By Catherine J. Petersen email
| bio
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:
-
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.
-
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.
-
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:
-
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.
- AES Option 2 is being renamed "pre-departure filing"
and Option 4 is being renamed "post-departure filing."
- 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)."
- 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.
By Susan Senger email
| bio
In my next series of articles, I will address
what documents are required for NAFTA countries along with some
helpful hints to smooth the entry process into Canada and Mexico.
I’ll start this series with the commercial invoice.
The commercial invoice is a statement of charges
given by a seller to a buyer covering a specific transaction.
Most countries require specific details for customs clearance
and statistical purposes.
The commercial invoice is one of the most important
documents in international trade and is reviewed by customs, freight
forwarders, international bankers, and transport and insurance
companies. This document reflects the complete details evidencing
fulfillment of the sales contract and provides necessary information
for third parties, listed above, of the transaction.
The Bureau of National Affairs (BNA), Export
Shipping Manual, and Exporter’s Encyclopedia are all excellent
references that provide specific document content required by
destination country.
Invoices commonly include the following information:
Invoice number and date: The
exporter provides the invoice number for ease of reference.
Name and address of buyer: This
is required for customs purposes.
Buyer’s reference number:
Provided for ease of reference.
Method of payment: Tells the
buyer when payment is due.
Term of sale: Incoterms specify
which party has responsibility for the cargo and at what point
that responsibility transfers from the buyer to the seller. The
Incoterms provide thirteen terms of sale established to create
a common set of rules to govern the basic buy/sell transaction.
Product number, description of merchandise,
unit price and total price: When shipping products to
Mexico, the customs process should be expedited by providing your
product description in both English and Spanish. Always include
the product number and correct calculation of the per unit price
and total price.
Harmonized System Classification Number
(HTS): You should include the first six digits of the
HTS number on the invoice.
Country of origin of products:
Custom duties are assessed based on the product’s country
of origin.
Mode of transportation: Provides
the buyer with shipping information.
Currency of invoice: When invoicing
in United States dollars, USD should clearly be stated on the
invoice next to the amount. When using a currency other than USD,
use the ISO code for that currency.
Type of insurance coverage and party
insuring: In case of damage or loss, this information
provides the buyer with which party is responsible.
Signature: Most companies sign
the commercial invoice. The signatory should be someone with responsibility
and knowledge of the shipment.
The commercial invoice is a bill or record of
transaction between the seller and buyer. It is the basis for
foreign customs' identification, classification, duty/tax assessment,
and final approval of entry of the goods. Accurate descriptions
help expedite the clearance process for the border brokers to
make customs entry, and help Customs quickly identify your commodity.
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