BECOMING EXPORT READY
When brands start to export products in a commercial capacity, there are a few considerations to be made to ensure compliance with trade and customs policies. We've assembled a few key areas to consider. Please also visit our Country Resources page to access a growing database of useful contacts across the Caribbean.
For most countries, companies/brands wishing to export goods may have to go through a simple export registration process. In some cases, for a special group of products, a separate export license may be required. Usually, there are separate government agencies in your country that handles and regulates these products and their corresponding export licenses. For example, in Jamaica, a special license is needed to export Coffee, some types of Jewelry, and other specialty products.
Some products may also be subject to certain quality standards testing, or certification. For example, in Jamaica, a certificate from the Bureau of Standards is needed for exports of certain processed foods. Please speak with your relevant trade institution to ensure you have completed all the necessary registration, licensing and certification processes.
Visit our Country Resources page for useful contacts across the Caribbean.
In addition to completing the relevant export registration and licensing processes, some products may have to abide by various labelling standards. These labelling standards could vary by product and even by country. If your shipments do not comply with them, your exports may not be allowed to cross the border.
In the US, for example, consumer product labels are governed by a series of federal and sometimes state regulations. Enforcement of these regulations is spread out among several different government agencies, including the Federal Trade Commission, the United States Department of Agriculture, the Food and Drug Administration (FDA), and many more.
The Food and Drug Administration regulates food, cosmetics and medicine, among others. FDA guides for labeling food products can be read here, and generally deal with nutritional information, ingredients, allergen warnings and net quantity. If you are a small business, be sure to check out the Small Business Food Labeling Exemption, described here, which may make your labelling requirements less rigorous. Note that the exemption applies only to the requirement for a nutrition labelling statement, one of the five mandatory statements that the FDA requires on a label.
Guides for labeling cosmetic products can be found here.
The FTC provides business-oriented information about labelling, including the requirements of the U.S. Fair Packaging and Labeling Act. The Act applies to goods that are consumed. A candle is consumed, for example, and is subject to the Act, while the candle holder, which is not consumed, and so is not.
There are other regulations that apply to textiles, clothing, wool, fur and leather. The FTC publication "Threading Your Way Through the Labeling Requirements Under the Textile and Wool Acts", is a user-friendly source of information on these rules.
For clothing and apparel labels, generally, labels on clothing and textiles sold in the US must display the following:
- Trade name of manufacturer or importer
- Country of origin
- Fiber content
- Care instructions
You can find more detailed information about fiber content labels here. For more on care instruction labels, check out this link.
When you export products to foreign countries, they are subject to duties and taxes, which are levied by the importing country. However, the Caribbean region has free trade agreements with several countries, which make your products eligible for duty free treatment. The CARICOM free trade agreement, for example, allows its member countries to ship eligible products duty free to other member countries.
The only way to access these duty free concessions, however, is by applying for a Certificate of Origin for your products. To be eligible for a Certificate of Origin, you need to meet certain requirements in terms of the amount of local ingredients used in your manufacturing process. If you use imported ingredients, you are still able to obtain a Certificate of Origin based on the extent to which you have transformed those ingredients in your production process.
Check with your local trade agency to see if you are eligible for a Certificate of Origin.
When it comes to the world of export and trade, knowing how your products are classified is extremely important. Products are classified globally using something called Harmonized System Codes.
The Harmonized System Classification is a 6-digit standardized numerical method of classifying traded products. HS numbers are used by customs authorities around the world to identify products for the application of duties and taxes, its import and export admissibility and whether or not the good should be physically examined. The first 6 digits of an HS code indicate the same product description for all 190 countries of the World Customs Organization (an independent intergovernmental organization based in Brussels, Belgium), but that does not mean that the rates of customs duties are the same. There are over 5,000 groups of 6-digit codes. Additional digits are added to the HS number by some governments to further distinguish products in certain categories. The HS code is also used to establish the basic rules of various trade agreements such as CARICOM or NAFTA.
In your conversations with your trade/business representatives, discuss ways to ascertain what the HS codes for your products are. This is a useful piece of information to have and will give you the upper hand when analyzing which markets could be good markets for your product.
There is a world of opportunity in global markets for your products, and this opportunity is amplified by free trade agreements. Free trade agreements make some of your products eligible for duty free treatment in various countries, which is a huge benefit. As you know, duty can sometimes add up to over half the cost of the product. In your conversations with the various trade and business institutions, be sure to ask about which Free Trade Agreements your products are eligible for.