Changes to Export Regs Mean New Fines and Penalties for Errors on the SED
I hate reading regulations. They are confusing and easily misinterpreted. But they are important. That’s why I’m paying attention to the changes in the Foreign Trade Statistical Regulations (FTSR) related to penalties. They are straightforward in at least one respect: the penalties for filing an SED late or with false or misleading information (either in paper or electronic format) will be increasing!
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I hate reading regulations. They are confusing and easily misinterpreted. But they are important. That’s why I’m paying attention to the changes in the Foreign Trade Statistical Regulations (FTSR) related to penalties. They are straightforward in at least one respect: the penalties for filing an SED late or with false or misleading information (either in paper or electronic format) will be increasing!

Of course, no one wants to receive a penalty notice. So let me give you the good news before I give you the bad: Census cannot assign or collect higher penalties until authority is delegated by them in the Code of Federal Regulations Title 13 to the:

  • Bureau of Immigration & Customs Enforcement,
  • Customs & Border Protection (CBP), and
  • Office of Export Enforcement of the Bureau of Industry & Security (BIS).

Next, Census needs to write and publish the supporting regulations or the changes to the FTSR to make all of this happen. It is estimated that these two activities will not be completed until early 2005. This gives you time to adjust to the new level of responsibility and accuracy in filing your Shipper’s Export Declaration (SED).

Now for the bad news: there are significantly increased civil and criminal penalties for failing to file or even filing your SED information late. These penalties were adopted in Public Law 107–228—September 30, 2002, Foreign Relations Authorization Act, Fiscal Year 2003 and update Title 15—Commerce And Foreign Trade, Chapter I—Bureau Of The Census, Department Of Commerce, Part 30—Foreign Trade Statistics.

Here’s a quick list of the old penalties as written in the Foreign Trade Regulations, Section 30.24 and 30.95, and the new penalties as adopted in the regulations in the previous paragraph, which cannot yet be enforced:

Reason for Penalty
Existing Penalties
New Penalty Adopted, Not Yet Effective
Parties Affected
Delayed Filing $100/day, not to exceed $1,000. $1,000/day, not to exceed $10,000 per violation. Carriers including motor, rail, ocean and air.
Failure to File or Filing with False or Misleading Information Not to exceed $1,000 per violation. Not to exceed $10,000 per violation or imprisonment for not more than five years, or both. Any person who fails to file or knowingly submits false or misleading information.
Futherance of Illegal Activities None. A fine not to exceed $10,000 per violation or imprisonment for not more than five years, or both. Any person who fails to file or knowingly submits false or misleading information.
Civil Penalties None. Civil penalty not to exceed $10,000 per violation; this is a penalty that may be in addition to any other penalty imposed by law. Any person violating the provisions of the Census rules or any rule, regulation, or order issued, except as provided in section 304, which affects carriers.

BIS Update 2003

The BIS Update held in Washington, D.C. included some other information related to filing the SED information in either paper or electronic format.

First, here is some updated information about the implementation of the new SED and mandatory use of AES:

  1. Exporters who are not required to file the SED electronically through AES have a grace period to use the October 18, 2003, version of the paper SED. Census issued a notice on November 14 that to facilitate the transition to the new SED form, all CBP ports will accept the old and new versions of the form through January 17, 2004. After that date, all previous versions of the SED will be rejected, and the exporter will be advised of their failure to submit an SED.
  2. The target date for mandatory filing of SEDs electronically in AES for all exporters is projected to be April 24, 2004. I have some hesitancy in saying that this date is fixed since changes to the system may not occur as quickly as expected.
  3. The ITAR regulations for AES have not been published yet so exporters who ship under a State Department License must continue to submit one copy of the SED, which will be forwarded to the State Department. The exporter should include the AES XTN or ITN number on the SED as proof that they filed electronically.

Here is some miscellaneous information about the data required on the SED or when filing through AES:

  1. According to Census, there are only two reasons a Freight Forwarder should appear as the USPPI: (a)
    the reexport of imported goods, in which case an in bond code should be included, and (b) goods that entered the U.S. under a carnet.
  2. AES Option 2 is being renamed "pre-departure filing" and Option 4 is being renamed "post-departure filing."
  3. The new term that Census wants everyone to use when referring to data on the paper SED or included when filing through AES is "Electronic Export Information (EEI)."
  4. Census is not currently pursuing a certification test for AES filers beyond the initial registration examination, because they have determined that they don’t have the legal authority to do so. However, they will be pursuing legislation that will give them this ability.
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