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Jeff Grody

Booming Domestic Firearms Market Crushes Exports – EasyExport Insights™ Monthly Analysis

By EasyExport Insights™ No Comments

If you want to see what happens to U.S. exports of firearms and related products when the American domestic market is hot, look no further than the table below:

Booming Firearm Exports

The table compares the 12-month period that ended January 31, 2021, with the two prior 12-month periods. So, for the most part, it compares 2020 with 2019 and 2018.

The five categories shaded in yellow are completely or heavily military and should be ignored for purposes of this analysis.

Of the remaining 17 categories, which primarily include exports to the commercial market:

  • Exports decreased in 15 of 17 product categories.
  • Exports increased in only two: Autoloading centerfire rifles and spring, air and gas guns.
  • In the 15 categories in which exports decreased, exports dropped from $887 million in the 12 months ending January 31, 2019 to $762 million in the corresponding period ending January 31, 2021, a decline of more than 14%.
  • In the 7 categories with the largest declines, (see table below) exports dropped by 33% overall, from $441 million to $294 million:

Booming Firearm Exports

  • As noted in the table, the largest decline occurred in ammunition for rifles and pistols, where exports decreased by $63 million, from $224 million in the first period to $161 million in the most recent 12 months.

–  What can we learn from the numbers?

What stories do these numbers tell us . . . other than the obvious one that exports of nearly all U.S. firearm products dropped by a lot – 14% — from the 12 months ending January 2019 to the same period two years later.

Why did exports fall?

Is the global market for U.S. non-military firearms, ammunition and related products shrinking? Happily, it isn’t. If one looks back 10 to 20 years, one sees the same phenomenon. U.S. exports go up and down. Today, we’re looking at a snapshot of a down cycle.

Things will turn around. The U.S. firearms market will cool down, product and management attention will be return to the international market and exports will increase again. It has always been that way.

Why is that good enough? Maybe exports shouldn’t shrink when domestic demand rises. Maybe international sales should keep growing, but at a slower pace, when there is heavy U.S. demand.

But why?. . . . Maybe exports should grow just as much as domestic sales in a hot market . . . . Or more . . . . Why is it a given that exports of firearms, ammunition and related products drop when U.S. demand increases? There is no rule that international sales must be down when U.S. sales are up. No requirement that the international sales manager must lose when their domestic sales counterparts are fighting for allocations of the same scarce inventory. No mandate that the international market must be treated as sub-market of the U.S. market.

–  Opportunity

At EasyExport Insights, we scan the numbers every month looking for opportunity for American exporters.

This is what opportunity looks like. There is no reason to think that exports decreased because demand decreased. Demand didn’t drop. Supply did. The products people wanted to buy weren’t on the shelves to be bought. Therefore, the numbers tell us that more than $100 million in international demand for U.S. products in 2020 went unmet.

It’s very easy to respond to the above by saying, “Same as in the U.S.” But it isn’t the same. The U.S. demand that couldn’t be met in 2020 represented growth from the past. Manufacturers couldn’t keep up with growth. In the global market, in contrast, U.S. suppliers couldn’t even keep up with the demand that was already there. That’s our point.

And there’s the opportunity. The numbers tell us all that it is when U.S. demand is highest that the best opportunities exist for strategic positioning in the global market. Can your company build a long-term international strategy to capitalize on that dynamic?

 

How to Instruct Non-U.S. Firearm and Ammunition Resellers to Conduct Screens for Designated Narcotics Traffickers

How to Instruct Non-U.S. Firearm and Ammunition Resellers to Conduct Screens for Designated Narcotics Traffickers

By Firearm Export Sales No Comments

Did you know that if you export non-military rifles, handguns, parts or ammunition for resale in another country, your customer is required to screen its customers against the U.S. Specially Designated Nationals list?

It’s true. It says so right there in the conditions included in your approved Commerce Department export licenses:

The items authorized for export by this license may not be transferred to individuals identified on the Department of Treasury, Office of Foreign Assets Controls (OFAC) Specially Designated Nationals (SDN) List with the bracketed suffixes [SDNT] or [SDNTK]. The SDN List is available at: https://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/sdn_data.aspx.

As an exporter, how should you convey this requirement (we’ll call it the “SDN Condition”) to your international dealers? Do you need to do more than inform them of the requirement?

In this post, we explain the SDN Condition and offer three simple recommendations for fulfilling your obligations. We also include a link to a free video we have prepared for firearm dealers in other countries. You can share it with them. The video gives step-by-step instructions and can display subtitles in any language.

 

 

What Does Your Export License Require You to Do?

When you export rifles, handguns, parts or ammunition for resale under a Department of Commerce export license, you are required to take reasonable steps to ensure that your international customers comply with the SDN Condition. The SDN Condition is included in every export license issued for 0A501 or 0A505 items. That means your customers who resell or otherwise transfer the firearms and ammunition you export to them must screen their customers against the SDN list.

Failure to inform your international dealer customers of this condition of your export license is a violation of the license and can lead to enforcement action under Part 764 of the Export Administration Regulations (EAR).

The need for non-U.S. dealers to comply with the SDN Condition underscores the importance of conducting due diligence before exporting firearms, parts, or ammunition to dealers in other countries. Among other reasons for conducting due diligence, you want to have a basis for expecting your dealers to comply with the requirement to screen their customers.

How Should You Tell Your Foreign Dealers They Must Conduct SDN Screens?

The export license condition does not specify the means for communicating the requirement. What should you do?

Section 758.6 of the EAR says that required destination control statements should be incorporated “as an integral part of the commercial invoice.” Exporters probably could not be faulted if they were to communicate the SDN Condition in the same place, immediately following the destination control statement, using a statement along the lines of the following:

These items may not be sold or transferred to individuals identified on the Department of Treasury, Office of Foreign Assets Controls (OFAC) Specially Designated Nationals (SDN) List with the bracketed suffixes [SDNT] or [SDNTK]. The SDN List is available at: https://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/sdn_data.aspx.

There is no limit to how many ways you are permitted to draw your customers’ attention to the importance of conducting SDN screens. Feel free to use multiple means, such as inserting the requirement in dealer contracts, quotes, bids, pro forma invoices, your website or any other appropriate communication.

The test to apply is, “How can I most effectively tell my customer that it must conduct SDN screens?”

