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e-Newsletter
Issue 27
2. Critical
AES Update for Exporters of U.S.M.L. ITEMS
The
following information has been reproduced below (verbatim)
from the U.S. Department of State’s Directorate of Defense Trade
Controls web site. Note that the electronic filing system to
report the export of U.S.M.L. items has been mandatory since
October 18, 2003. NOTE THE OTHER KEY DATES BELOW:
“ Defense Trade Controls: Electronic Filing of
Export Information Using the Automated Export System (AES) and
Direct
Export Reporting
to DDTC
The following is an overview of electronic reporting of export
information using the Automated Export System (AES) and direct
reporting of certain export data to the Directorate of Defense
Trade Controls (DDTC). Specific details on using AES can be found
on the Bureau of Customs and Border
Protection (CBP) web site.
The Department of State is finalizing a Federal Register Notice
amending the International Traffic In Arms Regulations (ITAR) that
will be published shortly regarding electronic reporting of export
information. Also, specific guidance on use of the electronic filing
of export data directly to DDTC will be published on the DDTC
web site.
Key Information
Key Dates
Background
Electronic Reporting of Hardware Via AES
Electronic Reporting of Technical Data and Defense Services to
DDTC
Interim Procedures for Reporting to DDTC
New AES Data Fields
AES Submission Acknowledgement
Timelines for Reporting Export Information Using AES
Option 4 SED Filing Alternative
Links
Key Dates
October 18, 2003: Use of AES is mandatory for all shipments of
United States Munitions List (USML) hardware. A hardcopy "back
up" of the AES submission must be provided to Customs at port.
December 18, 2003: Electronic system for reporting shipments of
technical data and defense services to DDTC is available, but is
not yet mandatory.
December 18, 2003: Provision of hardcopy "back up" of
the AES submission is no longer required at port.
January 18, 2004: Use of the DDTC direct electronic reporting system
is mandatory for all initial transfers of USML technical data and
defense services under DDTC approved licenses and agreements.
Summer, 2004 (projected): Expanded reporting requirements on technical
data and defense services are published.
Background
Section 38(i) of the Arms Export Control Act (AECA) requires the
implementation of a system for exporters of USML articles to report
export information to the Department of State. In addition, Public
Law l06-113 amended Section 30l, of Title 13 USC authorizing the
Secretary of Commerce to mandate electronic filing of export information
for items identified in the USML that require a Shipper’s
Export Declaration (SED). AES is an electronic alternative for
filing of SED information operated by the Bureau
of Census, Foreign Trade Division (FTD) and the Bureau of Customs and Border Protection
(CBP). Effective October 18, 2003, use of this system for filing
export information on shipments of USML hardware will be mandatory.
Some exports of ITAR controlled articles are not monitored by CBP
(e.g., oral, visual, electronic transmissions of technical data
and defense services), and are currently reported directly to DDTC
via letter or decremented license. The Department of State is developing
a system to electronically report shipments of technical data and
defense services directly to DDTC. Use of this system will be mandatory
on January 18, 2004.
Cost of implementation to the export community, because this automates
existing paper filing requirements, should be minimal. These procedures
will implement Section 38(i) of the AECA by use of an electronic
data reporting system that standardizes and simplifies the existing
reporting and record keeping requirements currently in the ITAR.
Electronic Reporting of Hardware via AES
Effective October 18, 2003, all exports of hardware controlled
by the ITAR, regardless of the type of approval (e.g., license,
agreement, or exemption) require filing of export information with
CBP using AES. To ensure a seamless transition from paper to electronic
reporting, exporters, or an agent acting on their behalf, will
until December 18, 2003 also be required to file with CBP a paper
copy of the AES document. Exporters can connect with AES by using
an in-house application conforming to the AES technical documentation,
a system developed by a third party vendor, or using AESDirect,
the Census Bureau's free internet based system for filing AES information.
Electronic Reporting of Technical Data and Defense Services to
DDTC
While electronic reporting of hardware exports is mandatory on
October 18, 2003, DDTC is not requiring electronic reporting of
exports of technical data and defense services until January 18,
2004, in order to ensure an effortless transition from paper to
electronic filing. However, to assist industry in acclimating to
the new procedure, DDTCs system will be available for voluntary
use on December 18, 2003.
Effective January 18, 2004, direct electronic notification to DDTC
shall be required when the initial export/transfer of technical
data and services is made pursuant to a license or an agreement.
