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 New "SED" Regulations Will Become Effective On October 10, 2000 -- Are You Ready For Some Rather Significant Changes?By Margaret M. Gatti, Esquire The Census Bureau amended the Foreign Trade Statistics Regulations (FTSR) on July 10, 2000 to clarify: (a) the responsibilities of U.S. exporters, U.S. forwarding agents and foreign buyers in completing and filing Shippers Export Declarations (SED's); (b) the requirements involved in authorizing U.S. forwarding agents to prepare and file SED's on behalf of U.S. exporters or foreign buyers; (c) the formula for reporting value on an SED as the "selling price" for the goods exported pursuant to a sale (net any unconditional discounts from list price) plus charges for inland freight and charges for inland insurance; and (d) the dual purpose nature of the SED, first as a document used by Census for statistical reporting purposes and second as an export control document for the Bureau of Export Administration (BXA) and other government agencies. The amended regulations WILL become effective on October 10, 2000. A summary of the major issues addressed by the amended regulations follows. According to the amended FTSR, the party responsible for completing and filing the SED for an export transaction varies with the assumption of export clearance responsibility. If a U.S. exporter assumes export clearance responsibility (a standard export transaction), the U.S. exporter or a U.S. forwarding agent appointed by the U.S. exporter is responsible for completing and filing the SED. According to the FTSR amendments, a U.S. exporter who has assumed export clearance responsibility must: (a) if preparing the SED itself, (1) insure the accuracy of all the export information reported on the SED (2) sign the SED; and (3) file the SED with Customs or transmit an electronic (AES) record to Customs; (b) if authorizing a U.S. forwarding agent to complete the SED on its behalf, (1) provide the forwarding agent with a power of attorney or other written authorization to complete the SED; (2) provide the forwarding agent with the export information that the forwarding agent requires to complete the SED and (3) maintain documentation to support the information provided to the forwarding agent for the completion of the SED. The amended FTSR further state that when a U.S. exporter authorizes a U.S. forwarding agent to perform the U.S. exporter's export clearance responsibilities, the forwarding agent is responsible for: (a) obtaining from the U.S. exporter a power of attorney or other written authorization to complete the SED or obtaining from the U.S. exporter a paper SED with the U.S. exporter's signed authorization; (b) accurately preparing the SED based on information received from the U.S. exporter and other parties involved in the transaction; (c) maintaining documentation which supports the information reported on the SED; and (d) upon request, providing the U.S. exporter with a copy of the export information filed in the form of a completed SED or an AES extract. If, on the other hand, the foreign buyer assumes export clearance responsibility (typically the case in an ExW or so-called "routed" export transaction), the foreign buyer must authorize a forwarding agent in the U.S. to perform the foreign buyer's export clearance responsibilities, unless the foreign buyer is in the U.S. at the time the export is made. The FTSR amendments prescribe that a U.S. exporter involved in a routed export transaction must provide the foreign buyer's U.S. forwarding agent the following information: (a) The U.S. exporter's name and address; (b) the U.S. exporter's EIN (employer identification number); (c) a description of the commodities to be exported; (d) the schedule B number for the commodities to be exported; (e) the quantity of the commodities to be exported; (f) the value of the commodities to be exported; (g) the Export Control Classification Numbers (ECCN's) for the commodities to be exported or sufficient technical information to enable the determination of the ECCN's for commodities to be exported; and (h) any information that the U.S. exporter knows will affect the determination of export license authority for the commodities to be exported. The FTSR amendments further prescribe that in supplying this information to the foreign buyer's forwarding agent, a U.S. exporter must maintain documentation which supports the information provided. As to the responsibilities of a U.S. forwarding agent in a routed transaction, the amended FTSR require that the forwarding agent: (a) obtain from the foreign buyer a power of attorney or other written authorization to complete the SED on the foreign buyer's behalf; (b) prepare, sign and file the SED or AES record on behalf of the foreign buyer based upon information provided by the U.S. exporter; (c) maintain documentation supporting the information reported on the SED or AES record; and (d) upon request from the U.S. exporter, provide verification that the information provided by the U.S. exporter was accurately reported on the SED or AES record. The form of verification provided to the U.S. exporter may range from a copy of the SED to a simple statement, signed by the forwarding agent, attesting to the forwarding agent's accurate reporting of information provided by the U.S. exporter. Without regard to which party has assumed export clearance responsibility, however, the exporter listed on the SED must always be the U.S. Principal Party in Interest (U.S. PPI). The U.S. PPI is the person in the U.S. who receives the primary benefit, monetary or otherwise, of the export transaction, and is generally: (a) the U.S. manufacturer, if it sells the merchandise directly for export to a foreign buyer (the foreign Principal Party in Interest or FPPI); (b) the U.S. buyer (wholesaler/distributor), if the U.S. manufacturer sells the merchandise as a domestic sale to a U.S. buyer who then sells the merchandise for export to a foreign buyer \ FPPI; (c) the U.S. order party, if it directly negotiates with a foreign buyer \ FPPI and arranges the sale and export of the merchandise to a foreign buyer \ FPPI. (The amended FTSR defines "U.S. order party" as the person in the U.S. who conducts direct negotiations or correspondence with a foreign buyer \ FPPI and consequently receives an order from the foreign buyer \ FPPI.); or (d) the foreign buyer \ FPPI, but ONLY if it is in the United States when the commodities to be exported are exported. Census has made it clear that a U.S. forwarding agent may never be the U.S. PPI (exporter) for the SED, unless the agent acts as an "order party." However, in a routed export transaction, for BXA export control purposes, the U.S. forwarding agent of a foreign buyer \ FPPI can be the applicant on an export license (as BXA defines "exporter" differently).
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