eSignature Legality for Export in United States

How to eSign a document: e-signature legality for Export in United States

hello and welcome to star usa training today is tuesday february 9th 2021 and today we're going to be talking about eei compliance uh and filing eei and router number transactions we are recording this webinar recording and other materials will be made available after broadcast uh all participants are going to be muted and the q a feature is available if you have any questions i will answer questions throughout and those of you that submitted questions in advance thank you very much i have those on the slides and we'll talk about each of those um i will be using a bunch of acronyms today that is the nature of the trade compliance industry uh so if i leave something out feel free to ping me on the q a or in the chat i'll take a look at it and this webinar is eligible for one uh credits uh please one ccs credit please email us at train starters a dot org again train at starusa.org uh after the webinar with your id number and we'll get you that credit for your system okay just some quick background on myself and my company um company we are star usa inc we are trading compliance consulting advice training and services company we handle all manner of international trade compliance regulatory oversight in and outsourcing import export policies and procedures ctpads supply chain security international travel although not lately broker and forwarder management oversights we really like to get involved uh with unpacking and demystifying trade compliance for your entire supply chain and myself personally my name is mike easton i am the president general manager of star usa inc i've been in the industry for more than 15 years now i'm kind of losing track as time goes by but um i really enjoy the field those of you that have worked with me in the past know that i'm a huge nerd about these things and today is a topic that i find to be one of the more interesting ones uh despite how seemingly introductory it is in my line of work i i often see a cognition gap specifically in recognizing how the eei is supposed to happen correctly and today's webinar is really about helping uh really what two things the first thing is is helping people unfamiliar with the export compliance arena to build that baseline foundation to build on and hopefully start you off on the right foot my other goal is to really help people that are currently mired in the uncertainty of electronic export information filing dei compliance rather memorizing uh help you to uh basically find a way to get out of that fog get a reset on the core aspects and help keep you pointed in the right direction so i'll be covering the basics of export compliance uh breaking into the versus non-routing perspective and then looking at some of the compliance practices and risks involved i won't be talking about things like export controls uh ear itar bis ofac embargoes and sanctions none of that's really going to come up today but if you do need help with those areas on the export control side feel free to ping us via train starter.org and then we can have a chat so whenever i talk about export compliance i always want to set the the foundational understanding that there are two simple rules for export compliance that you have to have uh when beginning any uh sort of endeavor and trying to improve your ethical compliance practices the first thing to remember is that exporting is a privilege not a right it's not in the bill of rights it's a privilege granted to us by the federal government that allows us to trade between borders and we have a different rules and regulations that we have to follow those that privilege to exporting uh comes with responsibilities and there are penalties for non-compliance and it's important to be aware that this isn't some um a flyby night uh you know whatever whatever you say goes kind of a situation we actually have to follow the laws in order to have a successful export compliance program and to retain that right or that privilege uh to continue doing export business those privileges can be taken away the second thing to remember is that you must be able to demonstrate your compliance there is a de facto assumption of non-compliance so if you can't prove that you are in compliance then you are presumed to be out of compliance one of the key things to remember as we go through eei in particular is to know your role the degree of compliance the degree of records that you must maintain are dependent on your role so you really have to be alert to that that role that you're playing in the export transaction i highly recommend implementing a comprehensive compliance program to help round out those rough edges so that you don't have to worry about things like record keeping but certainly you should be keeping and maintaining records of your transactions and dealings uh as you uh go about your business internationally okay so the the introduction to export compliance uh the basic universe that we're working within is title 15 of the code of regulations uh section 30 uh the foreign trade regulations the ftr this is the uh backbone the underpinning the the nut of export compliance if you have an eei related question it's going to be found in 15 cfr 30. on the right hand side we've got several citations that i'm using throughout the course of the webinar i'm just kind of encapsulating them all here for you but we will be talking about purposes and definitions the general requirements roles and responsibilities data elements themselves exemptions penalties and we won't be going to voluntary self-disclosure today but i wanted to include that as the provisions for for making a disclosure are included within the regs and that's the place that you would go to unpack that we did do a webinar last year late last year on self disclosures so if you want to look that up that is on our website as well so one of the preliminary things that we need to define uh is what is an export in that word the word export has different definitions depending on which regulations we're talking about in the context of the foreign trade regulations export is defined as the sending or transporting of goods out of a country and goods are defined as merchandise supplies raw materials products or any other item identified by a harmonized tariff system code the ftr differs from the export administration regulations and the international traffic and arms regulations in that we're only talking about physical goods when we're looking at exports under the foreign trade regulations so that's our that's our focus today is the physical goods we're not talking about uh software uh that can be electronically transmitted um unless we're talking about physical media uh like discs that you would stock on uh retail store shelves that kind of thing that would be counting since that is a physical good uh we're not talking about services and we're not talking about information we are talking about