Export Trading Company Act: Application Instructions
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Applying for a Certificate of Review
I. Introduction
Anyone who is a “person” within the meaning of that term in Title III is eligible to apply for an Export Trade Certificate of Review. Although the term “person” does not include foreign entities, U.S. subsidiaries of foreign companies would be eligible if incorporated in the U.S. Under this definition almost any individual or legal entity that is a resident or citizen of the United States can apply for a certificate of review.
A good place to start when applying for an Export Trade Certificate of Review is the Guidelines for the Issuance of Export Trade Certificates of Review. The guidelines contain information regarding eligibility, the application process, and examples of certifiable activities.
A source for examples of the types of activities that have received certification are ETCA’s Federal Register Notices. When a Certificate is issued, a notice of issuance is published in the Federal Register. The Federal Register notices contain summaries of the operational aspects of a certificate: Export Trade, and Export Trade Activities and Methods of Operation.
A printable application form in PDF format is available here:
A sample application based on the hypothetical export collaboration of pasta makers is available here:
ETCA staff members are available to answer any questions and to guide applicants through the application process. There is no charge for any of these services.
II. Item by Item Instructions for Completing the Application.
ITEM 1: Applicant/Organizer Information
This item is self-explanatory: the name and address of the “person” applying for the certificate of review is entered here. The U.S. entity whose name is entered here will be the certificate holder. If the applicant has any controlling entity (for example, the applicant is a subsidiary of another company), that information would be provided here. If the applicant has no controlling entity then none should be entered.
Individual(s) authorized by the applicant to submit application and to whom all correspondence should be addressed
The response to this portion of Item 1 identifies the individual who will serve as the contact person for the applicant during the entire application process. It is to the contact person that ETCA will address all correspondence, and who ETCA will contact regarding any questions that may arise about the application, or with any requests for additional information. Typically, the contact is an employee of the applicant or the applicant’s legal counsel.
ITEM 2: Name and principal address of each member, and of each member’s controlling entity, if any.
The members of a Certificate are all the firms or entities that will be covered by and receive the protection of the Certificate other than the applicant itself. (For example, if the applicant is a trade association, the members of the Certificate would be those members of the trade association who elected to receive the protection afforded by a Certificate.) If any member has a controlling entity, the name of the controlling entity and its address should be provided as well.
ITEM 3: Copy of any legal instrument under which the applicant is organized or will operate. Include copies, as appropriate, of its corporate charter, bylaws, partnership, joint venture, membership, or other agreements or contracts under which the applicant is organized.
In response to this item, a copy of any legal instrument under which the applicant is organized should be submitted. Typically, the legal instrument will be articles of incorporation, partnership agreements, etc.
ITEM 4: A copy of the applicant’s most recent annual report, if any, and that of its controlling entity, if any.
In response to this item the applicant’s most recent corporate annual report should be provided. If the applicant is not incorporated, or if the applicant does not normally issue an annual report any document containing inform should or other similar document , should be provided. If no such document is available, that fact should be noted in response to this item.
To the extent the information is not included in the annual report, or in other documents submitted in connection with this application, attach a brief description of the applicant’s domestic (including import) and export operations, including:
(a) The nature of its business; (b) The types of products or services in which it deals; (c) The places where it does business.
Typically most, if not all, of the information requested in this question is contained in the applicant’s annual report. In response to this question please provide a summary of the requested information as well as a copy of the annual report itself. If an annual report is not produced, or if any of the information required for this item is not present in the annual report, it should be provided separately.
The response to this item will differ depending upon the particular applicant and application. Some possibilities are:
1) Applicant is a company formed in connection with the application for a Certificate of Review: In this circumstance the response would be some variation of, “The Applicant is a newly formed company which has yet to conduct any operations, domestic or export. Applicant’s purpose is to promote the export of its members widgets.”
2) Applicant is a preexisting entity such a trade association. In this circumstance the response would be some variation of, “The applicant is a trade association of U.S. widget manufacturers. Applicant engages in activities designed to meet the needs of its members and to promote widget sales and public awareness of widgets.”
3) Applicant is one of a group of firms that has assumed the “role” of applicant for the purpose of the application and fulfilling reporting requirements, or the applicant is the firm to be covered by the Certificate. In either of these circumstance the response would be some variation of, “The applicant is primarily engaged in the production and sale of widgets. The applicant operates three widget factories located in the south western United States. Widget sales and production are described on pages 6-9 of the Applicant’s (attached)Annual Report. The applicant serves the home widget market and various industrial markets in both the U.S. and abroad. The applicant also operates several logistical support entities which offer services to third parties. The locations of the applicant’s operations are described on pages 10-11 of the Applicant’s Annual Report. The applicant has customers in Southwestern and Midwestern United States and in Denmark, Norway, and Sweden.”
ITEM 5: A copy of each member’s most recent annual report, if any, and that of its controlling entity, if any.
