July 31, 2003

Summary:  On July 17, 2003, the Bureau of Census, issued a final rule (68 Fed Reg. 42534) on the Mandatory Use Of the Automated Export System (AES)/AESDirect for filing export information for items identified on the Department of Commerce’s Commerce Control List (CCL) and the Department of State’s United States Munitions List (USML).  AES/AESDirect is the electronic method for filing export shipment information with the Census Bureau (Census) and the Bureau of Customs and Border Protection (Customs). 

Under existing regulations, an exporter or its appointed freight forwarder may use either the paper Shipper’s Export Declaration (SED) or the electronic equivalent (the AES record) to file export shipment information with the U.S. Government.  Once the new rule is fully implemented, AES will be the only means permitted to file export information for those items that are on the CCL and USML and that otherwise require the filing of export information.

Other changes are contained in the notice, including updating the required AES fields to meet ITAR/USML reporting requirements.

To assist exporters with the new requirements, Census has established an on-line support center.  Interested parties can e-mail ASKAES@census.gov for help.

DATES:	Effective Date:	The effective date of this rule is August 18, 2003.
	Implementation Date:	Census will implement provisions of this rule on October 18, 2003.

Background:  An exporter or its authorized freight forwarder is required, with certain exceptions, to file export related information with Census for all exports of merchandise valued at more than $2,500 from the United States, Puerto Rico, and the U.S. Virgin Islands to foreign countries.  These declarations are the primary means used by the U.S. Government to collect statistical trade data and for export enforcement purposes.

In July of 1999 Census amended the Foreign Trade Statistics Regulations (FTSR) to allow for filing shipper's export data electronically using AES, rather than by paper SED.  Under the regulations there were four data filing options:

Under AES the exporter or an authorized filing agent transmits the shipper's export information directly to Census.  AES validates the data and generates either a confirmation message or an error message back to the filer.  AESDirect allows exporters to file their export information directly with Census.

In November of 1999 Congress passed and the President signed into law the Consolidated Appropriations Act of 2000.  Section 1252 of this law authorized Commerce/Census to require mandatory AES reporting of export information for all items on the USML (State) and the CCL (BIS) that require an SED.

On October 9, 2002, Census published a Proposed Rule in the Federal Register (67 FR 62911) regarding the mandatory use AES filing for items identified on the Department of Commerce’s CCL and the Department of State’s USML, and the July 17, 2003, publication is the final action on this rule.

The Classification of Goods For Export 

All goods exported from the United States must be classified under a statistical nomenclature known as the “Schedule B.”  (Alternatively, an exporter may use the corresponding Harmonized Tariff Schedule number.)  Separately, all goods are subject to classification for export control purposes.  Goods are either classified under CCL or the USML. 

The USML covers items based on their specific military function, application or end use.  It is found in section 121 of the International Traffic in Arms Regulations, or ITAR, which regulates the export and re-export of defense articles and services. 

The CCL is a list of all items under the export control jurisdiction of the Export Administration Regulations (EAR) and the Department of Commerce.  The CCL is found in Supplement No. 1 to Part 774 of the EAR.  The Bureau of Industry and Security (BIS) maintains the CCL.  The coverage of the CCL includes commodities, as well as software, technology, and technical data.  The CCL does not include those items exclusively controlled for export by another department or agency of the U.S. Government, such as the USML.

All exporters have a responsibility to provide the export classification of their goods under the “Schedule B" and the appropriate CCL or USML classification at the time of export.  While some exporters retain the services of a forwarder or consultant to determine this information for them, the U.S. party exporting the goods is ultimately responsible for the accuracy of this and other information presented to Census.  (Certain exceptions apply in the case of routed export transactions.)

Treatment of EAR99 Goods 

There are many categories of goods which are not specifically identified on the CCL but which are still subject to the export control jurisdiction of the EAR.  Food, clothing, and farming equipment are just some examples of goods that are not specifically identified on the CCL but which are still subject to the export control jurisdiction of the United States and the EAR.  Such goods have a designation of EAR99.  Following the effective date of the rule change, export information for goods that are specifically classified under the CCL or the USML must be submitted through AES, whereas exporters of goods with a designation of EAR99 retain the option of filing paper SEDs or filing through AES (at least for the time being).

Option 4 Filers 

Census made it clear that the new rule has no effect on Option 4 filers.  Option 4 filers will continue to be allowed to submit post-departure export data to Census using AES.  This is not to say that other, future initiatives may not adversely affect the ability of exporters to use Option 4 post-departure filing.

Option 3 Filers 

Census has made a decision to eliminate Option 3 filing.  Option 3 allowed the filer to provide partial pre-departure information and complete information within five (5) working days from the date of exportation. The Census Bureau identified a number of specific reasons for eliminating Option 3, including the fact that Option 3 has been shown to be underutilized by the AES filers.  As of October 18th, Option 3 filing will no longer be allowed.

Other Changes In The Notice.  

Census is also amending the FTSR to provide:

Additional amendments include

• A change to sections 30.63 (14)–(21) to meet the State Department’s requirements.  AES filers of USML items will have to include information on:

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 such.