Is Additional Action Required?EasyExport now connects U.S. exporters to 82 Countries.

To be on the safe side, it is prudent to view communicating the requirement to conduct SDN screens as fulfilling only part of your obligation as an exporter.

Consider what else you can do to ensure that your foreign customers conduct SDN screens when required.

When you can, providing compliance training and resources to international customers is always a good idea. To make this easy for EasyExport™ customers, we have posted a training video for the dealers they sell to in other countries. You are welcome to use it, too. Viewers can use the Closed Caption feature to display auto-translated subtitles in any language. EasyExport does not process ammunition exports, so ammunition is not referenced in the video, but the instructions are equally applicable to foreign resellers of U.S.-origin 0A505 ammunition.

Keep Records

Record-keeping is always important in the compliance field. Take steps to ensure that you can show the U.S. Government the actions you took to ensure compliance by your customers with this license requirement. Also tell your customers to keep records so they can prove they did what they were supposed to do.

Worried you won’t do things right? If you sell firearms, parts, accessories, or optics online and want a safe and cost-effective way to export them without making mistakes, EasyExport probably can help. Schedule a call to learn more.

SCHEDULE A CALL
Export-Sound-Suppressors-from-the-United-States

5 Things to Know About Exporting Firearm Sound Suppressors to Civilian End Users

By Firearm Export Sales No Comments

The Department of State relaxed export controls on sound suppressors (aka silencers) in July 2020. The Directorate of Defense Trade Controls (DDTC) now authorizes exports of sound suppressors to non-governmental end users, ending a policy that had been in place since 2002.

DDTC’s requirements for DSP-5 licenses for exports of suppressors to civilians are stringent, however.

Here are 5 things you need to know if you want to export suppressors to civilian end users:

  • Exports of sound suppressors continue to be governed by the ITAR
  • Foreign dealers cannot import suppressors for stock; a separate DSP-5 license is required for each end user
  • A purchase order, import permit, DSP-83, and end user statement are required with every license application
  • Consider using a DSP-73 to supply dealers with samples
  • Limit the number of suppressors you export to any one end user

Exports of Sound Suppressors Continue to be Governed by the ITAR

Sound suppressors did not move to the Commerce Department in March 2020 along with other non-military firearms, parts and accessories. Suppressors remain on the United States Munitions List (USML) and continue to be classified for export purposes as Category I (e) defense articles. As such, suppressors remain subject to the International Traffic in Arms Regulations (ITAR).

This means that it is expensive to export suppressors. Exporters of suppressors are required to register with DDTC — $2,250 per year. (Manufacturers of suppressors are required to register even if they don’t export.) Exporters also must pay a fee of $250 per license if they obtain more than 10 ITAR licenses in a one-year period.

In addition, the more complex ITAR licensing requirements apply to licenses to export suppressors. DSP-5’s are required for permanent exports and DSP-73’s for temporary exports. Unlike Commerce Department licenses, ITAR licenses require that supporting documents be attached (more on this below).

Dealers Cannot Buy Suppressors for Stock; A Separate DSP-5 is Required for Each End User

In a major blow to the commercial potential for sound suppressors overseas, DDTC will not approve DSP-5 licenses for shipments to dealers or distributors who want to stock suppressors for resale.

Dealers in other countries are permitted to aggregate orders from their customers, but they must collect a lot of paperwork for each resale. Every ultimate end user needs to fuss with the supporting documents that are required for DSP-5 licenses. 

Here’s how it works if a dealer places an order for one or more end users.

  • The purchase order from the dealer to the U.S. exporter must not only identify the suppressors being purchased but also the customers to whom each suppressor will be resold. So, all the suppressors ordered by the dealer must be pre-sold.
  • The dealer collects the supporting documents (see below) for each ultimate end user and sends them to the exporter.
  • The exporter applies for a separate DSP-5 for each ultimate end user.
  • When all the licenses have been approved, the exporter can ship.
  • From a DSP-5 standpoint, the dealer is a foreign consignee identified in Block 16, not an end user in Block 14. The dealer’s customer is the Block 14 end user.

Obviously, with these rules, selling to distributors outside the U.S. for resale to dealers is out of the question.

A Purchase Order, Import Permit, DSP-83 and End User Statement Are Required with Every License Application

Required supporting documents for each DSP-5 license include the following:

  • A purchase order on the letterhead of the purchaser. If a dealer is making the purchase, the purchase order should be issued on the dealer’s letterhead or the dealer’s normal PO form if it includes the dealer’s name and address. In addition to listing the items being purchased, the purchase order must identify by names the ultimate end user of each suppressor.
  • An import permit issued by the appropriate authority in the destination country. If a dealer is purchasing for multiple end users, there should be a separate import permit for each end user because there will be a separate license for each end user.
  • A properly completed Form DSP-83 is required. If a dealer is aggregating orders, there should be a separate DSP-83 for each end user. The dealer should sign Block 6. The end user signs Block 7. The exporter signs Block 9 last. Exporters should remember that they are not permitted to change the DSP-83 after it has been signed by any other signatory.
  • Each end user (not the dealer) should sign an end user statement stating the intended use of the suppressor.

Licenses to Provide Dealers with Samples and Display Items

DDTC will approve DSP-5s to supply foreign dealers with display and demonstration suppressors but these items cannot be resold. They can be used only for display and demonstration purposes.

EasyExport now connects U.S. exporters to 82 Countries. The required supporting documents are the same as those described above with the following changes:

  • The purchase order will list the dealer itself as the end user. The PO should state the intended use of the suppressors as display and demonstration items and should describe with specificity how they will be safely stored when not in use.
  • The import permit should be for the dealer’s own use.
  • The dealer should sign the DSP-83 in Block 7. Leave Block 6 blank.

Although DDTC will approve a DSP-5 for display and demonstration suppressors, consider using a DSP-73 temporary export license instead. The problem with using a DSP-5 is how to deal with the disposition of the suppressors when they are no longer usable for display and demonstration purposes. The DSP-5 does not allow the dealer to transfer them and if a DSP-5 was used to send them out in the first place, it will be hard to ship them back to the U.S. or to authorize a transfer in the foreign country. The exporter remains responsible for the ultimate disposition under ITAR Section 127.1(c) even when a DSP-5 has been used to permanently export the suppressor. So, if the dealer sells the suppressors at the end of their useful life without DDTC authorization, that’s the exporter’s problem.

