Census Foreign Trade Division Updates HTS Codes and Schedule B Database

The U.S. Census Bureau’s Foreign Trade Division (FTD) has posted a warning to the trade community that some freight forwarders and Customs brokers may need to update their current commodity number classifications as updated/new Harmonized Tariff Schedule (HTS) numbers go into effect on July 1, 2010.

HTS commodity classification codes are generally revised twice annually, in January and July by the
U.S. International Trade Commission. The codes are usually revised because members in the trade community are looking for more detailed statistical data. Recommendations for revisions to existing classifications or for the establishment of new classifications should be submitted to the Chairman of the Committee for Statistical Annotation of Tariff Schedules.

In addition, the FTD
posted a link to an improved Schedule B database of export commodity codes. According to FTD, “the new improved search tool will interpret common commercial product information and interact intelligently and intuitively with users to help alleviate the complex nature of finding the correct code in the Schedule B book.”

Foreign Trade Regulations Eliminate Social Security Number as ID Number in AES

On August 5, 2009, the United States Census Bureau issued an interim final rule with request for comment in the Federal Register amending the Foreign Trade Regulations (FTR) to eliminate the requirement to report a Social Security Number (SSN) as an identification number when registering to file and filing electronic export information in the Automated Export System (AES) or AES Direct. This new rule will ensure that a USPPI’s or U.S. authorized agent’s SSN is protected in accordance with the Privacy Act of 1974, Title 5, United States Code, Section 552a.

Under the current regulations, the U.S. Principal Party in Interest (USPPI) or U.S. authorized agent residing or having an office located in the United States is required to enter (1) SSN, (2) Dun and Bradstreet Number (DUNS) or (3) an Employer Identification Number (EIN), when reporting export transactions in the AES or AESDirect.
(1) An SSN is used as an identification number principally by individual filers
(2) DUNS are available only to business entities, and
(3) EINs are available to both businesses and individuals.

Under the Interim Final Rule, if the USPPI or the U.S. authorized agent who resides or has an office located in the United States does not have an EIN, that USPPI, or U.S. authorized agent must obtain an EIN through the Internal Revenue Service’s
website, or by calling (800) 829-4933. Former SSN filers who are business entities and want to use a DUNS rather than an EIN for identification purposes, must first obtain an EIN from the IRS and apply to Dun & Bradstreet for a DUNS.

The new rule is effective on September 4, 2009 and the Census Bureau will implement its provisions on December 3, 2009. Comments on the interim rule should be submitted in writing to the address shown below on or before October 5, 2009 to be considered in the formation of the final rule.

You may submit your comments to: William G. Bostic, Jr., Chief, Foreign Trade Division, U.S. Census Bureau, 4600 Silver Hill Road, Room 6K032, Washington, DC 20233–6700; by telephone at (301) 763–2255; by fax at (301) 763–6638; or by e-mail: william.g.bostic.jr@census.gov.

Census Issues Mandatory AES Final Rule

On June 2, 2008, the U.S. Census Bureau (Census) issued a final rule requiring mandatory filing of export information through the Automated Export System (AES) or through AESDirect for all shipments where a Shipper's Export Declaration (SED) is required (an announcement of the rule can be found here). The new rule substantially revises Census' export regulations, significantly increases penalties, and allows for greater enforcement by Bureau of Industry and Security (BIS) and U.S. Immigration and Customs Enforcement (ICE). Although the effective date for this rule is July 2, 2008, the rule will not be implemented until September 30, 2008.

Census has posted mandatory AES frequently asked questions (FAQs)
here and "A Quick Guide to Title 15, Part 30 Foreign Trade Regulations" here.

The final rule was issued following a three year dispute between Census and the Department of Homeland Security (DHS) involving the sharing of confidential export information with foreign governments and the Option 4 program, which allows export data to be filed up to 10 days following vessel departure. DHS had pushed for the sharing of certain export data with foreign governments for antiterrorism purposes and Census strongly opposed this. In addition, DHS sought to end the Option 4 program because it believed it created an avenue for illegal exports, while Census disagreed. In the end, Census maintained the confidentiality of export data that existed in its previous regulations and continued the moratorium on new users for the Option 4 program with the program only allowed for current users.

Key changes made by the new regulations are as follows:

  • The Foreign Trade Statistics Regulations are renamed, "Foreign Trade Regulations" (FTR);
  • All export data must be filed electronically through AES -- no paper SEDs will be accepted after September 30, 2008;
  • Electronic Export Information (EEI) is the term for data filed through AES and is the equivalent to the data in the SEDs;
  • Increased civil penalties of a maximum of $1,100 per day of delinquency (but, not more than $10,000 per violation) for failures to file or delinquent filings; a maximum of $10,000 per violation for false filings or misleading information in AES, in addition to other penalties; and civil forfeiture of any property involved in a violation of the FTR;
  • Criminal penalties of a maximum of $10,000 per violation or five years' imprisonment or both for a knowing failure to file or a knowing filing, directly or indirectly, of false or misleading information;
  • New voluntary self-disclosure are "strongly encouraged" by Census of any violation or suspected violation of the FTR. Voluntary disclosures are to be directed to Census, which will notify Customs and Border Protection (CBP), BIS' Office of Export Enforcement (OEE) and ICE.
  • Specific rules on what constitutes proper proof of AES filing citations or exemptions are provided as well as how they are to be annotated on other shipping documents. For example, only the Internal Transaction Number (ITN), which confirms that the shipment information has been accepted in AES, is acceptable as proof of filing citation. The External Transaction Number (XTN) will no longer be accepted as proof of filing.
  • Time frames for filing AES are provided based on the mode of transportation.

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