Re-exporting is when someone sends a shipment to one country and then subsequently sends it on to another country without adding anything to the shipment and without clearing customs in the first destination country. Usually re-exporting is used to circumvent high tariffs or problems in shipping the cargo to the initial destination country. It may be that a company is going to send the cargo back to its origin due to production issues or other troubles. When a company is re-exporting, the cargo is
either left in a free trade zone or is stored in a bonded warehouse so that duties need not be paid to the temporary destination. Re-exporting can also be a strategy to take an export to a restricted country due to trade sanctions. These companies generally see this as justifiable since they do not feel like they are exporting for political purposes. For instance a company in the United States may have been in business with another company in Iraq but with the trade sanctions business was closed between the two nations. In this instance the exporting company may instead choose to send the cargo to another country that does not recognize the trade sanctions and then ultimately have the cargo sent on to Iraq. And while it is not technically illegal, it is certainly frowned upon by the US government since it would be ultimately exporting to a country which is in violation of International law. There are many reasons a company might choose to re-export and it is up to the importing and exporting companies to ensure due diligence in keeping their shipment within the boundaries of international laws.