Today, January 21, 2011, the U.S. Department of Commerce’s (Commerce) Bureau of the Census (Census) published proposed changes to the export requirements contained in its Foreign Trade Regulations (FTR) at 15 CFR Part 30. Along with a number of updates to improve the clarity of the FTR, Census has proposed to significantly change export reporting using “Option 4,” or the post-departure filing program. All exporters will have to re-apply for the program under more stringent criteria, authorized filers will only be allowed to use a post-departure option when exporting certain specified types of commodities, and filers will have less time to report exports.

Background  

The Census Bureau is responsible for collecting, compiling and publishing export trade data for the United States. Census maintains this data for statistical purposes only but reports it to other federal agencies that use it for export control purposes to detect and prevent the export of certain items by unauthorized parties, or to unauthorized destinations or end users. From time to time, Census updates or changes its reporting requirements to facilitate these national security objectives.  

Expected Changes

Although the final implementation date for the proposed changes is not yet certain, it is clear that the post-departure filing program is expected to change in a few substantive ways. Once a final rule is published (after Census responds to comments received in response to this proposed rule), companies will be allowed to apply for post-departure filing status. At the time of publication, companies that are currently approved for postdeparture reporting privileges, and are interested in retaining those privileges, will have to reapply; no exceptions will be allowed. Only U.S. Principal Parties in Interest (USPPI) will be granted the privilege to report post-departure and authorized agents will not be allowed to apply for post-departure filing status on behalf of a USPPI. For a USPPI to be approved for post-departure reporting, it will have to meet revised post-departure criteria (i.e., have a clean reporting history, established compliance, export approved products, etc.). These criteria will be available on a new post-departure filing application (PFA). The PFA is currently under development and, once published, will be available online. Exporters’ use of post-departure filing will also be limited to a list of approved commodities. These commodities include mostly perishable items (fruits, grains, plants, etc.) and items that are shipped in bulk (granite, slate, pebbles, etc.). Exported commodities that are not included on the approved list will no longer be eligible for post-departure filing.

Finally, Census is proposing to reduce the window available for exporters to report postdeparture export information. The current time frame of 10 calendar days from the date of departure will be reduced to five calendar days.  

Exporters have until March 22, 2011, to submit written comments on the proposed rule change to Census. After the comment period closes, Census will have as much time as it needs to respond to comments received -- likely in connection with the publication of a final rule.

The changes identified in this proposed rule have been expected for quite a while; those in the trade who are currently using a post-departure filing have hopefully been taking the steps necessary to allow them to move to a pre-departure filing environment. Those who have not been preparing for this change should begin immediately to implement any procedural and/or programming changes that will be necessary to ensure compliance with the changed rules, keeping in mind that late filing or a failure to properly file data via Automated Export System (AES) may result in penalties of up to $10,000 per filing.