Census Updates To Foreign Trade Regulations

October 7, 2014

A lot has been happening of late with the Census Bureau’s Foreign Trade Regulations, starting with a name change for the Foreign Trade Division (FTD).

On September 22nd, the FTD officially became the International Trade Management Division (ITMD). Other changes include:

• The AES Branch will now be known as the Data Collection Branch,
• Regulations, Outreach and Education Branch has become the Trade Regulations Branch, and
• The Trade Outreach Branch is a newly formed branch to support training and education for the trade community

But these aren’t the only changes. Below is a synopsis of other important changes.

Reinstatement of Exemptions for Temporary Exports/Carnets

On September 12, 2014, Census published an interim final rule that amends the Foreign Trade Regulations (FTR) to eliminate the reporting requirement for temporary exports, which includes carnets, and goods previously imported on a Temporary Importation Under Bond (TIB). 

By way of background, the Census Bureau published a final rule on March 14, 2013 (78 FR 16366) that removed the prior exemption from filing for carnets and other temporary exports, and goods previously imported under a Temporary Import Bond (TIB) exported in the same condition. This change became effective April 5, 2014. In other words, the March 14, 2013 rule created an AES filing requirement for previously exempted items, such as carnets.

The September 12, 2014 amendment reinstates exemptions for temporary exports/carnets and for goods that were imported under a TIB for return in the same condition as when imported. Section 30.37(q) and (r) is now revised to reinstate the exemptions from AES filing for temporary exports, including carnets, and goods that were temporarily imported under a TIB for return in the same condition are exempt from AES filing. As a result, these types of shipments are exempt from filing, except as noted in the FTR. This interim final rule is effective September 12, 2014. (Although Census notes that it and CBP will review these exemptions in partnership with the trade and may publish a Notice of Proposed Rulemaking to address temporary exports, carnets, and TIBs in the future.)

Implementation of the International Trade Data System (ITDS) For AES Filing

On August 22, 2014, Census issued an interim final rule to amend its regulations to reflect changes related to the implementation of the International Trade Data System (ITDS) and subsequent changes to permit access to the electronic export information (EEI).

Through AES, Census collects the EEI to compile its trade statistics. Additionally, other federal agencies (notably CBP) use the EEI for export control purposes to detect and prevent the export of certain items by unauthorized parties or to unauthorized destinations or end users.

The purpose of the ITDS is to eliminate redundant information requirements, efficiently regulate the flow of commerce and to effectively enforce laws and regulations relating to international trade by establishing a single portal system for the collection and distribution of standard electronic import and export data required by all participating federal agencies.

The August 22nd rule clarifies the confidentiality provisions of the EEI by amending section 30.60 of the FTR to allow other federal agencies with appropriate authority to access export data in the AES. The ultimate goal of this rule is to facilitate the legitimate sharing of export data consistent with the goals for the ITDS while maintaining the confidentiality of the data accessed by agencies other than Census.

Conclusion of the 180 Day Informed Compliance Period for FTR Changes

Finally, exporters and forwarders should be aware that the 180 day informed compliance period for implementation of the March 14, 2013 (78 FR 16366) changes to the FTR ended October 2, 2014. As of October 2nd, exporters and their agents are liable for penalties for failure to comply with the March 14, 2013 changes, which became effective on April 5, 2014. The March 14, 2013 changes include mandatory filing of export information through the AES or through AESDirect for all shipments of used self-propelled vehicles and for temporary exports; the reporting of two additional data fields, license value (15 CFR 30.6(b)(15)), ultimate consignee type (15 CFR 30.6(a)(28)); and the modified post-departure filing requirements.

New section 30.6(a)(28) provides that the EEI filer shall identify the ultimate consignee by type (the business function of the ultimate consignee that most often applies). For purposes of § 30.6(a)(28), the ultimate consignee will be designated as a Direct Consumer, Government Entity, Reseller, or Other/Unknown, as follows:

1. Direct Consumer – a non-government institution, enterprise, or company that will consume or use the exported good as a consumable, for its own internal processes, as an input to the production of another good or as machinery or equipment that is part of a manufacturing process or a provision of services and will not resell or distribute the good.
2. Government Entity – a government-owned or government-controlled agency, institution, enterprise, or company.
3. Reseller – a non-government reseller, retailer, wholesaler, distributor, distribution center or trading company.
4. Other/Unknown – an entity that is not a Direct Consumer, Government Entity or Reseller, as defined above, or whose ultimate consignee type is not known at the time of export.

If more than one type applies to the ultimate consignee, report the type that applies most often. Census has noted that if the USPPI uses “unknown” too often, it can trigger an inquiry.

If you have any questions about these or other customs matters, please contact George R. Tuttle, III, at (415) 986-8780 or email him at george.tuttle.iii@tuttlelaw.com.

George R. Tuttle, III, is an attorney with the Law Offices of George R. Tuttle in San Francisco.

The information in this article is general in nature, and is not intended to constitute legal advice or to create an attorney-client relationship with respect to any event or occurrence, and may not be considered as such.

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