Proposed Routed Export Regulations, Coming in Months, to Fix Forwarder Issues, Officials Say

SAN ANTONIO -- The Commerce Department's Bureau of Industry and Security and the Census Bureau hope to issue their long-awaited proposed regulations on routed export transactions in late spring or early summer, said Sharron Cook, senior policy export analyst at BIS, at the National Customs Brokers & Forwarders Association of America's annual conference April 17. When they come out, Cook thinks, export forwarders will see two of their bigger headaches with the current regulations on track for resolution.

BIS will tackle the process around assigning filing responsibilities to forwarders in the proposed rule. Often, forwarders find themselves out of the loop when the U.S. Principal Party in Interest (USPPI) assigns responsibility via a “writing” to the Foreign Principal Party in Interest (FPPI), and unaware of their newfound duties under the Export Administration Regulations. Some of those forwarders would be unwilling if they knew, sometimes because they are forwarders without the technical knowledge necessary to comply with the EAR.

BIS hopes the proposed rule will take on all aspects of this issue: the forwarder being aware of the transfer of responsibility, being given the choice on whether to accept it, and making a determination as to whether the forwarder is capable of doing it, Cook said. “We believe that we have solved this problem,” she said.

Improved knowledge of where filing responsibility lies should also help the Census Bureau achieve its goal of accurate export statistics, said Kiesha Downs, chief-trade regulations at Census. Sometimes, Census gets no filing because the USPPI thinks it has transferred responsibility but the forwarder doesn’t want to take it on. Other times, Census will see filings doubled up because of “overcompliant” USPPIs that file every time, regardless of who has responsibility.

In fact, responsibility was the biggest theme of the flood of comments Census received in response to its notice of inquiry on routed exports. “Many USPPIs said they wanted to be more accountable for the information that is put into the system for routed export transactions,” Downs said. The USPPI has to comply with BIS requirements and know who the buyer is, so “why turn over filing responsibilities to the party selected?” Downs said. “Sometimes we say, be careful what you ask for,” she said. “We’ll see how things go, but we did take into consideration those types of comments.”

The regulations will also address information sharing among parties in routed export transactions, Cook said. Currently, the USPPI is supposed to give the agent enough technical information to classify the product being exported by its Export Control Classification Number (ECCN). “I think we’ve come far enough down the road where we want to change that so that the USPPI must give the agent the ECCN,” she said. “Let’s stop there.” BIS will “see how that floats” after it issues the proposed rule, but “I think that it will go well,” Downs said.

Once issued, the trade community will have 60 days to comment on the proposed rules, Cook said. “We want you to look forward to them, read them and then get back to us through regulations.gov,” telling BIS what will and what won’t work, Cook said.