A copy of the notification to DDTC shall also be made available
to CBP, upon request, for shipments of technical data when using
a U.S. Port (e.g., hand carried exports of technical data). Exports
of technical data or defense services using an exemption need not
be notified to DDTC at this time, unless the export is made through
a U.S. Port. DDTC anticipates requiring notification for exports
using an exemption in the future through publication of a separate
Federal Register notice. Pursuant to existing requirements under
the ITAR, exporters should continue to maintain records of shipments
using exemptions and make these records available to DDTC upon
request. Specific guidelines for use of the DDTC Export Data System
will be provided on the DDTC web site.
Interim Procedures for Reporting to DDTC
Until electronic reporting becomes mandatory on January 18, 2003,
DDTC will retain the current practices for the reporting of exports
of technical data and services. That is, for reporting exports
of technical data that is licensed on a DSP-5, the applicant must
decrement the initial export on the original of the Form DSP-5
and return the license to DDTC. Any additional exports of the licensed
technical data (i.e. the transaction must be identical, including
the end use and end users) would be the subject of the exemption
in Section 125.4 of the ITAR. For reporting on agreements, the
initial export of technical data and defense services using an
agreement will be by letter. For ease in handling these requests,
the letter should have an attention line reading "ATTN: Initial
Export Notification for Agreement [insert agreement number]".
Should the applicant need to export technical data using a U.S.
Port (e.g. hand carry), the exporter should present to U.S. Customs
a copy of this letter upon request and one copy should be immediately
sent to DDTC consistent with the current ITAR requirement.
New AES Data Fields
AES data requirements include the following elements:
DDTC registration
number of the authorized exporter;
Identification of Significant Military Equipment (SME) as defined
in Section 120.7 of the ITAR;
A certification that all parties in the transaction are eligible;
Identification of the USML Category (§121.1 of the ITAR)
of the item being shipped;
Data fields to report the quantity and unit of measure as described
in the license or ITAR exemption; and
A field to identify the ITAR exemption authorizing the export.
Further changes to AES may be necessary (e.g., identification of
the article being exported against the line item of the article
authorized on the export license). Should changes occur, they will
be published by DDTC, the Bureau of the Census and CBP as enhancements
to the AES and DDTC systems.
AES Submission Acknowledgement (XTN/ITN)
AES requires either the use of external or internal transaction
numbers to track a transaction. The External Transaction Number
(XTN) is generated at the time of AES filing by the DDTC registered
applicant/exporter or agent. The Internal Transaction Number (ITN)
is generated by AES and returned to the filer electronically. In
any instance when CBP rejects the AES submission, it will be considered
as not having met the regulatory requirement of the ITAR and export
of the defense articles may not be made.
Timelines for Reporting Export Information Using AES
Both the Department of State and CBP agreed that the timelines
for reporting exports of USML articles must provide sufficient
time to ensure that the shipments could be properly monitored by
CBP priorto the export. Thus, the timelines for providing export
information to CBP using AES are:
Air or truck shipments must be electronically filed at least
8 hours prior to departure
Sea or rail shipments must be electronically filed at least 24
hours prior to departure
Emergency Shipments
Recognizing that instances occur when the exporter is unable to
meet the required filing timelines, an emergency shipment procedure
is being implemented. The procedure is for emergency shipments
of hardware against a valid license when the ultimate destination
and end user identified on the license is a government. The timeline
for filing of emergency shipments are:
When the export is by truck, the export information may be provided
to CBP using AES at least one hour prior to departure from the
U.S.; or,
When the shipment is by air at least two hours before any departure
from the U.S.
DDTC and CBP will monitor use of the expedited procedures.
Abuse by any applicant, or agent acting on behalf of an applicant,
will be considered grounds for rescinding the offending person's
privileges to use the emergency procedure.
Option 4 SED Filing Alternative
Effective October 18, 2004, the DDTC Direct Shipment Validation
Program and the Bureau of Census Option 4 SED filing alternative
for any shipments of USML articles is no longer available. All
participants in the Option 4 alternative filing program must, before
reporting any exports using AES, provide the original of the license
to CBP. Concurrent with the filing of the license the license holder
must provide CBP and DDTC Compliance a list of the licenses filed
and a report of the quantify and value of the exports already made
against the license.”
SOURCE:
http://www.gattiassociates.com
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