Well, the long awaited and much anticipated regulations requiring automated filing of export information, along with attendant penalties for late filing, has officially been published today, Monday, June 2. These regulations appear in today’s Federal Register which, for the curious and brave, is available on line at: http://www.access.gpo.gov/su_docs/aces/fr-cont.html. These new requirements will become effective 30 days from today, which will be July 2. There will then be an additional 90 day period before full implementation, which will be the so-called soft implementation period. This will mean that come October 1, which probably not coincidentally is also the beginning of the government’s fiscal year, any late filing of export information will be a costly proposition.

In reviewing the contents of the regulations, there are few significant changes from the proposed regulations as they appeared in February of 2005 (Yes, it’s really been more than three years!). We will discuss the major provisions of these new requirements below.

First, the name Shipper’s Export Declaration and its abbreviation, SED, will no longer exist. Instead, the export trade data reported will be referred to as Electronic Export Information (EEI) and, wherever the term SED was used previously, the term AES EEI will now be used. No end to acronyms here.

Second, regarding the required filing time limits, there was a slight change in the time frame for reporting ocean exports. The final rule is that the filing citation or exemption legend must be provided to the exporting carrier 24 hours prior to loading cargo on the vessel at the U.S. port where the cargo is laden. This rule, if interpreted literally, will mean that, in essence, the ITN information will have to be provided to the carrier by the cutoff date. Thus, all relevant EEI data will have to be provided to the freight forwarder sufficiently ahead of time to allow input of the data, its transmission through AES and then sending the ITN reference statement to the carrier 24 hours prior to the cargo being loaded onto the vessel. That will probably mean the freight forwarder will have to have all data 36 to 48 hours prior to the cutoff date and time, just to ensure that the data is filed timely. It’s not clear how changes in shipping times will affect the filing period, and therefore any penalties, but the new rules do say that the information transmitted should be the information as known at that point and any changes to that information must be reported as soon as they become known. So, at this point, both shippers and freight forwarders are going to have to start planning on how they are going to accomplish this timely transmission, as any late filing penalties will fall on both parties.

The time frames for the other modes of transportation remain basically the same as proposed in the original notice in 2005. For air cargo, the filing citation or exemption legend must be provided to the exporting carrier, including air express couriers, no later than two hours prior to the scheduled departure time of the aircraft. For truck cargo, the EEI filing must be done no later than one hour prior to the arrival of the truck at the U.S. border to go foreign. For rail cargo the filing citation or exemption legend is to be given to the exporting carrier no later then two hours prior to the time the cargo arrives at the U.S. border to go foreign. It should be noted that in these last two modes, the filing time is counted from when the carrier intends to cross the border, not the time it arrives at the border. In practice, enforcement actions will probably be based on the time at which the carrier actually crosses the border and then counting back. For filers who presently are allowed to file under the Option 4 rules (more about that later) the filing citation or exemption legend must be provided to the exporting carrier no later than ten calendar days from the date of export.

The penalty provisions also remain pretty much as originally proposed. A civil penalty not to exceed $1,100 for each day late beyond the applicable period prescribed but not more than $10,000 per violation (per shipment), may be imposed. It still appears the issuance and the collection of any penalties will be delegated to Customs (CBP). Also, any investigations related to other violations, and any voluntary self disclosures submitted will be handled by the enforcement arm of the Bureau of Industry and Security (BIS).

Regarding the post-departure filing option, which was formerly called Option 4, the Census Bureau and CBP have agreed that the moratorium placed on any new applications for Option 4 in August 2003, will remain in effect pending further review of the post departure filing program. As many of you may know, the issue of Option 4 filing was one of the principal reasons these proposed rules have languished for so long. CBP wanted to eliminate the provision completely and Census wanted to keep it and to open it up again for further participation. So, it appears that, in the finest of government fashion, the two agencies have decided not to decide. Although the revised Sec. 30.5(c) discusses applying for the post-departure filing option, the web site referenced indicates that no applications are being accepted at this time. If you already have this post-departure filing privilege you will get to continue using it. For the rest of you shippers, I wouldn’t count on being able to apply anytime soon.

There was one interesting section in the comments portion of the notice that will not be included initially in the new regulations. This deals with the Routed Transaction concept and the existing requirement that the USPPI, even though not filing the AES EEI, must provide their EIN to the buyer’s designated freight forwarder. Census is proposing to create a registration number to be used in place of the Employer Identification

Number (EIN) or Social Security Number (SSN). Apparently, the Census Bureau is currently working with CBP to develop a system that will allow the reporting of registration numbers, at least for Routed Transactions. How long before this will actually happen is anyone’s guess.

So, it appears that the more than three years of anticipation, warnings and threats have come to an end. It’s now crunch time and shipper’s and freight forwarders have only four months to ensure that processes are firmly in place to allow timely and accurate reporting of all required export information. Come October 1, the cost of not doing this will be substantial for both parties.