Omari Wooden & Fay Johnson

December 12, 2012

Complying with the Complying with the Foreign Trade Foreign Trade Regulations &Regulations &

Accessing Census Trade Accessing Census Trade DataData

Today’s TopicsToday’s Topics

Legal Requirements

U.S. Principal Party in Interest

Types of export transactions

Penalties

Automated Export System

Best practices

2

3

Complying with the Foreign Complying with the Foreign Trade RegulationsTrade Regulations

3

Legal RequirementsLegal Requirements

Census Bureau Foreign Trade Regulations (FTR) Title 15 Code of Federal Regulations, Part 30

Bureau of Industry and Security (BIS) Export Administration Regulations (EAR)

Customs and Border Protection (CBP)

Customs Regulations

State Department International Traffic in Arms Regulations (ITAR)

4

When is Electronic Export Information (EEI) When is Electronic Export Information (EEI) Required? (FTR 30.2)Required? (FTR 30.2)

U.S. foreign countries U.S. U.S. Virgin Islands Puerto Rico foreign countries Puerto Rico U.S. Virgin Islands U.S. Puerto Rico

EEI must be filed for exports of physical goods when shipped as follows:

5

6

What is a Shipment?What is a Shipment?(FTR 30.1)(FTR 30.1)

ONE U.S. Principal Party in Interest shipping their merchandise, to

ONE Foreign consignee, on ONE Carrier moving the product out of the U.S., on ONE day, with Valued over $2,500 per Schedule B number or

license is required

1Tip: The ONE Rule

Shipment ExampleShipment Example

7

US Company A

US Company B

US Company C

US Company D

German Company X FedEx / UPS Friday

Four unique shipments based on the four different US companies

Four unique shipments based on the four different US companies

Shipment exampleShipment example

8

US Company AGerman

Company X FedEx / UPSWednesday

Monday

Friday

Three unique shipments based on the three different dates of export

Three unique shipments based on the three different dates of export

U.S. Principal Party in Interest U.S. Principal Party in Interest (FTR 30.3)(FTR 30.3)

The U.S. Principal Party in Interest (USPPI) is the:

U.S. Person or Entity Primary Benefactor (Monetary or Otherwise) Foreign Entity (if in the U.S. at time goods are purchased or

obtained for export)

Generally that Person can be the: U.S. Seller: (Wholesaler or Distributor) U.S. Manufacturer U.S. Order Party

9

Ultimate Consignee Ultimate Consignee (FTR 30.6(a)(3))(FTR 30.6(a)(3))

Report the Ultimate Consignee as known at the time of export.

Licensed shipments shall be the person designated on the export license

10

The person, party, or designee located abroad and actually receives the export shipment.

11

Two Types of TransactionsTwo Types of Transactions(FTR 30.3)(FTR 30.3)

Export Transaction (Standard): • USPPI files the EEI or authorizes an agent to file the EEI

Routed Export Transaction: • Foreign Principal Party in Interest (FPPI) authorizes a U.S.

agent to facilitate the export of items from the United States and to prepare and file the EEI

12

Export TransactionExport Transaction(FTR 30.3(c))(FTR 30.3(c))

USPPI Responsibilities: Prepare and file EEI and provide proof of filing citation Authorize a U.S. agent to file EEI via power of attorney or

written authorization Provide agent with accurate and timely export information Assume responsibility for license determination If filing, respond to AES fatal errors or compliance alerts Retain documentation

13

Export TransactionExport Transaction (FTR 30.3(c))(FTR 30.3(c))

U.S Authorized Agents’ Responsibilities: Obtain written authorization or power of attorney from USPPI

Accurately prepare EEI via the AES, based on information provided by the USPPI and other parties

If filing, respond to AES fatal errors or compliance alerts

Provide AES Internal Transaction Number (ITN) to carrier based on required filing timeframes

Upon request, provide USPPI with copy of information filed on its behalf

14

Routed Export TransactionRouted Export Transaction (FTR 30.3(e))(FTR 30.3(e))

USPPI Responsibilities:

