If you haven’t yet made plans to file your Shipper’s Export Declarations (SEDs) electronically, you better start soon. Newly published export regulations and statements made by U.S. Census Bureau officials at recent public events make it clear that the paper SED will be abolished at some point in 2004.

Instead of filing the paper SED, U.S. exporters will be required to file the information electronically through the Automated Export System (AES). Some U.S. companies are required to use AES even sooner.

According to a final rule published in the July 17, 2003, Federal Register, companies that export items on the Commerce Department’s Commerce Control List (CCL) or the State Department’s U.S. Munitions List (USML) must begin filing through AES by October 18, 2003.

This change from paper SEDs to the electronic AES shouldn’t come as a surprise to most U.S. exporters. On November 1, 2000, the Census Bureau and U.S. Customs (as it was known then) agreed to allow ocean carriers to charge $100 for every paper SED that shippers filed. About that same time, the Commerce Department issued a report recommending that shippers and forwarders be required to file SEDs electronically through AES by 2005.

Census published the first notice that exporters of items on the CCL and USMC would be required to use AES rather than paper SEDs in October 2002.

Companies that fail to follow these new rules will face civil fines of $10,000 per violation. In addition, company officials who knowingly fail to file through AES or file fraudulent information will face criminal penalties of $10,000, five years in jail, or both.

When is an SED/AES Required?

The Census Bureau uses the information on the SED and AES for collecting trade data for statistical purposes. The monthly news stories reporting the United States’ “alarming” trade deficit, for example, come in part from these statistics.

The Bureau of Customs and Border Protection (CBP), formerly known as U.S. Customs, also uses SEDs and AES to monitor export compliance. In particular, CBP wants to ensure that certain critical technologies and commodities aren’t exported to unauthorized destinations or end users.

Under current U.S. export rules and regulations, a paper SED or electronic AES filing is required for most exports of merchandise valued at more than $2,500 from the United States, Puerto Rico and the U.S. Virgin Islands to foreign countries or between the U.S. Virgin Islands, Puerto Rico and the United States. The SED or AES filing is also required for all exports under the Bureau of Industry and Security (BIS) or State Department export license or license exemption regardless of the value.

Exports from the U.S. to Canada do not require an SED or AES filing regardless of the value of the merchandise unless an export license or license exemption is required.

The Advantages of AES

According to the Census Bureau, electronic filing of the SED improves the government’s ability to monitor and prevent exports of critical goods and technologies and significantly improves the quality and timeliness of export statistics. For example, the error rate for export transactions filed through AES is approximately six percent compared to an error rate of about 50 percent on paper SEDs.

AES offers advantages for exporters, as well.

Because the export data is submitted real-time to Census, AES provides immediate feedback to the filer when data is omitted or incorrect. The filer can correct this data immediately, ensuring compliance with export reporting requirements and reducing the chances that the shipment will be delayed by Customs.

When an exporter utilizes AES as part of an export documentation software such as Shipping Solutions, the company can eliminate redundant data entry that reduces mistakes and provides a substantial cost savings. Some Shipping Solutions customers have said they have recouped their investment in the software in less than 10 export shipments.

In addition, by utilizing an AESDirect-certified software program, export companies eliminate the need to create their own direct interface with AES, which involves an application and on-site approval process. It also allows them to keep the AES filing in-house since a company is responsible for the accuracy of the data regardless of who they have file it.

Registering for AESDirect is an easy five-step process:

1. Go to www.aesdirect.gov.
2. Click on the “Registration Form” link and complete the online form. If you will be using Shipping Solutions export documentation software to file, skip the section entitled “EDI Upload.” When you are finished, click the “Submit AESDirect Registration” button.
3. You will receive a User ID and Password from AESDirect by email. Enter your User ID and Password to log on to AESDirect.
4. Click on the “Tutorial Option. (You must complete the tutorial to begin filing through AES.) The Census Bureau will set up your AES account once you have successfully completed the tutorial.
5. You will be notified by email when your AESDirect account is fully activated for filing.