You may make it easier to close the loop properly if you use a DSP-73 temporary export license, instead of a DSP-5. In most cases, a term of two or three years will cover the useful display and demo life of a suppressor, but you can select a term as long as four years. Before the license expires, the dealer should ship the items back to the U.S., where they can re-enter under the authority of the DSP-73. You can obtain a new DSP-73 to ship current-model replacements to the dealer.

Supporting documentation for a DSP-73 is a little different from the documents required for a DSP-5. Here is a quick summary:

  • In lieu of a purchase order, prepare a letter for the dealer to put onto its letterhead, sign and send back. The letter should request the suppressors (identify them specifically in separate line items, as would be the case with a PO, with description, number of units, unit price and extended price). In the letter, the dealer should state that the items will be used only for display and demonstration, won’t leave the dealer’s possession and will be stored safely and securely when not in use. Describe how and where they will be stored. For your own benefit, the details of when and at whose expense the suppressors will be returned to the exporter should be stated.
  • An import permit is required, just as would be the case with a DSP-5. 
  • A DSP-83 should be obtained, completed the same way as it would for a DSP-5 for an export to the dealer as ultimate end user.
  • The letter that takes the place of a purchase order will substitute for an end user statement.

Limit the number of suppressors you export to any one end user

The process described above is so complex and expensive as to tempt foreign purchasers to buy suppressors not only for themselves but also to resell or gift some to others. As noted above, even legitimate dealers legally authorized to sell suppressors are not permitted to buy U.S. suppressors for resale. Individual end users who claim to be buying for their own end use certainly are not allowed to resell.

But the temptation will exist. How can you manage this risk?

When foreign dealers aggregate orders for their customers there is a certain amount of built-in control. Dealers should be reluctant to help their customers do what the dealers themselves can’t do. On the other hand, you’re here and they are over there, so it is hard to be certain that the foreign parties are behaving as they are supposed to.

This points to the importance of thorough due diligence of every commercial party to whom you export a sound suppressor — both dealers and ultimate end users. If all you do is run a restricted party screen through the BIS Consolidated Search Engine or through a commercial restricted party screening product, ask yourself whether a clean search gives you all the comfort you need.

Suppose an end user wants to buy 10 suppressors. That seems like a very nice order indeed from a single individual. But if the ten consist of four units of one model and six of another, is that the type of purchase people would make for their own use? Asking questions of the purchaser will give you answers, sometimes good ones, but that takes time. 

It may be a good idea to impose a strict per-order and annual limit on the number of suppressors any one end user can buy. Good due diligence combined with self-imposed limits can help manage the risk that end users you don’t know and can’t see will buy your suppressors for resale rather than for their own use.

DDTC has said it will limit the number of suppressors it will approve for export to a single end user, as it should in light of its overall posture toward suppressors, but you are the one on the front line. Imposing your own limit would be consistent with your obligations as an exporter under ITAR Section 127.1(c).

Does this all sound too hard? If you make or sell sound suppressors in the United States, EasyExport can enable you to sell them from your online store directly to end users in 15 countries, with more countries to come. Schedule a call to learn more.

SCHEDULE A CALL

New Canadian Data (Part 2) EasyExport Insights™ Monthly Analysis

By EasyExport Insights™ No Comments

We reported in our last issue that the Census Bureau has made some important changes to the way it reports exports to Canada in response to our questions and suggestions.

Analysts now have new visibility into four categories:

  • Exports of revolvers have been broken out from pistols and are reported separately.
  • Exports of autoloading centerfire rifles have been broken out from other centerfire rifles.
  • Exports of pump action shotguns have been broken out from other shotguns.
  • Exports of military rifles used to be reported as exports of military shotguns. Now they are reported correctly, as military rifles.

These changes not only allow us to track exports in four categories, but also increase the precision of the categories that previously contained this data.

In our September issue, we identified seven product categories for which exports to Canada were not being reported. So, where are the exports in the three remaining categories?

New Canadian Data Part 2

–     Centerfire – Bolt Action – Single-Shot Rifles

We believe that exports of single-shot bolt action rifles are included in the published data for Rifles – Centerfire – Bolt Action – Other. The Census Bureau does not disclose its exact methodology for converting Canadian import data into U.S. export data, so this is our best guess.

–     Parts for Military Rifles / Parts for Military Shotguns

We have determined that exports to Canada of parts for military rifles and shotguns are lumped together with exports of parts for large guns and armament in Schedule B category 9305.91.3030.

We have no way to segregate rifle and shotgun parts from parts for heavier weapons. Therefore, we have decided not to report on these two categories for Canada. The data just isn’t there.

­–     Concluding Thoughts on Canada

It is ironic and disappointing that the largest export market is the one for which the published data falls short. We have annotated our Canada report (page 27) to address the three categories for which no data exists.

 View: EasyExport Insights November 2020
 Download: EasyExport Insights November 2020.pdf

Step-by-Step-Instructions-for-Selling-Firearms-Internationally-from-Your-Gun-Store

12-Step Instructions for Selling Firearms Internationally from Your Gun Store

By Firearm Export Sales No Comments

Have you had to turn down a sale to a visitor to your store from another country who wants to buy a gun to take home? Or a potential online sale to someone from another country who wants you to ship the gun?

New U.S. export regulations took effect in March. Now you can sell and ship sporting rifles, pistols and shotguns to citizens of other countries. There are no registration or license fees, but it is important to follow each step of the process carefully.

Follow these 12 steps to export most handguns, rifles and shotguns legally:

  • Ship the gun; In-store transfers are not possible
  • Know your customer
  • Obtain a copy of the buyer’s import permit
  • Price for the international market
  • Determine whether an export license is required
  • Obtain an export license if required
  • Pack with the correct shipping documents
  • Submit an AES filing if required
  • Use a carrier that can deliver to the destination country
  • Let your customer deal with duties, import taxes and other import charges
  • Enter the export sale in your bound book
  • Keep records for five years

1. Ship the Gun; In-Store Transfers Are Not Possible

With few exceptions, ATF regulations do not permit FFLs to transfer firearms in their stores to visitors from other countries. The exceptions are outlined in the instructions for Question 26.d on Form 4473. They do not include sales to foreign visitors to the U.S. who simply want to buy a gun to take home.

