On March 14, 2013, the U.S. Census Bureau’s Foreign Trade Division (FTD) published the final rule revising the Foreign Trade Regulations (FTR), Title 15, Part 30. The publication of the final rule amends the FTR published in 2008. The effective date of the final rule is January 8, 2014, which gives the trade community approximately ten months to implement the new requirements.

The Census Bureau is responsible for collecting, compiling, and publishing export trade statistics for the United States. The Automated Export System (AES) is the primary instrument used by Census for collecting export trade data. Through the AES, the Census Bureau collects Electronic Export Information (EEI), the electronic equivalent of the export data formerly collected via the hard copy Shipper’s Export Declaration. Among other purposes the data collected by Census is used by U.S. Customs and Border Protection, the Bureau of Industry and Security, and the Department of State, for security and enforcement purposes.

While the data collected is used for statistical purposes only, unless excepted, submission of all required data elements is mandatory, and the failure to properly file, or delayed filing, can result in significant penalties for each day of delinquency. More severe civil and criminal penalties apply for filing false or misleading information, or for conduct in furtherance of illegal activities.

Key revisions to the Regulations include requiring mandatory filing of export information through the Automated Export System (AES) or through AESDirect for all shipments of used self-propelled vehicles, revisions on how to report port of export, new exclusion statements, and new data items on how to report value, as well as other major changes. Also a number of definitions have been added, deleted, or modified to reflect changes to the regulatory requirements, provide clarity, or to correct errors in the original regulations.

Some of the new definitions introduced or modified under the final rule include the “Commercial Loading Document”, which was changed from the original definition of “Loading Document” to reflect that loading documents now expressly cover truck and rail bills of lading and “Carrier Responsibilities”, which provide that the carrier must not load or move cargo unless all required documentation is received and properly cited on the commercial loading documents. Other definitions cover familiar terms such as “Filer ID”, “Diplomatic Pouch”, and “Non-Vessel Operating Common Carrier” (NVOCC) and “Voluntary Self Disclosure” (VSD) that have now been formally defined for the first time.

Among the numerous substantive changes under the Final Rule Include changes to the use of downtime filing certificates, which may now be used only when AES or AESDirect is not operating, and when the exporter / filer’s computer system is down. Also the time to respond to a notification of a fatal error involving shipments filed post-departure has been reduced from ten calendar days after export to five. Prior to the new rule, shipment reference numbers could be reused after five years, but now reuse of the numbers is prohibited altogether. New rules apply for the reporting of license value for shipments requiring an export license, and for a foreign entity to be listed as a United States Principal Party in Interest (USPPI). (The foreign entity must be in the United States at the time the goods are purchased). Also a new mandatory filing requirement has been introduced requiring disclosure of the type of ultimate consignee.

The rules also include a number of changes related to exclusions from the need to file EEI such as clarification that Puerto Rico and the U.S. Virgin Islands are not excluded from filing EEI, and that the exclusion applies to goods destined to international waters where the person(s) or entity assuming control of the item(s) is a citizen or permanent resident of the US.

Given the scope and breadth of the changes, ten months is not a very long time for exporters, carriers and forwarders to digest and incorporate the changes into their operations. Special focus is recommended for the changes dealing with timing requirements, exclusions, and the new types of mandatory information that must be submitted.

For the full text of the March 14, 2013 Federal Register Notice see:

http://www.census.gov/foreign-trade/regulations/regs/regulations20130314-federalregister.pdf