Businesses & Entrepreneurs
Welcome to our dedicated guides for micro, small, and medium-sized enterprises. Here you will find a concise overview of key aspects of international trade.
What do you trade:
Select either the goods or services option and we will provide you with our tailored guides. Our trade guides
are designed to inform you about international trade in ways that are simple and clear for new traders.
Goods
Goods are the tangible products that your business produces and may sell for profit. Examples include products that you can purchase from a store, market, online shop, or any other retailer.
I trade goodsServices
Services are amenities or benefits provided by your business to your consumers. They can only be delivered at a particular moment. For example postal services, banking, insurance, etc.
I trade services
1What should I know before trading goods?
Where should I get started?
View GuideExport Readiness Assessment Guide
Is my business export ready? One of the first questions to consider is why Export? What are the benefits? Research shows companies that export are more profitable, more productive and more innovative than those that do not. Research has shown that businesses are 11% more likely to survive if they export. The reasons for this range from spreading export risk amongst different country markets, to increasing turnover and improving innovation by developing specific services for specific overseas markets. Increased Sales – If you are selling well in your own home market, and your service is in demand, exporting is a way to develop new additional sales in other countries. If your services are in demand at home, then there is likely to be significant demand in foreign markets. Higher profits result from increased sales – If you can cover fixed costs through domestic operations or other types of financing, your export profits can grow very quickly. Economies of scale – You can benefit from the cost savings when you produce and sell more services. The benefits from the economies of scale can be very advantageous. Global competitiveness – The experience your company gains internationally will help keep you competitive in both your home market and in the global marketplace. Domestic competitiveness – Successful exporting companies are often more resilient to potential foreign competition. Reduced risk – If you can sell into several different countries, you are spreading the risk. If you diversify into international markets, you avoid depending on a single marketplace and suffering from any domestic instability. New knowledge & experience leads to innovation – The global marketplace abounds with new ideas, approaches and marketing techniques that could also prove successful in your home market. Adaptations to your service for example leads to new innovations and new service development. Trading internationally not only helps with all of the above, in addition trading globally can boost your company’s profile, reputation and credibility. Is my business export ready? We live in an increasingly interconnected world, which means that businesses of all sizes might receive enquiries from buyers in other countries. An export-ready business is one that has the capacity, resources and management to deliver a marketable service on a global scale at a competitive price. To determine if your business is ready to export internationally you can do your own export readiness assessment. Here is a check list of areas to consider Set clear and achievable export objectives. Develop an Export Plan. Understand your service USPs (unique selling points) in export markets. Formulate a realistic idea of what exporting entails and create a timetable for results. Understand what is required to succeed in the international marketplace. Confirm you have staff in place with the knowledge and skills to trade internationally or are willing to learn Is finance in place to help scale up for export? Undertake market research and decided on the best international target markets. These could be neighbour countries who are part of a trading bloc or developed countries with large populations and large purchasing power. Understand international marketing requirements. Research your competitors – both international competitors but also competitors based in the country which you want to export to. Considered any adaptations that may be required. Understand any cultural and language needs. Research your market entry strategy how, and to whom you will sell to in the export markets: Direct sales to a business or consumer / Intermediary representatives / licensing / foreign direct Investment through establishing a company in your target export market Understand destination country regulations, export and import documentation, customs requirements and procedures. You can also use export readiness assessment tools. A typical export readiness assessment will involve answering questions to determine a final score. This score is then used to help guide businesses through the necessary steps to become fully export ready. See the links for more information. Links to Supporting Information The Canadian Trade Commissioner Service Step-by-Step Guide to Exporting(tradecommissioner.gc.ca) Official Website of the International Trade Administration USA Exporter Assessments (trade.gov) Government of Canada Export quiz Are you ready? (international.gc.ca) Caribbean Export Development Agency 10 Steps to Exporting | Caribbean Export (carib-export.com) Kenya Export Promotion & Branding Agency BrandKE – Guide to Exporting
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Where Can I Find Trade Resources and Get Started?
Where do I start? An essential first step in the export process is ensuring your products are classified correctly. Identifying your product’s Harmonized System (HS) code also helps to find the information most useful to your business needs as you look to trade. The Trade4MSME guide on How Do I Determine My Product’s HS Code, provides detailed information on how to find the right classification. Once you know your HS Code, the internet offers a variety of online tools, platforms, and interfaces that provide relevant trade information. One of these online resources is the Global Trade Helpdesk (GTH) The GTH is a multi-agency initiative that facilitates market research for companies, by integrating trade and business information into a single online portal. It builds on existing trade information services being offered by several international organizations, enabling businesses to access a wealth of global trade resources. What types of information does the Global Trade Helpdesk offer? The GTH allows businesses to explore markets, assess requirements, navigate procedures, and identify partners through its four modules: The first module offers an insight into the target market attractiveness and a snapshot of this market performance and access conditions. The second module helps businesses to assess market access conditions, including tariffs, regulations, and private standards. The third module offers overall guidance on domestic procedures, including time and cost to export, step-by-step procedures, and information related to intellectual property rights. Finally, the fourth module provides relevant contact details for both potential buyers and trade support institutions. Full details are at the GTH site. What trade information tools are integrated into the GTH? Trade Map: analyses global trade flows, export/import performance, international demand, alternative markets, and the role of competitors. Market Access Map: identifies customs tariffs, tariff rate quotas, trade remedies, regulatory requirements, and preferential regimes. UNCTAD (United Nations Conference on Trade and Development) TRAINS: provides data on non-tariff measures at the HS 6-digit product classification across more than 90 countries. Export Potential Map: highlights markets, products, and suppliers with export potential, as well as opportunities for diversification in international markets. Trade Information Portals: Ten countries have their trade information portals linked to the GTH. These portals visualize step-by-step guides to trade procedures. Trade Facilitation Database: analyses the implementation status of the World Trade Organization’s Trade Facilitation Agreement (TFA) and provides information about trade procedures, enquiry points, customs brokers, and single windows. Sustainability Map: highlights business strengths and sustainability credentials to access new markets and preferential credits. ePing Alert notifies businesses about product requirements and facilitates dialogues on potential trade problems at earlier stages. Regional Network Hubs: Business social networks can help businesses reach regional and global clients, suppliers, and investors. For example: ConnectAmericas or Asia-Pacific Economic Cooperation (APEC) MSME Marketplace Rules of Origin Facilitator: enables businesses to find import duties in foreign markets appropriate to their products, as well as identifying detailed rules of origin, potential duty savings and certification procedures. Links to Supporting Information Trade4MSMEs guide How Do I Determine My Product’s HS Code? Global Trade Helpdesk Global Trade Helpdesk Trade map Trade Map – Trade statistics for international business development Market Access Map Market Access Map (macmap.org) UNCTAD TRAINS TRAINS Online (unctad.org) Export potential map Export Potential Map (intracen.org) Trade information portals Global Trade Helpdesk Trade Facilitation database Traders | TFAD – Trade Facilitation Agreement Database Sustainability Map Sustainability Map ePing alert Home – ePing SPS&TBT platform (epingalert.org) Connect Americas About ConnectAmericas | ConnectAmericas Asia-Pacific Economic Cooperation (APEC) MSME Marketplace APEC MSME Marketplace Rules of Origin Facilitator Rules of Origin Facilitator ITC ITC Benchmarking for Trade | ITC Benchmarking for Trade
As an exporter/seller, how do I classify my product for customs purposes?
What should I consider before trading internationally?
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Export Potential Guide for Goods
What is export potential and why is it important for my business? Export potential refers to the likelihood that a company's product or service can be successfully sold abroad.
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Basics of Exporting
What are exports? Exports are defined as both the action of sending goods to another country or customs territory, and the goods themselves.