Must provide FPPI’s agent with commodity data and Licensing

information May request copy of the authorized agent’s power of attorney or

written authorization from the FPPI If filing, obtain power of attorney or written authorization from FPPI

to complete and file the EEI Maintain documentation

15

Routed Export TransactionRouted Export Transaction (FTR 30.3(e))(FTR 30.3(e))

U.S. Authorized Agent Responsibilities: Obtains a POA or written authorization from the FPPI

Prepare and file the EEI Upon request, provide the USPPI with data elements filed on its

behalf

Upon request, provide the USPPI with a copy of the POA or written authorization from the FPPI

Provide filing citation or exemption legend

Maintain documentation

16

Shipments Exempt from FilingShipments Exempt from Filing (FTR 30.36-30.40)(FTR 30.36-30.40)

Country of ultimate destination is Canada (30.36)

$2,500 or less per Schedule B number (30.37(a))

Tools of Trade: hand carried, personal or company use, not for sale, not shipped as cargo, returned within 1 year (30.37(b))

Intangible exports of software & technology (30.37(f))

Temporary Exports (e.g., Carnets) (30.37(q))

Shipments consigned to the U.S. Armed Forces (30.39)

17

Exemptions Do Not ApplyExemptions Do Not Apply (FTR 30.2(a)(iv))(FTR 30.2(a)(iv))

Commerce (BIS) licenses

Country Group E:1 (Supplement 1 to 15 CFR 740)

State Department licenses and ITAR controlled items

License shipments from other government agencies

Shipments on Office of Foreign Assets Control Sanctions Program List

Rough Diamonds

Repair ItemsRepair Items (FTR 30.29(a))(FTR 30.29(a))

Report the value of the repairs, including parts

and labor

Report Schedule B number 9801.10.0000 for the

re-export of any article that was imported for

repairs or alterations

18

Warranty ItemsWarranty Items (FTR 30.29(b))(FTR 30.29(b))

Report the value of the replacement commodity

Report original Schedule B number

If the value on the EEI record is different from the value on the bill of lading, invoice, etc., include a statement notating:

“Product replaced under warranty, value for EEI record purposes”

19

Voluntary Self DisclosureVoluntary Self Disclosure (FTR 30.74)(FTR 30.74)

Submit letter on company letterhead and include the following information:

Description of information unreported or reported incorrectly Number and value of shipments affected Steps taken to resolve problem Point of contact Letters should be submitted to:

File data in AES as soon as possible and retain documentation regarding all shipments involved in disclosure

20

21

Parties Subject to PenaltiesParties Subject to Penalties(FTR 30.70-30.74)(FTR 30.70-30.74)

All parties involved in an export transaction are subject to penalties, including:

USPPI

Freight forwarder

Authorized agent

Carrier

21

PenaltiesPenalties(FTR 30.71)(FTR 30.71)

Criminal Penalties U.S. exporters, agents, or carriers who knowingly fail to file, file false or

misleading information, or continue to participate in illegal activities

Penalty can be up to $10,000 per violation and/or imprisonment for no more than five years

Civil Penalties U.S. exporters, agents, or carriers who report incorrect information or

report export information late

Penalty can be up to $10,000 per violation or $1,100 per each day of delinquency

22

23

Mitigating FactorsMitigating Factors

Including, but not limited to:

• First-time USPPI or authorized agent, FPPI, carrier, etc.

• Voluntary self-disclosure of the violation

• Clear documentary evidence of remedial measures undertaken to prevent future violation

• Exceptional cooperation with CBP, Census or BIS

• Demonstration by party of having a systematic export compliance effort.

23

24

Aggravating FactorsAggravating Factors

Including, but not limited to:

• Several violations in the same export transaction

• Circumstances suggest the intentional nature of the violation

• High number of violations in preceding 3 year period

• Evidence of criminal conviction for related violation, i.e. BIS violation

• The party exports as a regular part of its business, but lacks a systematic export compliance effort.

