Case 3 RichInFur of Rochester

RichInFur Rochester, a U.S. fur label, has specialized in upcycling old or unsold furs and pelts in the NY-New-England-Quebec region, a traditional stronghold of the fur industry. Over the past decade, recycling fur has grabbed the attention of producers and consumers alike.RichInFur'srecycling and upscaling of fur into garment accessories and decorative items and advertises has saved over 800,000 animal lives since the inception of the program a decade ago. Due to market saturation in North America, RichInFur is looking to export to Europe, where they expect to find a good market for their sustainable fur products.

Their market research shows that fur clothing accessories like hats, gloves, scarves, ear-protectors, collars, and fur trims are in highest demand in countries with severe winters, as in Scandinavia and Eastern Europe. However, this was not found to be true for their decorative fur items, such as bags, key rings, house shoes, decorative applications on garments, like on bags, knit hats, house shoes, home wear, and key chains, which sell equally well all over European markets.

RichInFur has developed an export plan and intends to sell their products abroad directly from a sales representation to be located in an EU country, which will in turn will sell to big established wholesalers who distribute the RichInFur product lines to department stores and clothing chains all over Europe. To establish their fur merchandise brand in Europe, RichInFur plans to exhibit their full line of currently 57 designs and models at the most important European apparel fairs.

Questions

1. Will RichInFur have to pay import duties on theirtrade show exhibitsthat will circulate through major fairs in the EU in early 2016 to push into the market for the 2017/18 season? What is the best import procedure here?
2. Regardingregularmerchandise originating from the U.S., to be sold byRichInFur'sEuropean subsidiary, what are the steps in the customs procedure these imports will have to go through? Are there any special trade related concerns RichInFur may have address in the importation process?
3. Should the European subsidiary, for customs reasons, be established in (or nearby) the country of their biggest expected market? Explain all possible trade-related issues the European subsidiary might face when exporting from its country of establishment to other European countries.