Bill Introduced to Enhance AES, Allow Licensing of Filers, Etc.

On April 17, 2008, Representatives Manzullo and Smith introduced the "Securing Exports Through Coordination and Technology Act" (H.R. 5828), which would require the federal government to enhance the Automated Export System, allow for the licensing of AES filers, etc.

Highlights of this measure include the following provisions:

Minimum AES Filing Requirements

H.R. 5828 would amend 13 USC 1301 note (which requires regulations for mandatory AES) to indicate, among other things, that filing under mandatory AES must occur before the items are exported, unless excepted.

This AES filing would be required to include, at a minimum:

the name and address of the principal party-in-interest in the U.S.;

the foreign principal party-in-interest;

all intermediate consignees;

the ultimate consignee;

the commodity classification of each item being exported;

when appropriate, the license number or regulatory authorization for the export; and

a declaration, under penalty of perjury under the laws of the U.S., that the information filed (as outlined above) is true and correct.

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Licenses Could be Required for AES Filers

H.R. 5828 would allow the Secretary of Commerce to establish a program to grant licenses to persons to file information in AES, either on behalf of themselves or acting as an intermediary (e.g. freight forwarders, NVOCCs, ATA Carnet national guaranteeing associations, and similar entities.).

The bill would grant licenses to individuals that were U.S. citizens, lawful permanent resident aliens, and U.S. nationals, and would specify requirements for corporations and other business entities. In assessing an individual's qualifications, the Secretary of Commerce could conduct an examination to determine the applicant's knowledge of AES, export laws and regulations, etc.

Licenses would be for a minimum of three years; however, the Secretary of Commerce would also be able to deny, revoke, or suspend a license or license application.

AES Would Block Filings in Connection with Prohibited or Restricted Exports, Etc.

H.R. 5828 would also require the Secretary of Commerce to issue regulations to ensure AES would electronically block the filing of data in connection with prohibited or restricted exports. At minimum, these regulations would contain the following operational features and provide the following notifications to filers:

1. codes entered into AES to identify an export, whether by classification under the Harmonized Tariff Schedule (HTS) or otherwise, that will alert the exporter of potential export license requirements under the Export Administration Regulations (EAR) or the International Traffic in Arms Regulations (ITAR);
2. issuance of a Fatal Error notice when data entered for an export contains (a) the name or address of an individual or legal entity that has been described on any restricted party listand the data are not accompanied by the necessary export authorization; (b) the intermediate or ultimate country of destination is subject to trade sanctions imposed by the U.S. and the data are not accompanied by the necessary export authorization; (c) in the case of defense articles and defense services, the country of the intermediate or ultimate consignee is subject to an arms embargo or prohibition imposed by the U.S. and the data are not accompanied by the necessary export license.
3. Compliance alerts or other warnings to the filer when data for an export are entered containing any of the following errors or omissions (a) the HTS code is inconsistent with the Export Control Classification Number (ECCN) or the U.S. Munitions List (USML) Category; (b) in the case of a dual use item, the license exception is not available to the country of the ultimate consignee or to the intermediate or ultimate consignee; and (c) in the case of defense articles and defense services, the USML Category is identified but no license number, exemption, or exception is correctly identified.
4. Fatal Error notices, compliance alerts, or other warnings are accompanied by references to the applicable regulations and licensing authorities.

Confidentiality of Filings, Educational Outreach, Etc.

H.R. 5828 also prevents these filings from being disclosed to the public, and allows the sharing of AES information with other U.S. government agencies and foreign governments if the national interest is involved, subject to certain safeguards.

In addition, the bill contains provisions requiring AES educational conferences and seminars.

(See ITT's Online Archives or 03/18/08 news, 08031810, for BP summary stating that the Census Bureau will soon issue a final rule on mandatory AES.)

H.R. 5828 available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:h5828ih.txt.pdf.

Reps. Manzullo and Smith press release (dated 04/17/08) available at http://manzullo.house.gov/News/DocumentSingle.aspx?DocumentID=88891.