physical items so when i say the words eei and i'll be using that that phrase throughout the entirety of this webinar eei i am i'm saying electronic export information this is the actual data that gets filed through the aes and is the electronic record of the export that is given to the bureau of census which is part of our us department of commerce for statistical reporting and export control purposes so we actually transmit the data the electronic export information through the aes system the aes is the automated export system it's the electronic system where the eei is filed by or on behalf of the party exporting the goods and those goods are coming from the context of eei filing they must be coming from mainland u.s or district of columbia puerto rico or the u.s virgin islands the other territory the u.s territories are not covered by these regulations and the aes is currently accessed through the automated commercial environment the ace or ace as people call it so you can actually get to your aes filing system to file your eei by logging into your ace account and going into the into that aes section the eei is really that the baseline for all export statistics it helps inform things like international trade deficit foreign policy export control parameters uh many other key economic indicators the filing the eei is a legal requirement and it is codified under the foreign trade drugs and violations do result in penalties it should be noted that the terms eei and aes are often used interchangeably by people in the industry a lot of times forwarders will refer to it i need to file the the aes um the way i say it i say i need to file the eei so i'm going to be using eei a lot more than aes but um for those of you uh kind of following along uh they're mostly interchangeable when used in conversation like that but technically there's a difference there are three key roles to pay attention to for uh purposes of the eei and the foreign trade regulations those three roles that are going to come up throughout the course of this webinar are the usppi the fppi and the authorized agent i'm going to kind of break down what each of these are but i'm going to be circling back to these frequently throughout the webinar so if you're not sure on exactly what i'm talking about here definitely please use the q a section to to submit your question but the usppi is the united states principal partying interest ppi principal partying interest this is the person or legal entity in the u.s that receives the primary benefit monetary or otherwise from the export transaction generally this is going to be your your seller um people refer to this as the exporter record but that term was deprecated almost 20 years ago now and has no meaning in the context of u.s regulations exporter record does not exist as far as the u.s is concerned that the the correct term views is and uspi we're talking about the seller the manufacturer uh maybe an order party or a foreign entity who's in the us but generally speaking we're talking about the person that's doing the selling the entity that's selling the goods the fppi meanwhile is the foreign principal party interest this is the party abroad who is purchasing the goods for export or to whom filing final delivery or unusually made this party may also be the ultimate constantine unlike the usppi and the authorized agent the fppi is not a named party on the eei filing there is no box for fppi you do not need to declare who the fpbi is but generally speaking the fppi is the buyer and if they are also the ultimate constantly there is a box for the ultimate constantly in the eei filing so you can actually enter the who the fppi is there the authorized agent meanwhile is an individual or legal entity physically located in the united states that has obtained the power of attorney written authorization from one of the ppis to act on their behalf and to complete and file the electronic export information the party who is doing the authorization to the agent is a critical aspect to determining router they're not routed if you don't know who did the authorization you can't know who whether it's a router or non-railroad transaction and again we'll unpack this uh quite thoroughly uh during the course of this webinar but uh keep that in mind if the party who authorizes the agent whether it's the usppi or the fppi is going to be a major determining factor and generally speaking the authorized agent is going to be the export freight forwarder not always but that's the most common scenario so what is the eei required well whenever the goods uh whenever the value of the goods is over twenty five hundred dollars per schedule b you follow the one rule and the one rule uh states that all goods being sent from one usb ppi to one constant e to one country uh one country destination on one conveyance on the same day one usppi one foreign one destination country one conveyance one day that's your one rule if you have multiples to any of those categories there you've actually got multiple eeis you need to break it down so that there is only one the answer must be one for each of these so if you have one exporter uh shipping to the same buyer but going to different countries that means you have different eeis for each of those filings even if they're on the same advantage even throughout the same day if they're going to two different destination countries you have two eeis and uh before anybody thinks of it um don't split your shipments up to get around that 2500 requirement per schedule b there are specific rules against doing that and you will find yourself in violation and they will not take kindly to anybody trying to skirt around that 2500 threshold by manipulating their shipments so the us eei filing requirements uh this is kind of a slide um again you'll you'll get all these um slides after the webinar this is one you could print out if you were interested in having this handy reference sheet um but it's important to know that the eei is different than things like the isf the isf would only apply to vessel shipments whereas the eei applies to an export by any mode of transport land sea or air and there are different rules on when the eei must be filed prior to those goods departing the country for truck excuse me uh for truck your time limit is one hour prior to arrival at the border you must have the eei file for rail it's two hours prior to arrival at the border for vessels it's 24 hours prior to lading not departure lading so you have to make sure that you build enough buffer time to allow for when the goods are going to be loading uh laden up aboard the vessel for departure a lot of times you won't know the actual uh time or date of lading so give yourself that buffer i typically recommend 72 hours before vessel departure and then for air shipments it is two hours prior to departure when we're talking about the um which zones uh eeis required as far as the u.s is concerned 50 states and in the district of columbia puerto rico any