US export management is no easy task. In this QAD Precision Report
we discuss the importance of correctly filing export declarations
The US Customs and Border Protection is responsible for customs,
including cargo screening. Companies must report their imports and
exports to CBP. They do this via the Automated Commercial Environment
(ACE) portal on the CBP website.
In the US, an electronic export declaration is filed using the
Automated Export System (AES). Users log on to the ACE portal and then
enter all the shipment information on to AESDirect.
AES is a central collection point for key export data. It has
replaced paper-bound processes. AES was designed to simplify
compliance with export laws and regulations. It also improves the
collection of trade statistics.
However, exporters must meet all the requirements in order to file a
correct export declaration.
The Electronic Export Information — EEI — is the actual data that
exporters submit. The EEI includes:
The exporter’s name, address and identification number
Detailed information about the products being exported
The products classification and licensing requirements
Exporters must ensure that all of this information is 100 percent
accurate. This can be a challenge if you are manually entering
information into AES. A mistake could risk exposing your company to
shipment delays, or penalties for non-compliance.
Three Reasons Why Compliance is Necessary
There are three very good reasons why you should ensure that you
correctly file your exports declarations with AES.
Non-compliance is not an option. You could be subject to civil and
criminal penalties for not filing export declarations or for filing
incorrect information. The more mistakes you make, the
higher the fines.
DELAYS AND COSTS
Get your export declaration wrong and your shipment is likely to be
held in customs. These delays are costly, financially and to your
reputation. Increased cycle times have a knock-on effect — not only to
your customer, but to your customer’s customers too.
EXPORT COMPLIANCE REGULATIONS
CBP uses AES data to ensure that exports are compliant with
regulations. The aim of these export laws is to ensure that exporters
do not send critical goods and technologies — either by accident or on
purpose — to sanctioned individuals, organizations or countries.
Rules and Exceptions
While the majority of US exports must be filed with AES, there are
some exceptions. For the most part, if your merchandise is valued at
$2,500 or more by Schedule B number you need to file.
However, there are rules, and exceptions to the rules, that make
things a little more complicated.
The origin of your goods can impact whether you need to submit an
Here’s an example. Imagine you are exporting ten items in a single
shipment. All ten items are exactly the same, and have the same
classification. They are not controlled goods, and are all of US
origin. Each has a declared value of $300.
In this case, the total value is $3,000. As a result, this exceeds
the $2,500 threshold. Therefore, you must file.
However, if five of the items were sourced from a foreign country,
the rules are different. In such a case, you don’t need to make an AES
filing. This is because by origin, the goods would only have a
combined declared value of $1,500.
OUR FRIENDS UP NORTH
Generally speaking, US exporters don't need to file with AES if they
are exporting to Canada. However, there are exceptions to this exception.
If you export self-propelled vehicles or any goods that require an
export license, or a license exception, to Canada, you must file.
THE DIAMOND RULE
Rough diamond exports always require an AES filing. This is true no
matter where you are exporting the diamonds, or whatever the value.
This includes exports to Canada.
And finally, there is something else to bear in mind. If you don’t
need to file EEI data, you must explain why with the correct AES exemption.
Who is Responsible for Filing to AES?
As a general rule, the United States Principal Party in Interest
(USPPI) submits EEI data to AES.
The USPPI can vary. It could be a US-based exporter, manufacturer or
wholesaler. In addition, the USPPI could be a third party that has
negotiated a sale between a US seller and a foreign buyer.
If you are the exporter then, for the most part, you will be the
USPPI and responsible for filing with AES.
However, the USPPI can outsource this responsibility to a
third-party, such as a freight forwarder.
Furthermore, in some cases, the Foreign Principal Party in Interest
(FPPI) — the final consignee — can submit the filing. If the FPPI uses
a freight forwarder based in the US to arrange the export, then a US
agent of the final consignee can submit the filing.
All this means that there are several options when it comes to filing
with AES. Nonetheless, the USPPI must ensure all relevant export
declarations have been filed with AES.
A USPPI that authorizes a third-party to file the EEI with AES will
need proof of filing. Furthermore, the USPPI must make such that each
filing has complete and accurate information.
Exporters need to track all AES filings no matter who submits them.
If any violations occur the USPPI is responsible.
Submitting to AES
There are two ways you can file EEI data to AES. We will have a quick
look at them here.
Your company or an authorized third party can file electronically
using AESDirect. To do this, your company or authorized agent must log
on to the ACE portal on the CPB website. After that, you enter all the
shipment information on AESDirect.
Every item in your shipment must have the proper classification
information such as Schedule B numbers and the Harmonized System (HS) codes.
Schedule B is the US export classification system, while HS numbers
are international. Therefore, it is important to include HS codes in
most international export documentation and commercial invoices.
AUTOMATING AES FILING
Companies can also use an export
management software solution to automate this process. Such a
solution should offer integrations to customs authorities for
electronic export declarations. This includes AES. As a result, you
can file on your own behalf, without needing a third-party.
If you are the exporter and thus the USPPI, you bear the
responsibility for ensuring all your exports meet the required regulations.
By leveraging a software solution, you don’t have to re-enter
information into a separate system. This is quicker and more
efficient. Most importantly, it mitigates the risk of human error.
It is easy to make a typo or other mistake when entering a long
series of HS and Schedule B numbers. With an automated solution, you
can ensure that all EEI data is correctly filed and that all your
export management obligations have been met.
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About QAD Precision – Trusted Global Trade and Transportation Execution
QAD Precision, a division of QAD Inc., provides industry-leading global
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execution solutions from a single, integrated platform. An
ISO-certified company, QAD Precision assists companies to streamline
and transportation operations, optimize deliveries, and increase
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