NCBFAA Hits Back at State Proposal to Require Control Statements on Transport Documents

State and Commerce Department efforts to harmonize destination control statements would simplify the export process, but the State requirement for those statements on transportation documents burdens industry and accomplishes nothing, said the National Customs Brokers & Freight Forwarders Association of America in recent comments on the proposed rules. State’s Directorate of Defense Trade Controls should require control statements only on commercial invoices and contractual documentation, said NCBFAA President Geoffrey Powell in the comments. DDTC and Commerce’s Bureau of Industry and Security posted the NCBFAA and other industry comments (here) submitted in response to slightly different proposals from late May (see 1505210063).

The requirement for control statements on transport documents “continues to raise compliance problems for the forwarder or carrier that prepares the bills of lading and other transport documents,” said Powell. “Forwarders and carriers do have the appropriate obligation to ensure that they perform their duties in accordance with any license restrictions or other controls that might pertain to a given transaction, so that requiring that they observe a [control statement] that may be placed on transport documents does nothing to advance the goals” of the harmonization effort.

The DDTC proposed to require the control statement on all transportation documents (here). “These items are controlled and authorized by the U.S. Government for export only to the specified country of ultimate destination for use by the end-user herein identified," said the proposed control statement language from both agencies. "They may not be resold, transferred or otherwise disposed of, to any other country or to any person other than the authorized end-user or consignee(s), either in their original form or after being incorporated into other items, without first obtaining approval from the U.S. government or as otherwise authorized by U.S. law and regulations.”

Placing the control statement on transport documents may in fact increase security concerns for industry, said Powell. “The transport documents alert anyone in the supply chain that the shipment contains sensitive goods, thus signaling that they are prime candidates for possible theft or diversion,” he said. If DDTC continues to believe the transport document requirement needs to be in place, Powell urged the agency to shorten and simplify the statement on those documents.