foreign trade zones located in the u.s and puerto rico uh and uh the u.s virgin islands so any shipment to a foreign country from any of those areas eei is required also included are any shipments to puerto rico from the us so it's still us to us you know u.s mainland to puerto rico but an eei is required same thing in reverse coming from puerto rico to the us on eei is required to get out of puerto rico and then if you're going to the u.s virgin islands from the u.s or puerto rico there are some common exemptions to find the eei uh i've kind of captured some of the more common ones um and i'll unpack these a little bit but uh shipments where the ultimate constitution in canada are exempt from filing the eei under 30.368 and you can declare that on your bill of lading no eei 30.36 a which means it's going to canada and eei is not required and note that we're talking about ultimate destination only if it's passing through canada to go somewhere else an eei is required so if it's going uh through the port of montreal uh over to europe for example you do need to file an eei and one important thing to note for those shipments that are going through canada is that your date of export is the date that's crossing the border into canada the data leaves the us not the date it departs from montreal which could be several days later it's going to be the time it actually leaves the u.s even though it's going to a foreign country via canada uh commodities valued under 25 2500 per schedule b um that's the most common exemption basically low value uh eei reporting is not required uh tools of trade in their containers uh so if it's an instrument of international traffic you don't have to file an eei on that item itself um to export it and then any shipments that are moving from one point in canada or mexico to another point in the same country but it happens to be traveling through the u.s to get there uh don't require an eei those are going to be a transit and bond the exceptions to the exemptions also exist so regardless of the exemptions that i just listed uh any licensable shipment whether it's bis ear and itar dtc nuclear regulatory commission if a license is required you must file the eei regardless of the value regardless of what the ultimate destination country regardless of tools of trade licenses required must file the eei same thing applies if it's subject to the itar but it's exempt from a license requirement if it's part of itar and no license is required you still must file the eei rough diamonds eeis all always required and self-propelled vehicles license is always required for any sort of self-propelled vehicle i'm not i might say license there i might just say eei is required uh for self-propelled vehicles so the key takeaways that i want you to have from this section uh are the three primary responsible parties which are the usppi the fppi and the authorized agent other parties are involved in the transactions and are listed on the eei but these are the three primary responsible parties and an eei is required when you've got that 2500 threshold met when goods uh leave the country by any mode uh when you've met the one rule and when no exemptions apply so uh if you've got any questions at the moment i'm going to read through the ones that are pre-submitted that are on the slide here um i have a note here in the chat also that the one rule is also based on whether the goods are domestic or foreign that's a good point uh thank you debbie if yeah if you have uh goods that are domestic uh you have to file eei even if it's meeting all the other uh um criteria of the one rule uh if you've also got foreign goods that meet those same criteria okay schedule b so the question submitted was uh if i have many different items in my shipment and none are over 2500 per schedule b but the total shipment is over 2500 is an eei required and the answer is no um if you do not cross that 2500 per schedule b even if the total shipment does cross 2500 you are not required to file on the eei and special march question uh what is considered a softball vehicle this is when i face on a regular basis uh self-propelled vehicles include anything that can move under its own power basically um that's going to include cars anything that has a vehicle identification number the vin but it also includes things like for forklifts motorized pallet jacks golf carts uh lots of other things that don't have a bin uh so basically the the rule of thumb i use if i'm moving anything that has a motor and wheels i'm going to get confirmation from customs before trying to cross the border the vehicle export provisions come directly out of us customs and they're the ones that will kind of control whether this particular article that you're exporting is considered a self-developed vehicle but it is a very broad definition a question on what about shipments of acoustic guitars to guam that are over 2500 in value the uh shipments to guam should not require an eei can you co-mingle foreign trade zone and non-foreign trade zone products on same eei filing if going to same destination or do ftc shipments need their own eei um i believe that you would need to file separately depending on the disposition of the articles as they're being pulled out of the ftc i would need to check with uh census on that one but my guess is that there would be separate eeis uh because of their or the nature of their origin and where they are considered to be um originating their journey the the foreign trade zone is a different area than the customs territory united states but i would definitely get that confirmed by census effective june 9th 2020 u.s exports destined to china russia and venezuela will require eei to be filed uh regardless of value does this apply to ear 99 items uh yes i believe that it does uh any exports to those countries are going to be subject to eei filing regardless of value and regardless of licensed requirements i hope i answered those effectively for everyone and i am going to move forward if you need to expand feel free to post another question okay so now that we have a baseline of what the eei is uh what export compliance is kind of rooted in we're going to take a look at the differences between the routed and the non-routed export transactions so it's important to recognize that routed exports are explicitly defined in the foreign trade regulations and in the fppi or in the routed export definition the fppi is the one that assumes responsibility for filing uh the eei the fppi must also authorize an agent since the filer must be in the us when it is filed and loosely speaking rounded exports are aligned with the fca and x works eco-terms rules two things to note on the eco terms rules uh number one incoterms is a registered trademark of the international chamber of commerce so um keep that in mind uh not a federal um aspect of uh shipments there's no regulatory associated legal terms and the in fact the eco terms rules are not recognized by the foreign trade regulations uh