Federal Register / Vol. 74, No. 171 / Friday, September 4, 2009 / Rules and Regulations 45757 

DavidlRostker@omb.eop.gov, or fax to 

202–395–7285. 

List of Subjects in 15 CFR Part 902 

Reporting and recordkeeping 

requirements. 

List of Subjects in 50 CFR Part 665 

Administrative practice and 

procedure, Fisheries, Reporting and 

recordkeeping requirements. 

Dated: August 31, 2009. 

Samuel D. Rauch III, 

Deputy Assistant Administrator For 

Regulatory Programs, National Marine 

Fisheries Service. 

■ For the reasons set out in the 

preamble, the amendments to 50 

CFR 665.13, 665.14, 665.21, and 665.22, 

published at 73 FR 70600 (November 

21, 2008), have been approved by OMB, 

and 15 CFR part 902 is amended as 

follows: 

15 CFR CHAPTER IX 

PART 902—NOAA INFORMATION 

COLLECTION REQUIREMENTS UNDER 

THE PAPERWORK REDUCTION ACT: 

OMB CONTROL NUMBERS 

■ 1. The authority citation for part 902 

continues to read as follows: 

Authority: 44 U.S.C. 3501 et seq. 

■ 2. In § 902.1, amend the table in 

paragraph (b), under the entry ‘‘50 CFR’’ 

by revising the entries for ‘‘665.13’’, 

‘‘665.14’’, ‘‘665.16’’, and ‘‘665.21(k)’’ to 

read as follows: 

§ 902.1 OMB control numbers assigned 

pursuant to the Paperwork Reduction Act. 

* * * * * 

(b) * * * 

CFR part or 

section where 

the information 

collection 

requirement is 

located 

Current OMB control 

number the information (All 

numbers begin with 0648–) 

* * * * * 

50 CFR 

* * * * * 

665.13 –0490, –0586, and –0589 

665.14 –0214, –0586, and –0589 

665.16 –0360, –0586, and –0589 

* * * * * 

665.21 (k) –0490 and –0589 

* * * * * 

[FR Doc. E9–21405 Filed 9–3–09; 8:45 am] 

BILLING CODE 3510–22–S 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Parts 1 and 602 

[TD 9458] 

RIN 1545–BI72 

Modification to Consolidated Return 

Regulation Permitting an Election To 

Treat a Liquidation of a Target, 

Followed by a Recontribution to a New 

Target, as a Cross-Chain 

Reorganization 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Temporary regulations. 

SUMMARY: This document contains 

temporary regulations under section 

1502 of the Internal Revenue Code 

(Code). The change to the consolidated 

return regulations is necessary in light 

of the regulations under section 368 that 

were issued in October 2007 addressing 

transfers of assets or stock following a 

reorganization. The temporary 

regulations modify the election under 

which a consolidated group can avoid 

immediately taking into account an 

intercompany item after the liquidation 

of a target corporation. The temporary 

regulations apply to corporations filing 

consolidated returns. The text of these 

temporary regulations also serves as the 

text of the proposed regulations (REG– 

139068–08) set forth in the notice of 

proposed rulemaking on this subject in 

the Proposed Rules section in this issue 

of the Federal Register. 

DATES: Effective Date: These regulations 

are effective on September 4, 2009. 

Applicability Date: The changes 

reflected in these temporary regulations 

(§ 1.1502–13T(f)(5)(ii)(B)(1) and (2)) 

generally apply to transactions in which 

T’s liquidation into B occurs on or after 

the effective date of the § 1.368–2(k) 

regulations, October 25, 2007. For 

transactions in which T’s liquidation 

into B occurs before October 25, 2007, 

§ 1.1502–13(f)(ii)(B)(1) and (2) in effect 

prior to October 25, 2007 as contained 

in 26 CFR part 1, revised April 1, 2009, 

continue to apply. 

FOR FURTHER INFORMATION CONTACT: 

Concerning the temporary regulations, 

Mary W. Lyons, (202) 622–7930; 

concerning submission of comments 

and the hearing, Oluwafunmilayo 

(Funmi) Taylor, (202) 622–7180 (not 

toll-free numbers). 

SUPPLEMENTARY INFORMATION: 

Paperwork Reduction Act 

These temporary regulations are being 

issued without prior notice and public 

procedure pursuant to the 

Administrative Procedure Act (5 U.S.C. 

