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The U.S. Census Bureau is warning exporters about doing business in Kazakhstan after the legislature recently passed a law requiring importers there to produce a copy of U.S. export documents, an official in the Foreign Trade Division told a gathering of freight forwarders in Denver on Friday.
It is illegal to disclose information on the Shippers' Export Declaration (SED) to unauthorized parties not responsible for regulating U.S. exports. Census officials zealously guard the confidential business data they collect from SEDs and worry that shippers will avoid providing accurate information about their overseas sales if they feel it might fall into the hands of other governments or competitors and be used against them.
"If you follow their legislation, you'll violate our regulations. Take your pick. How do you want to die?" said Jerry Greenwell, chief of the regulations, outreach and education branch in the Foreign Trade Division, at the Pacific Coast Council of Customs Brokers and Freight Forwarders Associations' annual Western Cargo Conference.
Meanwhile, Kazakh authorities have said that any cargo left on their docks for more than 60 days will be considered abandoned. The dispute has halted the movement of everything from cargo and parcels to diplomatic pouches.
"So anything that's in the pipeline -- you're probably not going to get it back," Greenwell said.
The U.S. government has demanded that Kazakhstan repeal the legislation and lift what Greenwell called "this self-invoked trade embargo of their country," to no avail.
Kazakhstan responded, he said, by agreeing to revoke the law and replace it with an even more onerous requirement for a notarized SED or a commercial invoice stamped by U.S. Customs and Border Protection.
Both options are not realistic because nearly 98 percent of SEDs are electronically filed with Census and CBP doesn't issue stamps for export documents.
A bevy of U.S. agencies are working to resolve the issue, including the State Department, the U.S. Trade Representative, International Trade Administration, CBP, and the Commerce Department. Census was reprimanded by the State Department for breaking protocol when it sent a letter directly to Kazakhstan Customs officials alerting them that they were putting U.S. companies in jeopardy, Greenwell noted.
Countries such as Kazakhstan seek export documents from trading partners so that they can verify the value of the goods entering the country for duty purposes. In 2004, the government of Costa Rica quickly ditched a requirement for importers to produce an SED for exports from the United States and other countries under pressure from the United States.
Last year U.S. companies exported $646 million worth of goods to the central Asian nation and 2007 export trade was $523 million through August, according to Census figures.
"My recommendation: Don't do business with Kazakhstan right now," Greenwell said.
Companies could work around the restrictions if they were willing to incur the extra expense of double exporting through another country that doesn't restrict sharing of export documentation, Greenwell said in a follow-up interview. An exporter, for example, could ship to an agent in the United Kingdom to re-export the goods to Kazakhstan, unless the goods required a U.S. export license.
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