departments of bureau of commerce bureau of census and none of them will acknowledge the anchor term when considering routed versus non-martin the anchor term does not actually come into play for those situations so i include this here for people that are familiar with the equal terms but as i explained to people that i work with uh on a regular basis try not to conflate incoterms with the rather number of definitions those have to be understood independently first understand we're out of non-routed then understand eco terms and then try and merge the the two together but otherwise you can use this as a kind of a loose guide nonviolent exports on in the meantime are undefined in the foreign trade regulations uh usppi uh under non-transactions usppi is the one that assumes the responsibility for filing usbs may self-file or use an agent at their choice and uh these are loosely aligned with the c d terms cpt cfr these are also known as standard shipments they include any transactions that do not meet the definition for routing so the the default presumption if it does not meet the definition of router is that the shipment is non-routed or standard and i'll go through the definitions a little bit more closely here in a moment but uh when looking at the terms rather than standard i'm going to be using the term non-rotted so that we're all on the same page i'll try not to use the word standard and why are these important the the importance of these of understanding these is the roles and responsibilities for the parties will change within the regulations depending on what type of export transaction you have your obligations under a routed export are different than your obligations under non-routed export and we'll take a look at those here in a second so the route of transactions the definition under 30.1 is a transaction in which the fppi authorizes a u.s agent to facilitate the export of items and to prepare and file the eei within this universe each of those players that i mentioned previously the usppi the fbi and the authorized agent have specific roles the usppi has the responsibility to either perform as the authorized agent if so delegated by the fppi or to provide the fppi's agent with the data elements uh identified in thirty point three e one through twelve or one i through um as well as record keeping requirements so the usppi is either going to be the file of themselves or they're going to provide information to the filer and the uspi is going to keep records the fppi has the responsibility to authorize an agent again they can authorize the usppi to be their agent or in most cases they will authorize a freight forwarder in the us to be their agent the agent's responsibilities in this scenario is to receive and retain the authorization get granted them to be the filer to actually file the eei to provide evidence of the filing to the usppi and to retain their own records um i'm going to kind of contrast that here against non-rotted transaction and try and um make sure that the parallels are evident so in a non-rod transaction again these are not explicitly defined in regs so this includes with the available and timely info or make sure that they have their own accurate and timely information adhere to all the filing requirements defined in 30.6 and keep the records in a non-routed transaction the fppi has no responsibilities in the foreign trade regulations they have no obligation to the u.s government to provide to perform any action the authorized agent meanwhile has basically the same responsibilities receive and retain the authorization this time coming from the usppi not the fppi file the eei itself provide evidence of filing to the usbi and retain their records i want to talk a bit more about the authorized agents here they are authorized by either the usppi for non-variety transactions or by the fppi in router transactions the agents must be physically located in the u.s at the time of filing the last time i did this webinar somebody asked i'm a forwarder in mexico and my u.s customer has asked me to file the eei am i allowed to do that the answer was no they were not physically located in the u.s and therefore they could not be the fire so it's important to be alert to that agents are required to obtain a power of attorney or written authorization from a principal party of interest to file the information on their behalf if an authorized agent that has not received that authorization then they are not authorized as an agent first of all uh and second of all uh the party that's giving them that authorization is going to directly inform uh whether it's a routed or non-violent transaction if we go back up a slide non-routed the fppi does nothing the authorization comes from the usppi groudon transactions the fppi authorizes the agent the usppi does not provide the authorization written authorizations should specify their responsibilities with particularity um i've seen some very open-ended authorizations and even the the regs uh prescribed format is pretty open-ended i recommend being as specific as you can when giving authorizations uh you typically don't want to be handing out authorization to file on your behalf without considering what other things the entity might do implicitly with that authorization that you had not considered so i like to specify that you're going to file the eei if it's for a limited uh time basis you know for one year if it's for a particular shipment i will list the shipments but i recommend being as particular as possible and limiting the the authorization uh to be for eei filing purposes not for being full fledged customs power attorney or even a broader power attorney than that in a routed transaction the usppi should never be the one providing the agent of the fppi with that authorization so i'll say that one more time in route of transactions the usppi should not provide the agent with the written authorization i see this happening quite often and i'd like it to um not be a thing that ever happens but it it often does where the fppi's agent will reach out to the shipper and say hey i need you to sign this document which includes the authorization to file that is making the usppi the one doing the authorization not the fppi and that's not correct is turning a router transaction into a non-routed transaction we need to be careful about so i want to talk about some of the data elements that are included in the the filings again these will have different responsibilities depending on the type of transaction so loosely uh there are mandatory conditional and optional data elements on the eei filing mandatory elements which means in all cases uh they want to know who's sending it the name address ein of the usppi they want to know who and where it's going to the ultimate constant knee the address information there the type of constitution they are the destination country how and when it's going to leave carrier and conveyance information the port of export is going through the time of the