Say Goodbye to SEDs, Mandatory AES Nearly Here

In what may truly be the most long-anticipated regulatory change in the export control arena, the Census Bureau is finally nearing its goal of mandating use of the Automated Export System (AES) in place of paper Shipper’s Export Declarations (SEDs) across-the-board. AES is already mandatory (since 2003) for the export of items on the United States Munitions List (USML) and the Commerce Control List (CCL), as well as rough diamonds subject to the Kimberly Process. In a February 17, 2005 notice of proposed rulemaking, Census reiterated its intent to extend the AES requirement to cover all exports from the US which currently require a SED. The threshold triggering the need for a SED under the current Census regulations - a value of more than $2,500 classified under an individual Schedule B or Harmonized Tariff Schedule (HTS) commodity classification code - remains unchanged. (After all these years, an adjustment for inflation would be nice.) Exports valued at less than $2,500, but which require either a license from Commerce or a license or license exemption from State will continue to require AES reporting (data submitted via AES is now called “Electronic Export Information” or EEI).

Census solicited feedback with their February proposed rule, which they received in spades from over forty different exporters, carriers, trade associations, and even other federal government agencies. For those seeking to understand every nuance, impact, and possible criticism of the Census proposal, the comments are an excellent resource. (Although, unfortunately, when Census scanned the comments into Adobe Acrobat files they did not turn on the optical character recognition feature which would have made it possible to easily locate references to particular words or phrases.) I particularly recommend the response offered by the Regulations and Procedures Technical Advisory Committee (pdf, RPTAC), which identifies numerous inconsistencies and ambiguities in the Census proposal, and the comments from US Customs and Border Protection (pdf, CBP) which argues that even the very limited exemptions from filing EEI provide an unacceptable loophole for bad actors to exploit. CBP wants all exemptions eliminated, including the sub-$2,500 exclusion.

Census is expected to issue a final rule as early as this month, which will most likely go into effect sometime around the first day of the new year.