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Foreign Trade DivisionForeign Trade DivisionAES Compliance SeminarAES Compliance Seminar

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Regulations, Outreach Regulations, Outreach and and

Education BranchEducation Branch

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Today’s TopicsToday’s Topics

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Census BureauForeign Trade Regulations (FTR)

•15 CFR, Part 30 Section 30.1 - 30.74

Bureau of Industry and Security (BIS)Export Administration Regulations (EAR)

•15 CFR, Parts 700 - 799

Legal RequirementsLegal Requirements

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Legal Requirements Legal Requirements (cont’d)(cont’d)

State DepartmentInternational Traffic in Arms Regulations (ITAR)

•Title 22 CFR, Parts 120 – 130

Customs and Border Protection (CBP)Customs Regulations

• Title 19 CFR, Parts 1 – 199

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Impact On Trade CommunityImpact On Trade Community

• New compliance requirements may lead to shift in business practice

• Meet filing time frames

• Know who files, what is filed and when to file

• Required filing citations to carriersInternal Transaction Number (ITN) Proof of Filing CitationExemption CitationPostdeparture CitationDowntime Citation

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Enhancements to the FTREnhancements to the FTR

Improved Clarifications

Definitions and Appendices

Filing Time Frames

Electronic Letter of Intent

Penalty Provisions

Voluntary Self Disclosure

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New Terminology and ChangesNew Terminology and Changes

Current FTSR New FTR Changes

SED Electronic Export Information (EEI)

FTSR FTR

Option 2 Predeparture

Option 4 Postdeparture

Section 30.1-30.99 Section 30.1-30.74

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Definitions andDefinitions and Appendices Appendices EnhancementsEnhancements

• Purpose and Definitions Section (30.1)

• Appendix A- Sample POA/Written Authorization

• Appendix B- Automated Export System (AES) Filing Codes

• Appendix C- Proof of Filing Citations and Exemption Legends

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Definitions andDefinitions and Appendices Appendices Enhancements Enhancements (cont’d)(cont’d)

• Appendix D- Exemptions and Exclusions

• Appendix E- FTSR to FTR Concordance

• Appendix F- FTR to FTSR Concordance

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When is an EEI Record Required? When is an EEI Record Required? Section (30.2)Section (30.2)

An EEI record must be filed for exports of physical goods when shipped as follows:

From U.S. to foreign countriesBetween the U.S. and Puerto RicoFrom Puerto Rico to foreign countriesFrom Puerto Rico to U.S. Virgin IslandsFrom the U.S. to the U.S. Virgin IslandsLicensable commodities

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U.S. Principal Party In Interest U.S. Principal Party In Interest Section (30.3)Section (30.3)

USPPI Can Be The:

• U.S. Seller: (Wholesaler or Distributor)

• U.S. Manufacturer

• U.S. Order Party

• Foreign Entity

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What is a Shipment?What is a Shipment?Section (30.1)Section (30.1)

• Merchandise shipped from one U.S. Principal Party in Interest (USPPI) to one consignee

• On the same flight/vessel

• To the same country

• On the same day

• Valued over $2,500 per Schedule B number or license required

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Two Types of TransactionsTwo Types of TransactionsSection (30.3)Section (30.3)

Export Transaction (Standard):

• USPPI files the EEI record or authorizes U. S. agent

to file the EEI

Routed Export Transaction:

• Foreign Principal Party in Interest (FPPI)

authorizes a U.S. agent or USPPI to file the EEI

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Export TransactionExport TransactionSection (30.3(c))Section (30.3(c))

USPPI Responsibilities:

• Prepare and file Electronic Export Information and provide

proof of filing citation to carrier

• 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

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Export TransactionExport TransactionSection (30.3(c))Section (30.3(c))

U.S. Authorized Agents’ Responsibilities:

• Obtain written authorization or POA from USPPI

• Accurately prepare export information via 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 (30.4)

• Provide USPPI with copy of information filed on its behalf

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Export TransactionExport TransactionSection (30.3(c))Section (30.3(c))

Carrier Responsibilities:

• Do not accept cargo without ITN

• Annotate Outbound Manifest (30.7)

• Present proof of filing citation or exemption legend to CBP Port Director

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Routed Export TransactionRouted Export TransactionSection (30.3(e))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

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Routed Export TransactionRouted Export TransactionSection (30.3(e))Section (30.3(e))

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

record

• Obtain a writing from the FPPI, if the FPPI assumes

responsibility for licensing functions (See EAR 758.3)

• Retain documentation

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Writing Writing EAR (758.3)EAR (758.3)

