Exporters and freight forwarders do it every day, all day long. That is, submit their electronic export information or EEI via the U.S. Census Bureau’s Automated Export System (AES) using AESDirect, AESPcLink and other custom software programs. Do you know what you are signing up for when hitting “enter” and submitting your EEI?
All parties involved in export transactions, including authorized agents or forwarders, should be aware that commercial invoices and other commercial documentation may not necessarily contain the information necessary to prepare and submit the EEI. Yet, the U.S. Principal Party In Interest (USPPI), freight forwarder or agent is certifying that the EEI information is true and correct. How do you know if it is true and correct? Who’s problem is it and what are the ramifications if it is incorrect?
You or your company signed up to seventeen separate AES Terms and Conditions when you registered your new AES account. For example, in the 2nd item you have certified that, as a registered company, you are and will continue to be in compliance with all applicable laws and regulations. In term #13, you have signed up to the fact that filing EEIs for exports constitutes a representation by the USPPI that all statements and information are in accordance with the export control regulations and that the commodity described on the declaration is authorized under the particular license as identified on the declaration and all conditions of the export control regulations (presumably 15CFR parts 730-774) have been met. In the 14th term, you agree that it is unlawful to knowingly make false or misleading representations for exportation and that doing so constitutes a violation of the Export Administration Act, 50 U.S.C. App. 2410. Terms 15-17 also address the world of pain that you will endure for violations of 22 U.S.C., 18 U.S.C. and 13 U.S.C. Or did you just click the check box stating that “I have read and agree to the Terms and Conditions that govern the use of AESDirect?
Now that you remember what you signed up for, you should take a closer look at the information that you are certifying. The EEI includes information about the parties to the transaction including name, address and contact information about the USPPI, Ultimate Consignee and Carrier Identification. Are you sure you know who the USPPI is for your transaction? While this may appear obvious to USPPIs filing on their own behalf, I recognize that, in many instances, forwarders and even other USPPIs are filing EEIs listing the wrong USPPI and those USPPIs are often unaware of the misuse of their company information! Exporters (USPPIs) are advised to request a validated record of their AES submissions for your internal audits. This information is free for 12 months of data and can be requested every year.
What about the other data elements? Did you get the Schedule B number in writing from a reliable source (e.g. manufacturer, item database, compliance department, etc.) or are you using the number that you predecessor told you to use? Or worse, you weren’t provided with a Schedule B number so you are simply using the number that worked for you last time? The same holds for the ECCN and other data fields. Did this information come from a documented source or “tribal knowledge”. Simply entering EAR99-NLR (No License Required) without fully understanding the classification of the product you are exporting puts you and your company at great risk of violation of the aforementioned laws and regulations. While this may sound shocking to some, it is happening every day and unsuspecting exporters are often unaware of the violations that are occurring under their watch. In fact, it has been reported that Customs and Border Protection (CBP) has issued over 1,200 penalty notices in the first half of this year!
The most important data element that an exporter or their agent can certify is the License Code / License Exemption Code. These codes indicate the type of export license, export permit, license exception or license exemption or other export authorization. This could be a national security concern as loose controls here could permit the inadvertent export of controlled U.S. items, software of technology. It is imperative that the filer understand the “License Type” or applicable exemption in the commodity information and not simply enter “C33: No License Required”. Furthermore, it is not advisable to use any license exception/exemption without fully understanding their implications. Using a license exemption/exception essentially empowers the exporter to make the “go, no-go” decision of a U.S. government licensing officer. It is a significant responsibility!
Exporters should be aware that they still have significant responsibilities as the USPPI even if their forwarder or agent prepares the EEI on their behalf (please contact us for our white paper on this subject). Part 30.71 of the Foreign Trade Regulations hold that any person, including USPPIs, authorized agents or carriers, are subject to fines and penalties not to exceed $10,000 (or imprisonment of up to 5 years if criminal violation) or both, for each violation of the regulations.