2. Omari Wooden & Fay Johnson December 12, 2012 Complying with the Foreign Trade Regulations & Accessing Census Trade Data

3. Today’s Topics  Legal Requirements  U.S. Principal Party in Interest  Types of export transactions  Penalties  Automated Export System  Best practices 2

4. 3 Complying with the Foreign Trade Regulations 3

5. Legal Requirements Census Bureau Foreign Trade Regulations (FTR) Title 15 Code of Federal Regulations, Part 30 Bureau of Industry and Security (BIS) Export Administration Regulations (EAR) Customs and Border Protection (CBP) Customs Regulations State Department International Traffic in Arms Regulations (ITAR) 4

6. When is Electronic Export Information (EEI) Required? (FTR 30.2)  U.S.  foreign countries  U.S.  U.S. Virgin Islands  Puerto Rico  foreign countries  Puerto Rico  U.S. Virgin Islands  U.S.  Puerto Rico EEI must be filed for exports of physical goods when shipped as follows: 5

7. 6 What is a Shipment? (FTR 30.1)  ONE U.S. Principal Party in Interest shipping their merchandise, to  ONE Foreign consignee, on  ONE Carrier moving the product out of the U.S., on  ONE day, with  Valued over $2,500 per Schedule B number or license is required 1 Tip: The ONE Rule

8. Shipment Example 7 US Company A US Company B US Company C US Company D German Company X FedEx / UPS Friday Four unique shipments based on the four different US companies Four unique shipments based on the four different US companies

9. Shipment example 8 US Company A German Company X FedEx / UPS Wednesday Monday Friday Three unique shipments based on the three different dates of export Three unique shipments based on the three different dates of export

10. U.S. Principal Party in Interest (FTR 30.3) The U.S. Principal Party in Interest (USPPI) is the:  U.S. Person or Entity  Primary Benefactor (Monetary or Otherwise)  Foreign Entity (if in the U.S. at time goods are purchased or obtained for export) Generally that Person can be the:  U.S. Seller: (Wholesaler or Distributor)  U.S. Manufacturer  U.S. Order Party 9

11. Ultimate Consignee (FTR 30.6(a)(3))  Report the Ultimate Consignee as known at the time of export.  Licensed shipments shall be the person designated on the export license 10 The person, party, or designee located abroad and actually receives the export shipment.

12. 11 Two Types of Transactions (FTR 30.3) Export Transaction (Standard): USPPI files the EEI or authorizes an agent to file the EEI Routed Export Transaction: Foreign Principal Party in Interest (FPPI) authorizes a U.S. agent to facilitate the export of items from the United States and to prepare and file the EEI

13. 12 Export Transaction (FTR 30.3(c)) USPPI Responsibilities:  Prepare and file EEI and provide proof of filing citation  Authorize a U.S. agent to file EEI via power of attorney or written authorization  Provide agent with accurate and timely export information  Assume responsibility for license determination  If filing, respond to AES fatal errors or compliance alerts  Retain documentation

14. 13 Export Transaction (FTR 30.3(c)) U.S Authorized Agents’ Responsibilities:  Obtain written authorization or power of attorney from USPPI  Accurately prepare EEI via the AES, based on information provided by the USPPI and other parties  If filing, respond to AES fatal errors or compliance alerts  Provide AES Internal Transaction Number (ITN) to carrier based on required filing timeframes  Upon request, provide USPPI with copy of information filed on its behalf

15. 14 Routed Export Transaction (FTR 30.3(e)) USPPI Responsibilities:  Must provide FPPI’s agent with commodity data and Licensing information  May request copy of the authorized agent’s power of attorney or written authorization from the FPPI  If filing, obtain power of attorney or written authorization from FPPI to complete and file the EEI  Maintain documentation

16. 15 Routed Export Transaction (FTR 30.3(e)) U.S. Authorized Agent Responsibilities:  Obtains a POA or written authorization from the FPPI  Prepare and file the EEI  Upon request, provide the USPPI with data elements filed on its behalf  Upon request, provide the USPPI with a copy of the POA or written authorization from the FPPI  Provide filing citation or exemption legend  Maintain documentation

17. 16 Shipments Exempt from Filing (FTR 30.36-30.40)  Country of ultimate destination is Canada (30.36)  $2,500 or less per Schedule B number (30.37(a))  Tools of Trade: hand carried, personal or company use, not for sale, not shipped as cargo, returned within 1 year (30.37(b))  Intangible exports of software & technology (30.37(f))  Temporary Exports (e.g., Carnets) (30.37(q))  Shipments consigned to the U.S. Armed Forces (30.39)

18. 17 Exemptions Do Not Apply (FTR 30.2(a)(iv))  Commerce (BIS) licenses  Country Group E:1 (Supplement 1 to 15 CFR 740) Country Group E:1  State Department licenses and ITAR controlled items  License shipments from other government agencies  Shipments on Office of Foreign Assets Control Sanctions Program ListOffice of Foreign Assets Control Sanctions Program List  Rough Diamonds

