Export Management and AES Filing For US Exporters

US export management is no easy task. In this QAD Precision Report we discuss the importance of correctly filing export declarations with AES.

Understanding ACE

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.

Understanding AES

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.

FINES 

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. 

ORIGIN

The origin of your goods can impact whether you need to submit an export declaration. 

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.

DIY FILING

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 trade compliance, and multi carrier transportation execution solutions from a single, integrated platform. An ISO-certified company, QAD Precision assists companies to streamline their import, export and transportation operations, optimize deliveries, and increase logistics ROI. QAD Precision’s scalable and extensible solution easily integrates with existing ERP and WMS solutions. Industry leaders in every region of the world rely on QAD Precision’s global support centers to leverage thousands of carrier services and manage millions of global trade and shipping transactions every day. For more information about QAD Precision, visit www.qadprecision.com.