exports and whether it's routed or there's a specific flag for that and then more or less what it is an hs description domestic or foreign flag quantity value hazardous information those are all mandatory uh data elements the conditional data elements meaning as the case may be include any other parties which if there are filing agents involved they will be listed here and immediate constant needs will be listed here any export control information if there is an eccn or license information or department of state requirements those would be listed here if they exist and special exports foreign trade zones diamonds vehicles those get encompassed in the conditional data data elements as well date elements uh basically as the principal parties in interest may require seal numbers equip numbers things like that can go in there looking at the data elements i'm not going to go through lists and read all these for everybody's sake it's important to recognize the difference between the routed and non-routed data element requirements in a routed transaction the usppi is required to provide the elements on the left those 1 through 12 items that have to do with the types of goods that they are this is where the foreign principal party interest is the one responsible for authorizing the agent and controlling the actual export out of the country so a usppi needs only provide this information and most of this information is going to be part of your commercial invoice already it should already be included there in virtually all cases there shouldn't have to be any special inclusions to have quantity uh quantities and units to measure the value schedule b not everybody puts ecc in our licensing information on the invoice that can be conveyed in other ways but also if you can put on the invoice drop an ear99 on there or drop the actual eccn number on there if there is one that shall be conveyed up front in a non-routed transaction the usppi is responsible for all of the other data elements those are things that um in here are things that the uspi may not have uh intimate personal knowledge of they're relying on their export forwarder to have things like the um the uh conveyance numbers and the excuse me shipment filing action request indicators uh these other parties will have the information not all that will be coming from the usppi but the usppi is responsible for uh these these data elements directly or indirectly so i'm gonna do a quick um a little practice scenario here and i'm not gonna do a poll i'm just gonna kind of give you guys a few seconds to consider here i'm running through three scenarios and the question is basically did you authorize the agent a lot of times when we're talking about authorizing agents and establishing who has which responsibility it sounds good and abstract but putting into practice or in the normal terms helps to kind of bring it to to bear so in the first scenario you're a u.s manufacturer there's a company in singapore that wants to buy your products and you agree to deliver their to their door and you call your freight forwarder and make the arrangements so the question is did you authorize the agent there's a lot of information left out here but uh in a nutshell the answer is yes you're going to be reaching out to your forwarder to make the arrangements so this would be a non-routed transaction um you're the one that uh authorized the agent so uh that makes this anonymous transaction in scenario two you are a us manufacturer a company in singapore wants to buy your product you would agree to work with their freight forwarder to deliver the product to their door hopefully in this case uh you are not the one authorizing the agent and therefore this is a router transaction uh so it's important to pay attention to those the the role that each party is playing the fppi wants you to use their agents so you're going to be using basically working under that agent's authorization from the fppi not your own authorization and scenario three uh you're a usd distributor a company in mexico wants to buy your product you agree to deliver the product to the buyers freight forwarder in laredo texas did you authorize the agent and the answer again in this scenario is no you did not authorize the agent you're delivering it to the fppis freight forwarder in laredo texas so this is a this should be a router transaction and those of you that have similar scenarios in my experience people are often doing things like authorizing the forwarders in scenarios two and three when they technically should not be and paying attention to what sort of authorization authorizations you've given is important to maintaining compliance uh one of the key concerns that i hear people voice uh quite often is the fact that the forwarder wants me to complete an sli a shipper's blood or instruction what should i do so i wanted to kind of demystify what the sli is whether it's a regulatory requirement and in unpack how that works an sli a shipper's letter instruction provides an information to the authorized agent that is sufficient for them to complete and file the eei these are necessary data elements that they're they're asking for from the uspi most companies don't provide all the necessary data elements in their commercial documents so forwarders provide consistent form and formatting to ensure complete documents at least ostensibly that's the the genesis behind the sli the sli is not a regulatory form and has no regulatory imperative but it will contain information that is necessary for doing the eei filing which is a regulatory imperative and you're responsible for the accuracy of the information that you provide on the sli document if you if you go ahead and complete it the thing to look out for with the shipper's letter of instruction is language like i hereby authorize this for act as my agent and to prepare and file the electronic export information any slides that have that language where you're expecting this to be a route of transaction you should know that you are not responsible for and should not authorize the agent to file on your behalf and write a transaction if the it's the foreign principal party's responsibility to do that authorization you can cross that out of the sli you can delete it from it and not not provide that signature and you can just provide the data elements that they require or um preferably you can say to them uh refer to my invoice all the information that you require for the eei is on my documents that you've already been provided so that's really the the gist of what you want to try and work towards is providing only what you need in terms of authorization so the key takeaways from this section are recognizing who authorized the agent the party authorizing agent may be the most critical factor in recognizing whether the foreign trade regulations considers this transaction and again it doesn't matter if you consider it routed or non-routed it's what the regulations consider it to be that's relevant from a trade