.

Penalties for irregularities.-Errors or irregularities on consular invoices, or other export documents prescribed by the receiving country, make the shipment liable to penalties ranging from a nominal fine to double the duties, and even confiscation. The utmost measures are taken to protect the revenues of the country against wrongful declarations or irregularities, which might possibly result in less being paid to the customs than is lawfully due. In the enforcement of the regulations established for this purpose, the question is seldom raised whether a particular irregularity indicated an obvious intent to defraud, or whether the error might have been purely clerical and unintentional. Fines and penalties imposed for irregularities in documentation are seldom refunded.

These difficulties and penalties may largely be avoided if the instructions and advice given in this manual under the section on documentation for each country are followed. If it is discovered that an error has been made, information is given as to whether the country has provision for letters of correction; if such provision is not available, and an error is not discovered until a shipment has arrived at destination, the section on fines and irregularities gives information as to the regulations of each country in this matter and what recourse there is for appeals or claims.

CONSULAR FEES

All but one of the American Republics require that the invoice or other documents be presented to the consul of the country for certification. For this service a fee is regularly collected, the amount of such consular fee varying widely among the different countries. In about half of the number the fee is a fixed amount, usually ranging from $1 to $5, for the legalization of a set of invoices, or certificates of origin, or bills of lading, often with a reduced fee for packages of small value or on shipments by parcel post. About 10 countries now have their consuls collect their fees for the certification of shipping documents in the form of percentages of the value of the shipment, the percentage usually ranging from 1 to 5 per cent, but going as high as 10 per cent in the case of one country. On shipments to several countries this ad valorem consular fee is collected from the consignee in the country of destination, either wholly or in part. The tendency toward collection of consular fees at destination appears to be growing.