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Basics of Importing
What are imports? Imports are defined as both the action of bringing goods into a country or customs territory, and the actual goods themselves. For example, imports are goods or services that buyers in one country purchase from sellers in another country. Domestic businesses bring in imports from overseas for many purposes, for example, to access new products that are not available in their home country, or to reduce manufacturing costs. Imports are delivered in many ways. They can be shipped by air, sea or road freight, sent by postal/mail services, or even hand-carried in personal luggage on a plane. The cross-border aspect of international trade means that importing businesses are sometimes required to obtain licenses or permits to clear imports through customs, and to comply with safety standards. Resources that can help businesses get started with importing include local chambers of commerce, industry associations, and trade agencies. Businesses can also access the Global Trade Helpdesk, an online portal that provides information on trade requirements, procedures and relevant business partners. What should I consider before importing? Before importing goods from overseas, business owners should consider a number of factors. The importing process can be expensive, due to the need for transportation, insurance, foreign exchange, and other steps. For example, some or all of the import process will require the importing company to contract third party service suppliers such as: customs brokers, currency dealers, translators, freight forwarders Businesses need to incorporate these cost considerations in their cash flows, and in addition, consider supplier reliability. Businesses should identify dependable and reliable suppliers that can provide the necessary services while also fulfilling quantity, quality, and regulatory requirements. What are the key practical steps for importing? Before importing, businesses should check the steps required and any relevant prohibitions or import procedures for the item being considered. Practical steps that importing businesses may consider include: Finding a foreign supplier: One way to start is by consulting with your local chamber of commerce, trade agencies, and business network about possible suppliers. You can also identify potential trade partners and business contacts at trade fairs and events organized by business support organizations. Online marketplaces are also an important way to connect importers and exporters. TheTrade4MSME guide on Selling Abroad Online also provides additional information. Reviewing import conditions, duties, and compliance requirements: Duties are tariffs applied to the planned imports the Trade4MSME guide on How do I determine my product’s HS code contains more detailed information on how various products may attract different rates of duty. Compliance requirements include: health safety environmental technical regulations that certify products and help standardize certain products within a country. registration and marketing rules for engaging in the importing process also need to be considered. Organizing sales by defining contractual liabilities with foreign suppliers for the delivery and insurance of imports: In the case of importing goods, contracts can also specify transport and shipment conditions see the Trade4MSME guide on Logistics for more information. Preparing all required paperwork for the border: This may include: presenting a customs declaration to the national customs authority, preparing a commercial invoice, insurance and transport documents, certificate of origin, import license, or other documentation. Links to Supporting Information Global Trade Helpdesk a multi-agency initiative jointly led by ITC, UNCTAD, and the WTO Global Trade Helpdesk Canadian Small Business Development Center – Guide to Imports Importing Guide European Commission Guide to Imports – Checklist of 4 Steps to Import a Product Guide for import of goods | Access2Markets Trade4MSMEs guide Selling Abroad Online Trade4MSMEs guide How Do I Determine My Product’s HS Code? Trade4MSMEs guide Logistics
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Standards
What are Standards? The formal definition of “standards” from the International Organization for Standardization (ISO) and its sister organization, the International Electrotechnical Commission (IEC) is...
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Voluntary sustainability standards
What are voluntary sustainability standards (VSS)? Voluntary Sustainability Standards (VSS) are a set of standards which aim to encourage...
As a trader, do any tariffs or trade measures apply to my products?
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Tariffs and Taxes at the Border
What are tariffs? Tariffs are a tax or duty that is applied to goods upon import or export. Import tariffs are paid by the importer, or buyer, and export tariffs...
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Non-tariff Measures
What are non-tariff measures? Non-tariff measures are policy measures that can potentially affect traded goods by changing their quantities, prices, or both. The purposes of non-tariff measures include the protection of public health, or the environment, and may imply information, compliance, and procedural costs. These measures can apply to both imports and exports and are divided into 16 categories. The United Nations Conference on Trade and Development (UNCTAD) provides a full list of non-tariff measures and their definitions. What are the different types of non-tariff measures? Below is a table with broad categories of non-tariff measures that you may encounter. The first two, A and B, apply to importers, or buyers, and item P at the bottom of the table applies only to exporters, or sellers. It is important to note that some of these, such as quotas and trade-related investment measures, are prohibited under World Trade Organization (WTO) rules except for specific circumstances. For more details, please see the WTO’s General Agreement on Tariffs and Trade (GATT). Technical measures on imports A Sanitary and phytosanitary (SPS) measures: These include measures to restrict substances, ensure food safety, and prevent the dissemination of diseases or pests. (See guide on SPS measures) B Technical barriers to trade: These relate to product, technical, or quality requirements. They also include measures on labelling and packaging. (See guide on TBT) C Pre-shipment inspection and other Customs formalities: These involve other technical measures. Non-technical measures on imports D Contingent measures: These include antidumping, countervailing, and safeguard measures. E Licensing and quotas: These also cover quantity controls and other related restrictions. F Price control measures: These affect the prices of imported goods. G Finance measures: These restrict payment of imports and terms of payment. H Competition measures: These grant privileges to one or more economic operators. I Trade-related investment measures: These impose local content or export conditions on investment. J Distribution restrictions: These regulate the internal distribution of imported products. K Restrictions on post-sales services: These restrict, for example, the provision of accessory services. L Subsidies and other forms of support: These include financial transfers to enterprises, individuals, or households. M Government procurement restrictions: These restrict bidders from selling products to a foreign government. N Intellectual property: These involve restrictions or rules related to intellectual property rights. O Rules of origin: These are criteria involving the origin of products or their inputs, which can affect whether these are subject to restrictions, duties, or other measures. P Export-related measures: include export quotas and other export prohibitions. How can I start identifying non-tariff measures? Chambers of commerce, industry associations, and trade agencies may provide online portals with lists of non-tariff measures applicable for your products. Businesses can also identify trade restrictions in their targeted markets by using four available online tools, described below: Market Access Map: This database features specific non-tariff regulations that apply to exports or imports of products, as well as a tracker of temporary trade measures put in place in response to COVID-19. Trade Analysis Information System (TRAINS): The TRAINS database provides an exhaustive list of non-tariff measures available for more than 160 countries, covering more than four fifths of world trade. Global Trade Helpdesk: The Global Trade Helpdesk provides an overview non-tariff measures coming from the Market Access Map and TRAINS, as well other information on rules of origin, trade statistics, and related procedures for importers or exporters targeting foreign markets. World Integrated Trade Solution (WITS): The WITS presents country profiles on non-tariff measures by type. Links to Supporting Information The United Nations Conference on Trade and Development (UNCTAD) provides a full list of non-tariff measures and their definitions International Classification of Non-tariff Measures – 2019 edition (unctad.org) World Trade Organization (WTO)’s General Agreement on Tariffs and Trade (GATT) WTO | legal texts – Marrakesh Agreement Trade4MSMEs guide Sanitary and Phytosanitary Measures Trade4MSMEs guide Technical Barriers to Trade International Trade Centre ITC Market Access Map UNCTAD TRAINS International Trade Centre ITC Global Trade Helpdesk World Integrated Trade System WITS
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Sanitary and Phytosanitary Measures