If an FFL ships a firearm to another country, however, ATF regulations do not govern the sale. Export regulations do. Export regulations do allow FFLs to ship a gun to a foreign visitor’s home address, as long as you jump through the right hoops, discussed below.

2. Know Your Customer

There is no NICS check for export sales. Instead, you are required to make sure the person you are exporting to is not a sanctioned party prohibited from receiving exports. You also want to satisfy yourself that there are no “red flags.”

Here’s how to do this for an export sale.

First, obtain the person’s passport, check to make sure it looks genuine and hasn’t expired, and make a copy of the photo and personal information pages for your records.

Second, chat with the customer. Try to confirm that the customer is on the up-and-up and that the firearm is legal in the customer’s country. Look for anything that doesn’t seem right. There are many possible red flags that should, if you spot them, cause you to decline to make the sale. One would be an evasive customer who doesn’t want to provide any information. Another would be a customer who knows very little about firearms, especially if that customer wants to buy more than one. The U.S. Commerce Department has posted a long list of other possible red flags. If you are not comfortable that the buyer and the intended use of the gun are legitimate, don’t complete the sale.

Next, visit the export.gov Consolidated Screening List to screen the person’s name against lists of sanctioned persons. You can do this when you leave the room to photocopy the passport. Input the person’s name in the second block, turn “Fuzzy Name” on, leave the Address and Sources fields empty, and select the person’s country of residence and, if different, the country of citizenship (both countries of citizenship in the case of dual citizenship). Then click on Search. If you see “No result” to the left of the Search button, the name has been cleared. In the rare case where a name is returned after you click Search, you would be wise to decline the sale unless you can clearly determine that the name returned is not your customer.

Use the “print screen” feature on your computer to keep a copy of your search, both the completed search form and the “No result” that came back when you clicked Search. Keep the copy of the search with your copy of the person’s passport and the other records of the transaction (see below).

3. Obtain a Copy of the Buyer’s Import Permit

You should obtain a copy of the customer’s import permit for the gun before you ship it. If the customer is in your store, they most likely will need to return home, obtain the import permit and email a copy to you.

A dealer’s license or individual’s firearms permit in the home country is not an import permit. Import permits clearly state that they authorize imports of firearms and almost always specifically identify the firearm(s). If English is not an official language in the customer’s home country, request a translation together with a copy of the import permit in the original language.

Look at the import permit when you receive it. Does it look like an official government-issued document? Check the issuance and expiration dates to confirm that the permit is in effect. Confirm that the name of the importer on the permit corresponds with the name on the passport you copied. (If the customer is a dealer, ask the customer to provide a copy of the dealer’s license. The name on the dealer’s license should correspond with the name on the import permit.)

4. Price for the International Market

It is customary for exporters of firearms to be paid in full before they ship. Many take a 50% deposit with the order and collect the balance, plus shipping cost, before shipment, but after the export license and import permit have been obtained.

There are extra costs associated with exports. It is totally “market” to pass them along to the customer in the price or by adding them to the invoice. In addition to shipping, it is appropriate to add a service charge as compensation for the extra work, such as obtaining an export license. Anything in the range of $100 to $250, on top of shipping, would be in line with what other exporters charge.

That said, there is a silver lining when you export a firearm. FET is not collected on export sales so you can keep that portion of your price. You may decide to let the FET savings substitute for the service charge recommended above.

5. Determine Whether an Export License is Required

You will need to obtain an export license from the Department of Commerce, Bureau of Industry and Security (BIS) if the gun is a rifle, handgun or combination gun. Shotguns with barrel lengths of 18 inches or more can be shipped to 30 countries without a license. You can find a list of the 30 countries at the end of this blog post. Note that Canada is not one of the 30 countries; if you ship a firearm to Canada, will you need an export license.

You can use the following table to determine whether an export firearm license is required for the firearms specifically listed in the table. The table also includes information you will need for the export license (if required), AES filing and shipping labels (discussed below):

Type of Firearm*

Export Classification (ECCN)

Export License Required?

Schedule B No.

Handguns

 

 

 

       Pistols – Semi-auto

0A501.a

Yes

9302.00.0040

       Pistols – Other pistols

0A501.a

Yes

9302.00.0090

       Revolvers

0A501.a

Yes

9302.00.0020

Sporting Rifles

 

 

 

       Centerfire – Autoloading

0A501.a

Yes

9303.30.7010

       Centerfire – Bolt Action – Single-Shot

0A501.a

Yes

9303.30.7012

       Centerfire – Bolt Action – Other

0A501.a

Yes

9303.30.7017

       Centerfire – Other

0A501.a

Yes

9303.30.7025

       Rimfire

0A501.a

Yes

9303.30.7030

Sporting Shotguns (Barrel length ≥ 18”)

 

 

 

       Shotguns – Pump Action

0A502

All but 30 countries

9303.20.0030

       Shotguns — Other

0A502

All but 30 countries

9303.20.0035

       Combination Rifle-Shotguns

0A501.a

Yes

9303.20.0080

* List above does not include the items below. They all can be exported but the mechanics are outside the scope of this post:

  • Any type of firearm not specifically listed
  • Automatic firearms or firearms that shoot caseless ammunition
  • Firearms with caliber greater than .50
  • NFA firearms
  • Black powder or antique firearms
  • Magazines with over 50-round capacity
  • Blank-firing guns
  • Spare parts, scopes extra magazines not boxed with the firearms, sound suppressors
  • Ammunition

6. Obtain an Export License if Required

Export licenses authorize a specific transaction or group of transactions between one exporter and one purchaser. If you do multiple exports that require licenses, you will need separate licenses for each customer.

If the table above says an export license is required, this is how to go about obtaining one.

Start by registering with SNAP-R, the portal for submitting export license applications to BIS. Registration is free. Just follow the instructions here.

After your registration is complete, log in to your SNAP-R account. Login will take you to a screen that says “Welcome to SNAP-R.” In the menu on the left side, click on “Create Work Item.”

At the “Create Work Item” screen, make sure that the dropdown menu says, “Export License Application.” Then insert a reference number you want to use for this license (you can choose any reference number you want) and click Create. That takes you to the license application. Instructions are embedded in the form, but you might want to watch this excellent 7-minute BIS training video for guidance on completing and submitting your export license.

