A common situation that U.S. companies find themselves in is selling product to a U.S. customer, and then being asked by that customer to ship directly to a foreign company. This practice, known as drop-shipping, turns the U.S. company into an exporter and with it they undertake the responsibilities of being the U.S. Principal Party in Interest (USPPI).
When being asked to ship to a foreign company, you should first run all foreign parties to the transaction through all U.S. government Restricted Parties lists (this should also be done prior to shipment) to make sure there are no sanctions on any of the parties. The jurisdiction/classification must also be confirmed and licensing obtained, as necessary. As a reminder, foreign manufacturer’s supplied classifications can assist U.S. exporters in determining the classification, but cannot solely be relied upon. U.S. exporters should review and validate the export classification. Additionally, the destination control statement with the appropriate licensing authority/classification statement should also be included on the Commercial Invoice.
This Blog is made available by Wilmarth & Associates for educational purposes as well as to give you general information and a general understanding of export law and compliance, not to provide specific legal advice. This blog is not legal advice and should not be treated as such. You must not rely on this blog as an alternative to legal advice from your attorney or other professional legal services provider. The information provided on this website is presented “as is” without any representations or warranties, express or implied.