June 5, 2008
After three years, the U.S. Census Bureau (Census Bureau) has issued it final rule requiring the mandatory filing of export information through the Automated Export System (AES) or AESDirect for all shipments where a Shipper’s Export Declaration (SED) is required.
The effective date of this new rule is July 2, 2008. However, implementation of the provisions of this rule will go into effect on September 30, 2008. Census states that this will allow all affected entities sufficient time to come into compliance with this rule.
AES is an electronic method for filing export information directly with the U.S. Customs and Border Protection (CBP) and the Census Bureau. AESDirect is the Census Bureau’s free Internet-based system for filing SED information through the AES.
The paper SED and the AES are the primary means used for collecting export trade data (referred to as “Electronic Export Information” or “EEI”), which is used by Census for compiling and publishing trade statistics. Additionally, the SED and the EEI are used for export control purposes to detect and prevent the export of items by unauthorized parties or to unauthorized destinations or end users. AES aids in targeting and identifying suspicious shipments prior to export and affords the government the ability to significantly improve the quality, timeliness, and coverage of export statistics. In October of 2003 use of AES became mandatory for filing of export information for all items on the Commerce Control List (CCL) and the U.S. Munitions List (USML).
Summary Of The New Rule
This rule provides that all export information for which an SED is required (generally, all commodities shipped under a single Schedule B number with a value of $2500 or more, except for shipments to Canada) be filed through the AES.
The requirements to file EEI for goods shipped to the United States from Puerto Rico, goods shipped to Puerto Rico from the United States, and goods shipped to the U.S. Virgin Islands from the United States or Puerto Rico remain unchanged.
Use Of Internal Transaction Number (ITN)
Previously, AES filers were allowed use either the External Transaction Number (XTN) or the Internal Transaction Number (ITN) to validate the filing on commercial shipping documents. The ITN is an AES generated number assigned to a shipment confirming that an EEI transaction was accepted and is on file in the AES. The XTN is a self generated number assigned to a shipment by the exporter. Under the Final Rule, only the ITN is acceptable as the proof of filing citation. The ITN confirms that the shipment information has been accepted in the AES. The XTN will no longer be accepted as a proof of filing.
Pre-Departure Time Frames For Filing EEI In AES
Pre-departure filing time frames will vary according to the method of transportation. For State Department USML shipments, parties are to refer to the International Traffic in Arms Regulations (ITAR) (22 CFR 120–130), § 123.22, for the specific requirements concerning filing time frames. For non- USML shipments, under the new rules, the EEI is to be filed as follows:
- For vessel cargo, the EEI is to be filed and the filing citation or exemption legend provided to the exporting carrier 24 hours prior to loading cargo on the vessel at the U.S. port where the cargo is laden;
- For air cargo, the EEI is to be filed and the filing citation or exemption legend provided to the exporting carrier, including air express couriers, no later than two hours prior to the scheduled departure time of the aircraft;
- For truck cargo, the EEI is to be filed and the filing citation or exemption legend provided to the exporting carrier no later than one hour prior to the arrival of the truck at the U.S. border to go foreign;
- For rail cargo, the EEI is to be filed and the filing citation or exemption legend provided to the exporting carrier no later then two hours prior to the time the cargo arrives at the U.S. border to go foreign;
- For mail and cargo shipped by other methods, except pipeline exports, the EEI is to be filed and the filing citation or exemption legend provided to the exporting carrier no later than two hours prior to exportation.
Option 4 (Post-Departure) Filing
In agreement with the Census Bureau and CBP, the moratorium placed on Option 4 (post-departure filing) on August 15, 2003 will remain in effect pending further review of the post-departure filing program.
Requirement That The Agent Of FPPI Provides The USPPI With A Copy Of The Power Of Attorney Or Written Authorization From The FPPI
The Census Bureau has revised § 30.3(e)(2) of the FTR to require the agent of the FPPI, upon request, to provide the USPPI with a copy of power of attorney or the written authorization giving the agent the authority to file the EEI on behalf of the FPPI before the USPPI provides the required information necessary to complete the EEI filings.
Retention Of Export Information And The Authority To Require Proof Of Documentation Of EEI
Section 30.10 has been revised to clarify the requirements for retaining export information. All parties to the export transaction (owners and operators of export carriers, USPPIs, FPPIs and/or authorized agents) are to retain documents pertaining to the export shipment for five years from the date of export.
Census has eliminated the requirement that AES filers retain a paper copy of the Letter of Intent to participate in the AES and the requirement that AESDirect and/or AESPcLink filers print and maintain a copy of their electronic certification notice. In addition, the Census Bureau has modified this section to add a note describing its responsibilities with respect to the retention and maintenance of EEI.
For purposes of verifying the completeness and accuracy of information reported as required under § 30.6 and for other purposes under the regulations, all parties to the export transaction (owners and operators of the exporting carriers, USPPIs, FPPIs, and/or authorized agents) are to provide, upon request, to the Census Bureau, CBP, ICE, BIS and other participating agencies the EEI, shipping documents, invoices, orders, packing lists, and correspondence as well as any other relevant information bearing upon a specific export transaction at anytime within the five year time period.
Proof Of Filing Citations, And Exemption Legends
The USPPI or the authorized agent is responsible for annotating the proper proof of filing citation or exemption legend on the first page of the bill of lading, air waybill, export shipping instructions or other commercial loading documents. The USPPI or the authorized agent must provide the proof of filing citation or exemption legend to the exporting carrier. The carrier must annotate the proof of filing citation, exemption or exclusion legends on the carrier’s outbound manifest when required. The carrier is responsible for presenting the appropriate proof of filing citation or exemption legend to CBP Port Director at the port of export.
Transmitting And Correcting Electronic Export Information
The USPPI or the authorized filing agent is responsible for electronically transmitting accurate EEI as known at the time of filing in the AES, and for transmitting any changes to that information as soon as they are known. Corrections, cancellations, or amendments to that information shall be electronically identified and transmitted to the AES for all required fields as soon as possible. Failure to correct the EEI is a violation of the provisions of the FTR.
Fines, Penalties And Voluntary Self-Disclosure
Pursuant to the authority in Public Law 107–228, Commerce has delegated authority for enforcement to the Bureau of Industry and Security’s (BIS) Office of Export Enforcement (OEE) and the DHS. The Census Bureau has worked with CBP and the BIS to develop regulations implementing the process and requirements for submitting a notification disclosing a violation or suspected violation of the FTR. These regulations are found in Subpart H, § 30.74 Voluntary Self-Disclosure.
In addition, a new Subpart (Subpart H) was created to cover the FTR penalty provisions formerly addressed in § 30.95 of the FTR. New penalty provisions addressed in Subpart H describe the increase in penalties imposed for violations from $100 to $1,000 for each day of delinquency, to a maximum from $1,100 to $10,000 per violation. In addition, the penalty provisions provide for situations when the filer knowingly fails to file, files false and/or misleading information and other violations of the FTR where a civil penalty shall not exceed $10,000 per violation and a criminal penalty shall not exceed $50,000 or imprisonment for no more than five years, or both, per violation. Finally, Subpart H provides for the enforcement of these penalty provisions by the BIS’ Office of Export Enforcement (OEE) and the DHS’s CBP, and ICE.
If you have any questions on the issues raised in this newsletter, please contact George R. Tuttle, III at (415) 288-0428 or at firstname.lastname@example.org.
George R. Tuttle, III 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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