After submission, you will receive an email confirming receipt of the license application.

You will be notified of the approval of your export license by email. Allow up to 30 days from the time you submit the license, but it is unlikely to take that long. You can check on the status here.

If you have questions, you will probably find the answer at SNAP-R Online Help for Exporters. If you can’t find the answer, you will find a phone number for the SNAP-R Help Desk on that page. Additional BIS user resources are located at the BIS Home Page.

7. Pack with the Correct Shipping Documents

After the export license has been approved, or in the case of shotguns that do not require an export license, the next step is to pack the box.

When packing, be sure to pack the correct item. Do not include extra parts, magazines or optics.

You are required to include certain documents when shipping firearms internationally. You will find detailed instructions here.

EasyExport now connects U.S. exporters to 82 Countries. 8. Submit an AES Filing if Required

If you use USPS or another courier service to ship your gun (as opposed to a commercial freight forwarder), you will need to submit an AES filing prior to shipment. After you submit the AES filing, you will receive an Internal Transaction Number (ITN).

You will need to create a free ACE Exporter Account first. Do that here. After you obtain your account ID and password, click here and follow the instructions to obtain an ITN.

Additional information on submitting AES filings can be found here. A user guide with easy step-by-step instructions can be found here.

If you use a commercial freight forwarder to ship (see below), confirm that the freight forwarder will complete the AES filing on your behalf.

9. Use a Carrier that Can Deliver to the Destination Country

The United States Postal Service (USPS) will accept firearms for delivery to certain countries, including Canada. Click here to check on shipping restrictions that apply to shipments to your customer’s country.

If USPS will not accept your shipment, you can check with the big-name couriers. Historically, they were reluctant to carry firearms, but since the change in export regulations earlier this year, there have been reports that in some cases, past policies may be undergoing changes.

As a last resort, you can use a commercial freight forwarder to arrange the shipment for you. This will work but is considerably more expensive than USPS or private couriers.

Use the table above for the ECCN (export classification) and Schedule B number. If the shipping label asks for the “HS Code,” use the first six digits of the Schedule B number.

10. Let Your Customer Deal with Duties, Taxes and Other Import Charges

Duties, taxes and other import charges imposed by the destination country on the shipment are for your customer to address. They will be collected by the customer’s government after the goods arrive in the destination country.

11. Enter the Export Sale in Your Bound Book

Don’t forget to record the disposition of the firearm in your bound book. Record it as an export sale and enter the name and address of the customer. If you were required to obtain an export license, attach a copy to the record in your bound book.

12. Keep Records for Five Years

Keep a copy of every document or record mentioned or referred to in this article for at least five years from the date you ship. Also keep a copy of the delivery receipt and purchase order or sales order. Keep all the copies together in one folder (except for the bound book).

13. You’re an Exporter!

Congratulations! You’re an exporter.

It will be easier the second time.

Does this sound too hard? If you think you can sell 25 or more firearms or scopes a month from your website to customers outside the United States, EasyExport™ may be the right solution for you. Click here now to learn more and schedule a call.

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New Canadian Data (Part 1) EasyExport Insights™ Monthly Analysis

By EasyExport Insights™ No Comments

We are pleased to report that the Census Bureau has made some important changes to the way it reports exports to Canada in response to our questions and suggestions.

–     Revolvers

Exports of revolvers from the United States to Canada were reported for the first time in the October statistics. For the month of October, we see that exports of revolvers to Canada totaled $278,673, as compared with pistol exports of $130,724 (page 27). Looking at the leading export markets for revolvers (page 6), Canada was the leading export destination for U.S. revolvers in October. Our top-25 destination reports rank markets on the basis of 36-month statistics, so it will take a few months for Canada to rise to the top of that report.

We have not been able to confirm that revolvers were previously lumped into the stats for pistols, but that is likely the case. Therefore, those who track exports of pistols to Canada are likely to see what looks like a significant decline in pistol exports to Canada, but which is merely the result of more accurate data for revolvers.

–     Autoloading Centerfire Rifles

Autoloading centerfire rifles is another category for which data is newly available. This month’s report (page 27) shows exports of $348,703 to Canada in October versus zero in all previous months. Even though this amount exceeds the value exported to any other country in October, it is not quite enough to put Canada in the top 25 export destinations in our table on page 7, which ranks markets based on 36-month totals.

It appears that this category was previously reported as “Other Centerfire Rifles.”

–     Pump Action Shotguns

Exports of pump action shotguns to Canada totaled $380,600 in October, the first month for which statistics for this category have been available (page 27). This amount exceeds the total exported to the 24 other top-25 destinations (page 12) but it will take another month or two for Canada to rise to the top of that report.

­–     Remaining Questions

Behind the Numbers will look at Canada again in January. Several categories for which no data to Canada has been reported in the past are unchanged. These mostly include military products.

In addition, we want to take a final look at Canada in January, after the November stats have been published, to see what other insights can be gleaned that should affect the way you interpret the Canadian data in our reports.

 View: EasyExport Insights October 2020
 Download: EasyExport Insights October 2020.pdf

Issues with Canadian Data – EasyExport Insights™ Monthly Analysis

By EasyExport Insights™ No Comments

We have discovered some issues with the U.S. Government export stats for Canada.

If you read or use our reports, please read this column. The Canadian issues are significant. We expect to resolve them, but, until then, you will want to understand them to give proper weight to our reports.

–     The Problem

In EasyExport Insights, we report on exports of 22 categories of firearms and related products. The data we use is published monthly by the U.S. Census Bureau.

We recently discovered that the Census Bureau data does not include exports to Canada in seven of the product categories we track. Not only that, the data that is not included in those seven categories appears in other categories, inflating the exports to Canada in those categories.

The seven product categories that include exports to every country except Canada, and the associated Schedule B numbers, are:

Issues with Canadian Data

Let’s look at revolvers to see the impact. The table showing the top 25 export markets for revolvers (page 8 of this issue) doesn’t include statistics for Canada. Canada may well be the number one market for revolvers exported from the United States but, whatever, the actual volume of exports is, the published data says it’s zero. No exports of revolvers at all to Canada, according to the published data.