What are sanitary and phytosanitary (SPS) measures? SPS measures consist of laws, decrees, regulations, requirements, and procedures that countries adopt to protect human, animal, or plant life or health against certain risks. These measures generally aim to promote food safety and protect against potential risks from cross-border spread of contaminants, diseases, and pests affecting animals and plants. Examples of SPS measures include: Requirements for products to come from disease-free areas; specific treatment or processing of products; thresholds for pesticide residues; use of certain additives in food. SPS measures apply to domestic foods, local animals, and plants, as well as foreign products. For more information, see the link below to the World Trade Organization document on Understanding the WTO Agreement on Sanitary and Phytosanitary Measures. What are the types of SPS measures that can apply to imports? SPS measures include six broad categories: prohibitions or restrictions of imports; limits for residues and restricted use of certain substances; labelling, marking, and packaging requirements related to food safety; hygienic requirements related to sanitary and phytosanitary conditions; treatment for elimination of plant and animal pests and disease-causing organisms in the final product or prohibition of treatment; other requirements relating to production or postproduction processes. In addition, SPS measures cover procedures to verify that products meet SPS requirements. For a more comprehensive list of SPS measures, see the United Nations Conference on Trade and Development’s (UNCTAD) International Classification of Non-Tariff Measures. How do I find information about the SPS measures that may apply to my products? The exporter, or seller, is responsible for complying with all SPS requirements that apply in the country of import. Local trade agencies, industry associations, and chambers of commerce may offer resources such as newsletters, events, and online platforms for businesses to learn about SPS measures. ePing: To stay informed of new and updated SPS requirements, businesses can register on ePing, an online initiative developed by the United Nations, the World Trade Organization (WTO), and the International Trade Centre (ITC). Through ePing alerts, businesses can receive notifications of new SPS requirements relevant to their products and target markets, and also identify existing measures in their database. Global Trade Helpdesk: This provides an overview of product requirements for importers or exporters targeting foreign markets. Market Access Map: This displays specific SPS measures applicable to products that businesses may seek to import from targeted markets. Trade Analysis Information System (TRAINS): This presents an outlook of existing SPS measures worldwide and multiple features of non-tariff measures reported by 160 countries. World Integrated Trade Solution (WITS): This offers country profiles on SPS regulatory indicators, organized by product sectors. Links to Supporting Information The World Trade Organization Document on Understanding the WTO Agreement on Sanitary and Phytosanitary Measures WTO | Understanding the Sanitary and Phytosanitary Measures Agreement The United Nations Conference on Trade and Development’s (UNCTAD) International Classification of Non-Tariff Measures International Classification of Non-tariff Measures – 2019 edition ePing Home – ePing SPS&TBT platform ITC UNCTAD WTO Global Trade Helpdesk ITC Market Access Map UNCTAD TRAINS Online World Integrated Trade Solution (WITS) World Integrated Trade Solution (WITS) | Data on Export, Import, Tariff, NTM
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Technical Barriers to Trade
What are technical barriers to trade (TBT)? The World Trade Organization Agreement on Technical Barriers to Trade (or the ‘TBT Agreement’) exists to ensure that technical regulations and procedures do not cause unnecessary barriers to international trade. TBT measures include product-related technical regulations and standards, as well as procedures to assess compliance with the requirements set out in these regulations and standards, because technical regulations are mandatory. TBT measures are used by a country for safety reasons, to protect the environment, to enhance national security, or to provide information to consumers, among other reasons. What are examples of TBT measures? TBT measures can take the following forms: testing and certification requirements to ensure product quality, safety, or performance; labelling, marking and packaging requirements; production or post-production requirements; product identity requirements; product quality, safety, or performance requirements. Some examples of TBT measures include: packaging or labelling requirements, such as health warnings on tobacco products; regulations on product characteristics, such as energy performance requirements for electrical appliances; conformity assessment procedures, such as testing procedures for motor vehicle safety requirements. How do I find information about TBT requirements that may apply to my products? Exporters, or sellers, are responsible for complying with TBT measures applied in the target country and for providing all necessary documents. Trade agencies, industry associations, and chambers of commerce may offer resources such as newsletters, events, and online platforms to help businesses learn about TBT measures. Businesses and governments can collaborate to address questions and potential trade issues related to notified TBT requirements using the national forums included in the tool. For any questions on technical regulations, procedures and standards in an export market, businesses can contact the TBT enquiry point in that market. Global Trade Helpdesk: This provides an overview of product TBT requirements for importers or exporters targeting foreign markets. Market Access Map: This displays specific TBT measures applicable to products that businesses may seek to import from targeted markets. Trade Analysis Information System (TRAINS): This presents an outlook of existing TBT measures worldwide and multiple features of non-tariff measures reported by 160 countries. World Integrated Trade Solution (WITS): This offers country profiles on TBT regulatory indicators, organized by product sectors. Links to Supporting Information World Trade Organization’s (WTO) information on technical regulations and standards WTO | Understanding the WTO – Standards and safety United Nations Conference on Trade and Development’s (UNCTAD) International Classification of Non-Tariff Measures (Chapter B) International Classification of Non-tariff Measures – 2019 edition (unctad.org) ePing Home – ePing SPS&TBT platform (epingalert.org) ePing Enquiry point – ePing SPS&TBT platform (epingalert.org) ePing Enquiry point – ePing SPS&TBT platform (epingalert.org) ITC UNCTAD WTO Global Trade Helpdesk ITC Market Access Map (macmap.org) UNCTAD TRAINS Online (unctad.org) World Integrated Trade Solution (WITS) World Integrated Trade Solution (WITS) | Data on Export, Import, Tariff, NTM (worldbank.org)
Is there a trade agreement or preference scheme in place between my country and my potential destination market?
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Regional Trade Agreements and Preferential Trade Agreements – for Businesses
What is a regional trade agreement or preferential trade arrangement? A regional trade agreement (RTA) or a preferential trade arrangement (PTA) is a treaty or contractual agreement that governments use to manage their trade relationships and market access conditions. Through trade agreements, governments agree on a range of conditions such as preferential tariffs for goods, market access for services, intellectual property rights, competition and investment measures, among other things. How can trade agreements affect my business? Regional trade agreements (RTAs) provide preferential market access, such as full or partial relief from tariffs for goods traded between the RTA parties. They also include chapters related to trade facilitation, SPS and TBT measures, and intellectual property rights, all of which may impact your business. Preferential trade arrangements (PTAs) are usually provided by developed nations that are members of the World Trade Organization (WTO), to members in developing nations, in the form of reduced tariffs for goods. Businesses can claim these benefits by meeting Rules of Origin and other conditions stated in the text of these arrangements. The Trade4MSME guide on Rules of Origin contains more information. What are the different types of RTAs and PTAs? PTAs are unilateral, or one-sided, meaning an arrangement where one government provides preferential access to imports from one or more governments without receiving anything in return. RTAs may involve multiple governments, in the same region, or across different regions, or they may be on a bilateral between two governments. Both the World Trade Organization and International Trade Centre websites have more information on trade agreements. Unilateral agreements: also known as preferential trade arrangements, or PTAs, these provide trade preferences to the markets of the member that developed the PTA, without requiring that beneficiary economies grant the same preferences in return. These preferences often come in the form of zero or lower import tariffs for products, and only cover trade in goods. One example of a PTA is the Generalized System of Preferences scheme GSP, under which developed economies grant preferential tariffs to imports from developing economies. PTAs can also involve more limited schemes such as the United States’ African Growth and Opportunities Act (AGOA) or the European Union’s Everything But Arms (EBA) scheme. These are subject to a waiver granted by WTO Members and subject to review. Reciprocal agreements: Reciprocal agreements are also known as regional trade agreements or RTAs, and these cover the rules and conditions that apply to trade in both goods and services. These include free trade agreements (FTAs), Customs unions, and partial scope agreements. Governments signing these agreements provide each other with preferences and benefits in terms of lower trade barriers and market access. In addition, RTAs can include provisions on investment, Customs cooperation and trade facilitation, trade and environment, trade and labour, and other areas. How do I know if my products benefit from preferential treatment under an RTA or PTA? Trade agencies, industry associations, and chambers of commerce can provide information on how businesses can benefit from trade agreements. For example, the World Trade Organization has an online RTA Database and PTA Database, which provides information on tariff preferences and other provisions such as Customs procedures, SPS and TBT measures, which are under any RTAs and PTAs notified to the WTO. Businesses can also visit the Rules of Origin Facilitator, an online tool that identifies preferential tariffs under trade agreements, so long as these goods meet the rules of origin requirements included under these agreements. Through the Facilitator, businesses can find opportunities for preferential market access under trade agreements that can apply to their products. Links to Supporting Information Trade4MSME Guide Rules of Origin World Trade Organization (WTO) Regional Trade Agreements WTO | Regional Trade Agreements – scope of RTAs International Trade Centre Rules of Origin Facilitator – Introduction to Trade Agreements Rules of Origin Facilitator African Growth and Opportunity Act (AGOA) African Growth and Opportunity Act (AGOA) | United States Trade Representative European Union’s Everything But Arms (EBA) scheme Everything but Arms (EBA) | Access2Markets The Institute of Export and International Trade Export essentials: how to make the most of preferential tariffs – The Institute of Export and International Trade
Can I benefit from being an authorized economic operator and what does this mean?
