Transcript Slide 1

Foreign Trade Regulations &
Automated Export System
Omari Wooden
Trade Ombudsman
U.S. Census Bureau
Foreign Trade Division
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Today’s Topics
• Legal/Filing Requirements
• U.S. Principal Party In Interest (USPPI)
• Types of shipments and transactions
• Automated Export System (AES)
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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
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What is a Shipment?
(FTR 30.1)
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Tip: The ONE Rule
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ONE USPPI shipping their merchandise, to
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ONE Foreign consignee, on
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ONE Carrier moving the product out of the U.S., on
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ONE day, with
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Valued over $2,500 per Schedule B number or license is
required
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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
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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
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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
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Export Transaction
(FTR 30.3(c))
U.S Authorized Agents’ Responsibilities:
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Obtain written authorization or POA from USPPI
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Accurately prepare EEI via the AES, based on information provided
by the USPPI and other parties
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If filing, respond to AES fatal errors or compliance alerts
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Provide AES Internal Transaction Number (ITN) to carrier based on
required filing timeframes
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Upon request, provide USPPI with copy of information filed on its
behalf
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
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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
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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
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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”
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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))
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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
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CBP Penalty Guidelines
• Penalties may be mitigated
• CBP Published Guidelines on Jan. 2, 2009
• Effective Date
• February 1, 2009
• Highlights:
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Penalties for failure to file, late filing, and other violations
Mitigating and Aggravating Factors
Guidance for CBP officers
Carrier Penalties
Mitigating Factors
Including, but not limited to:
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First-time USPPI or authorized agent, FPPI, carrier, etc.
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Voluntary self-disclosure of the violation
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Clear documentary evidence of remedial measures undertaken to
prevent future violation
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Exceptional cooperation with CBP, Census or BIS
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Demonstration by party of having a systematic export compliance
effort.
Aggravating Factors
Including, but not limited to:
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Several violations in the same export transaction
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Circumstances suggest the intentional nature of the violation
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High number of violations in preceding 3 year period
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Evidence of criminal conviction for related violation, i.e. BIS
violation
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The party exports as a regular part of its business, but lacks a
systematic export compliance effort.
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.
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AES Process Flow
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Before Filing the EEI
Gather/Review filing resources
Foreign Trade Regulations (FTR)
Export Flipper
AESDirect Support Center
FTD Blog at blogs.census/gov/globalreach
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Before Filing the EEI
• 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.
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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 – Ireland
IR – Iran
IQ – 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/
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AES Responses
Verify
Compliance
Warning
Informational
Fatal
Shipment Accepted
Shipment Rejected
ITN Issued
No ITN Issued
or
Update Rejected
Invalid ITN
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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
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Implement Best Practices
Document!!! Document!!! Document!!!
Correct information as soon as possible
Maintain compliance
Education & cross training
Automation & Procedures
Attend Seminars & Workshops
Implement Best Practices
• Perform Cross Training
• Implement mentoring program
• Know your US authorized or forwarding agent
• Develop training manual
• Perform yearly audits
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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
For More Information
• FTD Call Center: 800-549-0595
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Option 1 – AES Assistance
Option 2 – Commodity Classification Assistance
Option 3 – Regulations Assistance
Option 4 – Data Dissemination
• Fax: 301-763-8835
• E-mail: [email protected]
• FTD Blog: blogs.census.gov/globalreach/
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Questions?
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