Foreign Trade Regulations Mandatory Automated Export System. Omari Wooden Trade Ombudsman Foreign Trade Division U.S. Census Bureau.

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1 Foreign Trade Regulations Mandatory Automated Export System Omari Wooden Trade Ombudsman Foreign Trade Division U.S. Census Bureau 1 Today s Topics Legal/Filing Requirements U.S. Principal Party In Interest (USPPI) Types of shipments and transactions Automated Export System (AES) 2 1

2 Legal Requirements Census Bureau Foreign Trade Regulations (FTR) 15 CFR, Part 30 Bureau of Industry and Security (BIS) Export Administration Regulations (EAR) 15 CFR, Parts Customs and Border Protection (CBP) Customs Regulations Title 19 CFR, Parts State Department International Traffic in Arms Regulations (ITAR) Title 22 CFR, Parts 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 1 Tip: The ONE Rule ONE Schedule B number valued over $2,500 or license is required 4 2

3 When is an EEI Record Required? (FTR 30.2) An EEI record must be filed for exports of physical goods when shipped as follows: U.S. foreign countries U.S. U.S. Virgin Islands Puerto Rico foreign countries Puerto Rico U.S. Virgin Islands U.S. Puerto Rico 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 3

4 Address of USPPI Section (30.6(a)(1)(ii)) No post office box number Address where goods begin their journey to the port of export For multiple origins, report address where the commodity with greatest value originates 7 USPPI Address [FTR 30.6(a)(1)(ii)] Receives order from FPPI for Potato Chips and Corn Flakes. USPPI has two different warehouses. Value $5000 Value $8000 Florida Shipment Consolidator For Multiple Origins, the address of the USPPI (reported on the EEI) is the address of the warehouse location with the greatest value of the commodity. In this case, it is the Nebraska warehouse. 8 4

5 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 9 Export Transaction [FTR 30.3(c)] USPPI U.S Authorized Agent or USPPI 1. Order is placed 2. EEI is filed and goods shipped. FPPI If using U.S. Agent, USPPI provides Agent with written authorization or POA. 10 5

6 Export Transaction Section (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 under EAR If filing, respond to AES fatal errors or compliance alerts Retain documentation 11 Export Transaction Section (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 12 6

7 Export Transaction Section (30.7)(b) Carrier Responsibilities: Do not accept cargo without ITN Annotate Outbound Manifest Present proof of filing citation or exemption legend to CBP Port Director 13 Routed Export Transaction [FTR 30.3(e)] USPPI 3. Data provided U.S. Authorized Agent 1. Order is placed 2. Contracts to ship goods 4. EEI is filed and goods shipped. FPPI If using U.S. Agent, FPPI provides Agent with written authorization or POA. 14 7

8 Routed Export Transaction Section (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 Obtain a writing from the FPPI, if the FPPI assumes responsibility for licensing functions (See EAR 758.3) Maintain documentation 15 Routed Export Transaction Section (30.3 (e)) FPPI Responsibilities: Authorize a U.S. agent or USPPI to file the EEI record Provide the (POA) or written authorization to U.S. agent or USPPI If writing is issued, assume licensing responsibility 16 8

9 Routed Export Transaction Section (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 17 Filing Time Frames [FTR 30.4 (b)(1)] & [22 CFR (b)] USML Shipments 8 hours prior to scheduled departure time 8 hours prior to truck departure 24 hours prior to train departure 24 hours prior to vessel departure 18 9

10 Filing Time Frames [FTR 30.4 (b)(1)] Non-USML Shipments 24 hours prior to loading the vessel 1 hour prior to truck arriving at U.S. border 2 hours prior to plane s scheduled departure time 2 hours prior to train arriving at U.S. border 2 hours prior to export of mail 19 Shipments Exempt from Filing Sections ( ) 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)) 20 10

11 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 21 Delegation of Authority (FTR 30.73) Bureau of Industry and Security s Office of Export Enforcement Customs and Border Protection Bureau of Immigration and Customs Enforcement 22 11