24

25

Automated Export System & Automated Export System & Electronic Export InformationElectronic Export Information

25

26

AES Process FlowAES Process Flow

26

27

Gather/Review filing resources

Foreign Trade Regulations (FTR) Export Flipper

AESDirect Support Center

FTD Blog at blogs.census/gov/globalreach

Before Filing the EEIBefore Filing the EEI

27

28

• Decide who is filing the EEI

– USPPI files

– Authorized U.S. Agent files on USPPI’s

behalf.

To avoid duplicate EEI filings, only one party files the EEI.

Before Filing the EEIBefore Filing the EEI

28

29

Filing the EEI and TroubleshootingFiling the EEI and Troubleshooting

Misreported Codes:• Port of Export: Four digit number

• Misclassification: • Ink cartridges vs. weapon cartridges• Rubber seals vs. live seals

• Country of Destination: Two alpha characters

• IE – Ireland IR – Iran IQ – Iraq

• Carrier SCAC/IATA• Four character code for Vessel, Truck, and Rail• Two or three character code for Air

• Schedule B: Ten digit number

• Search engine available at: http://www.census.gov/foreign-trade/schedules/b/

29

30

AES ResponsesAES Responses

VerifyCompliance

WarningInformational

Fatal

Shipment Rejected

No ITN IssuedorUpdate Rejected

Shipment Accepted

ITN Issued

30

Implement Best PracticesImplement Best Practices

Document!!! Document!!! Document!!!

Correct information as soon as possible

Maintain compliance• Education & cross training• Automation & Procedures

Attend Seminars & Workshops

31

32

Accessing Census Accessing Census Trade DataTrade Data

32

Foreign Trade Website

33

www.census.gov/trade

Schedule B Product ClassificationSchedule B Product Classification

It is important to correctly classify your product to avoid costly fines and penalties.

34

https://uscensus.prod.3ceonline.com/

Schedule B Search ToolSchedule B Search Tool

Drill down capability

Full commodity description

2009-2010 trade export value at the 6-digit level

35

Additional Classification DataAdditional Classification Data

36

End-Use North American Industry Classification System Standard International Trade Classification

(SITC) Advanced Technology Products (ATP)

01 – Biotechnology 06 – Flexible Manufacturing

02 – Life Science 07 – Advanced Materials

03 – Opto-Electronics 08 – Aerospace

04 – Information & Communications 09 – Weapons

05 – Electronics 10 – Nuclear Technology

Data NavigationData NavigationThe Data tab is the central navigation tool for trade statistics

37

FT900: U.S. International Trade in FT900: U.S. International Trade in Goods & Services ReportGoods & Services Report

Produced by FTD and the Bureau of Economic Analysis (BEA)

Principle economic indicator

Services statistics provided by BEA

Monthly, year-to-date (YTD) and annual data

38

Additional ReleasesAdditional Releases

Other Statistical Releases FT920: U.S. FT920: U.S.

Merchandise Trade: Merchandise Trade: Selected HighlightsSelected Highlights

U.S. Imports for Consumption of Steel

Related Party Profile of U.S. Importing

and Exporting Companies

39

Visualize Trade DataVisualize Trade Data

Monthly top 15 U.S. trading partners by

dollar value and more with…

40

Interactive legends and downloadable data and images

Country Trade BalanceCountry Trade Balance

Current export, import, and trade balance data by month

Historical data available

Country Groups European Union OPEC

41

www.census.gov/foreign-trade/statistics/country/

Trade in Goods by Country Top Trading Partners North American Industrial Classification System

(NAICS) End-Use Standard International Trade Classification (SITC) Advanced Technology Products (ATP) Trade w/ Puerto Rico and U.S. Possessions

42

Country and Product Trade DataCountry and Product Trade Data

State DataState Data

Top 25 Harmonized System (HS) Commodity Exports and Imports by State

43

www.census.gov/foreign-trade/statistics/historical/

Annual Trade Totals, 1960 – present

Monthly trade, 1992 – present

Petroleum historical data

Constant-dollar historical data

44

Historical DataHistorical Data

www.census.gov/foreign-trade/download

U.S. Exports & U.S. Imports of Merchandise 1-10 Selected Commodity Subscription Service State Data (OM & ZIP)