What is a “Writing”? · A writing designates the party that is responsible for

export control functions

When is writing required? · For Routed Export Transactions

How much are penalties for violatingSection 758.3 of the EAR? · $250,000

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Routed Export TransactionRouted Export TransactionSection (30.3(e))Section (30.3(e))

U.S. Agent Responsibilities:

• Obtains a POA or written authorization from the FPPI

• Prepare and file EEI record

• 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

• Retain documentation

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Required Predeparture FilingsRequired Predeparture FilingsSection (30.4(a))Section (30.4(a))

• U.S. Munitions List (USML)/Commerce Control List (CCL) shipments

• Drug Enforcement Agency (DEA) Permit

• Used self-propelled vehicles

• “Sensitive” by Executive Order

• Routed Exports

• Rough Diamonds

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Postdeparture FilingPostdeparture FilingSection (30.5(c))Section (30.5(c))

• 10 calendar days to file EEI after date of

export

• Currently, only approved filers may file

Postdeparture

• Moratorium placed on the acceptance of

new applicants pending further review

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ITAR Filing Time Frames ITAR Filing Time Frames Section (30.4(b)(1))Section (30.4(b)(1))

USML Shipments

Air: 8 hours prior to scheduled departure time

Truck: 8 hours prior to truck arriving at U.S. border

Rail: 24 hours prior to train arriving at U.S. border

Vessel: 24 hours prior to loading

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Filing Time Frames Filing Time Frames Section (30.4(b)(2))Section (30.4(b)(2))

Non-USML Shipments

Vessel: 24 hours prior to loading

Truck: 1 hour prior to truck arriving at U.S. border

Air: 2 hours prior to scheduled departure time

Rail: 2 hours prior to train arriving at U.S. Border

Mail: 2 hours prior to export

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Exclusions From Filing EEI Exclusions From Filing EEI Section (30.2(d))Section (30.2(d))

• Goods transiting the U.S. under CBP bond from one foreign country to another

• Goods shipped from the U.S. territories to foreign countries and between the U.S. and these territories

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Exclusions From Filing EEI Exclusions From Filing EEI Section (30.2(d)) (cont’d)Section (30.2(d)) (cont’d)

• Electronic transmissions and intangible transfers

• Goods shipped to Guantanamo Bay Naval Base from United States, Puerto Rico, or the U.S. Virgin Islands and from Guantanamo Bay to these areas

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Shipments Exempt from FilingShipments Exempt from Filing Sections (30.36 - 30.40) Sections (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))

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Exemptions Do Not ApplyExemptions Do Not Apply

• Commerce (BIS) licenses

• State Department licenses

• License shipments from other government agencies

• Shipments on Office of Foreign Assets Control Sanctions Program List

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Data ElementsData Elements Section (30.6) Section (30.6)

Mandatory · Must be reported for each transaction

Conditional · Must be reported if they are required for, or apply to

the specific shipment

Optional · May be reported at the discretion of the USPPI or the

authorized agent

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Name & Address of USPPI Name & Address of USPPI Section (30.6(a)(ii))Section (30.6(a)(ii))

• Company, U.S. Citizen, Foreign Entity Name

• Identification Number

• No post office box number

• Address where goods begin journey

• For multiple origins, report address where the commodity with

greatest value originates

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ValueValueSection (30.6(17))Section (30.6(17))

• Selling price including inland domestic freight and insurance, or

• Cost, if the goods are not sold

• Estimate freight insurance domestic, if not known

• Report value to nearest U.S. dollar

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Value of Repair ItemsValue of Repair ItemsSection (30.29)Section (30.29)

• Report the value of the repairs, including

parts and labor

• Report Schedule B number 9801.10.0000

for the export of any article that was

imported for repairs or alterations

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Value of Warranty ItemsValue of Warranty ItemsSection (30.29)Section (30.29)

• Report the value of replacement part only

• 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”

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Domestic/Foreign IndicatorDomestic/Foreign IndicatorSection (30.6(11))Section (30.6(11))

Indicates if the goods exported are of domestic or foreign origin.

•Report foreign goods separately from goods of domestic production even if the commodity classification number is the same.

•Domestic grown, produced, or manufactured in the United States.

•Foreign grown, produced, or manufactured in foreign countries that entered the United States.

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Port of ExportPort of ExportSection (30.6(9))Section (30.6(9))

• Seaport or Airport where goods are loaded leaving U.S.

• Overland crosses border into foreign country

• Report where goods are loaded on last conveyance for multiple ports.