We think, but aren’t yet certain, that revolvers are lumped in with pistols, thereby artificially inflating the volume of pistols exported to Canada (see page 7).

So, the published data understates U.S. exports of revolvers to Canada and overstates U.S. exports of another category, probably pistols.

Revolvers are just one example. A similar phenomenon is occurring with each of the other six categories.

–     How Could This Happen?

This issue traces to the way the Census Bureau determines exports to Canada.

In the case of every country except Canada, the published export data comes from AES filings submitted by exporters when their products leave the U.S. In AES filings, products are identified by 10-digit Schedule B numbers. The Census Bureau counts the products and values by Schedule B number, publishes the data and we turn that data into our reports.

AES filings are not used to calculate exports to Canada. Instead, when determining how much product – of any type – the United States exports to Canada, the U.S. Government measures the amounts received by Canada rather than the amounts that left the U.S.

In theory, that shouldn’t matter. The amounts leaving the U.S. to Canada should equal, more or less, the amounts entering Canada from the U.S. They probably do.

But the United States categorizes products one way in its 10-digit Schedule B system and Canada categorizes the same products differently in the 10-digit Harmonized Tariff System (HTS) it uses to measure imports. The first six digits of the U.S. Schedule B product categories are identical to the first six digits of the Canadian HTS codes for the same categories. However, the two systems use very different approaches to assigning the final four digits.

Therefore, when it compiles statistics for exports to Canada the Census Bureau translates the Canadian 10-digit HTS data into the correct 10-digit Schedule B categories.

At least, they try to.

Thinking it would be simple, we attempted to do it ourselves. In a few cases, it wasn’t hard. With respect to the others . . . well . . . after spending hours poring over the numbers, we threw our hands up. In a number of categories, it can’t be done, at least not without making a few judgments/assumptions/guesses. The Census Bureau makes them but we don’t yet know what they are.

Further work is underway. We expect to get to the bottom of this and will report back in a future issue of EasyExport Insights.

–     How to Interpret Our Reports for Now

For now, we recommend that you take the following into account when using our reports:

  1. When viewing our Worldwide Exports table (page 5), you can be comfortable that the bottom row is accurate. Regrettably, until we sort this out, there is a risk that every other number in that table is either too high or too low. We believe that in some instances the errors could be material.
  2. Every bar and dollar amount in the Worldwide Exports graph (page 6) is potentially off, high or low.
  3. In the 22 tables that show the top 25 destination countries for each product category (pages 7-28), take the following into account:
  4. You can take the data for every country other than Canada at face value.
  5. If the table contains data for Canada, the Canadian numbers could be accurate, or high, or low.
  6. If the table does not contain a row for Canada, that’s almost certainly because the Canada data for that product is rolled into another product category. The absence of exports of a product category to Canada does not mean there were no exports to Canada or that Canada was not in the top 25 destination countries.
  7. The bottom row in every table is somewhat off due to the likely under- or over-inclusion of data pertaining to Canada.

–     Apology

We apologize for not catching this sooner. The underlying mistake isn’t ours, but we bring our reports to you in the belief that they are substantially accurate, and we want you to feel comfortable relying on them.

When we began publishing EasyExport Insights in July 2020, we conducted an analysis of the accuracy of the data we use. The results are reported in EasyExport Insights No. 2. We uncovered some minor issues, discussed in that issue, and we did learn that the Census Bureau’s export data for Canada is derived from Canadian import data. We didn’t see how difficult it is to align the Canadian and U.S. 10-digit codes until we tried to do it ourselves.

As noted above, the story doesn’t end here. We do believe it will be possible to bring you better data for Canada soon.

No More Product Spotlight Reports

We have discontinued our Product Spotlight feature. We concluded that our monthly reports on the top 25 markets for each product category do a good job (leaving the Canada issues aside) and that the Product Spotlight feature wasn’t adding much value.

New Zealand Added to Country Spotlight

In this issue, we add New Zealand to the countries we will follow every month. Please see pages 29-30 for the last 36 months of exports to New Zealand for all 22 product categories.

 View: EasyExport Insights September 2020
 Download: EasyExport Insights September 2020.pdf

international firearms marketing data

The 6 Keys to Using Data to Drive International Marketing of Firearms

By Firearm Export Sales No Comments

Suppose you knew that the countries with the best prospects for increasing international sales of your products were Canada, Australia, Germany, New Zealand and France.

Would you know how to translate that information into sales?

We’re not international marketing experts, but we do generate monthly market research reports about exports of U.S. firearms and related products. How international market data can be used to generate sales is of great interest to us, so we will pass along what we have learned from the experts.

Target the Best Markets

For starters, it’s important to recognize that “the international market” is a collection of markets. Each country is a unique niche, with its own laws, culture, history of firearms usage and opportunities for sport shooting.

Publicly available market data can help you identify and prioritize the countries that are likely to offer the best opportunities for growth. That’s the first step in finding the users of your products and honing your messaging to them.

EasyExport Insights (www.easyexport.net/insights) is a free monthly downloadable report that provides detailed export sales statistics for 20 categories or firearms and related products.

Use EasyExport Insights to identify the international markets in which your products are likely to sell best.

Take Control of Your Brand

American exporters of firearms have traditionally relied very heavily on their international distributors, dealers and representatives to establish their products’ position in international market. There hasn’t been a good alternative, so this approach has made a lot of sense.

Now there are better alternatives that give you the power to control your brand in international markets in much the same way you do in the U.S.

In the U.S., your distributors and the dealers who stock and promote your products are your valued distribution partners, but you and the users of your products define your brand. You have the ability to do the same in thing in international markets.

Think Online

The Internet is the source of your new power to control your brand internationally.

Using market data to target a small number of the most promising international markets, you can employ search engine optimization strategies and social media (like influencer marketing) to reach and engage dealers and end users of your products.

Start SmallEasyExport now connects U.S. exporters to 82 Countries.

If you know which markets are the ones where you are most likely to succeed, choose a small number, perhaps the top two or three. Implement your international digital marketing strategy only in those countries at the outset.

Learn on a small scale what works and what does not before scaling up.

Localize

Reach your market in the countries you target by creating an online presence in those countries. International marketing experts call this “localization.”

