Census' July 2009 Newsletter Includes Info on CBP AES Penalties, Export Compliance with EAR, Etc.

The Census Bureau has posted to its Web site the July 2009 issue of its Automated Export System (AES) Newsletter. Highlights of Census' AES Newsletter include:

CBP Enforcement of the Foreign Trade Regulations

On June 2, 2008, Census published a complete revision of 15 CFR Part 30 of the Foreign Trade Regulations which gave Customs & Border Protection the authority to enforce the FTR and to issue fines and penalties.

CBP's penalty mitigation guidelines. In January 2009, CBP published a matrix of the different violations, the initial penalty amounts, and the mitigation guidelines for first, second, and third violations. (See ITT's Online Archives or 01/08/09 and 01/30/09 news, 09010810 and 09013025, for BP summaries of CBP's mandatory AES and FTR penalty mitigation guidelines.)

Higher penalties, against more parties. Census notes that while the previous regulations included a maximum penalty of $1,000 per export violation, the FTR increases the maximum to $10,000. Another important revision is that any and all parties responsible for the violations may be penalized. This may include the manufacturer, wholesaler, retailer, buyer's agent, seller's agent, freight forwarder, carrier, and/or the filer of the Electronic Export Information (EEI) - depending on the specifics of the violation.

CBP to focus on 7 types of violations. These are:

• failure to file the EEI;
• late filing of the EEI;
• incorrect data on the EEI, such as port of exit, value, commodity description;
• failure to provide the carrier with the appropriate proof-of-filing citation or exemption legend;
• failure to retain records for the required five-year period;
• loading of cargo without the appropriate proof-of-filing citation or exemption legend; and
• failure to annotate the manifest with the appropriate proof-of-filing citation or exemption legend.

BIS Works to Improve Compliance with Export Administration Regulations

For the past two years, the Bureau of Industry and Security has used AES data provided by Census to measure exporter compliance with the Export Administration Regulations.

Additional AES validations. BIS will continue to work with Census and CBP to add additional validations to prevent BIS compliance errors from occurring in the future. (Census recently announced that BIS would be tightening up the AES edits for some of these issues on October 1, 2009. See ITT's Online Archives or 07/06/09 news, 09070615, for BP summary.)

Top errors. According to BIS, the following are the top errors committed by AES filers of concern:

• Ineligible use of Export Commodity Control Number (ECCN) with license exceptions
• Ineligible Country of Export use with license exceptions
• Invalid ECCN
• Value of export exceeds the ceiling value of the BIS license
• Ineligible ECCN and country of export combination use with NLR designation
• Misrepresentation of NLR types C32 and C33
• Mismatch of ECCN and Country between BIS License and AES EEI filing

BIS outreach and referral. BIS has developed a program that identifies specific exporters responsible for the noncompliance of EEI filings in AES. These exporters are referred to the BIS Office of Enforcement Analysis and to the BIS Office of Exporter Services for additional follow-up. In extreme cases, the exporter may receive a warning letter or a visit instead of a phone call explaining the problem.

Requests for SEDs, AES Records by Foreign Governments

Census states that recently it has received several inquiries from the export trade community on how to handle requests from foreign governments for copies of previous years' Shipper's Export Declarations (SED, Form 7525-V, obsolete), as well as current copies of AES records.

Census states that providing the EEI filed in the AES for nonofficial purposes is a violation of Section 30.60 of the Foreign Trade Regulations (FTR). Submission of AES records to foreign governments for any reason is a nonofficial purpose.

If a foreign customs agent, government representative, or customer requests the EEI for any U.S. export, Census states that they should be provided with the regulatory requirement stated in section 30.60 of the FTR. Additionally, the FTD issued a notice in 2004 that remains valid.

(See ITT's Online Archives or 03/05/04 and 04/15/04 news, 04030530 and 04041535, for BP summary of Census' position on providing copies of SEDs to foreign governments.)

Other Issues in the July Newsletter

Census also discusses several other areas of AES in its July 2009 newsletter, including:

• New Trade Ombudsman Omari Wooden
• 2009 Schedule B and Harmonized Tariff Schedule tables
• Guide to archived shipments in AESDirect
• AESDirect and AESPcLink user notes
• AES seminars and workshops
• Sample AESDirect and AESPcLink Shipment Guides
• FTR Letter No. 4 on shipments to Puerto Rico

Census' July 2009 AES newsletter available at http://www.census.gov/foreign-trade/aes/aesnewsletter072009.pdf.