1

Omari WoodenTrade Ombudsman

U.S. Census Bureau Foreign Trade Division

Foreign Trade Regulations & Automated Export System

2

Today’s Topics

• Legal/Filing Requirements

• U.S. Principal Party In Interest (USPPI)

• Types of shipments and transactions

• Automated Export System (AES)

3

Legal RequirementsCensus Bureau Foreign Trade Regulations (FTR) • 15 CFR, Part 30Bureau of Industry and Security (BIS) Export Administration Regulations (EAR) • 15 CFR, Parts 700 - 799

Customs and Border Protection (CBP) Customs Regulations • Title 19 CFR, Parts 1 – 199 State Department International Traffic in Arms Regulations (ITAR) • Title 22 CFR, Parts 120 – 130

4

What is a Shipment?(FTR 30.1)

• ONE USPPI shipping their merchandise, to• ONE Foreign consignee, on• ONE Carrier moving the product out of the U.S., on• ONE day, with• Valued over $2,500 per Schedule B number or license is

required

1Tip: The ONE Rule

5

U.S. Principal Party in Interest (FTR 30.3)

The U.S. Principal Party in Interest is the:• U.S. Person or Entity• Primary Benefactor (Monetary, or Otherwise)• Foreign Entity (if in the U.S. at time goods are purchased or

obtained for export)

Generally that Person can be the:• U.S. Seller: (Wholesaler or Distributor)• U.S. Manufacturer• U.S. Order Party

6

Two Types of Transactions(FTR 30.3)

Export Transaction (Standard): • USPPI files the EEI or authorizes an agent to file the EEI

Routed Export Transaction: • Foreign Principal Party in Interest (FPPI) authorizes a U.S.

agent to facilitate the export of items from the United States and to prepare and file the EEI

7

Export Transaction(FTR 30.3(c))

USPPI Responsibilities:• Prepare and file EEI and provide proof of filing citation• Authorize a U.S. agent to file EEI via POA or written

authorization• Provide agent with accurate and timely export information• Assume responsibility for license determination• If filing, respond to AES fatal errors or compliance alerts• Retain documentation

8

Export Transaction (FTR 30.3(c))

U.S Authorized Agents’ Responsibilities:• Obtain written authorization or POA from USPPI

• Accurately prepare EEI via the AES, based on information provided by the USPPI and other parties

• If filing, respond to AES fatal errors or compliance alerts

• Provide AES Internal Transaction Number (ITN) to carrier based on required filing timeframes

• Upon request, provide USPPI with copy of information filed on its behalf

9

Routed Export Transaction (FTR 30.3(e))

USPPI Responsibilities:• Must provide FPPI’s agent with commodity data and Licensing

information• May request copy of the authorized agent’s POA or written

authorization from the FPPI• If filing, obtain POA from FPPI to complete and file the EEI• Maintain documentation

10

Routed Export Transaction (FTR 30.3(e))

U.S Agent Responsibilities:• Obtains a POA or written authorization from the FPPI

• Prepare and file the EEI • Upon request, provide the USPPI with data elements filed on its

behalf

• Upon request, provide the USPPI with a copy of the POA or written authorization from the FPPI

• Provide filing citation or exemption legend

• Maintain documentation

Value of Repair Items (FTR 30.29(a))

Report the value of the repairs,

including parts and labor

Report Schedule B number

9801.10.0000 for the reexport of any

article that was imported for repairs

or alterations

11

Value of Warranty Items (FTR 30.29(b))

Report the value of the replacement commodity

Report original Schedule B number

If the value on the EEI record is different from the value on the bill of lading, invoice, etc., include a statement notating: “Product replaced under warranty, value for EEI record purposes”

12

13

Shipments Exempt from Filing (FTR 30.36-30.40)

• Country of ultimate destination is Canada (30.36)

• $2,500 or less per Schedule B number (30.37(a))

• Tools of Trade: hand carried, personal or company use, not for sale, not shipped as cargo, returned within 1 year (30.37(b))

• Intangible exports of software & technology (30.37(f))

• Temporary Exports (e.g., Carnets) (30.37(q))

