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US Gov't Hands Out Do's/Don'ts for Exporting to North Korea
SEOUL, Jul 07, 2000 (AsiaPulse via COMTEX) -- The US Department of Commerce handed out a fact sheet entitled "Do's and Don'ts for Exporting to North Korea" Thursday. The information was released during a briefing on the mitigation of economic sanctions on North Korea, the Korea Trade-Investment Promotion Agency said Friday.
Over 80 US companies like IBM, Hewlett-Packard, Oracle, Caterpillar, Dupont, Philip Morris and organizations like the North American Export Grain Association, US Dairy Export Council and National Chicken Council attended the briefing in Washington, showing widespread interest in exporting to North Korea.
The Following is a breakdown of the list
*Do's
- Be sure that the ultimate purchaser and end-user of the items is not associated with North Korean missile technology exports. This is especially important when a license is not required.
- Keep good records of your transaction. Names, addresses and phone numbers of all North Korean contacts, purchasers, receivers and distributors are important data points in case there is ever a question of goods being diverted to unauthorized end-users in the Democratic People's Republic of Korea (DPRK).
- Be aware of the instability of the North Korean financial sector. There is little, if any, fungible capital in the consumer economy since everything is provided by state enterprises. Initially, cash deals with pre-payment may be the best way to structure your exports to the DPRK until you gain confidence that you can be paid by more conventional methods (i.e., electronic, letters of credit,etc.).
- Understand what can and cannot be exported without a license under the new guidelines. If you have doubts, apply for a commodity classification from Commerce. Licensable goods shipped without a license will be subject to the comprehensive legal and administrative penalties.
- When submitting an export license application, pay particular attention to end-user information (blocks 16-20), specific end-use (block 21), and technical description (block 22). Good background information is essential for US interagency license review, and will eliminate unnecessary delays in processing your application.
- When submitting a license application, the applicant should provide detailed information in block 24 (additional information), using attachments for more space if necessary, demonstrating the relationship between the end-user purchasing or receiving the goods and their actual end-use. Ask your North Korean customer if the purchaser will also be the end-user, or if the goods will ultimately be shipped elsewhere.
- US exporters are encouraged to establish direct contact with the North Korean government, either in Pyongyang itself, through the North Korean mission to the United Nations, or the North Korean embassy in Beijing, to ascertain DPRK laws and regulations for doing business in North Korea. Familiarize yourself with North Korean import guidelines. Consult official government web sites for further information.
- You should be sure to make whatever agreements you reach with prospective customers in North Korea under the sanctions easing measures contingent on your receiving an appropriate US Commerce Department export license for the particular export transaction, if goods require a license.
- Make sure that your application states the destination as "North Korea" or "Democratic People's Republic of Korea". Applications for "South Korea" or "Republic of Korea" may be delayed or returned.
*Don'ts
- Don't assume that North Korea is like a Western environment for business and investment.
- Don't enter into any dealings with North Korean entities known or suspected of missile proliferation activities. Know your customer.
- Don't expect there to be any real infrastructure for your proposed production or assembly venture in North Korea, or assume that basic industrial resources like water, electricity, roads, airports, will be available.
- Don't assume that North Korean tariff-free zones are without costs.
- Don't mix controlled and non-controlled goods in shipments to North Korea.
- Be wary of doing non-cash deals, at least until you are comfortable with the payment performance of your North Korean customer.
- Don't expect your customer to obtain the necessary import, export, or tariff permits for doing business in North Korea, unless this is required. You are better off to approach DPRK government officials directly with your request.
- Don't ship anything on the Commerce Control List. There is a presumption of denial for all controlled goods to North Korea. The current liberalization affects a broad range of consumer goods and low-level industrial items.
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