compliance perspective and you want to match your actions to figure aims the regs don't care about your intentions or who you thought was responsible the documentation is going to be what matters again going back to that presumption non-compliance if you intended for this to be a raw transaction but then you went around and did provide the authorization uh then you no longer meet the definition of a provider transaction and therefore you fall into de facto that non-routed transaction that standard transaction level i see some questions have come in so i'm going to kind of go through those i have sandy indicating that uh she has different advice regarding ear 99 to those uh shipments going to china and venezuela and can you provide the cfr for clarification i don't have it off top of my head um and it might be possible that uh year 99 are not required um i have to go back and look so i i might just be wrong on that uh is the slide deck going to be sent out after the presentation yes it will uh everybody that's on the webinar should get an email by the end of the week with a link and the resources from the webinar if the usppi is authorized to file on behalf of the fbi can the usppi's freight forward or file for them or is there further authorization needed from the fppi to the uspi straightforward um that is a layer of um uncertainty i think it would depend in part on the nature of the authorization that you're giving by the fppi to the usbi um if it says something like i hereby authorize uh the uspbi and its agents uh then that should be sufficient to not get another authorization uh but if it's very limited in scope and it doesn't address that or it's very ambiguous um you might want to get that refined to include the right language and probably um even consult with uh your senses on that or send me some copies i'll take a look i would not defacto assume that the usppis agent can automatically file just based on the fbi's authorization to the usbr how long should you keep the eei paperwork great question tammy um the answer is gonna be five years from the date of export um and i will cover that in the next session as well next section does the usppi have to have written authorization to file the aes when the usbi is working with the fppis nominated freight forwarder the usppi would only need a written authorization to file the aes if they're the one filing it so if the freight forwarder is not filing the eei for some reason then in the uspi is taking on that responsibility then yes the uspi is the one that would need that authorization from the fppi uh sandy i hope that answered that unless the fppi gives usppi authorization the uspi ppi selector agent i'm not sure what that question is and see what came in if the usppi wants the export transaction to be routed what is the best way to inform my foreign customer that it will be a route of transaction if the buyer agrees do i the usppi you do obtain a copy of the filing from the agent for my records so we will cover some of the documentation you need a little bit in the next section uh but on on the surface um to the second question do the does the usb on you need to obtain a copy of the filing from the agent for my records uh not explicitly the filing you are able to obtain a copy of the authorization that the fppi gave to the agent and you are authorized to get a copy back from the filing agent of the data elements that they filed based on what you gave them so just the just the 12-day elements that are the u.s the uspi are responsible for in a routed transaction they do not have to give you the full eei record and technically they're not supposed to share that abs record with anyone but the the agent who filed it and the ppi that authorized them technically i'm using air quotes but nobody can see them thank you ryan for that one all right there's a lot of questions here and i'm going to try and um get to all them towards the end of the sh of the presentation um because there's a lot of layers and i don't want to get stuck on time um so i'm not going to answer these uh questions right now that are on the screen and i will move into the next section okay establishing and maintaining export compliance program uh three basic elements that i think need to be there in all cases you need to have policies and procedures if you don't have anything in the way of policies and procedures i would consider starting with the bis's published export management and compliance program and manual the emcp i have a link to it at the end of the webinar on the last slide or one of the last slides so you'll be able to take a look at how they kind of frame out what they would want you to have you can pick and choose pieces from that you can add on as needed but that's a that's a fine place to start communication essential i am a big proponent of making sure that you're talking to the people that care and have a stake in these transactions whether or not the direct or indirect involvement internal stakeholders include your sales people making sure that you're able to communicate with your foreign buyers what uh what their responsibilities are what you're going to expect with them it's often going to come through your sales your custom customer service teams you want to make sure that they know what to say and that they know how to say it and how to perceive the transaction and not stand in the way of the sale a lot of times those players will make commitments without considering the compliance regulations if they're informed ahead of time in my experience they will comply with that request they'll be fine with putting that in there they just don't want to do it after the fact so the sooner you can have them start doing it the more the better position you'll be in shipping compliance and management um for clear reasons i think external stakeholders making sure that you're talking to your customer and explaining them what you're going to need from them your forwarders are involved their brokers their forwarders are also involved and any distributors are in the way making sure that everybody's working together for the same aims communication is a big deal and lastly i strongly recommend an audit program uh the ace reports that are available through the automated export system through ace uh reporting mechanism uh you can pull out uh various reports on both your routed and mount amount of transaction transactions from the perspective of the government this is what the government will see uh what's on record for your employer employer identification number your tax id number and you can pull these reports for a period of time to see if all the transactions there meet the records that you have for what's supposed to be filed uh documenting your accountability chain and your processes and reviewing your records regularly those are the three main components of a stable export compliance program i want to talk about uh the penalties for non-compliance in export transactions the thing to do to avoid penalty