Census Advises on “Routed Transactions” in AES Newsletter

In its October 2011 Automated Export System (AES) Newsletter, the Census Bureau provided guidance on determining whether a shipment is routed. The article states that a routed transaction is one where the Foreign Principal Party of Interest (FPPI) facilitates the movement of goods out of the U.S. Conversely, if the USPPI selects and authorizes the freight forwarder to move the goods out of the country, it is considered a standard transaction (not a “Routed Transaction”).

Routed Transactions involve FPPI-authorized export agents. According to Section 30.3 of the Foreign Trade Regulations (FTR), if the FPPI selects and authorizes a U.S. agent to export or move the good out of the United States and to file the Electronic Export Information (EEI), this would be a “Routed Transaction.” In a Routed Transaction, the USPPI may still file the EEI upon agreement in writing with the FPPI.

Party to which final delivery is made is FPPI. The Foreign Principal Party in Interest (FPPI) is the party shown on the transportation document to which final delivery or end-use of the goods may be made. This party may be the ultimate consignee.

Primary beneficiary from the export transaction is USPPI. The U.S. Principal Party in Interest (USPPI) is the person or legal entity in the U.S. that receives the primary benefit, monetary or otherwise, from the export transaction. Generally, that person or entity is the U.S. seller, manufacturer, order party, or the foreign entity while in the United States when purchasing or obtaining the goods for export.

Key Question is who facilitates movement of goods. If the answer to the question of who facilitates the movement of goods out of the country is the USPPI, the export transaction is standard (not a “Routed Transaction”) and you would select “No” in AES (“Not a Routed Transaction”). However, if the answer to this question is the FPPI, the export transaction is a “Routed Transaction” and you would select “Yes” (“Is a Routed Transaction”) in the AES.

(See ITT’s Online Archives 11012636 for summary of provisions of Census’ January 2011 proposed rule that would require more information for Routed Transactions. See also ITT’s Online Archives 11090216 for summary of BIS best practices for preventing dual-use diversion, including avoidance of Routed Transactions with dual-use exports, and 10021930 for summary of a BIS Freight Forwarder Guidance that includes information on Routed Transactions.)