1. Foreign Trade Division AES Compliance Seminar

2. Regulations, Outreach and Education Branch

3. Today’s Topics Legal Requirements
Enhancements and Changes to the Foreign Trade Regulations (FTR)
Filing Requirements for Electronic Export
Information (EEI)
Filing Timeframes
Exemptions
Confidentiality
Penalty Provisions
Compliance Strategies

4. Legal Requirements Census Bureau Bureau of Industry and Security (BIS)
Foreign Trade Regulations (FTR)
•15 CFR, Part 30 Section
Bureau of Industry and Security (BIS)
Export Administration Regulations (EAR)
•15 CFR, Parts

5. Legal Requirements (cont’d)
State Department
International Traffic in Arms Regulations (ITAR)
•Title 22 CFR, Parts 120 – 130
Customs and Border Protection (CBP)
Customs Regulations
• Title 19 CFR, Parts 1 – 199

6. Impact 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 carriers
Internal Transaction Number (ITN) Proof of Filing Citation
Exemption Citation
Postdeparture Citation
Downtime Citation

7. Enhancements to the FTR
Improved Clarifications
Definitions and Appendices
Filing Time Frames
Electronic Letter of Intent
Penalty Provisions
Voluntary Self Disclosure

8. New Terminology and Changes
Current FTSR New FTR Changes
SED Electronic Export Information (EEI)
FTSR FTR
Option 2 Predeparture
Option 4 Postdeparture
Section Section

9. Definitions and Appendices Enhancements
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

10. Definitions and Appendices Enhancements (cont’d)
Appendix D- Exemptions and Exclusions
Appendix E- FTSR to FTR Concordance
Appendix F- FTR to FTSR Concordance

11. When is an EEI Record Required? Section (30.2)
An EEI record must be filed for exports of physical goods when shipped as follows:
From U.S. to foreign countries
Between the U.S. and Puerto Rico
From Puerto Rico to foreign countries
From Puerto Rico to U.S. Virgin Islands
From the U.S. to the U.S. Virgin Islands
Licensable commodities

12. U.S. Principal Party In Interest Section (30.3)
USPPI Can Be The:
U.S. Seller: (Wholesaler or Distributor)
U.S. Manufacturer
U.S. Order Party
Foreign Entity

13. What is a Shipment? 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

14. Two Types of Transactions 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

15. Export Transaction 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

16. Export Transaction 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

17. Export Transaction 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

18. 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

19. Routed Export Transaction 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

20. Writing 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 violating
Section of the EAR?
· $250,000

21. Routed Export Transaction 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

22. Required Predeparture Filings 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

23. Postdeparture Filing 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

24. ITAR Filing Time Frames 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

25. Filing Time Frames 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

26. Exclusions From Filing EEI 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

27. Exclusions From Filing EEI 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

28. Shipments Exempt from Filing 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))

29. Exemptions 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

30. Data Elements 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

31. Name & Address of USPPI 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

32. Value 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

33. Value of Repair Items Section (30.29)
Report the value of the repairs, including parts and labor
Report Schedule B number for the export of any article that was imported for repairs or alterations

34. Value of Warranty Items 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”

35. Domestic/Foreign Indicator 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.

36. Port of Export 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.

37. State of Origin Section (30.6(4))
2 Character postal code
State where goods begin journey
Same address as state of USPPI

38. Ultimate Consignee 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.

39. Country of Ultimate Destination 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

40. Record Retention 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

41. Confidentiality of the Data 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

42. Informed 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
, option 3

43. Enforced Compliance Strategy Section (30.73)
Delegation of Authority
Department of Commerce
Bureau of Industry and Security’s Office of Export Enforcement
Department of Homeland Security
Customs and Border Protection
Bureau of Immigration and Customs Enforcement

44. Criminal Penalties 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

45. Civil Penalties Section (30.71(b))
USPPI, Authorized U. S. Agent or Carrier
Unintentionally:
Failure to File or Late Filings
Up to $1,100 per each day delinquency or up to a maximum of $10,000 per violation
Other Violations
Up to $10,000 per violation
Penalties may be mitigated

46. Remission and Mitigation Section (30.72(d))
Violation History
Mitigating Factors
Level of experience
Voluntary disclosure
Compliance training

47. Voluntary Self Disclosure 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

48. Corrections 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

49. Show 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?

50. Show 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?

51. Foreign Trade Division
Regulations, Outreach, and Education Branch (ROEB)
Phone: (Option 3)
Fax: Secure Fax:
Website:
Dale C. Kelly Jerome Greenwell
Branch Chief Trade Ombudsman
Phone: Phone: