Issue 263, July 20, 2000
On July 10, 2000, the Census Bureau and the Bureau of Export Administration (BXA) of the U.S. Commerce Department finally released the amended sections of the Foreign Trade Statistics Regulations (FTSR) and the Export Administration Regulations (EAR) with regard to the proper completion of the Shipper's Export Declaration (SED) or its electronic equivalent, the Automated Export System (AES) record. The amended rules took effect on July 10, 2000, but there will be a 90-day grace period. Among the more important changes are those involving the definition of "exporter" and "routed export" transactions.

Definition of 'Exporter'

1. the U.S. manufacturer, if it sells the merchandise directly for export to a foreign principal party in interest;
2. the U.S. buyer (wholesaler/distributor), if the U.S. manufacturer sells the merchandise as a domestic sale to that U.S. buyer (wholesaler/distributor) who then sells the merchandise for export to a foreign principal party in interest;
3. the U.S. order party, if it directly arranges for the sale and export of merchandise to a foreign buyer; or
4. the foreign entity, if it is in the United States when the items are purchased or obtained for export.

The U.S. agent of the foreign principal party in interest is important as the EAR provides that only a person in the United States may apply for a license to export items out of the United States and the FTSR requires that the person who signs the SED must be in the United States at the time of signing. However, the FTSR still stresses that while the forwarding or other agent may be the exporter for compliance purposes under the EAR, the forwarding or other agent is never the "U.S. principal party in interest" on the SED/AES record, except when the forwarding or other agent acts as an "order party."

Our contributing writer, Michael Roll, is an attorney at Katten, Muchin & Zavis in Chicago and can be reached via email or at 312-902-5200.

Please note that due to the complex nature of the subject matter, Danzas AEI cannot be responsible for actions taken by the reader in reliance on the information contained herein without prior consultation with Danzas AEI.