Tuttle Law

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CBP Penalties for
AES (Export) Violations


October 22, 2010

In June 2008 CBP began requiring that all export information be submitted through its Automated Export System (AES) or through AESDirect. After June 2008 hard copies or paper filings of the shipper’s export declarations could no longer be filed. In January 2009, CBP started issuing penalties for violations of the AES filing requirements.

Under the applicable regulations, penalties can be assessed against all parties who are involved in the export transaction. The regulations, which are published by the Census Bureau (Department of Commerce), indicate that the parties against whom penalties can be assessed include the U.S. Principal Party in Interest (USPPI) or the Foreign Principal Party in Interest (FPPI). Under the regulations, the PPI is the person or entity that receives the primary benefit (monetary or otherwise) from the export transaction. The PPI can be freight forwarders, authorized agents (which may include brokers), carriers, or other parties to the export transaction. In addition, penalties can be assessed against more than one culpable party. Penalties are assessed against the culpable party or parties “per each AES transmission that is found to be in violation of the FTR” (Foreign Trade Regulations), rather than per each violation of the FTR with respect to the AES transmission.

Under the statute and regulations, the maximum penalty for violations of the electronic export filing regulations is $10,000 per violation or $1,100 per day in the case of late filings. A late filing becomes a non-filing after ten working days.

There is a procedure in the FTR whereby a party can make a “voluntary self-reported disclosure,” which is analogous to a “prior disclosure” for Customs import transactions. The voluntary self-reported disclosure is filed with the Census Bureau, but the ultimate disposition is made by CBP. 

Once a voluntary self-reported disclosure is filed, CBP will issue a penalty. However, pursuant to the FTR, the voluntary self-reported disclosure, if accepted, would be considered by CBP as an “extraordinary mitigating factor”. Once a penalty is issued, the party in interest can file a petition to mitigate the penalty or ask that it be rescinded altogether. A reduction of the penalty depends upon the facts, whether there are allowable mitigating factors, and whether there may be aggravating factors, etc.

If you have any questions AES filing requirements or other customs matters, please contact Stephen Spraitzar at (415) 288-0427 or via email at steve.spraitzar@tuttlelaw.com.

 

Stephen Spraitzar, is an attorney with the Law Offices of George R. Tuttle in San Francisco.

The information in this article is general in nature, and is not intended to constitute legal advice or to create an attorney-client relationship with respect to any event or occurrence, and may not be considered as such.

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