To the extent the information is not included in the annual report, or in other documents submitted in connection with this application, attach a brief description of each member’s domestic (including import) and export operations, including:
(a) The nature of its business;
(b) The types of products or services in which it deals;
(c) The places where it does business.
Item 5 asks for the same information as Item 4, but with respect to each and every member that is to be covered by the Certificate in addition to the applicant. The responses for each member should be along the lines of,
“Member X is primarily engaged in the production and sale of widgets. These activities are supported by sales, procurement, and administrative offices located in the United States, Europe, and the Pacific Rim. applicant operates three widget factories located in the south western United States. In addition to the above listed locations Member X sells widgets in Brazil, Morocco, and Easter Island.”
ITEM 6: Names, titles, and responsibilities of the applicant’s directors, officers, partners, and managing officials, and their business affiliations with other members or other businesses that produce or sell any of the types of goods or services described in ITEM 7, (below).
Note that the information being requested in this Item is with regard to the applicant’s officials only. Information about officials of the individual members needs to provided only for any individual who is affiliated with both the applicant and a member. For example if Ms. X who is president of Member X was also on the board of directors for the Applicant, her relationship with Member X should be mentioned in the response to this item. A second example where information about a member’s official needs to be included in the application would be if Mr. X, who is one of Member X’s board members was also on the board of directors of Company Y, (which is not a member of the proposed Certificate), and Company Y is a widget producer. (Such a situation might arise if Member X were a subsidiary of Company Y.) Finally, if Mr. Z is on the board of directors of the Applicant, and also affiliated with of Company Z, (which produces widgets that relationship), Mr. Z’s relationship with Company Z Should be mentioned.
ITEM 7(A): A description of the goods or services which the applicant exports or proposes to export under the certificate of review. The description should reflect the industry’s customary definitions of product and services.
The responses to item 7(A) will vary from application to application. For an applicant that is a trade intermediary whose products to be exported vary from transaction to transaction the response should be “all products. “Since a Certificate covers only those products that are listed in the Certificate the response “all products saves the intermediary from either having to amend their Certificate to add additional products or having export transactions that were not covered by the Certificate. Conversely, if the applicant does not itself actually sell any products, (e.g. if the applicant is a trade association) then the response should be along the lines of, “Applicant neither engages nor does it intend to engage in export operations.”
When the applicant is a manufacturer, or an intermediary that specializes, the response to this question will consist of descriptions of the products the applicant wishes to export. For example, ” Applicant wishes to export rotary 6 & 9 inch widgets for industrial and home applications.” Typically the applicant would include an overview of the U.S. widget market, what widgets are used for and who consumes 6 & 9 inch widgets.
ITEM 7(B): If the information is reasonably available, please identify the goods or services according to the Standard Industrial Classification (SIC) number. Goods should normally be identified at the 7-digit level. Services should be identified at the most detailed SIC level possible.
Responding to Item 7(B) is optional. Although the item asks for 7-digit code, we realize that it can be difficult to find the information at that level of refinement. Consequently, 4-digit codes have been used in some applications. The relevant NAICS code may be used in place of the now obsolete SIC code.
ITEM 7(C): Identify the foreign geographic areas to which the applicant and each member export or intend to export their goods and services
The recommended response to Item 7(C) is “World-wide”. The Certificate covers transactions only when they involve countries mentioned in the Certificate. For a firms to have coverage for transactions involving a new market not listed in the Certificate would necessitate amending the Certificate. Conversely, the response world-wide results in coverage already being in place whenever a firm expands into a new geographic export market. If an applicant wishes to restrict the Certificate to those areas in which it currently operates or intends to operate, that is an acceptable response.
ITEM 8: For each class of the goods, wares, merchandise, or services set forth in ITEM 7, please provide the following information: (A) The principal geographic areas or areas in the United States in which the applicant and each member sell their goods and services. (B) For each of the previous two fiscal years the dollar value of the applicant’s and each member’s (i) total domestic sales, if any, and (ii) total export sales, if any. Include the value of sales of any controlling entities and all entities under their control.
A response to Item 8(A) takes one of two forms depending upon where the applicant’s and member’s products are sold:
1) If the applicant and/or a member sell domestically only in regional markets or certain states, the response should mention those areas: “Northwestern U.S.” or “Maryland, Pennsylvania and Virginia.”
2) If the applicant and/or a member sell everywhere in the United States, the response should be “nation-wide” or “throughout the U.S.”
Sales figures provided in response to Item 8(B) should be broken by product. For example, “Applicant had total domestic sales of $12,000,000 of which $7,000,000 was industrial 6 inch widgets, $3,000,000 was industrial 9 inch widgets, and $2,000,000 were home-consumer 6 inch widgets. Applicant had $500,000 in export sales all of which consisted of sales of 9 inch industrial widgets.” “Member X had total domestic sales of $5,000,0000, of which $4,000,000 was comprised of sales of 6 inch industrial widgets, and $1,000,000 was comprised of sales of home-consumer 6 inch widgets. Member X had no export sales in the past two fiscal years.”
