2. 1 Omari Wooden Trade Ombudsman U.S. Census Bureau Foreign Trade Division Foreign Trade Regulations & Automated Export System

3. 2 Today’s Topics Legal/Filing Requirements U.S. Principal Party In Interest (USPPI) Types of shipments and transactions Automated Export System (AES)

4. 3 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 700 - 799 Customs and Border Protection (CBP) Customs Regulations Title 19 CFR, Parts 1 – 199 State Department International Traffic in Arms Regulations (ITAR) Title 22 CFR, Parts 120 – 130

5. 4 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 Valued over $2,500 per Schedule B number or license is required 1 Tip: The ONE Rule

6. 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

7. 6 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

8. 7 Export Transaction (FTR 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 If filing, respond to AES fatal errors or compliance alerts Retain documentation

9. 8 Export Transaction (FTR 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

10. 9 Routed Export Transaction (FTR 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 Maintain documentation

11. 10 Routed Export Transaction (FTR 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

12. Value of Repair Items (FTR 30.29(a))  Report the value of the repairs, including parts and labor  Report Schedule B number 9801.10.0000 for the reexport of any article that was imported for repairs or alterations 11

13. Value of Warranty Items (FTR 30.29(b))  Report the value of the replacement commodity  Report original Schedule B number  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” 12

14. 13 Shipments Exempt from Filing (FTR 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))

15. 14 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

16. 15 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

17. 16 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.

18. 17 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.

19. 18 Automated Export System Uses CBP uses AES to verify shipments directly at the port. BIS uses AES to track export license transactions and to validate end users. DDTC uses AES to track export license transactions and to automatically decrement values on some license types.

20. 19 AES Process Flow

21. 20 Gather/Review filing resources Foreign Trade Regulations (FTR) Export Flipper AESDirect Support Center FTD Blog at blogs.census/gov/globalreach Before Filing the EEI

22. 21 Decide who is filing the EEI –USPPI files –Authorized U.S. Agent files on USPPI’s behalf. To avoid duplicate EEI filings, only one party files the EEI. Before Filing the EEI

23. 22 Filing the EEI and Troubleshooting Misreported Codes: Port of Export: Four digit number Misclassification: Ink cartridges vs. weapon cartridges Rubber seals vs. live seals Country of Destination: Two alpha characters IE – IrelandIR – IranIQ – Iraq 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: http://www.census.gov/foreign-trade/schedules/b/

24. 23 AES Responses Verify Compliance Warning Informational Verify Compliance Warning Informational Fatal Shipment Rejected No ITN Issued or Update Rejected Invalid ITN Shipment Accepted ITN Issued

25. 24 What to do with Outstanding Fatal Errors Correction: the updating and resubmission of the rejected EEI to obtain an ITN Cancellation: the deletion of a successfully submitted EEI by the filer Suppression: the manual removal of a fatal error by the AES staff

26. Implement Best Practices  Document!!! Document!!! Document!!!  Correct information as soon as possible  Maintain compliance  Education & cross training  Automation & Procedures  Attend Seminars & Workshops

27. 26 Implement Best Practices Perform Cross Training Implement mentoring program Know your US authorized or forwarding agent Develop training manual Perform yearly audits

28. Notice of Proposed Rule Making (NPR) A NPR is issued when government agencies propose to add, remove, or change a rule or regulation Published in the Federal Register on January 21, 2011 The public comment period ended on March 22, 2011 Census, Customs and Border Protection (CBP) and Bureau of Industry and Security (BIS) will review comments Agency concurrence Respond to comments Issue and implement the Final Rule

29. 28 For More Information FTD Call Center: 800-549-0595 Option 1 – AES Assistance Option 2 – Commodity Classification Assistance Option 3 – Regulations Assistance Option 4 – Data Dissemination Fax: 301-763-8835 E-mail:ASKAES@census.govASKAES@census.gov FTD Blog: blogs.census.gov/globalreach/

30. 29 Questions?