risk uh primarily are ensuring that the eei gets filed that gets filed number one that gets filed on time and gets filed on time and accurately if you can hit that last bullet point you managed to get it filed on time and accurately you should not be at risk for penalties hopefully records are maintained for five years from the date of export it's important to note that date of export because that date of export is often going to be days sometimes weeks after the date the invoice was generated this is not the date of shipment from your plant this is the data left the actual country so build in that that uh extra time that you need to make sure that you have all the records that you're supposed to have if you do get audited if you are assessed a penalty uh census bis uh anybody that's doing that is going to be able to go back five years and assess penalties for all those transactions if you don't have records again the presumption is non-compliance the civil penalties uh for bei uh export compliance failures uh failure to file uh which means either the government discovered that there's no aes record on file after the prescribed time period going back to that earlier slide it's you know one hour for trucks two hours for rail 24 hours before loading on the vessel two hours for air i think maybe one hour um if the government finds out that you didn't file the eei on time you were subject to a failure file penalty or uh if 10 calendar days has passed it from that time period and regardless of who found the error whether it's you or the government uh you're looking at a failure to file a penalty of up to ten thousand dollars plus involved property may be subject to forfeiture the late filing penalty uh basically if you make a filing after the prescribed time period you're looking at 1100 per day not to exceed 10 000 because then it becomes a failure to file and then involve property may be subject to forfeiture again and then filing any false or misleading information uh false meaning incorrect just inaccurate um or furtherance of any legal activity or any other violation uh ten thousand dollars per violation in addition to any other penalty under law and involve property may be subject to forfeiture those are your civil penalties these are your accidents these are your mistakes criminal penalties different uh ball game you're looking at um jail time as a possible inclusion to the penalty here so knowingly failing to file the info on the aes doing that on purpose is up to five years in prison on top of your ten thousand dollars or both per violation plus forfeiture penalties which are a little bit more severe than forfeiting the uh goods themselves forfeiture penalties include any of your interest in property of any kind uh in the goods or items subject to the violation uh interest in the tangible property using the exporter attempt to make the export any of your property constituting derived from any proceeds obtained directly or indirectly from these illegal activities uh false or misleading info knowingly filing or submitting directly or indirectly this means providing false knowingly providing false information to your agent and then finally eei on your behalf uh getting that through the aes ten thousand five years in prisons are both per violation and further into the legal activity knowing the reporting or using the aes directly or directly for any further illegal activity uh ten thousand five years prison and forfeiture penalties so the key takeaways here exporting is a privilege not a right those privileges come with responsibilities and penalties and those privileges can be revoked you must be able to demonstrate compliance there is always a presumption of non-compliance it's your responsibility to know your role know if you're responsible for 12 data elements or 47. know if you're responsible for providing authorization or if you're if the fppi is be able to communicate that effectively to all the players have have a compliance program in place and keep and maintain your records of your transactions and dealings okay we have 10 minutes left in the session and i will attempt to answer as many questions as i can during that time um uh on the page here i'm gonna answer those real quick first uh we have many different types of export transactions and i don't know how to begin establish my compliance program this is kind of a distillation of a lot of different uh questions that i've had over the years but effectively my best advice is to start by finding out what your role is in the export transaction learn what it what it means to actually be the exporter uh what your role is as the exporter here and make sure that your actions are in line with those responsibilities as defined under the trade regulations once you get the compliance piece out of the way then you can worry about the operational pieces but you must be in compliance first you can't fix your operations if you if you don't have a good compliance practice in a good chain of events that help you stay in compliance and then complex exports again this is a derivative of my experiences not an explicit question but generally we often sell to companies in the us who will then sell overseas but we're not involved in the export transaction and we ship domestically do we have export compliance obligations there's a yes here there should probably be an asterisk asterisk on that you're not responsible for filing eei depending on the nature of the transaction you may be the usppi or you may not even be involved in the export transaction you may not be a principal party of interest on the export transaction so i say yes here because you never want to be in a situation where you're presuming that you're not but understanding more about the nature of the relationship um if you're selling to a distributor who you know to be selling overseas and they're just a middleman you probably are the uspbi because you're the one receiving the primary benefit from the export transaction even if there's another sale happening uh between the distributor and the foreign buyer you could still be the uspi that's based on my conversations with census i don't necessarily agree with them on that um in the scenarios that i've encountered but uh they take that stance that you very well could be the usbi and you need to demonstrate reasons why you're not uh first and foremost um if you know that the goods are going to be sold to another company in the us and worked on here and then resold later on down the road to another buyer overseas uh you're probably not the uspi you're not involved in export transactions so you wouldn't have uh export compliance obligations you might still have export control obligations not the scope of this webinar but you would not be beholden to eei filing or those usbi responsibilities okay i'm going to try and unpack the questions that are on here for the next few minutes uh routed if the invoice does not contain some of the information is required to be provided from the