Did you know that Google’s “search engine” actually consists of more than 200 search engines? The searches that lead U.S. customers to your .com website won’t do the same for potential customers in Australia searching on google.com.au. If you want Australian customers to find you easily, you need to acquire a .com.au domain.

Establishing a localized presence in an international market involves more than acquiring a local domain. The local domain is used to create a gateway to your U.S. website. The gateway uses the local language and culturally tuned messaging to speak to your local audience in ways that will be meaningful to them.

Partner with Marketing Experts

There are talented people who can help you develop international digital marketing programs that fit your budget.

If your team already “gets” digital marketing in the U.S. market, you have the first piece in place. On the other hand, if you want some fresh ideas on how to market more effectively online, Garrison Everest’s Josh Claflin, a digital firearms marketing veteran, has posted a collection of thoughtful pieces on digital marketing strategies for the firearms industry.

To learn more about the international aspects of digital marketing, you will find everything you might want to know in the IBT-Online video library. This fantastic resource will open your eyes to the potential benefits of localizing your website and the relative ease with which it can be done in targeted markets. The videos are free, of course. If they lead you to action, IBT-Online can help you design and implement an international digital marketing strategy with very affordable service packages. They also can show you how to use state-administered STEP grants to cover a portion of the funding to get you started.

Do you want to use the best international market data to drive your international marketing? EasyExport subscribers have exclusive access to reports drawn from the EasyExport system that enable them to understand the purchasing preferences and “buyer personas” of the people who buy their products and similar products. Schedule a call to learn more.

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Firearm Exporters: Take These 6 Steps to Prepare for a Visit from the Office of Export Enforcement

Firearm Exporters: Take These 6 Steps to Prepare for a Visit from the Office of Export Enforcement

By Firearm Export Sales No Comments

If you export firearms, you could receive a call at any time from the U.S. Office of Export Enforcement (OEE) asking to visit your company.

Do you know what how to respond?

Here are 6 recommendations.

Say Yes

If you export firearms, it is a very good idea always to be ready for a visit from government regulators or law enforcement.

OEE generally calls to request and schedule meetings. Say yes but schedule the meeting a week or two out so you have time to prepare. The meeting should take place at your facility, not off-site.

If OEE calls in advance to schedule a visit, assume that they are not coming to arrest you or to execute a search warrant. If that were the case, it is unlikely they would give you a heads up.

Much more likely is that the visit is part of OEE’s normal outreach to industry. These visits are intended to be, and can be, very helpful to you as an exporter.

Consider Whether To Contact Legal Counsel

The first thing to do after setting the meeting date and time is to consider whether to bring in legal counsel. If your company has an export compliance program and you believe that your export business is being conducted lawfully, you probably don’t need your outside counsel at the meeting, but you may want to check with your counsel anyway for peace of mind. If your company employs attorneys, then you should ask one of them to join you.

The analysis of whether to bring in counsel is not the same if you have no export compliance program or, worse, if you know that your organization is not following the rules. In either of these cases, it is wise to give legal counsel a chance to help you prepare.

Also, if OEE agents show up unannounced with a search warrant, call your attorney immediately and do nothing until you have spoken with counsel.

Most practicing attorneys are not familiar with firearm export regulations. If your attorney is among them, consider contacting Phil Milks, Johanna Reeves, Scott Braum or Camden Webb.

If you engage legal counsel, implement the recommendations below only as directed by your attorney.

Prepare Yourself to Discuss These 6 Topics

If you will be meeting with OEE, you want to be prepared to discuss these 6 topics:

  • The products your company exports
  • The foreign recipients to whom you ship
  • The countries to which you ship
  • The end uses for which customers outside the U.S. purchase your products
  • Your export compliance program
  • The location of your export records and the name of the person responsible for export record-keeping.

If you are knowledgeable about these topics, you can go into the meeting with confidence and you will convey a positive impression.

Check the State of Your Export Records

Your company is required to retain records of firearm export transactions for 5 years and they should be easy to locate. These are the most important records for each transaction:

  • Purchase order and any other purchase documents (e.g., sales contract, letter of credit)
  • Export license, if required
  • Export license decrementation record, if applicable
  • Record of usage of Low-Value Shipment (LVS) license exception and other license exceptions, if applicable
  • Signed end-user statement
  • Import permit from purchaser, if required
  • Destination control statement
  • Packing slip
  • Commercial invoice
  • Warranty certificate, if applicable
  • Air waybill
  • Shippers letter of instruction, if applicable
  • EEI submission via AESDirect, including ITN
  • Delivery confirmation
  • ATF Form 9, if applicable
  • Denied party screens on parties to the export, including records of any determination that apparent matches were false positives.

You do not need to make these records available to OEE as you would for an ATF inspection. Becoming familiar with the state of your company’s records is simply information you want to have in advance of the meeting. If you discover that your records are incomplete, there’s no need to volunteer that information. Instead, use the discovery of incomplete records as an opportunity to improve record-keeping.

Meeting Day EasyExport now connects U.S. exporters to 82 Countries.

Be sure there are at least two people from your company at the meeting. If you have an export compliance manager, that person should be in attendance and should be at least as well-prepared as you are.

Plan to use a comfortable meeting room in the administrative portion of your facility. You will not be required to provide a tour of any portion of your facility, unless they arrive with a valid search warrant, and there’s no reason to offer a tour. So, assume the visitor(s) will travel from the front door to the meeting room and then back out.

Don’t be alarmed if two agents show up for the meeting and if one of them is from the FBI. That happens and doesn’t necessarily mean anything. Ask for official identification and make a photocopy. If you maintain a visitor record (you should), it is okay to ask them to sign in.

Be aware that the visitors are likely to arrive with quite a bit of information about your export activities based on the AESDirect submissions that you or your freight forwarders have submitted. One reason for the preparation recommended above is to make sure they don’t know more about your export activities than you do.

When you sit down, collect their business cards, introduce your attendees and explain their roles in your company. Then, listen to what the visitors have to say. If you are asked questions you can answer, answer them. If they ask to see any documents or ask you to provide detailed information about one or more transactions, offer to put the information together and email it to them unless you have it handy and want to give it to them right away.

During the meeting you may be asked to contact OEE if you encounter suspicious individuals or transactions in your export activities. Tips can be very helpful to them and they appreciate information they receive from industry.

When the meeting is over, be sure you are clear about anything on which you have agreed to follow-up.

