Always Think Twice Before You Export

By Michael Jones (michael.jones@tsiglobalconsulting.com)

The developing world is an extremely lucrative market for many U.S. businesses.  Lower taxes, untapped potential, and abundant resources are the norm, and most emerging countries seem all too eager to work with companies in order to grow their economies.  Expanding your business there seems like a dream come true.  However, despite these advantages, there is a hidden dark side to working in the developing world that anyone looking to export abroad needs to be aware of.

A great example of this can be found in Mexico.  Mexico has been in the news a lot lately, as its growing economy is (debatably) the strongest in Latin America.  However, other news has not been so good: Mexico’s infamous drug cartels have stepped up their violence, and citizens, sick of living in their iron grip, have begun to fight back, dragging Mexico into civil war.  Now, let’s pretend for a minute that you are an international exporter shipping export controlled (and successfully licensed) weapons technology to a Mexican company.  Upon arrival, a slight mishap occurs.  Through corruption or extortion, the company that you shipped the technology to hands it over to a drug cartel, which, in turn, sells it fora massive profit to the Iranian government.  Now, you’ve got a severe problem: the Iranians have U.S. weapons technology, the drug cartel has more money to buy weapons with, and you will be held accountable by the U.S. government for this disaster.

Variations of this situation are one of the main perils to doing business in the developing world.  All too often, officials or companies fall victim to bribery, which can lead to things ending up where they don’t belong: in those cases, as the exporter, you will be held responsible.  Most of the time, simply doing your due diligence and screening your end user will be sufficient to stop this kind of thing from happening.  However, in these “high risk” countries such as Mexico, or in known transnational shipping points to unfriendly countries, such as the United Arab Emirates, inexperienced exporters should think twice before doing any business unless they already have a trustworthy, established partner in the region.  The ultimate lesson here is to always be cautious, and always think twice before exporting anything that is export controlled.

Of course, it is difficult and time-consuming to build up contacts abroad.  Fortunately, you don’t need to do this work on your own: TSI Global Consulting has an extensive network of contacts throughout the world, and can put them to work to help you grow your business.  Give us a call at 210-757-0618 for a consultation.

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