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Authorized Economic Operators (AEOs) – for businesses
What are Authorized Economic Operators (AEOs)? The Authorized Economic Operator (AEO) scheme was introduced in 2007 by the World Customs Organization (WCO), as a way to further improve international supply chain security, and to facilitate legitimate trade. AEO certification is recognised internationally as granting ‘trusted trader’ status, which demonstrates that a business meets the AEO standards of supply chain security and customs compliance. Any business directly involved in the international movement of goods can apply for AEO status, regardless of the size of their business, or role in the supply chain. An AEO is defined as ‘an Economic Operator who is certified reliable in their customs operations,’ and therefore is entitled to certain benefits such as priority clearance for goods at customs, and fewer physical and documentation checks. If your product is selected for controls at the border, it will be given priority as an AEO consignment. What do I need to do to benefit from AEO status? Businesses can apply for AEO status through their Customs authorities (if available). According to the World Customs Organization, there are currently 80 operational AEO programs worldwide, with 5 more under development, the WCO AEO online Compendium provides a list of all programmes. Although different governments have different requirements for becoming an AEO, broadly, to qualify, a company must: comply with national domestic laws; abide by Customs and taxation requirements; maintain appropriate records; and practice required safety and security measures. Where can I learn more about AEO for my business? The World Customs Organization (WCO) offers a guide for small businesses that can help you learn more about the context and general aspects of AEOs. In addition, some institutions offer training and courses that can help you navigate the process around obtaining AEO status. Links to Supporting Information The World Customs Organization (WCO) safe-framework-of-standards and World Customs Organization World Customs Organization (WCO) AEO Compendium 2020 Edition World Customs Organization United Nations Economic Commission for Europe (UNECE) Trade Facilitation Guide – AEO Authorized economic operators The World Customs Organization (WCO) guide for small businesses Guide for small businesses The World Customs Organization (WCO) Authorised Economic Operator (AEO) Validation – WCO – Academy Online training course and aeo-implementation-guidance The European Commission Course: Authorised Economic Operator (AEO), Topic
What are the benefits of requesting a legal entity identifier (LEI)?
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Legal Entity Identifier
What is a legal entity identifier (LEI)? A Legal Entity Identifier (LEI) is a 20-character, alphanumeric code that provides unique identification to businesses and other entities participating in financial transactions. The LEI contains information on business ownership structures, that regulators require in order to assess financial risks and therefore promote market integrity. LEIs are part of global standards that rely on high data quality for enhancing transparency in marketplaces. More information on what an LEI is can be found at the Global Legal Entity Identifier Foundation’s (GLEIF) website, and at LEI Worldwide in the links below. How can my business benefit from having an LEI? Although an LEI is not a legal requirement, it does provide benefits to businesses, such as international recognition and credibility with investors and customers, because LEI data will optimize business procedures for market transactions. Having an LEI number can also enhance business security by providing more detailed information about suppliers and partners when doing business overseas. An LEI may encourage a financial institution to give your company a loan, and an LEI can help your business to comply with many international regulations, secure your brand identity, and enhance reporting requirements. How can I get an LEI? LEI Worldwide has a website where you can sign up to get a new LEI code or renew an existing one. The process begins with completing an application form, with basic company details such as name, addresses, and telephone number. You will also be asked to provide ownership information for your company with supporting documents. Once you submit your form, you will receive a confirmation within a few hours, depending on the country where your business is located. It is important to note that although LEIs can provide a number of benefits, they do require an annual fee. Learn more about the LEI application process at the LEI website. Where can I learn more about LEIs? Some institutions offer online materials and courses that can help you learn more about LEIs and the legal landscape around business and trade. Global Legal Entity Identifier Foundation (GLEIF): The GLEIF has an online archive on their website of videos and podcasts that explain relevant LEI facts so that you can make the most of their potential benefits. Links to Supporting Information Global Legal Entity Identifier Foundation’s (GLEIF) website Introducing the Legal Entity Identifier (LEI) – LEI – GLEIF Legal Entity Identifier (LEI) Worldwide What is a Legal Entity Identifier – LEI Worldwide (lei-worldwide.com) Learn more about the LEI application process at the LEI website LEI Application – How to get an LEI Code – LEI Worldwide (lei-worldwide.com)
How can I protect my intellectual property rights?
2What will I need to trade my goods abroad?
What documents do I need to get my goods across borders?
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Trade Documents for Exports
What documents do I need to export? The documents required for export vary based on the destination market and mode of transportation. Before trading, it is very important to review what documents are required by the transporter and customs authority to ensure your shipment is released upon delivery. Trade documents, sometimes also referred to as customs documents, generally include the following: Commercial invoice: This is a document issued by the seller to the buyer requesting payment for the goods. It serves both as a formal request for payment and may also be used by customs officials to clear the goods in certain countries. It can be used as a supporting document for insurance claims and may be required for the release of funds from the buyer to the seller or for reimbursement of a letter of credit by banks. UN/CEFACT has developed a cross-industry invoice (CII) to support electronic invoicing and standardize the information shared between buyers and sellers, especially when used with Incoterms. For more information on UN/CEFACT’s initiative and whether it could be helpful to your business, see the Trade4MSMEs guide on Incoterms. Commercial invoices are prepared after purchase orders are submitted by a buyer to a seller detailing the requested item, amount, and purchase price to be paid. A purchase order generally contains more detail than a commercial invoice, listing each item purchased, the unit information, and both buyer and seller information. Bill of exchange: This document details the goods in a transaction, the amount due for payment, when the payment is due, and all necessary banking information. Bills of exchange can be issued directly from a bank (referred to as a bank draft) or from an individual (called a trade draft) and are negotiable, meaning the bearer can sell this document on the market for cash. Packing list: This document, sometimes referred to as a weight list, is used to record the precise contents of a shipment, sometimes including details like the product’s weight. Although the price may be listed in the packing list, it is different from a commercial invoice because it is not a request for payment. Rather, its purpose is for record keeping. Insurance documents: These are included if you have trade insurance. (See Trade4MSMEs guide on Trade Insurance.) Letter of credit: These documents can be used by the importer to finance its purchase from the exporter, essentially certifying payment by the importer’s bank to the exporter’s bank once the goods are received. (See Trade4MSMEs guide on Trade Finance). Transportation documents: These can include bills of lading or waybills. (See Trade4MSMEs guide on Bills of Lading.) Export compliance documents: These documents can involve export declarations, licenses, permits, or certificates. (See Trade4MSMEs guide on Basics of Exporting.) Certificate of origin: These documents certify where the goods come from. This information is required to apply appropriate tariffs, as well as to determine if the goods are allowed to enter the destination country. (See Trade4MSMEs guide on Rules of Origin.) Sustainability certifications: Many new standards and certifications are being created to provide consumers with information about a product’s sustainability, environmental or social impact. Some of these are provided by governments, such as “organic” labels for consumables, while others are through non-profits like the Forest Stewardship Council. (See Trade4MSMEs guides on Standards and Voluntary Sustainability Standards). Links to Supporting Information Trade4MSMEs guide Incoterms UNCFACT e-Invoice | UNECE Trade4MSME Guide Trade Insurance Trade4MSMEs guide for Trade Finance Trade4MSMEs guide on Bills of Lading Bills of Lading Trade4MSMEs guide Basics of Exporting Trade4MSMEs guide Rules of Origin Trade4MSMEs guide Standards Trade4MSMEs guide Voluntary Sustainability Standards
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International Commercial Contracts
Should I have a contract with my international partners? Any business dealing has a risk of misunderstandings or unfair dealings. Cross-border business transactions may have added difficulties due to the differences in culture, expectations, languages, and legal systems. Given these potential obstacles or risks, it is important to have a clear agreement on a transaction with overseas partners, preferably in writing, in order to avoid potential future disputes and to foster productive long-term relationships. How do I draft a contract? The contract should contain terms and conditions upon which both parties agree. It is generally recognized that the parties, i.e., you and your business partner(s), are free to choose and agree on the terms and conditions in your contract (freedom of contract). Some of the large international organizations aim to harmonize the substantive rules in international trade and business. These organizations include the United Nations Commission on International Trade Law (UNCITRAL), the Hague Conference on Private International Law (HCCH), and the International Institute for the Unification of Private Law (UNIDROIT), they have developed a wide range of Conventions, model laws, and principles that can be used by the parties for international business contracts. Noteworthy among these are the United Nations Convention on Contracts for the International Sale of Goods (CISG), also known as the Vienna Convention; the HCCH Principles on Choice of Law in International Commercial Contracts; and the UNIDROIT Principles of International Commercial Contracts. These instruments contain sets of rules that can either be incorporated in your contracts for international business transactions and/or can govern your contracts, in addition to national law rules. To assist you in navigating the various international instruments, the three organizations have jointly published a guide to International Commercial Contracts in six languages. Within a contract, it is also important to use specific and well-established terminology in international business transactions. For example, Incoterms (international commercial terms), established by the International Chamber of Commerce (ICC), can help standardize a contract’s terminology and assure that parties have the same understanding (see the Trade4MSMEs guide on Incoterms). Model contracts are also available free of charge from the International Trade Centre or for a fee from the ICC. For information on what to do in the event of a breach of contract, see the Trade4MSMEs guide on Dispute Settlement. Links to Supporting Information UNCITRAL Guide to International Commercial Contracts Legal Guide to Uniform Instruments in the Area of International Commercial Contracts, with a Focus on Sales Trade4MSMES guide Incoterms International Trade Centre Model Contracts for Small Firms International Chamber of Commerce ICC Model Contracts Trade4MSME guide Dispute Settlement
What do I need to know about exchange rates to make an international transaction?
