1 Routed Export Transactions June 2013 Name Place, date United States of America Routed Export Transactions June 2013 Freight Forwarders – Routed Export Transactions

2 June 2013 Routed Export Transactions - Topics It is never “easy” but it is the reality There are a few parties involved, including but “not limited to”: The Freight Forwarder The U.S. Principal Party in Interest (USPPI) The Foreign Principle Party in Interest (USPPI) The Consignees (may not be the FPPI) Scope of Responsibility Ensuring that the FPPI’s forwarding agent (Freight Forwarder) understands their responsibility

3 Routed Export Transactions June 2013 It is never easy – but it is the reality When working within the scope of a Routed Export Transaction remember it is all about the relationship between the FPPI, USPPI and the Freight Forwarder. FPPI’s want to get the best rate and many have special contracts and freight charges with their Freight Forwarder Is it all about trust? It sure is! Communicate – Communicate – Communicate USPPI request a ‘writing’ (?) from the freight forwarder? Look at what you are asking… communicate with the freight forwarders compliance team. Will the freight forwarder comply with the relevant regulations? Will the freight forwarder assume responsibility for ‘their’ mistakes? Will the freight forwarder advise the USPPI when there is an changes? (from the FPPI) The Freight Forwarder might ask the USPPI if they will assume responsibility for their mistakes or mis-information provided.

4 Routed Export Transactions June 2013 Parties Involved Freight Forwarder Obtain Authorization to file the Electronic Export Information (EEI) from the party controlling the movement of the cargo (who hired the Freight Forwarder?) Routed – Letter of Authorization (LOA) or Power of Attorney (POA) Standard – POA or other written authorization Filing the EEI to the Automated Export System (AES) Obtained the USPPI’s data elements (in writing) including licensing and classification File the EEI accurately If the USPPI is self-filing, provide all of the required transportation details for proper EEI reporting Upon request provide the USPPI with the proof of AES filing and proof of export If requested provide the USPPI with a Report of all of their EEI transactions A copy of the LOA or POA from the FPPI must be provided to the USPPI, if requested

5 Routed Export Transactions June 2013 Parties Involved USPPI Provide the required data elements in writing if EEI will be transmitted to AES by the freight forwarder. USPPI’s Name and Address USPPI’s Employer Identification Number (EIN – aka Tax ID) Point of Origin – the U.S. State where the cargo began it’s journey to the port of export Schedule B or HTS Quantity and unit of measure – per Schedule B/HTS Export Value – per Schedule B/HTS Domestic or Foreign Indicator – or Country of Origin per Schedule B/HTS Export Control Classification Number (ECCN) or EAR99 designation per Schedule B If ITAR Controlled then the USML Category and SME Indicator License Information (No License Required – License Exception – License Exemption – Export License or Permit) If EEI not required, provide EEI exemption to freight forwarder. Just because it is “low value” does not mean no EEI is required

6 Routed Export Transactions June 2013 Parties Involved USPPI A common misstatement: “It is a Routed Export Transaction as such it is the FPPI’s responsibility & their Freight Forwarder to determine Licensing” – received from some USPPI’s. 15 CFR 758.3(b) Key Word “Unless” Some Freight Forwarders and most FPPI’s do not understand this responsibility (serious responsibility). Most Freight Forwarders – will not act as the FPPI’s U.S. Agent for either license determination or obtaining license authority. The FPPI should check first with any ‘agent’ they appoint to ensure that they offer the service and accept the responsibility on the FPPI’s behalf. The agent in the US is not automatically the forwarder hired to transport the cargo. It may be a legal firm, consultancy.

7 Routed Export Transactions June 2013 Parties Involved FPPI Provide Authorization to the Freight Forwarder to transmit the EEI to AES. If the USPPI is self-filing then the FPPI must provide authorization to the USPPI to file the EEI to AES, per 15 CFR Part 30.3 (of the Foreign Trade Regulations (FTR)).

8 Routed Export Transactions June 2013 Scope of Responsibility Freight Forwarder: –Obtain Authorization to file the EEI to AES –Ensure to obtain “all” the required data elements from the USPPI –Determine the correct transportation data elements to be transmitted to AES –File the EEI accurately and timely (if filing) to AES –Question the USPPI if there are obvious concerns or issues –Ensure that all information provided is concise and if there is conflicting information received from the USPPI or FPPI, reach out for clarification USPPI: –Provide all of the information needed to file the EEI to AES to the freight forwarder (in writing) –Ensure to include the Classification and Licensing Information –EAR99 does not mean NLR and NLR does not mean EAR99

9 Routed Export Transactions June 2013 Scope of Responsibility FPPI: –Provide Authorization to file the EEI to AES –Per the FTR this is the only responsibility of the FPPI For routed export transactions, establish and maintain a trusted relationship with parties to mitigate risks.

10 Routed Export Transactions June 2013 Control Environment Internal Controls Risk Assessments / Audits Information & Communication Monitoring Does the Freight Forwarder have a Compliance Program? Is there a commitment to Export Compliance? One BIS’s best practices: Seek to utilize only those trade facilitators and freight forwarders that administer sound export control management and compliance programs that include transshipment trade best practices.

11 Routed Export Transactions June 2013 THANK YOU! Scott E Barney Area Export Compliance Consultant U.S.A. Panalpina, Inc. Area Trade Regulation Compliance

12 Routed Export Transactions June 2013 Routed Export Transactions