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State of OriginState of OriginSection (30.6(4))Section (30.6(4))

• 2 Character postal code

• State where goods begin journey

• Same address as state of USPPI

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Ultimate Consignee Ultimate Consignee Section (30.6(3))Section (30.6(3))

• The person, party, or designee located abroad and actually receives the export shipment.

• Ultimate Consignee as known at the time of export.

• Licensed shipments shall be the person designated on the export license or authorized to be the Ultimate Consignee.

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Country of Ultimate DestinationCountry of Ultimate DestinationSection (30.6(5))Section (30.6(5))

• The country in which the goods are to be consumed or further processed or manufactured

• The country of ultimate destination code is issued by the ISO

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Record RetentionRecord RetentionSection (30.10)Section (30.10)

Census:

• 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

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Confidentiality of the DataConfidentiality of the DataSection (30.60)Section (30.60)

• Only Summary Statistics are published

• Disclosed to USPPI or the USPPI’s Agent

• National Interest Determination

Yes – CBP, BIS, and State Department

No – Internal Revenue Service, foreign governments

and private attorneys

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Informed ComplianceInformed Compliance

• Offer guidance and assistance in interpreting the FTR

• Education through seminar and trade shows in conjunction with the trade associations

• Offer individual company training

• Regulations telephone assistance 8:00 am – 6:00 pm 1-800-549-0595, option 3

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Enforced Compliance StrategyEnforced Compliance StrategySection (30.73)Section (30.73)

Delegation of Authority

• Department of CommerceBureau of Industry and Security’s Office of

Export Enforcement

• Department of Homeland SecurityCustoms and Border Protection

Bureau of Immigration and Customs Enforcement

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Criminal PenaltiesCriminal PenaltiesSection (30.71(a))Section (30.71(a))

USPPI or Authorized Agent who knowingly:

• Fails to file• Files false and misleading information• Continues to participate in illegal activities

Fines:• Up to $10,000 per violation• Imprisonment for not more than five years• Both

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Civil PenaltiesCivil PenaltiesSection (30.71(b))Section (30.71(b))

USPPI, Authorized U. S. Agent or Carrier

Unintentionally:

• Failure to File or Late FilingsUp to $1,100 per each day delinquency or up to a maximum of $10,000

per violation

• Other ViolationsUp to $10,000 per violation

Penalties may be mitigated

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Remission and MitigationRemission and Mitigation Section (30.72(d))Section (30.72(d))

• Violation History

• Mitigating Factors

Level of experience

Voluntary disclosure

Compliance training

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Voluntary Self DisclosureVoluntary Self DisclosureSection (30.74)Section (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

• Retain documentation regarding all shipments involved in disclosure

• File data in AES as soon as possible

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Corrections Corrections Section (30.9)Section (30.9)

• Filer must submit corrections, cancellations, or amendments as soon as

possible

• Use ITN to locate AES record

• Paper filed prior to implementation must be corrected and sent to

Jeffersonville, IN

• Failure to correct EEI is a violation

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Show What You KnowShow What You Know What is the difference between a routed and standard export transaction?

The USPPI provides the POA to the forwarder in a routed transaction.

T or F?

What is meant by dual use of the EEI record?

Define the USPPI

An FPPI purchases $2,500 in widgets from Vendor A and $3,000 in widgets from Vendor B. The FPPI authorizes an U.S. agent to file the EEI and move the cargo. Is the U.S. authorized agent the USPPI? Why or Why not?

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Show What You KnowShow What You Know A foreign visitor in the U.S. purchases from a local retail store 3 refrigerators worth $1,000 each for export.

Who is the USPPI?

A U.S. manufacturer sells goods to a person from India. The person from India is in the U.S. at the time goods are purchased or obtained for export. Who is the USPPI?

What value should be reported for an item that has been repaired?

You are sending some computers to Canada that require a license. Is an AES record required?

Your Japanese customer is requesting a copy of the EEI record filed. Do you honor the request? Why or Why not?

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Foreign Trade DivisionForeign Trade Division

Regulations, Outreach, and Education Branch (ROEB)Regulations, Outreach, and Education Branch (ROEB)

Phone: 1-800-549-0595 (Option 3)

Fax: 301-763-4610 Secure Fax: 301-763-8835

Email: FTDRegs@census.gov

Website: www.census.gov/trade

Dale C. KellyDale C. Kelly Jerome GreenwellJerome Greenwell

Branch ChiefBranch Chief Trade Ombudsman Trade Ombudsman

Dale.C.Kelly@census.gov Jerome.M.Greenwell@census.gov

Phone: 301-763-6937 Phone: 301-763-6975