14

Exemptions Do Not Apply (FTR 30.2(a)(iv))

• Commerce (BIS) licenses

• Country Group E:1 (Supplement 1 to 15 CFR 740)

• State Department licenses and ITAR controlled items

• License shipments from other government agencies

• Shipments on Office of Foreign Assets Control Sanctions Program List

• Rough Diamonds

15

CBP Penalty Guidelines

• Penalties may be mitigated

• CBP Published Guidelines on Jan. 2, 2009

• Effective Date• February 1, 2009

• Highlights:• Penalties for failure to file, late filing, and other violations• Mitigating and Aggravating Factors• Guidance for CBP officers• Carrier Penalties

16

Mitigating Factors

Including, but not limited to:• First-time USPPI or authorized agent, FPPI, carrier, etc.

• Voluntary self-disclosure of the violation

• Clear documentary evidence of remedial measures undertaken to prevent future violation

• Exceptional cooperation with CBP, Census or BIS

• Demonstration by party of having a systematic export compliance effort.

17

Aggravating Factors

Including, but not limited to:• Several violations in the same export transaction

• Circumstances suggest the intentional nature of the violation

• High number of violations in preceding 3 year period

• Evidence of criminal conviction for related violation, i.e. BIS violation

• The party exports as a regular part of its business, but lacks a systematic export compliance effort.

18

Automated Export System Uses

• CBP uses AES to verify shipments directly at

the port.

• BIS uses AES to track export license

transactions and to validate end users.

• DDTC uses AES to track export license

transactions and to automatically decrement

values on some license types.

19

AES Process Flow

20

Gather/Review filing resources

Foreign Trade Regulations (FTR) Export Flipper

AESDirect Support Center

FTD Blog at blogs.census/gov/globalreach

Before Filing the EEI

21

• Decide who is filing the EEI

– USPPI files

– Authorized U.S. Agent files on USPPI’s

behalf.

To avoid duplicate EEI filings, only one party files the EEI.

Before Filing the EEI

22

Filing the EEI and Troubleshooting

Misreported Codes:• Port of Export: Four digit number

• Misclassification: • Ink cartridges vs. weapon cartridges• Rubber seals vs. live seals

• Country of Destination: Two alpha characters

• IE – Ireland IR – Iran IQ – Iraq

• Carrier SCAC/IATA• Four character code for Vessel, Truck, and Rail• Two or three character code for Air

• Schedule B: Ten digit number • Search engine available at:

http://www.census.gov/foreign-trade/schedules/b/

23

AES Responses

Verify

Compliance

Warning

Informational

Fatal

Shipment Rejected

No ITN IssuedorUpdate Rejected

Invalid ITN

Shipment Accepted

ITN Issued

24

What to do with Outstanding Fatal Errors

• Correction: the updating and resubmission of the rejected EEI to obtain an ITN

• Cancellation: the deletion of a successfully submitted EEI by the filer

• Suppression: the manual removal of a fatal error by the AES staff

Implement Best Practices

hDocument!!! Document!!! Document!!!

hCorrect information as soon as possible

hMaintain compliancehEducation & cross traininghAutomation & Procedures

hAttend Seminars & Workshops

26

Implement Best Practices

• Perform Cross Training

• Implement mentoring program

• Know your US authorized or forwarding agent

• Develop training manual

• Perform yearly audits

Notice of Proposed Rule Making (NPR)

A NPR is issued when government agencies propose to add, remove, or change a rule or regulation

• Published in the Federal Register on January 21, 2011

• The public comment period ended on March 22, 2011

• Census, Customs and Border Protection (CBP) and Bureau of Industry and Security (BIS) will review comments

• Agency concurrence

• Respond to comments

• Issue and implement the Final Rule

28

For More Information

• FTD Call Center: 800-549-0595• Option 1 – AES Assistance• Option 2 – Commodity Classification Assistance• Option 3 – Regulations Assistance• Option 4 – Data Dissemination

• Fax: 301-763-8835• E-mail: ASKAES@census.gov• FTD Blog: blogs.census.gov/globalreach/

29

Questions?