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Below, you’ll find a list of some of the most frequently asked
questions we receive from businesswomen about exporting. If you have a
question, first check the answers to these FAQs provided by our
exporting experts. If you can’t find the information you need
here, please contact us with
your question.
You may also want to check out the iFAQ located on Roadmap Online, which takes you through
a brief series of questions that will help determine your needs and
then provide you with a list of the most relevant services.
Q: What are good sources of information related to
exporting?
A: The following are good sources of information related to
exporting:
The Export Information Service. Call 1-888-811-1119 toll-free and a
trained information officer will discuss your export needs and provide
you with appropriate export information, sources and/or contacts. This
service is offered from within your region Monday through Friday from
9 a.m. to 5 p.m. in every time zone in Canada. This service is
provided by the Canada Business Service Centres across the country.
Online Export Information. Exportsource is Canada’s most
comprehensive online source for export information. You can
simultaneously search a number of government Web sites and link
instantly to numerous useful non-government and private-sector
information sources. Several key topics are covered: preparing to
export, researching countries and sectors, marketing and financing,
getting the product or service to market, preventing and resolving
problems, and understanding the global marketplace. www.exportsurce.gc.ca
A Step-by-Step Guide to Exporting. This guide is designed to give you
an understanding of the exporting process and how to assess your
export capabilities, and explains how to plan and execute your first
exporting venture. A Step-by-Step Guide to Exporting is available in
printed or electronic format. www.exportsource.gc.ca/stepbystep
Other sources of information include chambers of commerce, economic
development organizations, industry and trade associations and
Canadian companies that are already doing business in your target
market. Once you have completed your research, Canadian trade commissioners at embassies and
consulates can help you assess your potential in your target
market and provide lists of qualified contacts.
Q: How can I get the best out of a trade commissioner?
A: To get the best out of trade commissioners, give
your best. If they don’t have all the information on your
company, they can’t pass it on to potential buyers. So, provide
detailed information using this checklist of questions:
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What is unique or special about your company, product or service?
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Who are the end users of your product or service? To whom do you
sell in Canada and abroad, and how?
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Which country or regional market are you targeting and why? What do
you know about your target market?
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How do you plan to enter the market: export, licence, joint venture
or investment?
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How would you describe the typical buyer, distributor, agent or
partner you want to work with in your target market?
When do you plan to visit the market?
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Have you considered adapting your company and product literature to
the market at that time?
If you have already provided this information as a registered
member of WIN Exports, the Trade Commissioner Service’s client
database, please let your trade commissioner know.
In addition, be specific about your request. Trade commissioners offer
the following six core services, free of charge: market prospects; key
contact search; local company information; visit information;
face-to-face briefings; and troubleshooting. Ask for these services by
name.
Q: How do I reduce the risks of not getting
paid by a foreign customer?
A: Cash in advance is the most secure option for an
exporter, since it eliminates all risk of non-payment and bolsters
working capital. Unfortunately, few foreign buyers are willing to pay
cash in advance, although some will pay a portion when goods or
services are specially ordered. For services, a retainer might be paid
at the start upon signing a contract, after which progress payments
are matched to deliverables. If you can get cash in hand, however, you
obviously have fewer worries.
Letters of credit provide some measure of security to both the
importer and exporter by relying on banks to receive and check
shipping documents and guarantee payment. By specifying particular
terms, a letter of credit can allow the costs of financing a
transaction to be borne by either the exporter or the importer. Both
sight and term payment provisions can be arranged.
Another way to mitigate risks is by purchasing export insurance
through Export
Development Corporation (EDC). Accounts receivable insurance
covers up to 90% of an exporter’s loss when buyers don’t
pay, and can be used as collateral at the exporter’s bank to
increase working capital.
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Q: When should I use a customs broker?
A: Customs clearance varies depending on how you
export your product or service. For example, when shipping goods to a
wholly owned subsidiary in a foreign country, you are responsible for
taking the goods through customs, transporting, storing and delivering
them. In this case, a customs broker would be necessary. In many
cases, however, the buyer is informed that the goods are being held in
customs, and arranges to have them cleared and delivered.
Customs brokers will:
1) clear your goods through customs
2) prepare customs documentation
3) remit duties owing on exported goods
They are also good sources of information on recent tariff changes and
other customs-related developments.
Q: What does FOB (for “free on board” or
“freight on board”) actually mean?
A: Free on Board (FOB) means the goods are placed on
board the vessel by the seller at the port of shipment specified in
the sales contract. The risk of loss or damage is transferred to the
buyer when the goods pass the ship’s rail.