Monthly: 6-digit HS Quarterly: 3-digit NAICS; State/Region; State/Port

Port 6-digit HS Special Program Indicators (SPI – electronic version of IM146A) Trade with Puerto Rico and US Possessions (electronic version

of FT895) Textile Summary Commodity/Geographic/Textile concordances

45

Data DownloadsData Downloads

USA TradeUSA Trade®® OnlineOnlineUSA Trade Online (www.usatradeonline.gov) is the official online source of

U.S. merchandise trade statistics

46

www.usatradeonline.gov

USA Trade USA Trade OnlineOnline Data Offerings Data Offerings

Current and historical data

HS and NAICS based statistics

District, state and port-level trade by product and country

47

Data Level HS NAICS Measures

District Level

Annual Data 1992 – present

Monthly Data 2002 – present

2-, 4-, 6- and 10- digit

3-, 4-, 5- and 6-digit HS: Total Value, Quantity and Unit Price

NAICS: Total Export Value, Domestic Export Value, Foreign Export Value, General Imports for Consumption Value, General Imports CIF Value, Imports for Consumption Customs Value, Imports for Consumption CIF Value, and Balance of Trade

Port Level

Annual and Monthly Data 2003 – present

2-, 4- and 6-digit N/A Total Value, Vessel Value, Vessel SWT, Air Value, Air SWT, Containerized Vessel Value and Containerized Vessel SWT

State Level

Annual and Monthly Data Exports 2002 – present

Imports 2008 – present

2-, 4-, 6-digit 3- and 4-digit Total Value, Vessel Value, Vessel SWT, Air Value, Air SWT, Containerized Vessel Value and Containerized Vessel SWT

48

USA Trade USA Trade OnlineOnline Data Offerings Data Offerings

Standard ReportStandard Report

49

Use the Standard Report to customize every aspect of your trade report with as little or as

much detail as you want.

Commodity Selection Commodity Selection

50

Select the products you want to analyze using one of the following:

Commodity Selection Tree

Search Box

Create a Custom Commodity Group

Country Selection Country Selection

51

World Total and Individual Countries

Geographic Regions

International Organizations and Trade Agreements

Country Options:

Managing Time SelectionManaging Time Selection

52

Monthly and Annual Selection Tree

Time Series Sets

Monthly, annual and year-to-date time options available

View Your ReportView Your Report

53

Completed Customized Report

Additional FeaturesAdditional Features

54

Sort

My Reports Automatic Monthly

Updates Saves Custom

Groups Searchable

Download XML for Excel Comma-delimited

Quick and EasyQuick and Easy

55

Create a comprehensive trade report in 3 steps

1. Select Trade by Commodity

2. Select the Product(s)

3. View the Report

State Export Report SampleState Export Report Sample

56

Use USA Trade Online to identify California’stop 10 export commodities!

Export training videos http://www.census.gov/foreign-trade/aes/exporttraining/videos/index.html

Global Reach Blog http://globalreach.blogs.census.gov

57

Additional Training ToolsAdditional Training Tools

Fundamentals of Exporting Webinar Series

All webinars are stored at the following website: http://www.census.gov/newsroom/releases/archives/news_conferences/webinars_exporting.html

Understanding the Basics: Introduction to Foreign Trade StatisticsDiscovering New Markets — Utilizing USA Trade OnlineAll Products Have a Classification Number — Learn How to Find YoursForeign Trade Regulations — Demystifying the Rules of ExportingFiling Export Information Electronically — The ABCs of AESYour Free Tools of Trade — AES Direct and AESPcLinkGetting it Right the First Time — How to Avoid Common PenaltiesWhat is a Foreign Trade Zone and How Can It Help You?

59

For More InformationFor More Information

• FTD Call Center: 800-549-0595• Option 1 – AES Assistance• Option 2 – Commodity Classification Assistance• Option 3 – Regulations Assistance• Option 4 – Data Dissemination

• Fax: 301-763-8835• E-mail: ASKAES@census.gov• E-mail: FTDREGS@census.gov• FTD Blog: blogs.census.gov/globalreach/

Questions?Questions?

60