19. Repair Items (FTR 30.29(a))  Report the value of the repairs, including parts and labor  Report Schedule B number 9801.10.0000 for the re-export of any article that was imported for repairs or alterations 18

20. Warranty Items (FTR 30.29(b))  Report the value of the replacement commodity  Report original Schedule B number  If the value on the EEI record is different from the value on the bill of lading, invoice, etc., include a statement notating: “Product replaced under warranty, value for EEI record purposes” 19

21. Voluntary Self Disclosure (FTR 30.74) Submit letter on company letterhead and include the following information:  Description of information unreported or reported incorrectly  Number and value of shipments affected  Steps taken to resolve problem  Point of contact  Letters should be submitted to: File data in AES as soon as possible and retain documentation regarding all shipments involved in disclosure 20

22. 21 Parties Subject to Penalties (FTR 30.70-30.74) All parties involved in an export transaction are subject to penalties, including:  USPPI  Freight forwarder  Authorized agent  Carrier 21

23. Penalties (FTR 30.71)  Criminal Penalties  U.S. exporters, agents, or carriers who knowingly fail to file, file false or misleading information, or continue to participate in illegal activities  Penalty can be up to $10,000 per violation and/or imprisonment for no more than five years  Civil Penalties  U.S. exporters, agents, or carriers who report incorrect information or report export information late  Penalty can be up to $10,000 per violation or $1,100 per each day of delinquency 22

24. 23 Mitigating Factors Including, but not limited to: First-time USPPI or authorized agent, FPPI, carrier, etc. Voluntary self-disclosure of the violation Clear documentary evidence of remedial measures undertaken to prevent future violation Exceptional cooperation with CBP, Census or BIS Demonstration by party of having a systematic export compliance effort. 23

25. 24 Aggravating Factors Including, but not limited to: Several violations in the same export transaction Circumstances suggest the intentional nature of the violation High number of violations in preceding 3 year period Evidence of criminal conviction for related violation, i.e. BIS violation The party exports as a regular part of its business, but lacks a systematic export compliance effort. 24

26. 25 Automated Export System & Electronic Export Information 25

27. 26 AES Process Flow 26

28. 27 Gather/Review filing resources Foreign Trade Regulations (FTR) Export Flipper AESDirect Support Center FTD Blog at blogs.census/gov/globalreach Before Filing the EEI 27

29. 28 Decide who is filing the EEI –USPPI files –Authorized U.S. Agent files on USPPI’s behalf. To avoid duplicate EEI filings, only one party files the EEI. Before Filing the EEI 28

30. 29 Filing the EEI and Troubleshooting Misreported Codes: Port of Export: Four digit number Misclassification: Ink cartridges vs. weapon cartridges Rubber seals vs. live seals Country of Destination: Two alpha characters IE – IrelandIR – IranIQ – Iraq Carrier SCAC/IATA Four character code for Vessel, Truck, and Rail Two or three character code for Air Schedule B: Ten digit number Search engine available at: http://www.census.gov/foreign-trade/schedules/b/ 29

31. 30 AES Responses Verify Compliance Warning Informational Verify Compliance Warning Informational Fatal Shipment Rejected No ITN Issued or Update Rejected Shipment Accepted ITN Issued 30

32. Implement Best Practices  Document!!! Document!!! Document!!!  Correct information as soon as possible  Maintain compliance Education & cross training Automation & Procedures  Attend Seminars & Workshops 31

33. 32 Accessing Census Trade Data 32

34. Foreign Trade Website 33 www.census.gov/trade

35. Schedule B Product Classification It is important to correctly classify your product to avoid costly fines and penalties. 34 https://uscensus.prod.3ceonline.com/

36. Schedule B Search Tool  Drill down capability  Full commodity description  2009-2010 trade export value at the 6-digit level 35

37. Additional Classification Data 36  End-Use  North American Industry Classification System  Standard International Trade Classification (SITC)  Advanced Technology Products (ATP) 01 – Biotechnology06 – Flexible Manufacturing 02 – Life Science07 – Advanced Materials 03 – Opto-Electronics08 – Aerospace 04 – Information & Communications09 – Weapons 05 – Electronics10 – Nuclear Technology

38. Data Navigation The Data tab is the central navigation tool for trade statistics 37

39. FT900: U.S. International Trade in Goods & Services Report  Produced by FTD and the Bureau of Economic Analysis (BEA)  Principle economic indicator  Services statistics provided by BEA  Monthly, year-to-date (YTD) and annual data 38

40. Additional Releases Other Statistical Releases  FT920: U.S. Merchandise Trade: Selected Highlights  U.S. Imports for Consumption of Steel  Related Party  Profile of U.S. Importing and Exporting Companies 39

41. Visualize Trade Data Monthly top 15 U.S. trading partners by dollar value and more with… 40 Interactive legends and downloadable data and images