ITEM 9: For each product or service to be covered by the certificate, indicate the best information or estimate accessible to the applicant of the total value of sales in the United States by all companies (whether or not members of the proposed certificate) for each of the last two (2) years. Identify the source of the information or the basis of the estimate.
This information can usually be obtained from an industry trade association or the relevant state or federal agency that deals with the industry: e.g. the Departments of Commerce, Agriculture, Energy etc. Response to this item may be waived if it would be burdensome for the applicant to obtain the necessary information.
ITEM 10:Describe the specific export conduct which the applicant seeks to have certified. Only the specific export conduct described in the application will be eligible for certification. For each item, the applicant should state the antitrust concern, if any, raised by that export conduct.
Examples of export conduct which applicants may seek to have certified include the manner in which goods and services will be obtained or provided; the manner in which prices or quantities will be set; exclusive agreements with U.S. suppliers or export intermediaries; territorial, quantity, or price agreements with U.S. suppliers or export intermediaries; and restrictions on membership or membership withdrawal.
(These examples are given only to illustrate the type of export conduct which might be of concern. The specific activities which the applicant may wish to have certified will depend on its particular circumstances or business plans.)
Response to this item represents the heart of the application. It is here the applicant specifies exactly what activities they want certified. Responses to Item 10 will depend on the industry, the product or services involved and the export behaviors and activities the applicant wishes to have certified. Two general guidelines that to be follow when responding to this Item are:
- Be as specific as possible.
- Be creative.
Don’t restrict yourself to activities mentioned in the guidelines or those that have been certified in previously issued Certificates. Just because no applicant has received certification for a particular activity in the past does not mean that the activity can not be included in your Certificate. It may turn out that you have thought of a use for a Certificate that has never previously occurred to anyone.
Suggestion: An approach which may be useful when responding to this item is to think in general terms about what it is you want to use the Certificate for, and then to turn to the sample Certificates and the Federal Register Notices for guidance on how to express your general goals as the activities to be certified.
Finally, please note that the guidelines contain several examples and discussions relating to possible export activities for which an applicant may wish to seek certification.
ITEM 11: If the export trade, export trade activities; or methods of operation for which certification is sought will involve any agreement or any exchange of information among suppliers of the same or similar products or services with respect to domestic prices, production, sales, or other competitively sensitive business information, specify the nature of the agreement or exchange of information.
Response to this item will depend upon on the exact activities the applicant wishes to have certified.
ITEM 12: A statement whether the applicant intends or reasonably expects that any exported goods or services covered by the proposed certificate will re-enter the United States, either in its original or modified form. If so, identify the goods or services and the manner in which they may re-enter the United States.
Response to this item is typically a statement by the applicant that he or she does not believe that any of the products covered by the Certificate will be reimported into the United States. As a result the response can be a rewording of the item, “The applicant does not intend nor reasonably expect that any exported goods or services covered by the proposed certificate will re-enter the United States, either in its original or modified form. “However, if there is a reasonable belief that the any of the covered goods may reenter the U.S., those goods should be identified.
ITEM 13: The names and addresses of the suppliers of the goods and services to be exported (and the goods and services to be supplied by each) unless the goods and services to be exported are to be supplied by the applicant and/or its members.
In many cases all goods sold under the Certificate will be supplied from the applicant and the member firms covered by the Certificate. In that circumstance this item is not applicable. If it is expected that some goods may be resold which were acquired from suppliers outside of the Certificate, then those suppliers should be identified unless 1) the applicant and members are purely trade intermediaries in which case it is unlikely that there will be any fixed group of suppliers or 2) the applicant and/or members can not reasonably predict at this time the source of any outside supply.
ITEM 14: For each product to be covered by the certificate provide the following background information:
(a) detailed description of the product and its purpose or use;
(b) the estimated number of competitors (both foreign and domestic) in the particular U.S. market;
(c) a list of the top five competitors who are not proposed members of this certificate, in terms of sales in the U.S. market, and an estimate of their respective (%) share in the market;
(d) the ranking of the applicant and each proposed member in terms of their sales in the U.S. market.
For an export intermediary that handles a large variety of products, or for a shipper’s association containing a large number of members from disparate industries a response to this item is impractical if not impossible and will likely be waived. In most other situations:
(a) In response to this item the standard industry definition of the product will suffice in most instances.
In response to parts (b) through (d), it is realized that the applicant may not have ready access to the information required and a waiver may be granted.
ITEM 15: (Optional) A proposed draft certificate.
A response to this item is optional. Relatively few applicants provide draft Certificates with their applications. If an applicant wishes to provide a proposed draft Certificate see the sample Certificates for guidance on Certificate structure.
ITEM 16: If the applicant is requesting expedited review, specify the facts and circumstances which warrant it in the space below
To receive expedited review, the applicant must show that a burden will befall the applicant and/or members if the full 90 day review period is employed, and that the circumstances necessitating issuance of the Certificate in less than 90 days were beyond the control of the applicant. In practice, expedited review is infrequently granted.