What Is An Export License And Why Is It Necessary To Enter Foreign Trade?

If your company is planning different commercial activities, you should know that the export license is one of the main requirements that you should not overlook during said process.

An export license will allow you to obtain the green light before legal entities so that you can export certain types of merchandise to other regions, as it is one of the most important documents that we advise you to process in advance so that your company can start exporting with confidence. as normal as possible.

In this new Mundi entry, we will explain what the export license is, what it is for and we will tell you how to apply for the export license if your company needs it.

What is an export license?

An export license, also generally known as an export permit, is a document issued by the Ministry of Economy that has the objective of accrediting the conditions of a company to be able to export specific merchandise.

If there is one thing you should know about this export permit, it is that this document is not a mandatory procedure for all companies, since it is only required when you intend to export certain types of products that could harm the economy or the conditions of a particular region.

Therefore, this type of export licenses are part of the non-tariff regulations, since through them the necessary permits are granted to commercialize certain merchandise subject to periodic supervision and/or regulation.

What is an export license for?

According to Article 15 of the Foreign Trade Law, an export permit must be issued to prove the following:

• To ensure the supply of products destined for the basic consumption of the population and the supply of raw materials to national producers or to regulate or control non-renewable natural resources of the country, in accordance with the needs of the internal market and the conditions of the international market;
• In accordance with the provisions of international treaties or conventions to which is a party.
• In the case of products whose marketing is subject, by constitutional provision, to specific restrictions.
• When it comes to preserving the fauna and flora at risk or danger of extinction or to ensure the conservation or use of species;
• When it is required to conserve assets of historical, artistic or archaeological value,
• In the case of situations not foreseen by the official regulations regarding national security, public health, plant health or ecology, in accordance with the legislation on the matter.

What goods need an export license

Now, so that you can identify if your company needs to process export licenses and be able to operate normally, here is a list of merchandise that is subject to prior permits by customs regime, both for export and import, according to the Ministry of Economy.

Products subject to prior import permission:

• would turn on
• Used tires
• Used vehicles
• Material for research and development
• Pollution control equipment and its parts
• Agricultural products under the Uruguay FTA, Chile FTA and ALADI
• Diamonds for industrial use

Products subject to prior export permission

• Diamonds for industrial use
• Iron ore

Suspension of export permits

On the other hand, you should know that the Ministry of Economy may suspend export licenses if the company incurs a series of faults or breaches.

According to the Official Gazette of the Federation, “The SE will proceed to suspend prior permits and automatic import or export notices in the following cases”:

1. When the individual, due to the processing of the prior permit or automatic notice, submits to the SE documents or data that are false or not recognized by their issuer.
2. When the individual does not submit to the SE the required information or documentation related to the processing of the prior permit or automatic notice granted.
3. When the merchandise subject to the permit or automatic notice is used for a purpose other than that for which the respective prior permit or automatic notice was granted.
4. When the SE identifies that the conditions of the plant or facilities of the beneficiary of the prior permit or automatic notice are not those that motivated its granting.
5. When the SE identifies that the address of the plant or facilities of the beneficiary is not located.

This has been our post!

We hope that this note has been of great help in understanding what export licenses are and their importance for your foreign trade activities. We recommend that you read each of the considerations in detail so that you can carry out the corresponding export permit and you can avoid complications before the legal entities.

Finally, if you are going to enter the export business you can check with ExFrO, they are the largest exporters in India providing various kinds of export services around the globe and can help optimize your company’s resources and, in this way, obtain greater participation in international trade.