12 Criminal Penalties (FTR 30.71(a)) A party who knowingly: Fails to file 10 or more days late Files false and misleading information Continues to participate in illegal activities Fines for each violation: Up to $10,000 Imprisonment for not more than five years Both 23 Civil Penalties (FTR 30.71(b)) Late Filings Up to $1,100 per each day delinquency or up to a maximum of $10,000 per violation Other Violations, including but not limited to: Continued use of outdated citations and references to the FTSR Incorrect value for shipment Failure to site license code or number Up to $10,000 per violation 24 12

13 Parties Subject to Penalties All parties involved in an export transaction are subject to penalties, including: USPPI Freight forwarder Authorized agent Carrier 25 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 26 13

14 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. 27 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

15 Automated Export System The Automated Export System is the electronic filing of: Export Information AES Filers are: U.S. Principal Parties in Interest U.S. Authorized Agents 29 Ensuring Compliance with AES Filings are monitored for quality, timeliness and coverage Census will take the appropriate action to correct non-compliance AES filers can be penalized for: Failure to File Late Filing Providing false or misleading information 30 15

16 AES Filing Methods Direct connection to the Customs mainframe Self-developed Software Certified Vendor Software Certified Service Center AESDirect Online Filing System AESPcLink Standard/Network Edition Batch Filing (EDI Upload) AESWebLink Authorized U.S. Agent 31 AES Process Flow 32 16

17 AES Filing Options Predeparture All elements required to be filed prior to exportation based on the mode of transportation Postdeparture File within 10 calendar days after exportation Shipments not allowed for Postdeparture: Licensed or USML/ITAR controlled Raw or rough cut diamonds Routed export transactions Used vehicles (except between US & Puerto Rico) 33 Common Problems Misreported Codes: Port of Export: Four digit number Port of Unlading: Four digit number for US and PR ports Five digit number for all other countries Country of Destination: Two alpha characters 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:

18 Common Problems Missing Required Information Shipment Information USPPI Ultimate Consignee Commodity Details Improperly Reported Commodity Line(s) When to combine Same Schedule B numbers under same shipment When to separate Different Schedule B numbers under same shipment Licensed exports Value exempted per Schedule B Different origin of goods (Foreign/Domestic) 35 AES Responses Verify Compliance Warning Informational Shipment Accepted ITN Issued Fatal Shipment Rejected No ITN Issued 36 18

19 Format: Example: Proof of Filing Citations (FTR 30.7) Predeparture Format: Example: AES AES ITN (YYYYMMDD######) X Postdeparture If Authorized Agent files on behalf of USPPI If USPPI files directly to the AES Format: Example: AESPOST USPPI ID Filer ID Date of Export AESPOST /16/2009 AESPOST USPPI ID Date of Export AESPOST /16/ Exemption Legends EEI Exemptions (FTR ) NO EEI Required FTR 30.37(a) NO EEI FTR Products exempt and non-exempt based on value within the same shipment AES ITN and remainder of shipment valued under $2,500 per Schedule B number Required on bill of lading, air waybill, or other commercial loading documents 38 19

20 AES Downtime Policy When the AES filer s system is down Transmit through AESDirect Select an authorized agent to report on your behalf When the AES is down You will be notified by a nationwide broadcast Use Downtime proof of filing citation to move cargo Maintain log of unreported shipments and transmit when system comes back up AES Downtime Citation AESDOWN Filer ID mm/dd/yyyy AESDOWN /01/ Census: Record Retention Section (30.10) Retain documents verifying the shipment for 5 years from the date of export Other Government Agencies: Adhere to requirements of other agencies with export control 40 20

21 Voluntary Self Disclosure (FTR 30.74) Submit letter on company letterhead and include the following information: Description of information unreported or reported incorrectly Number and value of shipments affected Steps taken to resolve problem Point of contact Letters should be submitted to: Mr. William G. Bostic, Jr. Chief, Foreign Trade Division U.S. Census Bureau 4600 Silver Hill Road, Room 6K032 Washington, DC File data in AES as soon as possible and retain documentation regarding all shipments involved in disclosure 41 For More Information FTD Call Center: Select 1 AES Assistance Select 2 Commodity Classification Assistance Select 3 Regulations Assistance Fax: Secure Fax: ASKAES@census.gov ftdregs@census.gov 42 21

22 For More Information Census: AES Regulations CBP: Appendix A Commodity Filing Response Messages State: