‘Landmines’ in Exporting - The Don'ts of Exporting in Zimbabwe

International trade business has extra dimensions of legislations and controls over domestic trade business. Because of those extra dimensions, any new or existing exporter should tailor-make own operations to avoid committing the "don'ts" of exporting, as the effects of ‘stepping’ on those ‘landmines’ might be fatal. Therefore the purpose of this post is to advise on how to quality control own export operations by reviewing some of the "don'ts" which Zimbabwean exporters commit.

Don’t #One:

Exporters should not forget that they are responsible for maintaining full compliance with all Zimbabwean Exchange Control laws and Customs and Excise Laws (hereinafter collectively termed export laws) that are relevant to their products at the time of export. Such responsibility makes the exporter liable for the export control violations that one might knowingly or unknowingly commit while engaging in an export transaction and for the export control violations that one’s agents (such as freight forwarders) commit while carrying out export operations on the exporter’s behalf. These include carrying out illegal transshipment or illegal export of own products without permits etc.

Don't #Two:

Exporters should not neglect to investigate whether the foreign markets into which they are exporting their products have any Import Controls related to the sale of such product. Such foreign destination’s import controls may be in the form of import prohibitions, import restrictions (quotas) and import licensing requirements. Such controls may be based on country of origin, product type, or product characteristics, such as products produced by convicts and counterfeit products. Imported products, which contravene an importing country's import controls, are generally refused entry at the importing country's border, thereby resulting in unnecessary loses or costs.

Don't #Three:

Exporters should not neglect to evaluate country risk in addition to buyer risk in selecting the proper payment method for their export transactions. Countries frequently experience political and economic problems so severe that buyers in such countries are precluded from obtaining the necessary foreign currency to pay for their imports. Exporters that ship to such countries without having investigated the country's political and economic situation and without having selected a payment method appropriate in light of such political and economic situation run the risk of not receiving payment for their export sale, regardless of the good intentions evidenced and financial responsibility exercised by their foreign buyers. Such non payments by foreign buyers may end up degenerating into violations of repatriation laws of Zimbabwe.Exporters should not neglect to evaluate country risk in addition to buyer risk in selecting the proper payment method for their export transactions. Countries frequently experience political and economic problems so severe that buyers in such countries are precluded from obtaining the necessary foreign currency to pay for their imports. Exporters that ship to such countries without having investigated the country's political and economic situation and without having selected a payment method appropriate in light of such political and economic situation run the risk of not receiving payment for their export sale, regardless of the good intentions evidenced and financial responsibility exercised by their foreign buyers. Such non payments by foreign buyers may end up degenerating into violations of repatriation laws of Zimbabwe.

Don't #Four:

Exporter should not confuse INCOTERMS when submitting the customs documentation. It is important to ensure that the exporter does not misuse any INCOTERM for any purpose and that the exporter fully understands the costs, responsibilities, rights and obligations that accompany the use of a specific INCOTERM. The misuse of a selected INCOTERM can lead to over or underpayment of costs and to over or under assumption of responsibilities, rights and obligations. Zimbabwean transporter of exported goods under which INCOTERM has been misuses might end up being forced by Customs authorities to complete Forms CD3 at the Border Posts in foreign currency simply because the exporter quoted incorrect INCOTERM on the respective Form CD1.

Don't #Five:

Exporters should not ignore their responsibility to comply with the Zimbabwe Exchange Control Laws as they relate to required export documents. Exporters are required to prepare and submit a Form CD1 for each export, unless where an exemption applies. The Form CD1 must list the contents of each shipment, values of shipment, cite the appropriate export license, and identify the final destination, end recipient. Failure to provide a Form CD1 exposes an exporter to criminal penalties under the Zimbabwean laws.

Don't #Six:

Exporters should not make any misrepresentations on their Forms CD1. Exporters are responsible for accurate Forms CD1. The following specific areas require attention: Don't under-invoice or over-invoice your products on your Form to help an importing customer avoid tariffs or taxes.Don't misrepresent the place of origin on your Form CD1 in order to assist your foreign buyer to gain access to a preferential duty program to which your foreign buyer is not legitimately entitled.Don't incorrectly identify the contents of your shipment in an effort to evade the Zimbabwe export controls that apply to your product. These activities violate Zimbabwe export laws and expose a Zimbabwe exporter to civil and/or criminal penalties. In addition, they expose the Zimbabwe exporter to a potential violation of the importing country's tax law under the theory that the exporter aided and abetted the importer in committing tax fraud.

Don't #Seven:

Zimbabwean exporters should not be greedy - if an export opportunity looks too good to be true, it often isn't true! Just think of all the Zimbabwean exporters who have so far been trapped in export scams and don't get lured into participation by thoughts of the scarce foreign currency in Zimbabwe which may become available to you for little or nothing in return. Some have been duped after being convinced by foreign conmen that their product will fetch unbelievably high price, only to lose track of the ‘too-good-to-be-true’ foreign customer soon after shipment and before getting payment. Don't lose your good business sense in the face of an export opportunity and give export sales opportunities the same level of scrutiny that you would give any business deal.