42. Country Trade Balance  Current export, import, and trade balance data by month  Historical data available  Country Groups  European Union  OPEC 41

43. www.census.gov/foreign-trade/statistics/country/  Trade in Goods by Country  Top Trading Partners  North American Industrial Classification System (NAICS)  End-Use  Standard International Trade Classification (SITC)  Advanced Technology Products (ATP)  Trade w/ Puerto Rico and U.S. Possessions 42 Country and Product Trade Data

44. State Data Top 25 Harmonized System (HS) Commodity Exports and Imports by State 43

45. www.census.gov/foreign-trade/statistics/historical/  Annual Trade Totals, 1960 – present  Monthly trade, 1992 – present  Petroleum historical data  Constant-dollar historical data 44 Historical Data

46. www.census.gov/foreign-trade/download  U.S. Exports & U.S. Imports of Merchandise  1-10 Selected Commodity Subscription Service  State Data (OM & ZIP)  Monthly: 6-digit HS  Quarterly: 3-digit NAICS; State/Region; State/Port  Port 6-digit HS  Special Program Indicators (SPI – electronic version of IM146A)  Trade with Puerto Rico and US Possessions (electronic version of FT895)  Textile Summary  Commodity/Geographic/Textile concordances 45 Data Downloads

47. USA Trade ® Online USA Trade Online (www.usatradeonline.gov) is the official online source of U.S. merchandise trade statisticswww.usatradeonline.gov 46 www.usatradeonline.gov

48. USA Trade Online Data Offerings  Current and historical data  HS and NAICS based statistics  District, state and port-level trade by product and country 47

49. Data LevelHSNAICSMeasures District Level Annual Data 1992 – present Monthly Data 2002 – present 2-, 4-, 6- and 10- digit 3-, 4-, 5- and 6-digitHS: Total Value, Quantity and Unit Price NAICS: Total Export Value, Domestic Export Value, Foreign Export Value, General Imports for Consumption Value, General Imports CIF Value, Imports for Consumption Customs Value, Imports for Consumption CIF Value, and Balance of Trade Port Level Annual and Monthly Data 2003 – present 2-, 4- and 6-digitN/ATotal Value, Vessel Value, Vessel SWT, Air Value, Air SWT, Containerized Vessel Value and Containerized Vessel SWT State Level Annual and Monthly Data Exports 2002 – present Imports 2008 – present 2-, 4-, 6-digit3- and 4-digitTotal Value, Vessel Value, Vessel SWT, Air Value, Air SWT, Containerized Vessel Value and Containerized Vessel SWT 48 USA Trade Online Data Offerings

50. Standard Report 49 Use the Standard Report to customize every aspect of your trade report with as little or as much detail as you want.

51. Commodity Selection 50 Select the products you want to analyze using one of the following:  Commodity Selection Tree  Search Box  Create a Custom Commodity Group

52. Country Selection 51  World Total and Individual Countries  Geographic Regions  International Organizations and Trade Agreements Country Options:

53. Managing Time Selection 52  Monthly and Annual Selection Tree  Time Series Sets Monthly, annual and year-to-date time options available

54. View Your Report 53 Completed Customized Report

55. Additional Features 54  Sort  My Reports  Automatic Monthly Updates  Saves Custom Groups  Searchable  Download  XML for Excel  Comma-delimited

56. Quick and Easy 55 Create a comprehensive trade report in 3 steps 1.Select Trade by Commodity 2.Select the Product(s) 3.View the Report

57. State Export Report Sample 56 Use USA Trade Online to identify California’s top 10 export commodities!

58.  Export training videos http://www.census.gov/foreign-trade/aes/exporttraining/videos/index.html  Global Reach Blog http://globalreach.blogs.census.gov http://globalreach.blogs.census.gov 57 Additional Training Tools

59. Fundamentals of Exporting Webinar Series All webinars are stored at the following website: http://www.census.gov/newsroom/releases/archives/news_conferences/webinars_exporting.html http://www.census.gov/newsroom/releases/archives/news_conferences/webinars_exporting.html  Understanding the Basics: Introduction to Foreign Trade Statistics  Discovering New Markets — Utilizing USA Trade Online  All Products Have a Classification Number — Learn How to Find Yours  Foreign Trade Regulations — Demystifying the Rules of Exporting  Filing Export Information Electronically — The ABCs of AES  Your Free Tools of Trade — AES Direct and AESPcLink  Getting it Right the First Time — How to Avoid Common Penalties  What is a Foreign Trade Zone and How Can It Help You?

60. 59 For More Information FTD Call Center: 800-549-0595 Option 1 – AES Assistance Option 2 – Commodity Classification Assistance Option 3 – Regulations Assistance Option 4 – Data Dissemination Fax: 301-763-8835 E-mail: ASKAES@census.govASKAES@census.gov E-mail: FTDREGS@census.gov FTD Blog: blogs.census.gov/globalreach/

61. Questions? 60