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Quotas

Import quota is the number or amount of goods of a specific kind or class, such as garments and shoes, that the government of importing country will permit to be imported. Import quotas are normally imposed on an annual and a country basis.") document.writeln("

Export quota is the number or amount of goods of a specific kind or class that the government of exporting country will allow to be exported. The purpose of export quota is to protect the domestic supply of the goods, for example, sugar, cement and lumber. Export quota may also be used to boost the world prices of such commodities as oil and strategic metals, and to protect the natural resources of the exporting country.

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The term quota usually refers to the import quota. In practice, the term export quota often, but incorrectly, refers to the import quota. When exporters talk about the export quota, most often they are referring to the import quota of the importing country.

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The quota is allocated, in the form of a permit or a license, to the exporters \(the export-manufacturers and export-traders\) usually on pro rata, based on their past export records. The quota allocation normally is administered by the government export office or the national industry association of the exporting country, for example garment manufacturers' association and footwear manufacturers' association.

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For new exporters, the chance of being given a quota by the administering office is often slim. However, they can still export either by selling their products to exporters with excess quota---having a quota but for reasons like shortage of supply, they are unable to serve or utilize all the amount or quantity allocated by the administering office---or by 'buying' the excess quota from willing sellers \(exporters\), with approval from the administering office. To ensure that the quota granted to an exporting country is fully served or utilized within a given time, the administering office of that country may allow the 'quota buying' between exporters.

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When a quota is reached, imports from an exporting country cannot be legally obtained. Hence, the quota is more effective in limiting imports than the tariff barriers.

Countertrade

Please click here for information on the countertrade.

Import Levies

Levies on imported and transit goods are often collected from the use of ports and terminal facilities. They are collected to pay the costs of maintenance and development of the infrastructures. Levies may vary from port to port \(or point to point\) within a country.

Import Pre-shipment Inspections

Please see Government Required Pre-shipment Inspections

Consular Invoice or Legalization or Visa of Export Documents

Certain importing countries, particularly in Central America, require a Consular Invoice. The consular fee can be a percentage of the invoice value. Some importing countries require that the export documents be legalized or visaed by their Consulate or the Commercial Section of the Embassy located in the exporting country. A fee is usually charged.

Health, Safety and Technical Standards

Certain products require the health certificate, safety test marks, or standards certification of the importing country before they are allowed entry. The product modification may be needed to meet the import requirements, which means additional product inventory and expenses.

Currency Deposit in Importations

Currency deposit, in local or foreign currency, may be required in applying for a letter of credit \(L/C\) and/or an import permit. In practice, many banks require a deposit and the amount varies from bank to bank. In times of foreign exchange shortage in a country, the government may require a 100% deposit in foreign currency \(U.S. Dollar usually\).

Product Labelling in Foreign Language

Product labelling in the official language of the importing country is often required, especially health and food products, which normally require the name of manufacturer and product expiry date. It may mean having new packaging to conform to import requirements. Consequently, additional product inventory and expenses are often necessary.

Closed Market Distribution

The closed market distribution can be a government and/or a private sector business practice or prohibition that precludes foreign goods from the domestic distribution channels. This may occur in a country having a centrally planned economy or a deep sense of nationalism.

Advertising Restrictions

In some countries, the comparative advertising---naming or showing of competing products---is prohibited by laws. The kind of product and the extend of advertising claims are regulated, which may render the advertisement less effective. Violators could face heavy penalties.

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