What are Incoterms and why are they used in my trade contracts?
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Incoterms
What are Incoterms? Incoterms is an abbreviation for “International Commercial Terms.” Issued by the International Chamber of Commerce (ICC) and globally recognized, they prevent confusion in foreign trade contracts by clarifying the obligations of both the buyers and sellers and provide a standard list of global terms and acronyms used in trade. Why would I use Incoterms? Different practices and legal interpretations between traders around the world necessitated a common set of rules and guidelines, which led to the development of Incoterms. These are terms that hold a common, precise, and defined meaning. Whether you are filing a purchase order, packaging and labelling a shipment for freight transport, or preparing a certificate of origin at a port, the Incoterms rules are there to guide you. Various parties involved in both domestic and international trade use Incoterms as a shorthand to help understand one another and the exact terms of their business arrangements. Given the clarifying advantages of incoterms, it is recommended that they be used in a sales contract. What are the different Incoterms that have been developed? The ICC updates Incoterms every 10 years to align them with the latest trading practices. The most recent version is Incoterms 2020. Some examples of Incoterms include: Rules for any Mode of transport Ex works (EXW): These imply minimum obligations on the seller, requiring goods to be collected and loaded onto a vehicle by the buyer. Delivered at place (DAP): This requires the seller to deliver goods ready for unloading at the destination place agreed by the buyer. Delivered duty paid (DDP): This states that the seller is responsible for all costs and risks of delivering goods to the buyer, including goods clearance and handling customs formalities. There are others in this series Carriage and Insurance Paid to (CIP): This requires the seller to obtain insurance in addition to complying with obligations on handing over goods to carriers and clearing goods for export. Rules for sea and inland waterway transport Free alongside (FAS): This requires the seller to bear risks until goods are either procured or placed alongside a ship/vessel nominated by the buyer. The buyer is responsible for carriage of the goods from the shipment port onward and handling all import formalities. Free on board (FOB): This deems that the seller is the one to deliver goods on board the ship agreed by the buyer. Once the goods have been loaded on board the vessel, the responsibility for carriage of the goods and all import formalities transfers to the buyer. Cost and freight (CFR): CFR is similar to FOB but requires the seller to bear risks until goods are placed on board the vessel at the delivery port and costs to the destination port. The seller must also manage all export formalities and unloading costs when goods reach the destination port. The buyer is responsible for insuring the goods once the goods have been loaded on board at the departure port. Cost, insurance, and freight (CIF): CIF is similar to CFR but requires the seller to insure the buyer’s risk of loss or damage from the shipment port to the destination port, at least. For detailed information about Incoterms 2020, see the ICC’s new e-commerce platform in both print and digital formats, which can be purchased online for a fee. The edition is also translated into twenty-nine languages. You can contact your local ICC country office and representatives for their help and for more information. You can also visit the websites of some international law firms to learn more about different types of incoterms. Where can I get training on how to use Incoterms? The ICC national committees worldwide organize different training seminars, online courses, and certificate programs on Incoterms and other related topics. Their Incoterms 2020 professional certification covers each Incoterm’s rules and the corresponding obligations. It is especially helpful for professionals involved in trade and international business transactions, including those working in legal and regulatory affairs. Links to Supporting Information ICC International Chamber of Commerce (ICC) website and ICC Knowledge 2 Go Guide to Incoterms 2020 ICC local ICC country office and country representatives Contact information for your local International Chamber of Commerce Aceris Law Aceris Law also provide information on incoterms ICC ICC Incoterms 2020 Certificate. IOE&IT Export essentials: Incoterms and selling goods overseas – The Institute of Export and International Trade
What customs procedures and forms do I need to fill out?
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Customs and Border Procedures
What are customs? Customs refers to the government agency or authority tasked with regulating trade in goods and collecting any duties levied on imports and exports. Offices and staff working for customs are located at places where goods transit across borders, such as ports, airports or other frontiers. Customs manage a set of procedures and operations to control goods and people (travelers) that enter or exit the country. When you export or import, you will have to comply with a series of customs and border procedures that will verify if your products meet market access requirements (see the Trade4MSMEs guide on Trade Documents for Exports). What role do customs play in cross-border trade? Before selling goods abroad or purchasing foreign commodities or products, it is important to map out the relevant procedures your business will have to manage with customs and other competent authorities (such as national plant protection organizations to obtain SPS certificates). Customs play an important role in trade because they protect domestic borders against potential security threats and counterfeit goods. They also examine if your products will be subject to duties and other local regulations and standards (see the Trade4MSMEs guides on Trade Document for Exports and Non-Tariff Measures). How can my business navigate customs procedures? In some economies, it is compulsory when an import value is above a certain threshold to use a licensed customs agent to clear goods through customs. In others, businesses simply choose to hire a customs broker to help avoid potentially costly errors. In all cases, the importer is responsible for knowing the requirements and for ensuring compliance. The Global Trade Helpdesk (GTH) is a free-of-charge website from the United Nations, the International Trade Centre (ITC), and the World Trade Organization (WTO) that provides information on customs authorities and enquiry points for relevant government authorities (see the Trade4MSMEs guide on Enquiry Points) for border procedures involved in exports, imports, and transit of goods. It also describes single window platforms (see the Trade4MSMEs guide on Single Windows) that you can use to submit all documents required by customs and other agencies to comply with local requirements and border procedures. When using the GTH website, you can check the section on navigating trade procedures that appears when you type the product you seek to export from your domestic market and import into your targeted market. These two webpages will provide you or your customs broker with a starting map of resources to navigate through customs. Where can I learn more? Various institutions have online resources and training materials that can help you learn more about technical terms and border procedures managed by customs. Some examples are: Glossary of international customs terms: The World Customs Organization has a glossary with descriptions on key terms used by customs authorities. E-learning courses on customs: The European Commission offers about 600 e-learning courses in 21 languages about customs and border procedures. Most of the materials are free to access. Factsheet on customs procedures and declarations: The European Union Customs Code (UCC) provides a general guide with steps that you can consider for complying with procedures required by customs authorities. Links to Supporting Information Trade4MSMEs guide Trade Documents for Exports World Customs Organization World Customs Organization (WCO Trade4MSMEs guide Non-tariff Measures FEDEX Guide to navigating customs Fedex Global Trade Helpdesk Global Trade Helpdesk Trade4MSMEs guide Enquiry/Contact Points Trade4MSMEs policymakers guide Single Windows and National Portals WCO World Customs Organization Website of the European Union eLearning courses and eBooks The European Union Customs Code (UCC) Union Customs code & Customs Procedures and Customs Declarations Quick Info
Who should I talk to if I have a problem or question about trade documents or processes?
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Enquiry/Contact Points
What are enquiry points? Enquiry/contact points are officials in government agencies tasked with answering questions that anyone involved in international businesses may have about trade requirements, such as sanitary and phytosanitary measures (SPS) and technical barriers to trade (TBT). (See Trade4MSMEs guides on SPS and TBT) Where can I find enquiry points for TBT and SPS matters? TBT and SPS enquiry points must be notified to the World Trade Organization (WTO). The ePing Alert also provides a list with enquiry points for TBT and SPS measures notified by over 180 countries or territories. To contact the relevant enquiry points for your trade transactions, you can begin by checking the resource materials made available by ePing Alert. Also on that website, you can subscribe to receive notifications on TBT and SPS regulations that may affect your products and identify who to contact for any enquiries you may have. How can I contact enquiry points for other goods trade procedures? The Global Trade Helpdesk (GTH) provides information on enquiry points that you can contact to ask about matters related to exports, imports, and transit procedures. It also describes single window platforms (see the Trade4MSMEs guide on single windows) that you can use to submit all documents required by customs and other agencies to comply with local requirements and border procedures. When using the GTH website, you can check the section on navigating trade procedures by typing in the information required for your desired export or import transactions. Where can I learn more? The Trade Facilitation Agreement Facility (TFAF): The World Trade Organization has an online Trade Facilitation Agreement Facility that lists contact points for trade facilitation matters reported by about ninety countries or territories. If you need assistance with other trade-related matters, you can reach out to the contact points listed, they may be able to answer questions or direct you to the relevant enquiry officials. Links to Supporting Information Trade4MSMEs guide Sanitary and Phytosanitary Measures Trade4MSMEs guide Technical Barriers to Trade The ePing alert Enquiry point – ePing SPS&TBT platform ePing SPS&TBT Platform Home – ePing SPS&TBT platform The Global Trade Helpdesk Global Trade Helpdesk TRADE4MSMEs Guide Single Windows WTO Trade Facilitation Agreement Facility Contact Points | TFAF
What is a rule of origin and why does it matter?
