1. MASS Export Center – Oct 2011 October, 2011 1 MASS Export Center - October 2011 Scott Barney, Panalpina, Inc. Partners in Compliance USPPI and Forwarder Challenges MASS EXPORT CENTER 2011 – AES Compliance Update

2. MASS Export Center – Oct 2011 October, 2011 2 I bet we all have some stories to tell!

3. MASS Export Center – Oct 2011 October, 2011 3 What Shipper’s might hear… “Jamie doesn’t work here anymore.” “I can’t find the file.” “I’ll correct the invoice tomorrow.” “No, it’s ‘NLR’ because it doesn’t need a license.” “What’s an ECCN? Just provide me with the Schedule B so I can file AES and get your cargo out.” “I don’t have to provide you with anything except the ITN.” I’m sure you’ve heard plenty more…

4. MASS Export Center – Oct 2011 October, 2011 4 What forwarder’s hear… “The Commerce Control List? I don’t know what you’re talking about.” “Here’s the invoice – just assign a Schedule B Number and get the freight out. It’s not my problem.” “No, I will not give you my EIN.” “You’re the only forwarder asking me for that information. I’ll call another forwarder to move the cargo.” “Just move the cargo – I’ll get the documents to you tomorrow.” My personal favorite: “You are my compliance department. That’s what I’m paying you for.”

5. MASS Export Center – Oct 2011 October, 2011 5 We all face challenges Shipper challenges and concerns about forwarders Level of compliance knowledge Inconsistencies between branch offices, and even within offices Risk (control of cargo, end users) Accuracy of data (AES Transmissions, L/C Documentation, Billing, etc.) … and many more, I’m sure. Forwarder challenges Staff (number, quality, turnover) Continuous training and education Pressure from customers to move the cargo Workload Uneducated Shippers (and Consignees) Educating global network

6. MASS Export Center – Oct 2011 October, 2011 6 Mutual Challenges  Getting senior level attention to Compliance  Managing Compliance Risk  Increased Government Enforcement  Educating foreign parties (your buyers, our network) about far reaching US regulations  Interpreting regulations that are written ambiguously  Dealing with conflicting government regulations

7. MASS Export Center – Oct 2011 October, 2011 7 Partners in Compliance (Overcoming the challenges)

8. MASS Export Center – Oct 2011 October, 2011 8 Working closely together Recommendations for Exporters Engage the Forwarder … even on the ‘dreaded’ Routed Export Transaction Ask questions about their Compliance and Training Programs. Do they have a program? Talk to the Compliance Officer – connect shipper & forwarder compliance people. … especially if you have controlled or licensed products. How do they monitor accuracy? Do they take corrective action?

9. MASS Export Center – Oct 2011 October, 2011 9 Focus on Account Implementation During the implementation process:  Take a minute to discuss the documentation that you provide. What does it look like? Are the products on the Commerce Control List? Should the forwarder expect to see ECCNs? Licensing? Where does it appear on the documents? When will that information be provided to the forwarder?  Who will be filing data into AES? USPPI or Forwarder? If it’s the USPPI, when and how with the ITN be provided. Ask the forwarder for the transportation data elements.  What information will the USPPI need back. When, how often?

10. MASS Export Center – Oct 2011 October, 2011 10 Obtain written authorization from your Principal before filing AES!! From the USPPI on Standard Export Transaction From the FPPI (Foreign Principal Party in Interest) on a Routed Export Transaction. Obtain all of the required data element in writing from the USPPI The ECCN box is blank on this SLI. Does that mean that the product is EAR99 or has an ECCN controlled for AT purposes only? Or could it mean that the exporter didn’t know what to fill in, so they left it blank?? Recommendations for Forwarders

11. MASS Export Center – Oct 2011 October, 2011 11 OBTAINING WRITTEN INFORMATION FROM THE USPPI (US PRINCIPAL PARTY IN INTEREST) Name, Address and EIN (Tax ID)# Schedule B or HTS Numbers, Schedule B units, number of units and value Goods foreign or domestic origin (per Schedule B/HTS) Commercial commodity description EAR99 or ECCN. License, License Exception or Exemption, or NLR (No License Required) designation. Any information that affects licensing. Related Parties (Y/N)

12. MASS Export Center – Oct 2011 October, 2011 12 Don’t be afraid to ask questions  Are their products on the CCL (Commerce Control List) ?  Are their products on the USML (US Munitions List)?  ITAR Controlled – State Department Licenses (or Exemptions) are required to all destinations.  Do they ever have licenses (Commerce-BIS, State-ITAR, OFAC, etc.)  If they do, we should ask them to always provide a copy to us with their documentation. If ITAR – State Department License:  Have they listed your forwarder name on the license.  Who will lodge the license with CBP? Critical that this is clearly stated.  Offer Guidance if the USPPI doesn’t understand what you are asking.

13. MASS Export Center – Oct 2011 October, 2011 13 More Questions  Do they ever ship to Embargoed Countries?  Cuba, Iran, North Korea, Sudan (North), Syria  Shipments of Humanitarian or Ag/Med (Agricultural or Medical) may be allowed with OFAC license.  How will they provide the information to the forwarder?  SLI? Commercial Documents?  They must provide all required information: Schedule B, ECCN (Export Control Classification Numbers)  Get examples of documents where they will provide the information. It is sometimes extremely difficult to work with exporter’s documents so it is good to know in advance where to look for the information. Don’t be afraid to say ‘No’ to a customer? If you advise a customer that you cannot ship product to Iran without a license, it is NOT OK to then ship it to Dubai just because the customer asked you to.

14. MASS Export Center – Oct 2011 October, 2011 14 Partners in Compliance It’s always about communication!!

15. MASS Export Center – Oct 2011 October, 2011 15 THANK YOU We’re all in it together… Scott Barney Area Export Compliance Consultant, USA Panalpina, Inc. scott.barney@panalpina.com Tel: 978.977.0083 ext. 4236 www.panalpina.com