553). For this reason, the collection of 

information contained in these 

regulations has been reviewed and, 

pending receipt and evaluation of 

public comments, approved by the 

Office of Management and Budget under 

control number 1545–1433. Responses 

to this collection of information are 

required in order for the parent of a 

consolidated group to make the election 

found in § 1.1502–13T(f)(5)(ii)(B). An 

agency may not conduct or sponsor, and 

a person is not required to respond to, 

a collection of information unless the 

collection of information displays a 

valid control number. 

For further information concerning 

this collection of information, and 

where to submit comments on the 

collection of information and the 

accuracy of the estimated burden, and 

suggestions for reducing this burden, 

please refer to the preamble to the crossreferencing notice of proposed 

rulemaking on this subject in the 

Proposed Rules section in this issue of 

the Federal Register. 

Books or records relating to a 

collection of information must be 

retained as long as their contents may 

become material in the administration 

of any internal revenue law. Generally, 

tax returns and tax return information 

are confidential, as required by 26 

U.S.C. 6103. 

Background and Explanation of 

Provisions 

Section 1.1502–13(f)(5) provides that 

S’s (the selling member in an 

intercompany transaction) 

intercompany item from a transfer to B 

(the buying member in an intercompany 

transaction) of the stock of another 

corporation (T) is taken into account in 

certain circumstances even though the T 

stock is never held by a nonmember of 

the consolidated group after the 

intercompany transaction. For example, 

if S sells all of T’s stock to B at a gain, 

and T subsequently liquidates into B in 

a separate transaction to which section 

332 applies, S’s gain is taken into 

account under the matching rule. This 

result would also be obtained in other 

transactions in which B’s basis in its T 

stock is permanently eliminated in a 

nonrecognition transaction, including a 

merger of B into T under section 368(a), 

a distribution by B of its T stock in a 

transaction described in section 355, 

and a deemed liquidation of T resulting 

from an election under section 

338(h)(10). However, an election to 

apply § 1.1502–13(f)(5)(ii)(B) is available 

that allows a taxpayer whose 

intercompany gain on subsidiary (T) 


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45758 Federal Register / Vol. 74, No. 171 / Friday, September 4, 2009 / Rules and Regulations 

stock was taken into account upon the 

subsidiary’s liquidation to reincorporate 

the subsidiary to prevent the 

intercompany gain from being taken 

into account at such time. Section 

1.1502–13(f)(5)(ii)(B) provides: 

If section 332 applies to T’s liquidation 

into B, and B transfers T’s assets to a new 

member (new T) in a transaction not 

otherwise pursuant to the same plan or 

arrangement as the liquidation, the transfer is 

nevertheless treated for all Federal income 

tax purposes as pursuant to the same plan or 

arrangement as the liquidation. For example, 

if T liquidates into B, but B forms new T by 

transferring substantially all of T’s former 

assets to new T, S’s intercompany gain or 

loss generally is not taken into account solely 

as a result of the liquidation if the liquidation 

and transfer would qualify as a 

reorganization described in section 368(a). 

(Under [§ 1.1502–13(j)(1)], B’s stock in new T 

would be a successor asset to B’s stock in T, 

and S’s gain would be taken into account 

based on the new T stock.) 

1. Results Prior to the Issuance of 

§ 1.368–2(k) Regulations 

Prior to the issuance of the regulations 

under § 1.368–2(k) (the –2(k) 

regulations) in October 2007, the 

election to apply § 1.1502–13(f)(5)(ii)(B) 

triggered the application of the step 

transaction doctrine. Under the step 

transaction doctrine, the liquidation of a 

corporation followed by a contribution 

of substantially all its assets to a new 

corporation generally is recharacterized 

as a cross-chain reorganization. In a 

cross-chain reorganization, B’s basis in 

the new T stock is determined by 

reference to its basis in the old T stock. 

Therefore, under § 1.1502–13(j), the new 

T stock is a successor asset to the old 

T stock, and S’s gain on the old T stock 

is not taken into account upon the 

liquidation of old T, but instead is taken 

into account by reference to the new T 

stock. By not immediately taking the 

gain into account, the purpose of 

§ 1.1502–13, that is, to provide rules 

that clearly reflect the income and tax 

liability of the group by preventing 

intercompany transactions from 

creating, accelerating, avoiding, or 

deferring consolidated taxable income 

or consolidated tax liability, is 

accomplished. See § 1.1502–13(a)(1)). 

2. Results After the Issuance of § 1.368– 

2(k) Regulations 

The issuance of the –2(k) regulations 

created a conflict with the language of 

§ 1.1502–13(f)(5)(ii)(B). Section 1.368– 

2(k) provides, in general, that a 

transaction otherwise qualifying as a 

reorganization under section 368(a) 

shall not be disqualified or 

recharacterized as a result of one or 

more subsequent transfers (or successive 

transfers) of assets or stock, provided 

that the requirements of § 1.368–1(d) are 

satisfied and the transfer(s) are 

described in either § 1.368–2(k)(1)(i) or 

(ii). Under the –2(k) regulations, which 

are generally effective for transactions 

occurring on or after October 25, 2007, 

the liquidation of old T followed by the 

contribution of substantially all the old 

T assets to new T would now be 

characterized as an upstream C 

reorganization (if it so qualifies) 

followed by a section 368(a)(2)(C) drop 

of assets, and would no longer be 

recharacterized as a cross-chain 

reorganization. Thus, B’s basis in its 

new T stock would not be determined 

by reference to B’s basis in the old T 

stock, but by reference to the basis of 

old T’s assets. 

3. Reason for Change 

Section 1.1502–13(j)(1) provides that 

an asset is a successor asset if its basis 

is determined by reference to the basis 

of the first asset. In a cross-chain 

reorganization, the result prior to the 

issuance of the –2(k) regulations, B’s 

basis in the new T stock would be 

determined by reference to the basis of 

the old T stock, thus the new T stock 

would clearly fall within the meaning of 

successor asset in § 1.1502–13(j)(1). 

However, in an upstream reorganization 

followed by a drop of the assets to new 

T, the result after the issuance of the 

–2(k) regulations, B’s basis in new T 

would be determined by reference to the 

basis of the old T assets, not the old T 

stock. Thus, the new T stock would not 

be a successor asset to the old T stock 

in an upstream reorganization. 

Permitting an election to apply 

§ 1.1502–13(f)(5)(ii)(B) while treating 

the transaction as an upstream 

reorganization would be inconsistent 

with the purposes of § 1.1502–13. For 

example, assume S sells its stock in T 

to B for $1,000,000 and T has a basis in 

its assets of $3,000,000. T then 

liquidates into B, which recontributes 

the assets to new T. If the transaction is 

treated as an upstream reorganization 

under section 368(a)(1)(C), followed by 

a drop of the assets under section 

368(a)(2)(C), B would receive a basis in 

T’s assets of $3,000,000 under section 

362(b), and, on the drop of the assets to 

new T, would receive a basis in its new 

T stock of $3,000,000 under section 

358(a). This increase in basis in the new 

T stock over the basis of the old T stock 

is inconsistent with allowing S’s 

continued deferral of the gain on the old 

T stock and the purposes of § 1.1502–13. 

Therefore, in order to satisfy the 

purposes of § 1.1502–13, these 

regulations provide that if the election 

to apply § 1.1502–13T(f)(5)(ii)(B) is 

made for a transaction in which old T 

liquidates into B on or after the effective 

date of the –2(k) regulations, followed 

by B’s transfer of substantially all of old 

T’s assets to new T, then, for all Federal 

income tax purposes, old T’s liquidation 

into B and B’s transfer of substantially 

all of old T’s assets to new T will be 

disregarded and, instead, the transaction 

will be treated as if old T transferred 

substantially all of its assets to new T in 

exchange for new T stock in a 

reorganization described in section 

368(a). This election is available only if 

a direct transfer of the old T assets to 

new T would qualify as a 

reorganization. Thus, S’s gain from the 

sale of the T stock to B is not taken into 

account upon the liquidation of T but 

instead is taken into account with 

respect to the new T stock, the successor 

asset to the old T stock. 

4. Previous Intercompany Transaction 

With Respect to the T Stock 

Under current § 1.1502–13(f)(5) and 

these regulations, the election so 

described is available only if the old T 

stock had previously been transferred in 

an intercompany transaction. Comments 

are requested on whether the election 

should be available even when there has 

not been a previous intercompany 

transaction with respect to the old T 

stock. 

5. Effective/Applicability Date 

The changes reflected in these 

temporary regulations (§ 1.1502– 

13T(f)(5)(ii)(B)(1) and (2)) generally 

apply to transactions in which T’s 

liquidation into B occurs on or after the 

effective date of the –2(k) regulations, 

October 25, 2007. For transactions in 

which T’s liquidation into B occurs 

before October 25, 2007, § 1.1502– 

13(f)(ii)(B)(1) and (2) in effect prior to 

October 25, 2007 as contained in 26 CFR 

part 1, revised April 1, 2009, continue 

to apply. Generally, pursuant to 

§ 1.1502–13T(f)(5)(ii)(B)(2) and 

§ 1.1502–13(f)(5)(ii)(E), the election 

described in these temporary 

regulations is made by entering into a 

written plan to transfer the T assets from 

B to new T on or before the due date of 

the consolidated tax return for the tax 

year that includes the date of the 

liquidation and including the statement 

described in § 1.1502–13(f)(5)(ii)(E) on 

or with such timely filed return. 