3How do I get my goods across borders?
What are the logistics and transport options available?
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Logistics
What are logistics? Logistics are the processes needed to get your goods or services from their origin to their destination. Logistics goes beyond the mode of transportation. It also includes the legal arrangements, insurance, border requirements, and delivery. What are the main steps and considerations for goods logistics? Arrange the sale: The first step for international trade is to agree the terms of the sale. Contracts need to be drawn up. Various trade documents will apply including commercial invoices, getting Incoterms agreed, trade finance may be needed, and the mode of transport or shipping needs to be decided on too. Prepare for export: After the terms of the sale are agreed the shipment needs to be packed, labelled, and documented appropriately. There may be additional requirements to be considered. Other requirements need to also be considered, Bills of Lading, Rules of Origin, selecting the right HS (Harmonized System) Codes, Tariff & Non-Tariff measures, Sanitary & Phytosanitary Measures, Technical Barriers to Trade. Warehousing costs at the port before and after shipping, container types, and potential restrictions for the shipment should be considered. Prepare for import: Once a shipment has reached its destination, it will need to clear customs before it can be released either to the recipient or for further transportation. Customs clearance can depend significantly on where the goods are being shipped and the type of transportation chosen. Deliver to buyer: Finally, once the item has cleared customs and been released from storage, the last step requires delivery to the buyer. What are freight forwarders and other intermediaries and how can they help my business? Freight forwarders and other intermediaries can significantly reduce the required work for an international transaction. Types of intermediaries include: Customs brokers and clearing agents: These are specialists in customs rules and procedures. They can help ensure import documents are correct and may assist with forwarding arrangements. To find a licensed customs broker, the first step is to search the national customs agency where the import will take place, as they frequently list registered brokers that can be contacted. Freight brokers: They match shipments with land transportation, helping you find a way to get a delivery to its destination on schedule, usually by truck or rail. Ship brokers: They match ship owners with importers or exporters that want to charter a vessel to transport their product. Freight forwarders: They help with all the above, assuming the entire logistical, legal, and financial responsibility of a shipment. Freight forwarders generally arrange everything from transportation and shipment consolidation to tracking or monitoring and delivery to the final destination. Most countries will have a trade association for Freight Forwarders to help you select the right provider. Links to Supporting Information Trade4MSME Guide Shipping Trade4MSME Guide Trade Finance Introduction Trade4MSME Guide Incoterms Trade4MSME Guide Bills of Lading Trade4MSME Guide Rules of Origin Trade4MSME Guide How Do I Determine My Product’s HS Code? Trade4MSME Guide Sanitary and Phytosanitary Measures Trade4MSME Guide Customs and Border Procedures The International Trade Centre’s (ITC) SME Academy Introduction to International Transport and Logistics. An online training course. ITC ITC SME Trade Academy – Summary of Introduction to International Transport and Logistics (intracen.org)
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Shipping
Shipping: It is important to choose the right international shipping strategy for your business. The shipping strategy should...
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Bills of Lading
What are bills of lading? A bill of lading (BL, B/L or BOL) is a legal document showing the ownership of the goods in a trade transaction (document of title). A bill of lading is also a receipt issued by the shipper that the specified goods have been received by the transporter and are on the transportation vehicle. Finally, it also serves as a contract for how the goods will be shipped. When shipping your cargo, one of the most important things to ensure is that the cargo arrives safely and without mix-ups. This is why the bill of lading is so relevant. Not only are the items being shipped listed, the BOL also includes specific shipping instructions so that your cargo arrives complete and at the correct destination. What information is included in a BOL? The BOL describes the essential details of a goods shipment. Depending on the type of BOL that is being filled, it is important to have information including: shipper (seller), consignee (buyer), point of origin, place of delivery, contents of shipment, and payment terms. What are the different types of BOLs? Bills of lading are issued by a carrier, or transporter, for a consignor (seller) to detail the transportation of the goods to the consignee (buyers). There are two main types of BOLs: Straight bill of lading: This type of BOL is used when the buyer has already paid for the shipment and the transporter is delivering the item directly to the consignee or other appropriate party. This is very similar to a waybill. Straight bills of lading and waybills are generally used for intra-firm transactions or between two trusted parties using an open account payment rather than trade finance(see the Trade4MSMEs guide Trade Finance). Order bill of lading: This type of BOL is used when the shipment will be paid for at a later time. Importantly, an order bill of lading is also a transferable document of title and can be used to access credit by the holder. BOLs that are “to order” mean that the goods can be delivered to any added consignee following transfer of the document if all endorsements are in place. The document can therefore be used to access finance given its inherent value, represented by the goods. Links to Supporting Information International Trade Centre (ITC) Cotton Exporter’s Guide This guide has detailed definitions and descriptions of different types of BOLs, and how they are used. Trade Finance Global What Is Bill of Lading? BoL Example 2023 | Trade Finance Global Trade4MSME guide Trade Finance Introduction Trade Finance Global Trade Finance Global | Trade Finance Without Barriers
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Reverse logistics
What is reverse logistics? Once trading for a while you will find that customers may need or want to return products to you either because they are damaged, faulty, or are no longer required. Companies must manage costs, inventory and customer relationships during this returned product process. One solution is reverse logistics which is a supply management practice for moving products from customers back to the sellers or suppliers. Using reverse logistics enables businesses to regain value from returned goods by recycling, refurbishing or reselling them. Unlike traditional logistics that transports products from suppliers to distributors to consumers, reverse logistics starts with the consumer and moves in the opposite direction along the supply chain. Examples and types of reverse logistics Retailers like Home Depot, Levi Strauss and Kohl use reverse logistics to repurpose returned goods into new items or product lines while enhancing customer relationships in the process. Manufacturing and healthcare companies also adopt reverse logistics practices to refurbish, repair and remanufacture goods consumers find defective or outdated. There are different types of reverse logistics that businesses can explore. These are also known as reverse logistics components which focus on policies, procedures and management strategies for reusing products that are returned, unsold, damaged or reached end of life or contractual terms. Why do reverse logistics matter for my business? Managing returned items by customers can often lead to additional unplanned costs, hiring extra staff, return shipping costs, possible additional duties and increased overhead. To offset costs involved in returns, reverse logistics can help generate value companies can use to recoup losses. Reverse logistics can offer a way for your business to maintain an efficient flow of goods while reducing supply chain management costs and building consumer trust. By adopting reverse logistics, you can generate additional benefits to your business such as improved customer satisfaction and retention, enhanced brand sentiment, waste reduction and greater sustainability. How can I get started with reverse logistics? Business support organizations such as chambers of commerce and industry associations may have relevant resources to help you get started with using reverse logistics as part of your business practices. By searching on the internet, you can also find guides, training manuals and materials on reverse logistics. Links to Supporting Information Oracle NetSuite A Guide to Reverse Logistics: How It Works, Types and Strategies | NetSuite information on how reverse logistics works The International Trade Centre (ITC) ITC SME Trade Academy – Summary of Introduction to Supply Chain Management (intracen.org) Online Training Course on Introduction to Supply Chain Management
4What is trade Finance and how can I access it?
What are the different types of trade finance options?
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Trade Finance Introduction – for Businesses
What is trade finance and why may I need it? There are many definitions of trade finance, varying by organization and purpose. Trade finance...
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Supply Chain Finance
What is Supply Chain Finance (SCF)? Supply Chain Finance (SCF) is a cash flow solution that businesses can adopt to help free up working capital stuck in global supply chains.
Who can help me finance my trade activities?
