International Legal News: V9N5
Let’s Go Abroad: Temporary Exports and Foreign Trade Shows
For many in the industry, the SHOT Show in Las Vegas may be the firearms trade show they attend. For others, SHOT Show may be just the beginning of the trade show circuit, with plans to attend and exhibit at the NRA Show, Small Arms Review Show or other trade shows around the U.S. While many in the firearms industry tend to focus on the domestic U.S. market, there are dozens of small arms trade shows around the world. For an exhibitor, how does one get product out of the U.S. and back, with a minimum of regulatory and law enforcement hassle?
To start, the U.S. State Department regulates export of most firearms and accessories. A good start to the temporary export process is the DSP-71, Application for a Temporary Export License. The DSP-71 will ask “the 5 w’s”–Who, what, when, where, why and how. Who is hosting the trade show? Where is the trade show to be held? When is the trade show scheduled? Why is the trade show being hosted? Is the trade show focused on the civilian firearms market or the military end user? Finally, how does the exhibitor plan on shipping the firearms to the foreign trade show venue? Being able to answer these questions and having a good grasp on the export process will ease the export application process.
What is going to be exported? Currently, the U.S. State Department will not allow the temporary export of a sound suppressor (or silencer) for exhibition at a trade show. Several licensing officers within the State Department still take a dim view to suppressors, holding the belief that a suppressor is “only good for assassinations.” Although most in the industry will dispute that belief, the State Department is the gate-keeper, and one must follow their policies in order to get an approved export license. Along the same lines, the export of live machine guns can be problematic.
From a policy standpoint, the loss of a suppressor or machine gun overseas could be problematic to U.S. foreign relations and the exhibitor. One may want to consider the temporary export of a dummy suppressor or non-functional dummy machine gun for exhibition at a foreign trade show. The U.S. State Department will allow the temporary export of dummy suppressors and non-functioning machine guns for exhibition abroad.
As part of the DSP-71 process, an import permit should be secured. It is possible to apply for the DSP-71 without an import permit from the destination country, but one should ensure that an import permit is in hand and secured prior to shipping. As one might expect, rules, regulations and laws vary from country to country. What is allowed in the U.S. may not be allowed within a foreign country. Case in point: China takes a dim view of pocket knives that may be opened with one hand–think Spyderco or a similar-style knife. Germany has strict rules about what determines a rifle to be “semi-automatic” and can impose strict fines on the spot if a violating firearm is found within the trade show. Arriving at a foreign trade show often involves a long flight and many sleepless hours. Arriving at the trade show floor to find foreign law enforcement within your booth is not comforting and may be made worse by a lack of sleep and loss of mental acuity. Knowing in advance of what is allowed will prevent headaches and trouble once you’re on-site.
As one might expect, the DSP-71 export license process is only the first step in the process. At this point, working with the show promoter or the freight forwarder designated by the show promoter may be helpful. Is an import permit required? What about a carnet? As discussed within this column in the past, a “carnet” is sometimes described as a “passport for goods.” In simple terms, a carnet works as a bond against import duties and taxes.
When the goods are temporarily imported into the foreign country, the carnet will put any import duties and taxes on hold, pending re-export. If the goods are not re-exported within a timely manner, duties and taxes will be imposed. Thankfully, a carnet is usually good for the length of the trade show and may be renewed–thereby extending the duty-free period. The trade show designated freight forwarder should be able to assist in securing the required paperwork needed for entry into the foreign country.
You’ve secured your temporary export license, shipped the goods via the show recommended freight forwarder, completed the flight to the foreign destination and arrive on-site to find that the firearms have not arrived. Murphy strikes again! In this case, you should have a phone number to contact the freight forwarder’s local agent. In some cases, it may be a U.S.-based employee for the freight forwarder who is on-site. In other cases, it may be an individual based out of the local office. In either event, the freight forwarder’s agent on the ground can assist. In some cases, the cargo may have been held up by foreign customs. In other cases, the cargo may be delayed and is still en route. The cargo may be misplaced within the freight forwarder’s warehouse. In most cases, the cargo will arrive in time for the exhibition. Occasionally, it doesn’t. Continue to work with the freight forwarder until all possible avenues of resolution are exhausted. Foreign customs officers may reject the shipment. In one case, copies of SADJ destined for a foreign trade show were delayed from entry into the country by foreign customs because the magazine depicted firearms; it took a day or two to get the magazines released and to the show floor. It turned out this foreign customs officer had seized every magazine and brochure coming into the show as “Possibly being seditious.” That country’s Minister of Defence found out and sent the local army to retrieve all of the magazines and catalogs, it was a state sponsored show and this was quite embarrassing. In nearly all cases, finding the firearms and retrieving them in person will not be allowed and is not advised.
Occasionally, a foreign end user may seek a demonstration before, during or after the trade show. While this may seem to be a non-issue, be advised that the U.S. State Department will only grant a license for the stated purpose within the export license application. If the export license is granted for exhibition at a trade show, performing an overseas demonstration will not be one of the allowed activities covered by the export license. Often, the U.S. State Department will require a separate export license for a planned foreign demonstration. As one may guess, the applicant will need to disclose who is attending the demonstration, the purpose of the demonstration and why the demonstration is being performed. Speaking to potential end users and buyers early in the export process can save valuable time and avoid trouble later. Worst case, a second trip may be required to perform the demonstration to a qualified buyer.
Finally, although not specific to the temporary export process, one topic bears mentioning. When attending a foreign trade show, use your own badge or credentials. Ensure that your show credentials match your identification. Do not lose your show credentials, do not lend them to colleagues and do not use a colleague’s credentials. During a recent trade show in the Middle East, a small number of individuals were arrested and jailed for using show credentials that did not match their identification. Reportedly, a $5,000 USD fine per person was required to secure release. The U.S. Constitution and many rights that we enjoy within the United States do not apply overseas. Do not risk it. Use only your own show credentials.
Attending a foreign trade show can be rewarding and exciting. Often, exhibiting at a foreign trade show can lead to increased international sales opportunities. Nevertheless, one who is not familiar or experienced with the process (or the venue) may want to consider attending and walking the trade show prior to signing up as an exhibitor. There are pitfalls and hazards to avoid in international transactions. With a little experience and the right team of freight forwarders, foreign agents and/or export consultants can go a long way. Good luck and safe travels.
Mr. Wong is a Washington-licensed attorney. He regularly provides legal counsel to the firearm and defense industry via his law firm, The Firearms Law Group. Mr. Wong also manages Hurricane Butterfly, an import/export company that assists firearm manufacturers, resellers and collectors from around the world to wade through the regulatory quagmire of U.S. import/export regulations. He may be found online at FirearmsLawGroup.com.