Monday, March 10, 2008

Coming Soon: Mandatory AES

As most of the country eagerly anticipates the coming of spring, the trade community will be anticipating the mandatory use of the Automated Export System (AES). The Bureau of Census is in the final stages of requiring mandatory electronic filing using the Automated Export System (AES); therefore, the use of the paper SED will be likely be eliminated sometime in the second quarter of 2008. The original proposal was published in the Federal Register in February, 2005.

On February 25, the proposed revisions to the AES records were published in the Federal Register. The revisions include changes that have been made by Census and CBP since 2005. The changes include (1) edits for rough diamond shipments for the Kimberly Process; (2) e-mail messaging; (3) created the Validated End-User license code; (4) automated carrier code updates; (5) developed background Standard Carrier Alpha Codes (SCAC) update process from National Motor Freight Traffic Association file; (6) developed SCAC maintenance log list; (7) developed Consignee screens; (8) allowed Option 4 vessel shipments to proscribed countries; (9) developed method of transportation maintenance screens; and (10) developed edit value type screens.

Census believes that the mandatory use of the AES will provide more accurate export statistics and data to assist in the enforcement of export controls. The export statistics collected from the current collection process are used by a variety of government agencies and the trade community. In addition to the use as economic indicators, the information collected from the SED and the AES records is used to detect and prevent the export of certain items by unauthorized parties or to unauthorized destinations or end users and enforce the International Traffic in Arms Regulations. The information can also be used by the trade community to develop new markets and other applications as they apply to the specific sector. For example, carriers can use the shipping information to determine the need for changes to sailing schedules, ports of call, etc.

When implemented, the penalties for inaccurate or late filed information will increase from $1,000 to $10,000 per violation. Not only is the AES a tool for collecting statistical information, but it also becomes a method for enforcing export control requirements. Both exporters and freight forwarders can be held liable for inaccurately filed information. As part of their compliance program, exporters should be reviewing the SED/AES data submitted by forwarders on their behalf. Additionally, forwarders should ensure that they have procedures in place for obtaining information from customers and submitting that information accurately and timely. The trade community should use this time to make sure they are prepared for the implementation of the mandatory filing requirements.

Comments for the proposed information collection requirements must be submitted to Brian Harris-Kojetin by e-mail ( or fax (202-395-7245) by March 26, 2008.

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