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Trade Finance Providers
What kind of trade finance lending do I need? Small businesses and new exporters can often find it difficult to access credit and finance, there are however lots of different resources MSMEs (Micro and Small Medium Enterprises) can explore. Who are the Trade Finance Lenders? There are several types of trade finance lenders to consider. Below are brief descriptions of some of the most common: Corporate and Commercial Banks: These banks can provide a range of trade credit options to businesses, including accepting letters of credit or bills of exchange, or facilitating documentary collection (see Trade4MSMEs guide on Trade Finance). Corporate banks typically service very large transactions, whereas commercial banks are more accessible to smaller traders. Alternative Finance Providers: These are non-bank lenders. These can include private investment, crowd-funding options, or other fintech that allows users to access financial services other than through a traditional bank. Alternative, or non-bank, finance can sometimes be more accessible to smaller traders because they do not face the same regulations as traditional banks, which can make traditional banks unwilling to spend the resources required to enable smaller transactions. Alternative finance providers based on new technologies may also be able to look at different types of collateral, which can open new areas of funding for businesses including Supply Chain Finance (SCF) (see Trade4MSMEs guide on Supply Chain Finance). Development Finance Institutions (DFIs): These provide trade finance help to businesses to promote economic development. They might be funded by national governments and tend to be country or region-specific. DFIs usually operate as joint ventures in emerging markets and can provide insurance and guarantees against political and socio-economic risk to encourage investment. Like commercial banks, they may also provide standby letters of credit, invoice discounting facilities, and project finance from mid-term to long-term projects. Although DFIs may have an overall objective of increasing small business finance, they often do not lend directly to businesses. Export Credit Agencies (ECAs): This financing is used to assist exporters through loans, loan guarantees, and insurance. The transactions supported by ECAs are capital intensive, such as machinery for large-scale projects. They have long-term financing maturities with attractive conditions, as they are usually provided through government financing facilities. ECAs may have minimum requirements, such as the size of a transaction, which could exclude certain smaller traders. What do I need to access this finance? Lenders have different requirements and criteria to access their financing options based on the level of risk, interest rate, and repayment conditions. If you are interested in accessing trade finance, first understand your financial needs and then reach out to your targeted lenders. Links to Supporting Information International Trade Centre (ITC) How to Access Trade Finance A guide for small exporters. Trade4MSMEs guide Trade Finance Introduction Trade4MSMEs guide Supply Chain Finance United Nations OHCHR | Development finance institutions OECD (Organization for Economic Cooperation and Development) Development finance institutions and private sector development – OECD The ITC’s SME (Small and Medium Enterprises) Trade Academy Export Finance and Payments Course Online training course Trade Finance Global Trade Finance Explained, an SME Guide for Importers and Exporters, is a publication co-authored by Trade Finance Global, the ITC, the Federation of Small Businesses (FSB), the Institute of Export & International Trade (IOE&IT), the British Exporters Association (BExA), the Forum of Private Business (FPB), and the International Finance Corporation (IFC).
Is trade something I need insurance for?
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Trade Insurance
What are the challenges and risks in international trade? Transactions across borders can be complex and risky. From not getting paid to geopolitical crises, businesses that trade across borders face many uncertainties. These can partly be eased by insurance. From the moment a transaction is started, there can be doubts about the trustworthiness of a business partner, whether the specified amount and quality of goods will be shipped, when the goods will be received, and more. Businesses should consider which risks they are most likely to face with any given transaction and weigh up the costs and potential benefits of purchasing some form of trade-related insurance. What types of trade-related insurance are available and what do they cover? Bonds are a financial product that ensures payment of a transaction. It is a type of insurance whereby an insurance company guarantees scheduled payments of interest and principal on a bond or other security in cases where the issuer of the bond or security has defaulted on payment. Credit insurance is a frequently used type of trade insurance. Importers guarantee to exporters that they will pay them in full when the contractual conditions are met. If the buyer does not fulfil the contract and defaults on payment, the insurance company compensates the seller. Foreign exchange risk insurance is a forward operation where a contract can be arranged with a financial institution to buy/sell currency on a specific date at a pre-defined exchange rate. This type of insurance is offered by financial institutions to lessen the loss from exchange rate fluctuations. Financial guarantees are binding, non-cancellable promises backed by banks or insurers to underwrite a contract and make payments to a recipient if terms are not met. Besides protecting the exporter against non-payment, guarantees can also protect importers against the risk that the supplier will not fulfil the contract. Political risk insurance covers the risk of the overseas government intervening in the investment, and if events that are considered “political” in nature interfere with a transaction. Examples of the latter situation include the expropriation of assets or the outbreak of violence. Although sometimes sold separately, it is important to note that many credit insurance contracts also cover political risk. Product liability insurance covers risks from litigation if the product fails to comply with national regulations. Surety is a guarantee issued by a third party to pay the loss suffered by one party in a contract in the event of complete failure to fulfil a contract. In this case, the third party assumes the responsibility of paying the contract. Transit insurance, for merchandise that is currently being transported, includes: Marine cargo insurance, which protects the shipment of merchandise via a cargo vessel, including from ship to terminal. Air cargo insurance, which provides protection against loss, damage, and sometimes the delay of shipments via aircraft. Ground transportation insurance, which is available for additional coverage for goods shipped by road and rail. This type of shipper is usually already liable for delivering the merchandise as received, with certain exceptions. Links to Supporting Information Trade Finance Global Risk and Insurance – Trade Finance Global An overview of the various types of trade insurance available and guides on how they work. Trade Finance Global Bond Insurance Policy Information on Bond Insurance
What do I need to know about exchange rates to make an international transaction?
5How can I make the best use of digital tools to trade?
How can I benefit from e-commerce?
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Selling Abroad Online
Why might I want to sell online? Selling online offers a competitive edge to small businesses seeking to expand into new markets. It is often a lower cost, lower risk business model for small businesses starting out in international trade. Retail e-commerce sales worldwide have seen a rapid increase in recent years. E-commerce can be a quick and effective way to attract more customers. By selling online, it is possible for you to reach a new global customer base with lower overhead than if sales were only made through physical stores. How can I sell online? From online marketplaces and platforms to social media and e-commerce websites, there are a wide range of digital sales options in addition to traditional or physical stores. Some of the most common ways to sell online are listed below. Marketplaces: These could be general or specialized by market sector (for example textiles, or electronics). General marketplaces are suitable to sell products or services with mass appeal when branding is not a business priority. In contrast, specialized marketplaces enable businesses to position their brands, find market niches, and offer customized value propositions to clients. Listing websites: These are useful for MSMEs with business models that focus on buying and re-selling common items. They are also appealing for businesses that sell by offering competitive prices or promoting additional features of goods and services advertised on the web. Social media: Social media platforms enable businesses to create customized webpages linked to online e-commerce sites and marketplaces with mass reach. Your own online webshop: Building and maintaining your own online shop can be effective, you can engage a commercial company /website builder to do this for you. This is the quickest, easiest route to creating a sleek, professional online presence for your ecommerce business. Many companies also offer competitively priced template sites that you customize. Or, if you have the knowledge and skill, you can code your own. What should I consider before selling online? A starting point is to plan a sound e-commerce sales strategy and get customer feedback on products and services. Either through social media or direct contact channels, you can reach out directly to potential customers to understand their needs and find target markets domestically and/or internationally. Understanding your customer base can help you customize products and services and identify market entry options. Other things to consider include payment methods, as well as the shipping and returns policies that may be best suited for your customers. These may vary depending on the market. You should also research market access requirements that may affect your products and services(see the Trade4MSMEs guides on services export potential and services contact points)Services Contact Points have more information. Many businesses can benefit from online communities and training courses about online sales methods and e-commerce strategies. Links to Supporting Information WTO (World Trade Organization) regional initiatives on e-commerce WTO | Electronic commerce UNCTAD Global E-Commerce Jumps to $26.7 Trillion, Covid-19 Boosts Online Retail Sales | UNCTAD Statista Global retail e-commerce sales 2026 | Statista International Trade Centre (ITC) ecomConnect: ecomConnect | E-commerce Community Engagement Platform for Everyone Is an e-commerce online community Trade4MSME Guide Export Potential Guide Trade4MSME guide Services Contact Points ITC Online training courses ITC SME Trade Academy – Catalogue (intracen.org) ITC ITC SME Trade Academy – Summary of Introduction to E-commerce (intracen.org) ITC ITC SME Trade Academy – Summary of Using Virtual Marketplaces for your E-commerce Initiative (intracen.org) ITC ITC SME Trade Academy – Summary of Creating Quality E-commerce Content (intracen.org) ITC ITC SME Trade Academy – Summary of E-Commerce for your B2B Business (intracen.org) Google Free Online Marketing & Career Courses – Google Digital Garage – Google Digital Garage (learndigital.withgoogle.com) Google Skillshop tutorials on using Google Ads Google Ads : Google (exceedlms.com) and Get a business online – Google Digital Garage (learndigital.withgoogle.com) PayPal How to Sell Internationally | PayPal US