usbi who is responsible in reaching out to required information information the fppi or the agent so um the agent is responsible for filing the eei information the fppi may be the one asking that question so the scenarios that the the commercial invoice or the shipping documents don't contain a critical piece of information let's say the hts number the agent's responsible for getting the eei information in there where they derive that information they're supposed to get that information directly or indirectly from the usppi um and it needs to get in there uh who's responsible for getting that information from the fbi it doesn't matter there's no explicit requirement whatever's going to be the most direct route to getting that information uh to get in there and the uspi is responsible for things like the hts code which are part of those 12 data elements in the route of transactions so i would say that either the fppi or the agent is responsible for asking if the question came from either one of those i would consider it a legitimate question thank you victor uh we are u.s manufacturing shipper um they load shipped from exworks to europe a customer chooses the agent and the shipment was stopped for customs inspections customs required prop proprietary formulation uh and h and uh validating the hts code we provide as much as we could to the customs agent provide correct hts um okay so this scenario isn't really dealing with the export compliance regulations this has to do with the import uh the customs import regulations in the importing country and i do have some opinions on the situation um anonymous person that asked this question but i i'm not gonna unpack it here and i'm sorry kathy asks what if the fppi asks the usppi to ship via courier is this considered transaction will the courier that have to reach out to the fppi for authorization uh career shipments are a special breed um generally speaking they should adhere to the foreign trade regulations uh in fall that uh the 2500 threshold is going to be um uh usually a major factor in these quarter shipments but uh everything else about it should go ing to the foreign trade regulations now i know that to not be the case in many scenarios especially with dhl fedex ups those are those major couriers um and i typically navigate those on a case-by-case basis and i look at the evidence i'm typically willing to take on the additional risk of making this a non-writer transaction in the eyes of the foreign trade regulations in order to facilitate the export of the goods i i just know that i have an additional responsibility in that and i have to accept that risk willingly kathy i hope that answered your question i know it didn't but zamina uh can you comment on what the regulation is uh referring to fixing eei filings after the cargo has a part of usa what is the time frame you are on the hook for up to five years basically so if you have an error on your eei file that you haven't covered uh nobody else has uncovered it yet you haven't received a penalty uh you are responsible for making those corrections and you can do that through one of two means basically you can either go into the aes directly and correct it and hope you don't get a penalty because it was incorrect at the time of filing and uh they could choose to assess a penalty that typically does set off a red flag or you can go the route of a voluntary self-disclosure which does not protect you from penalty the same way a prior disclosure you would on the import side but it certainly would be a mitigating factor a very strong mitigating factor to reduce enemy penalties for companies i've worked with doing disclosures on past errors particularly systemic ones where there's hundreds of eeis that were wrong over the span of like a year and a half two years uh you can often get the penalty bill that mitigated down to two hundred dollars for a first offense there is an escalation scale that is published somewhere it's not in the regs directly but it is published as informal advice from census so um generally speaking voluntary self-disclosure is likely to be in your best interest although if it's a serious error consider getting experts involved including legal counsel depending on the size but if it's a one-off go ahead and make the change directly in the eei system at any point after it's been filed wrong before five years is up okay so the oh the clarification from uh on the china russian venezuela it's if there is an eccn regardless of license requirements or value uh so it would not apply to the er99s so kind of putting a book into the saga of the questions from the very first section uh if you have an export going to u.s or going to china russia or venezuela and there is an eccn number regardless of the license requirements an eei is going to be required uh that's typically not the case for other countries uh if there's an eccn number on the goods but no license is required uh then the goods would not be the eei but in this case they would for china russia and venezuela thank you debbie when routed what suggestions do you have to get the agent to give the aes filing itune number for your files and to review uh sorry that's a very good question um the the the stance i'd like to take is first uh getting the fppi on my side um i like to be able to explain to them that hey uh we are a legitimate country company who does legitimate business internationally and we need you to uh cooperate with us i need you to instruct your forward to provide us this information uh we're going to ask you for the information from the forwarder directly and we expect them to give it to us so you would hopefully get the uh information that way and that would be the first step otherwise um i have uh i have had to report forwarders to your senses before for not adhering to their obligations under the foreign trade regulations typically doesn't go well um it doesn't i mean i i don't get in trouble but if nobody's happy in that scenario so i prefer going a different route um to make sure that i can get the information that i need in order to be accountable for the records that the government has on my business and my business transactions so yeah absolutely start with the fppi and try and get people on your side i'm going to continue answering questions for another 10 minutes or so because there's still a bunch in here i'm going to show you the references and resources here page additional resources on the right there are links you can use those as a reminder uh if you have a ccs credit uh send your id number to train at starbuck.org and we will um facilitate that over the next couple days there should be an email by the end of the week with the slides and uh links to the resources and uh the recording so if you want to share this internally please do note the problems with that i'm going to stop the recording at this point and continue answering questions and i want to thank everybody for for sticking around this long i really appreciate everyone's time