However, consolidated groups for which 

the liquidation of the target corporation 

occurred on or after October 25, 2007, 

and whose tax return for the year of 

liquidation was filed before November 

3, 2009 may make this election by 

entering into the written plan on or 

before November 3, 2009 and including 


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Federal Register / Vol. 74, No. 171 / Friday, September 4, 2009 / Rules and Regulations 45759 

the statement on or with an original tax 

return or an amended tax return for the 

tax year that includes the liquidation 

filed before November 3, 2009. In either 

case, the transfer of substantially all of 

T’s assets to new T must be made within 

12 months of the filing of such original 

or amended return. 

Special Analyses 

It has been determined that this 

temporary regulation is not a significant 

regulatory action as defined in 

Executive Order 12866. Therefore, a 

regulatory assessment is not required. It 

also has been determined that section 

553(b) of the Administrative Procedure 

Act (5 U.S.C. chapter 5) does not apply 

to these regulations. It is hereby 

certified that these regulations will not 

have a significant impact on a 

substantial number of small entities. 

This certification is based on the fact 

that these regulations do not have a 

substantial economic impact because 

they merely provide for an election in 

the context of a taxpayer that has 

triggered deferred gain on subsidiary 

stock upon the liquidation of the 

subsidiary. Moreover, the regulations 

apply only to transactions involving 

consolidated groups which tend to be 

larger businesses. Accordingly a 

Regulatory Flexibility Analysis under 

the Regulatory Flexibility Act (5 U.S.C. 

chapter 6) is not required. Pursuant to 

section 7805(f) of the Code, these 

regulations have been submitted to the 

Chief Counsel for Advocacy of the Small 

Business Administration for comment 

on their impact on small business. 

Drafting Information 

The principal author of these 

temporary regulations is Mary W. Lyons 

of the Office of Associate Chief Counsel 

(Corporate). However, other personnel 

from the IRS and Treasury Department 

participated in their development. 

List of Subjects 

26 CFR Part 1 

Income taxes, Reporting and 

recordkeeping requirements. 

26 CFR Part 602 

Reporting and recordkeeping 

requirements. 

Amendments to the Regulations 

■ Accordingly, 26 CFR parts 1 and 602 

are amended as follows: 

PART 1—INCOME TAXES 

■ Paragraph 1. The authority citation 

for part 1 continues to read in part as 

follows: 

Authority: 26 U.S.C. 7805 * * * 

Section 1.1502–13T also issued under 26 

U.S.C. 1502 * * * 

■ Par. 2. Section 1.1502–13 is amended 

by revising paragraph (f)(5)(ii)(B) to read 

as follows: 

§ 1.1502–13 Intercompany transactions. 

* * * * * 

(f) * * * 

(5) * * * 

(ii) * * * 

(B)(1) [Reserved]. For further 

guidance, see § 1.1502– 

13T(f)(5)(ii)(B)(1). 

(2) [Reserved]. For further guidance, 

see § 1.1502–13T(f)(5)(ii)(B)(2). 

■ Par. 3. Section 1.1502–13T is 

amended by: 

■ 1. Revising paragraphs (f)(5)(ii)(B)(1) 

and (B)(2). 

■ 2. Adding paragraph (f)(5)(ii)(F). 

The revisions and addition read as 

follows: 

§ 1.1502–13T Intercompany transactions 

(temporary). 

* * * * * 

(c)(6)(ii)(D) through (f)(5)(ii)(A) 

[Reserved]. For further guidance, see 

§ 1.1502–13(c)(6)(ii)(D) through 

(f)(5)(ii)(A). 

(B) Section 332—(1) In general. If 

section 332 would otherwise apply to 

T’s (old T’s) liquidation into B, and B 

transfers substantially all of old T’s 

assets to a new member (new T), and if 

a direct transfer of substantially all of 

old T’s assets to new T would qualify 

as a reorganization described in section 

368(a), then, for all Federal income tax 

purposes, T’s liquidation into B and B’s 

transfer of substantially all of old T’s 

assets to new T will be disregarded and 

instead, the transaction will be treated 

as if old T transferred substantially all 

of its assets to new T in exchange for 

new T stock and the assumption of T’s 

liabilities in a reorganization described 

in section 368(a). (Under § 1.1502– 

13(j)(1), B’s stock in new T would be a 

successor asset to B’s stock in old T, and 

S’s gain would be taken into account 

based on the new T stock.) 