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Assessing E-Commerce Readiness
How can an e-commerce readiness assessment support my business? Selling online has advantages over selling in traditional shops and stores. Businesses can reach customers worldwide and enter new markets quickly and easily. Geography no longer creates the same physical barriers to trade. It is always best to check that you have everything in place before you start. An E-commerce readiness assessment can help you evaluate what stage you are at. What is an e-commerce readiness assessment? An E-commerce readiness assessment is the starting point to help any businesses understand what is needed to design an online sales strategy. An e-commerce readiness assessment is a tool that evaluates the capabilities needed to set up and run a successful online business. It will help you evaluate strengths, as well as identifying areas that need improving. It shows that by investing in market research, online payment systems, developing good fulfillment and logistics, and creating great customer service experiences, will help build a more successful business. What is the structure of an e-commerce readiness assessment? The International Trade Centre ITC has developed a quick and easy short quiz to check your businesses readiness to start online sales. It will look at the following five sections: E-commerce planning: This involves getting you to think about your product and services value proposition, ask yourself why customers should buy your products. It gets you to think about your ideal target customers. Confirm if your products or services comply with regulations in your target markets. Online presence: This involves identifying whether you are going to run your own e-commerce website, or if you will list products and services in marketplaces. Digital marketing: This involves looking at the extent to which businesses use digital marketing to promote their online sales and monitor digital goals and key performance indicators (KPIs). Shipping and inventory: This involves checking that your inventory, fulfillment and shipping options meet the expectations of your customers. Confirming that you can manage the customs import duties, taxes and other charges needed is essential. Customer service: This involves understanding what good customer service is and that your business is supplying the right information about products and services. Coupled with the ability to communicate, interact and build trusted relationships with your customers and clients, will ensure your business will thrive. Links to Supporting Information ITC International Trade Centre ITC ecomConnect – Readiness an e-commerce readiness assessment quiz ITC International Trade Centre How to Start Your First E-commerce Business | ecomConnect ITC ITC ecomConnect – Calculator & Video tutorials from ecomConnect Strive Community’s Ecommerce Training Toolkit ecomConnect IOE&IT Export essentials: How to make the most of ecommerce platforms – The Institute of Export and International Trade
What digital tools and approaches can help my business?
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Digital Tools and Approaches
How can technology help my business trade? Businesses that adopt new technologies are better positioned to seize opportunities in global marketplaces.
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Standards for cross-border paperless trade
What are standards for cross-border paperless trade? Running a business can often involve filling in lots of forms, and printing lots of documents.
How do I protect my business from cyber attacks?
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The Importance of Cybersecurity
What is cybersecurity? Introducing Cybersecurity into your organization is a way individuals and businesses reduce the risk of cyber-attacks. It is also known as information technology security or electronic information security. Using technology and digital platforms for commercial activities exposes companies to cybercrime like phishing, malware, or data and identity theft. Cybersecurity embodies a set of systems, processes, and actions and its core function is to protect businesses from digital attacks. We all use smartphones, laptops, tablets and computers, and we access multiple services online at home and at work and we need to protect them from theft or damage. To reduce these cyber threats, learn more about how to protect your organization’s data, assets, networks, programs and your reputation from digital attacks. Introducing cybersecurity can protect your data and systems. Why does cyber security matter for my business? We all live in an increasingly interconnected world, and this has had many positive effects enabling businesses to collect and share more information, reach new customers and innovate. It has also though, led to a rise of criminal activities that profit from stealing customer data and spying on business practices. Small businesses can often be victims of cyber-attacks, putting their assets, data, information, and technology equipment at risk. Investing in sound cybersecurity systems can prevent you from suffering financial losses and corporate reputation damage. How cyber threats could affect business? Some examples of cyber threats that may affect your business. Phishing: This is a social engineering tactic that lures individuals into providing sensitive data by offering fake rewards. Through this tactic, criminals often target personally identifiable information, banking and credit card details, and passwords. Malware: This consists of malicious software that comes from website downloads, spam emails, and connection to other machines or devices. Hackers use malware to gain access to networks and steal or destroy data on computers. Ransomware: This is a form of malware that encrypts business files, making them no longer accessible. Criminals use it to demand a ransom in exchange for unlocking the data targeted. Weak passwords: Passwords are weak when humans or machines can easily identify them. Criminals that correctly identify passwords have easy access to business accounts that store confidential and sensitive data. Insider threats: These threats are performed by current or former employees, business contractors or other associates who seek to access critical business data for illicit purposes. How can I protect my business against cyber risks? Protecting your business from cyber risks can enable you to counteract criminal activity and keep pace with emerging trends in data privacy. You can start planning cybersecurity strategies by identifying systems, data, and users that are essential for your business operations. This mapping exercise will highlight vulnerability points that can be the subject of your cybersecurity goals and strategies, as well as help you to develop a cybersecurity plan at your business. Links to Supporting Information Cyber Research Institute Roadmap A guide to being cyber ready. Cyber Research Institute Cyber Readiness Program – Cybersecurity Awareness Workforce Training This program guides SMEs (Small and Medium Enterprises) to become cyber against cyber threats. GCA (Global Cyber Alliance) Cybersecurity Training Small Business and Know What You Have – GCA Cybersecurity Toolkit | Tools and Resources to Improve Your Cyber Defenses The Global Cyber Alliance (GCA) offers a cybersecurity toolkit designed for small businesses and online training courses. US Small Business Administration Strengthen your cybersecurity The United Kingdom’s National Cyber Security Centre and Small & medium sized organisations – NCSC.GOV.UK provides training and certification. Government of Canada Cyber Secure Canada offers an SME-targeted certification scheme.
6What happens when there is a trade disagreement?
What do I do when my trade transaction doesn’t go as planned?
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Dispute Settlement
What happens if there is a breach of commercial contract? If your business trades with a company based in another country or customs territory, this is classed as ‘cross-border trade’ and effectively it means, in legal terms, that the other party is not necessarily subject to the jurisdiction of courts where you are based. It is important that you get the right commercial agreements in place, and confirm the law applicable to the contract, and a dispute resolution mechanism, at the very start of trading internationally. Although you hope it will never happen, should a dispute arise, it is always better if you can have it resolved in your local court, with your own lawyers and in your own language. If this is not possible and the dispute involves an overseas jurisdiction, this can complicate things and you would need to obtain legal advice familiar with commercial law in both country’s jurisdictions. Points to consider when drawing up a contract: Look to minimise your risk with fair and transparent contracts and terms and conditions. Appoint a legal professional / specialist international trade lawyer to help guide you. Ensure you have a clear understanding of what all your obligations will be under the finalised contract. Don’t accept “standard terms” with which you cannot comply. Ensure you have a clear understanding of what all your obligations will be under the finalised contract. Be clear on the extent of your potential liabilities. It would usually be sensible to try and agree a cap on liability – in many cases this comprises a multiple of the contract value. Deliver on time to the terms of the contract When a breach of an international contract occurs, the parties encounter issues such as: What type of case it is. Where the case will be decided. Which law will be used to decide It is also important to agree on a dispute resolution mechanism at the start, choices can include: Judicial Proceedings Alternative Dispute Resolution ADR mechanisms Arbitration Mediation While choosing the mode of resolution, another factor to consider is where and whether the ensuing judgment or arbitral award will be recognized and enforced. It would not be helpful if, for example, the judgment or the arbitral award was in your favour but cannot be recognised and/or enforced in another state where your other contractual party has assets. The law applicable to the contract will be applied to settle the dispute arising from the negotiation, conclusion, performance, interpretation, or execution of the contractual terms. Links to Supporting Information The International Trade Centre ITC Model Contracts for Small Firms | ITC Model contracts are available free of charge WIPO (World Intellectual Property Organization) Alternative Dispute Resolution Alternative Dispute Resolution (wipo.int) New York Convention for arbitral awards 1958 New York Convention The UN (UNCITRAL) United Nations Commission on International Trade Law and Online Dispute Resolution: On-line Resources | United Nations Commission On International Trade Law
What should I do if I think someone has infringed on my intellectual property?