After the Meeting

After the visitor(s) have left, consider whether anything that came up at the meeting warrants seeking legal advice. If so, contact your attorney promptly.

If there’s nothing that requires legal help, then be sure to follow-up on anything on which you agreed to get back to them. If the agent(s) made recommendations, try to implement them.

If the preparation or meeting has revealed weaknesses in your compliance program, fix them. If the weaknesses constituted violations of regulations, consider whether to submit a voluntary self-disclosure.

Sound scary? If you sell firearms, parts, accessories, or optics online and want a safe and cost-effective way to export them without making mistakes, EasyExport probably can help. Schedule a call to learn more.

SCHEDULE A CALL
3-Actions-You-Should-Take-To-Boost-International-Sales-During-The-Year-With-No-IWA

3 Actions You Should Take To Boost International Sales During the Year with No IWA

By Firearm Export Sales No Comments

Smart people turn setbacks into opportunities.

Are you disappointed that this year’s IWA Outdoor Classic was canceled and that the next IWA won’t take place until March 2021? Have you found other ways to hit your international marketing goals for this year?

With IWA not an option, maybe 2020 is a good time to test new ways to connect with international customers and build your brand in the international market. New export regulations took effect on March 9. New doors have opened.

You may find that you can achieve objectives you thought were lost for the year and set yourself apart from the competition.

We have three ideas that are easy and inexpensive to implement. Do them now and you may find that you can turn the loss of IWA into a very good opportunity for your business.

1. Create an “International Booth” on your website.

Companies in the firearms industry miss a big opportunity to build brand loyalty and sales in the international market by treating international visitors the same as domestic customers.

If you want to reach new customers and end-users in other countries, and sell more to your existing customers, one approach might be to cater to needs international site visitors have that your U.S. customers don’t have. Show them you understand their unique needs and that you care about them.

No one does this. Check your competitors’ websites. With the change in export regulations that took place on March 9, it’s okay to put the welcome mat out for your international website visitors. Be among the first.

Here are some suggestions for your international booth:

  • Consider adding an “International” menu at the top of the page, where the important stuff goes. That by itself sends a good message. Most websites speak to international visitors from the bottom of the page.
  • Might it help to create a landing page for visitors to your website from other countries, a home page just for them that identifies the resources you provide for them, with links? If you like the idea of an international booth, this is where it would go – a background graphic with links to the resources mentioned below and others.
  • Give visitors an overview of which of your products are available in the international market and which aren’t. Help them avoid spending time on products they can’t buy.
  • If you ship directly to international end-users, tell them that you do and how to make purchases through your website. If you ship only to certain countries, make it easy for international visitors to check whether their country is among them. If you sell only through dealers, identify the dealers.
  • If you are soliciting new dealers or distributors, say so and tell them what to do next.
  • Create an “international sales and support” page. Post dedicated “international customer support” and “international sales” email addresses. Train international specialists on your product support and sales teams. Maybe develop and post a set of FAQs for international firearm customers.
  • Post your international terms of sale here so they’re easy to find.

There are lots of ways to implement these suggestions and other ideas you will come up with. The point is to make it clear that you are enthusiastic about the people in other countries who are looking at your products and that you are eager to help them learn more.

Action item: Schedule a meeting of your team or designate an individual in your organization to create an international booth for your website. Set an implementation deadline in 2020.

You can improve the face you show the world and drive more sales.

2. Explain how your company is using the new export regulations to make it easier for international customers to buy your products.

Whether or not you create an international booth on your website, consider rewriting your international shipping policies to announce the ways you are using the new export regulations to make it easier for international customers to buy your products.

Experienced importers of U.S. firearm products react with glee when they learn how much easier it is to do business with American suppliers under the new export regulations.

Show existing and potential customers that it is easy to do business with you:

  • Identify the products you sell that do not require an export license.
  • Demonstrate how the Limited Value Shipment (LVS) license exception lets you fill many small orders without an export license.
  • Tell customers you can obtain export licenses that will cover their future orders, so you can ship right away.
  • Inform large customers that orders for more than $1 million of firearms no longer require Congressional Notification.
  • Let smaller customers know that a formal purchase order is no longer required. An email or online order now suffices.

Yes, doing international business has gotten easier. Don’t keep it to yourself.

Action item: Rewrite your international sales and shipping policies to let international customers know all the cool ways you are making it easier to do business with you.

Think of it this way. The world changed on March 9 when the new export regulations took effect. Other companies are already rewriting their policies. Is doing nothing really an option?

3. Take a hard look at your international distribution strategy and make changes where appropriate.

EasyExport now connects U.S. exporters to 82 Countries. Are the international distribution channels you relied on prior to March 9 the right ones today?

Have you used a network of international distributors or dealers or on U.S. exporters to get your products to end-users in other countries? Maybe you can do more by yourself under the new regulations. The $500 license exemption under the ITAR has driven lots of direct-to-consumer sales into Canada for years. Now there is a $500 exemption that applies to almost all countries. Why not sell direct-to-consumers everywhere now that you can?

Imagine the worldwide direct-to-consumer business you now are able to do in firearm parts, accessories, optics and more. If you sell magazines, for instance, you can fill most consumer purchasers’ requirements yourself for less than $500. No license would be required. The same applies to many, many other products.

You also can reach small dealers, too, more easily today than in the past. Export licensing is simpler and more flexible. Does the $10,000 minimum order requirement you imposed in the past make sense today now that it’s easy to get an export license that covers future orders?

Are your products available for purchase today in all the countries in which potential purchasers exist? If not, how can you find channels into the countries you aren’t reaching today?

We’re not suggesting you disrupt your established distribution system and start fresh. Don’t lose the value you have in your existing channels but do take a hard look at additional ways to grow your international sales by reaching consumers, smaller dealers and other purchasers you couldn’t reach in the past.

Action item: Analyze your current international distribution channels and identify new channels to add this year.

To conclude, there’s no IWA this year, but why not use 2020 to prepare your company to go to IWA 2021 with a dramatically enhanced international profile?

EasyExport can do all the export compliance processing for you. Automatically, instantly and affordably, helping you gain a competitive edge and providing the comfort that your exports are being handled in full compliance with regulations. Please contact us to learn more.

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Photo credit: IWA

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