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By: Brian Bradley (American Shipper)

The BIS and Census Bureau are preparing to release proposals to harmonize the Export Administration Regulations’ and Foreign Trade Regulations’ definitions.

The Bureau of Industry and Security plans to release a proposed rule for routed export transactions by early summer, Sharron Cook, BIS senior export policy analyst, said last week.

BIS released an initial proposed rule in 2014 to clarify filing responsibilities under the Export Administration Regulations (EAR) for parties involved in routed export transactions, and the Census Bureau released an advance notice of proposed rulemaking in October 2017 to update its policy for such filings pursuant to the Foreign Trade Regulations (FTR).

Comments in response to the BIS and Census notices educated the Commerce Department as to its way forward on routed export transaction regulations, Cook said Wednesday during the National Customs Brokers and Forwarders Association of America (NCBFAA) Annual Conference in San Antonio.

“Our way forward was to start from scratch and write another proposed rule,” she said. “This time what we’re doing is we’re working together, hand in hand, to reintegrate the routed export transaction between the Export Administration Regulations and the Foreign Trade Regulations, and so we’re going to resync and go forward.”

In addition to BIS, Census is planning to update its routed export transaction regulations, Census Trade Regulations Branch Chief Kiesha Downs said during the conference.

The BIS and Census regulations aim to create some harmony across the agencies in managing routed export transactions.

Fundamental definitions of the term differ between the EAR and FTR. Broadly, the FTR defines a routed export transaction as a transaction in which the foreign principal party in interest (FPPI) authorizes a U.S. agent to facilitate the export of items from the U.S. and prepare to file electronic export information.

Broadly, the EAR defines a routed export transaction as a transaction in which the FPPI agrees to terms of sale including taking delivery of items inside the U.S. via a U.S. agent and assuming responsibility for transporting those items from the U.S. to a foreign destination.

“One thing that you will see in both regulations, we’re using consistent terms,” Downs said. “We’re using or referring to each other’s regulations; we’re trying to create some type of harmony within the federal government as it relates to routed export transactions. It has been challenging, and hopefully we can get through this last hurdle where we’re at for the review process, because both rules are written and ready to go.”

After Commerce’s final review, the rules must be approved by the White House Office of Management and Budget prior to publication.

The biggest issue that came up in the 53 total comments submitted in response to Census’ initial advance notice of proposed rulemaking pertained to filing responsibilities, Downs said.

Many freight forwarders said they wanted to be more accountable for filing routed export transaction information because they have relevant responsibilities, including compliance with BIS requirements, knowing who their buyer is and knowing the licensing process or if the product is controlled, Downs said.

“Sometimes we say be careful what you ask for as we move forward. So we’ll see how things go, but we did take into consideration those types of comments,” she said.

Another issue Census is taking into consideration is the filing authorization process, as the FTR currently asks the U.S. forwarder/authorized agent to get power of attorney from foreign entities not familiar with U.S. laws and regulations, which is “very challenging to get,” Downs said.

In crafting its proposed rule, Census specifically examined who in the U.S. would be responsible for filing and how the government will allow that party to release its filing responsibility to ensure every party involved in a routed export transaction is on the same page before shipment moves forward, she said.

Census also received comments touching on the definition of a routed export transaction and handling of “Incoterms,” a series of predefined commercial terms published by the International Chamber of Commerce widely used in international commercial transactions or procurement processes.

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