Omari Wooden Trade Ombudsman U.S. Census Bureau Foreign Trade Division

1. Omari WoodenTrade OmbudsmanU.S. Census Bureau Foreign Trade Division Foreign Trade Regulations & Automated Export System

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

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

4. What is a Shipment?(FTR 30.1) 1 Tip: The ONE Rule • 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

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. 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

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

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

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

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

11. 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

12. 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”

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))

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

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

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.

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.

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.

19. AES Process Flow

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

21. 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.

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 – 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/

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

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

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

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

27. 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

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.gov • FTD Blog: blogs.census.gov/globalreach/

29. Questions?