The buyer has to bear all costs and risks of loss of or damage to the
goods from that point forward. The vendor is responsible for the
shipment until it is loaded on board, and is required to clear the
goods for export.
A buyer will seldom agree to this form of shipment and assume all the
costs and risks.
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Q: Should I use representatives or agents in new international
markets I want to enter?
A: It depends on the product and country but most
exporters use representatives/ agents. This is because they know the
country, they ensure the delivery of the product and the satisfaction
of the customer. They can also help you to build your business. The
Trade Commissioner Service can advise you on the benefits of a
representative/agent in a particular market. This falls under one of
their six core services: market prospects – helping to assess
your market potential.
Q: How and where do I find good local partners and what are
typical payment arrangements?
A: The Trade
Commissioner Service can play a key role in providing you with
advice on good local partners, customers and clients who will advise
you on typical payment arrangements.
Q: With bribery and corruption being a problem in many
non-Western countries in terms of getting importer licences,
distributor licences, etc., how do I learn more about how to
avoid them?
A: The Convention on Combatting Bribery of Foreign
Public Officials in International Business Transactions, negotiated at
the Organization for Economic Co-operation and Development (OECD),
came into force on February 15, 1999. Each signatory government is
committed to criminalizing the bribery of foreign public officials in
international business transactions. Countries that have ratified the
Convention so far include: Iceland, Japan, Germany, Hungary, the
United States, Finland, the United Kingdom, Canada, Norway, Bulgaria
South Korea, Greece, Austria, Mexico, Sweden and Belgium (as of
October, 1999). The Convention requires that bribery of foreign public
officials be punishable by effective, proportionate and dissuasive
criminal penalties.
Canada’s legislation to implement the OECD Convention, the
Corruption of Foreign Public Officials Act, S.C. 1998, c.34
came into force on February 14, 1999. Businesses convicted under this
Act could face heavy fines, and individuals could be sentenced to a
maximum of five years in jail.
A practical guide is available through the Department of Justice
entitled the Corruption of Foreign Public Officials Act. This
is available from:
Communications and Executive Services Branch
Department of Justice
284 Wellington Street
Ottawa, ON
K1A 0H8
Tel.: (613) 957-4222
The guide can also be obtained at http://canada.justice.gc.ca/ (click on Minister and
Attorney General, then scroll down and click on publications).
A copy of the full text of the Corruption of Foreign Public
Officials Act is available under "Government Bills" on
Parliament's Internet site:
http://www.parl.gc.ca/36/1/parlbus/chambus/house/bills/government/S-21/S-21_4/S-21TOCE.html.
Other detailed information can be obtained at the following Web sites:
OECD Anti-Corruption Unit (ACU): http://www.oecd.org//daf/nocorruption/faq.htm - click on
Activities , then select
Initiatives to fight Corruption.
U.S. Commerce Department Office of Chief Counsel for International
Commerce at http://www.ogc.doc.gov/ogc/intlcom/intlcom.html .
Select Chief Counsel for International Commerce; scroll down and click
on Explanatory Papers.
Transparency International, an NGO concerned with corruption in
international business at www.transparency.de.
Q: I think my first export market should be to the U.S., but where can
I find information about the North American Free Trade Agreement and
how it applies to my product?
A: Information on the NAFTA, and the text of the
agreement are available from: http://www.dfait-maeci.gc.ca/nafta-alena/menu-en.asp .
Your customs broker would be a valuable source of information in
determining how the NAFTA applies to your product or service. It would
also be helpful to contact your local Canada Business Service Centre
representatives for information and advice.
Q: If I want to do a trade show in a specific country, how do
I find out which show is best for me in that country?
A: If you know the market you would like to target,
contact the Canadian Trade Commissioner Service at one of
Canada’s embassies, high commissions or consulates in that area.
They will advise you as to which trade show would be the most
appropriate for you to attend. This falls under one of their six core
services: market prospects – notification of upcoming events
(trade fairs, conferences, seminars, trade missions).
Q: Where can I find information on customers in foreign
countries?
A: The Trade
Commissioner Service at Canada’s embassies, high commissions
and consulates abroad provide local company information free of charge
as one of their six core services. They will provide information on
local organizations or companies that you have identified. You will
always be informed of any access charges to specialized databases.
Credit checks are generally referred to specialized agencies.
For market research, trade commissioners can provide names of market
research firms as part of their key contact search service.
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