Authored by: Vijendra Kargudri
Background of AES Filing
Today’s global trade is wrought with regular trade tariffs, embargoes, sanctions, penalties, and more by the US. Under such conditions, a US exporter faces constant challenge while trading with any foreign business. Hence, to be compliant, every US exporter ought to follow the Automated Export System (AES).
AES is a primary instrument used by the US Census Bureau to collect data on US exports. The purpose is to enable them collect statistics and compile US’s position on merchandise trade. In other words, when a business files its exports to AES, its information is included in the economic indicators and Gross Domestic Product (GDP) of USA’s economy.
Apart from this, the US Customs and Border Protection (CBP) uses the data to ensure compliance with its export regulations so that USA’s exports do not fall into the hands of unauthorized parties that are threat to the homeland security or its interests abroad.
Why is AES Filing mandatory?
In the past an exporter could manually file its export shipment’s information on a Shipper’s Export Declaration (SED) paper form. But starting April 2016, exporters are required to file shipment information electronically, using a system called AESDirect, which is accessed through the Automated Commercial Environment (ACE).
The information an exporter files is called Electronic Export Information (EEI). This process is followed to help the US government monitor & prevent exports of critical goods and technologies that are potential threat to country’s national security, apart from significantly improving the quality and timeliness of export statistics.
When is AES filing mandatory?
An AES filing is mandatory for a US exporter when exporting shipment under the following scenarios –
- when export merchandise is valued at $2,500 or more by Schedule B number from the US
- for example, if an export contains two items in the shipment with the same Schedule B number valued at $1,500 each, totaling $3,000, and both are of domestic origin or both are of foreign origin
- for all exports that require an Export License from the US Commerce or State Departments regardless of its value
- merchandise subject to ITAR but exempt from licensing requirements regardless of its value or destination
- all used self-propelled vehicles, regardless of its value or export destination
- for rough diamonds (classified under HS subheadings 7102.10, 7102.21 and 7102.31) irrespective of its value or destination.
In most cases, the filing must be done from 1 to 24 hours prior to the actual export of the shipment depending on the method of transportation.
Penalties for failing to file AES
Civil and criminal penalties for failing to file through AES or for filing incorrect information can be up to a maximum of $10,000 per violation.
Typically, the investigation and enforcement of these rules is done by the Office of Export Enforcement within the US Department of Commerce and US Customs & Border Protection within the Department of Homeland Security.
When is AES filing not mandatory?
However, an AES filing isn’t mandatory for a USA merchandise shipment exporting under following scenarios –
- if a shipment has two items and half of it is of foreign origin and other half is of domestic origin, because the items by and by origin are only valued at $2,500 each
- exports to Canada regardless of the value of the merchandise unless the item is a self-propelled vehicle or an export license or a license exception is required.
Who does the AES Filing?
An AES filing is routinely submitted by the US Principal Party in Interest (USPPI), though it can also be submitted by an authorized agent of the USPPI, such as a freight forwarder. A US agent of the Foreign Principal Party in Interest (FPPI), generally the final consignee, can also submit the EEI, in particular when the buyer hires a US-based freight forwarder to arrange the export. The address reported for the USPPI in the AES filing must be the address where the goods commence their journey to the destined port of export.
If the US exporter and/or the foreign buyer is relying on an agent/freight forwarder to file a submission through AES, they are required to present this agent with a written limited power of attorney/other accepted written authorization.
While the responsibility of AES filing can be outsourced, the liability cannot be.
How can Krypt help?
Krypt an SAP’s preferred partner can help your business set up SAP Global Trade Services Customs Management to take complete advantage of Automated Export System (AES) communication with US Customs and Border Protection. Doing so you can –
- connect GRC Global Trade Services to communicate and set up electronic customs processes with customs authorities worldwide to manage foreign trade activities
- screen restricted party and denied party
- standardize electronic communication processes, including customs declarations and export documents using Electronic Data Interchange (EDI) to communicate with customs brokers
- exchange data back and forth through the materials master and classifications against different tariff codes for accurate export classification processes.
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