In early 2005, the U.S. Census Bureau proposed that the Automated Export System (AES) be the only way to report Shipper’s Export Declarations (SED); it would have been a mandatory system to report all exports. It would have required exporters to switch from paper to electronic reporting.

Between 2003 and 2005, most of the stories written about AES contained tag lines that read like the following example, certainly making it seem that mandatory AES filing was imminent:

Mandatory Automated Export System (AES)
Ready or Not, Here It Comes!

Soon, all Shippers’ Export Declarations (SED’s) will have to be filed electronically via AES. The third and final phase requiring use of AES for all export shipments is expected to take effect this fall. Are you ready?

- Virginia International Trade, 2005

Census anticipated that the shift to mandatory electronic export reporting would be welcomed by the trade, save Census money, improve export compliance, and improve reporting accuracy. Before this significant change could be made, Census was required to revise the Federal Trade Statistical Regulations (FTSR), 15 CFR Part 30.

Many of the changes were well received by cooperating government agencies (e.g. the U.S. State Department and U.S. Customs and Border Protection), exporters and freight forwarders. However, there were changes to the FTSR that were not welcomed by the cooperating agencies that delayed the adoption of the revised FTSR requiring mandatory AES filing.

Delays in Mandatory AES

In our democracy, agencies of the U.S. government must publish proposed rules and regulations in the Federal Register, the U.S. government’s official newspaper asking the trade to comment on the proposed regulations. In addition, the proposed regulations and rules must be released to cooperating government agencies and the public prior to adoption for their review and comment.

International traders (freight forwarders, exporters and agents) were ready for the changes and anticipated swift adoption of the revised regulations. Most of the largest international traders had implemented technological changes to integrate AES into their export process, conducted training and established procedures for their staff.

After months and months of delays, the mandatory rule hasn’t been published for all exporters. The U.S. Department of Homeland Security (DHS) objected to an element of the final FTSR rules released on February 17, 2005, developed by U.S. Census and supported by international traders.

The provision under 30.4(c) that DHS objected to is known as “post-departure filing.” The rule would have allowed approved U.S. Principal Parties in Interest (USPPIs) or their designated agents permission to file the AES record no later than 10 calendar days from the date of exportation. DHS objected to this rule, since it prevents pre-shipment review of shipments for security and export compliance reasons.

In addition, DHS has other security initiatives and agreements with our biggest trading partner countries to prevent terrorism. One of those initiatives is known as the Container Security Initiative (CSI). CSI encompasses several security initiatives that DHS obtained through cooperation with foreign government’s customs officials, which includes advance cargo information on shipments. The FTSR provides U.S. exporters with a promise of data confidentiality, which prevents DHS from meeting security initiatives we have begun with our foreign trading partners related to shipment data visibility.

The Census Bureau has stopped guessing when mandatory AES for all exporters (USPPIs) might occur. However, certain exporters are required to file using AES including:

• Items on the Commerce Control List (CCL) and the U.S. Munitions List (USML) under the International Trade in Arms Regulations that require an SED, effective July 17, 2003, by Census and October 27, 2003, by State.
  
  
• Exports (or reexports) of rough diamonds, effective October 20, 2003, supplemented by a requirement for reporting the Kimberley Process Certificate Number May 16, 2005.

The Present

The truth is Census does not have updates on the new Census regulations for full mandatory AES, according to Jerry Greenwell, who is trade ombudsman for the Census Bureau’s Foreign Trade Division, and who spoke at the Commerce Department’s Regulations and Procedures Technical Advisory Committee meeting on December 5, 2006. He was also quoted in the February 2007 American Shipper magazine as stating that he wouldn’t speculate on when the proposed regulations would finally be released.

Census continues to encourage export traders to use AES through the Census portal or through an authorized agent, such as a freight forwarder. During 2007, Census representatives visited more than 40 firms to document their AES best practices, which they have published at their website.