Two weeks ago, I received an email from a client, a distributor, informing me that they were involved in a routed export transaction, but they were not the USPPI. They went on to say that the Foreign Principal Parties’ freight forwarder in El Paso was the USPPI. So, I therefore became really curious, and asked how could this be?
Well, my client said, “the freight forwarder said so and they sent the citation from 15 CFR Part 30- of the Foreign Trade Regulations (FTR)”. Here is what the email said “Veronica: A freight forwarder can be listed as the USPPI when the freight forwarder formally enters merchandise into the U.S. on behalf of the foreign entity acting as the importer of record, or when the freight forwarder is acting as an order party. FTR 30.3(b) (iv).”
At first glance, I was impressed that this freight forwarder knew the FTR. But, then it hit me. I took out my FTR and looked at section 30.3(b)(iv). [Yes, I do carry my regs with me at all times.], and there it was in plain English. FTR section 30.3 (b) (iv) and (v) is talking about a broker, and not a freight forwarder. This particular section deals with imports that are subsequently exported without change. This does not apply to situations where the U.S. seller, manufacturer, or order party sells directly to a FPPI.
If you read a little further in FTR section 30.3(b)(3), it says that “…. In a routed export transaction, the authorized agent can be the “exporter” for export control purposes as defined in 15 CFR 772.1 of the U.S. Department of Commerce EAR. However, the authorized agent shall not be shown as the USPPI in the EEI unless the agent acts as a USPPI in the export transaction as defined in paragraphs (b)(2)(iii), (iv), and (v) of this section.” So to answer the question, “When is the Freight Forwarder the United States Principal Party in Interest (USPPI)?” The answer is that the authorized agent/freight forwarder is never shown as the USPPI, unless the authorized agent/freight is actually the exporter.
Why would the freight forwarder want to be listed as the USPPI? I really don’t know, perhaps it is ignorance or it is a red flag that this freight forwarder is involved in something else? Moral of the story, be careful. USPPI’s remember, that you must conduct due diligence and at times even educate the FPPIs freight forwarder.