FTS/Census

The Census Bureau issued a memorandum on September 4, 2008 to clarify the Foreign Trade Regulations requirement for advance filing of electronic export information through the AES. It is required, by the FTR, that the US principal party or authorized agent file the export information no later than the time period specified by mode of transportation.

After reviewing the information, Census has determined that Trade Act Deadlines do not apply to shipments within US territory, which includes Puerto Rico. Any shipments between the US and Puerto Rico or vice versa are exempt from filing timeframes in the FTR.

Census notes that the US Virgin Islands are not a part of the US customs territory and any shipments to USVI are required to file timeframes.

More information:

• Title 15: Commerce and Foreign Trade (Electronic Code of Federal Regulations)

The Census Bureau is requesting comments by March 26 on their new proposed revisions to the Automated Export Systems record. Mainly the revisions entail changes that will reflect the following enhancements which have been made by the Census and US Customs and Border Protection:

• Edits for rough diamond shipments under the Kimberley Process
• E-mail messaging
• Created the validated end-user license code
• Automated carrier code updates
• Developed background Standard Carrier Alpha Code update process
• Developed SCAC maintenance log list
• Developed consignee screens
• Allowed Option 4 vessel shipments to proscribed countries
• Developed method of transportation maintenance screens
• Developed edit value type screens

If the proposed revisions are put into place the Census will be able to use the above collection of information to more accurately track what is being exported, how much and even how the goods are exported, who is exporting the goods, and even the date and place of the goods destination. With so much information the Census states that they will be able to detect and even prevent the export of certain items by unauthorized parties or destinations.

The information collected by the AES record will also be used by Federal agencies to plan and examine export promotion programs and development and assistance programs and aid in trade negotiations. The information will also be used by port authorities, airlines, steamship lines and many others to measure the volume of exports and any needs they may have for additional or new types of facilities.

Gentlemen (and Ladies): Start Your HTS and Schedule B Classification Engines…

The International Trade Commission has announced that the final version of the 2007 Harmonized Tariff System (HTS)l became effective on February 3, 2007. This will include the World Customs Organization (WCO) changes. Changes will affect about 10% of the eight-digit codes. Importers have until February 20, 2007 to begin using the new HTS codes.

The ITC has posted a draft version on its website, but has committed to posting a the final version by January 22, 2007. The US Customs and Border Protection (CBP) will allow a 17-day grace period for importers to transition to the new system. This grace period will end on February 20, 2007. These implementation plans are posted on their website.

Editor’s Note:

If you didn’t make it to Update 2006, it turns out that the only thing you missed was the posh reception including sushi, crab cakes, and free drinks. You get all of the substance of the presentations here because Scott Gearity wrote a live report from the Commerce Department’s annual Update conference on October 16-17, 2006. Note the time stamp at the beginning of each point below.
–John Black

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Count me in among the poor export control nerds hoping to ride the AES compliance gravy train to a trip to the tropics.  Yep, it’s San Juan, May 17 for a Census Bureau “AES Compliance Conference.”  And, I understand that the Census Bureau does not report back to your boss about whether you actually attended the meetings or sat out on the beach or by the pool sipping on a Pina Colada.

OK, if you can’t swing San Juan, here is the upcoming schedule of AES Compliance Conferences:

• Dearborn, MI, May 9 (not quite tropical)
• Jamaica, NY, June 6 (nope, despite the name, its not tropical)
• Pittsburgh, PA, June 20 (nope, the Pirates are not in town)
• Chicago, IL July 25 (White Sox are in town, but the Cubs aren’t)
• Omaha, NE, September 12 (nice time to watch the corn grow)

Census also has these “AESPcLink Certification Workshops” planned:

• Laredo, TX, May 16 (nice song about the town)
• Jacksonville, FL, May 24 (yes, its warm enough to hit the beach)
• Miami, FL July 19-20, English & Spanish sessions (beach city!)

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.

If diamond exporting is of interest to you then take note - effective June 15 there is a new AES documentation requirement for rough diamonds related to the international effort to stem the flow of conflict diamonds, also known as the Kimberley Process.  On that date the Census Bureau’s new and final rule will require that exporters of rough diamonds input the Kimberley Process Certificate (KPC) in the AES record license number field (excluding the 2-letter ISO country code).

As in other aspects of the US export control system, multiple agencies are involved in controls on conflict diamonds.  In this case, it is the Office of Foreign Assets Control (OFAC) which is responsible for the Kimberley Process in the US.  On their site you can find an overview (pdf) and the regulations.

The Census Bureau unofficially announced that it will publish the proposed rule requiring the mandatory use of the Automated Export System (and the elimination of paper Shipper’s Export Declarations) in the Federal Register in June 2004. There will be a 60 day public comment period for the proposed rule. Census hopes to publish the final rule in early Fall 2004, with a January 2005 effective date.

Aren’t you glad you have already started using AES (or PC Link)?

In the October 22, 2003 Federal Register the Census Bureau announced that it will eventually publish a proposed rule that would require AES reporting for all exports from the United States (with certain exemptions). Currently, the AES requirement does not apply to items classified as EAR99 in the Commerce Control List. You currently may use paper Shipper’s Export Declarations to report exports of items classified as EAR99. Census gave no official prediction as to when it might publish the proposed rule. Best guesses are pointing toward late Spring as the likely timing.

In the October 22, 2003 Federal Register the Census Bureau published a notice requiring AES reporting for rough diamonds. The United States is doing this as part of the international effort to combat rough-cut diamonds being used to finance military conflicts in Africa.

We have been talking about the new Census rules that will require mandatory filing of SED’s through AES for years now. So it should sound repetitive (but, by now, perhaps not surprising that we are still waiting. But the Census folks now seem pretty confident that the rule will actually out soon, as in a matter of days or weeks rather than months. Once this rule is published, it will go into effect 30 days after publication, followed by a 90 day transition period where either a paper filing or an AES filing will still be accepted. After that, all filing will need to be electronic.

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