(2) Time limitation and adjustments. 

The transfer of old T’s assets to new T 

qualifies under paragraph (f)(5)(ii)(B)(1) 

of this section only if B has entered into 

a written plan, on or before the due date 

of the group’s consolidated income tax 

return (including extensions), to transfer 

the T assets to new T, and the statement 

described in paragraph (f)(5)(ii)(E) of 

this section is included on or with a 

timely filed consolidated tax return for 

the tax year that includes the date of the 

liquidation (including extensions). 

However, see paragraph (f)(5)(ii)(F) of 

this section for certain situations in 

which the plan may be entered into after 

the due date of the return and the 

statement described in paragraph 

(f)(5)(ii)(E) of this section may be 

included on either an original tax return 

or an amended tax return filed after the 

due date of the return. In either case, the 

transfer of substantially all of T’s assets 

to new T must be completed within 12 

months of the filing of the return. 

Appropriate adjustments are made to 

reflect any events occurring before the 

formation of new T and to reflect any 

assets not transferred to new T, or 

liabilities not assumed by new T. For 

example, if B retains an asset of old T, 

the asset is treated under § 1.1502– 

13(f)(3) as acquired by new T but 

distributed to B immediately after the 

reorganization. 

(f)(5)(ii)(B)(3) through (f)(5)(ii)(E) 

[Reserved]. For further guidance, see 

§ 1.1502–13(f)(5)(ii)(B)(3) through 

(f)(5)(ii)(E). 

(F) Effective/Applicability date—(1) 

General rule. Paragraphs (f)(5)(ii)(B)(1) 

and (2) of this section apply to 

transactions in which old T’s 

liquidation into B occurs on or after 

October 25, 2007. 

(2) Prior periods. For transactions in 

which old T’s liquidation into B occurs 

before October 25, 2007, see § 1.1502– 

13(f)(5)(ii)(B)(1) and (2) in effect prior to 

October 25, 2007 as contained in 26 CFR 

part 1, revised April 1, 2009. 

(3) Special rule for tax returns filed 

before November 3, 2009 In the case of 

a liquidation on or after October 25, 

2007, by a taxpayer whose original tax 

return for the year of liquidation was 

filed on or before November 3, 2009 

then, notwithstanding paragraph 

(f)(5)(ii)(B)(2) of this section and 

§ 1.1502–13(f)(5)(ii)(E), the election to 

apply paragraph (f)(5)(ii)(B) of this 

section may be made by entering into 

the written plan described in paragraph 

(f)(5)(ii)(B) of this section on or before 

November 3, 2009, including the 

statement described in § 1.1502– 

13(f)(5)(ii)(E) on or with an original tax 

return or an amended tax return for the 

tax year that includes the liquidation 

filed on or before November 3, 2009, 

and transferring substantially all of T’s 

assets to new T within 12 months of the 

filing of such original or amended 

return. 

(f)(6) through (f)(7)(i) Example 6 

[Reserved]. For further guidance, see 

§ 1.1502–13(f)(6) through (f)(7)(i) 

Example 6. 

* * * * * 


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45760 Federal Register / Vol. 74, No. 171 / Friday, September 4, 2009 / Rules and Regulations 

PART 602—OMB CONTROL NUMBERS 

UNDER THE PAPERWORK 

REDUCTION ACT 

■ Par. 4. The authority citation for part 

602 continues to read as follows: 

Authority: 26 U.S.C. 7805. 

■ Par. 5. In § 602.101, paragraph (b) is 

amended by adding the following entry 

in numerical order to the table to read 

as follows: 

§ 602.101 OMB Control numbers. 

* * * * * 

(b) * * * 

CFR part or section where 

identified and described 

Current OMB 

control No. 

* * * * * 

1.1502–13 ............................. 1545–1433 

* * * * * 

Approved: August 27, 2009. 

Linda E. Stiff, 

Deputy Commissioner for Services and 

Enforcement. 

Michael Mundaca, 

(Acting) Assistant Secretary of the Treasury 

(Tax Policy). 

[FR Doc. E9–21324 Filed 9–3–09; 8:45 am] 

BILLING CODE 4830–01–P 

POSTAL SERVICE 

39 CFR Part 20 

U.S. Census Bureau Electronic Export 

Information Requirements When 

Sending Shipments Internationally 

AGENCY: Postal ServiceTM. 

ACTION: Final rule. 

SUMMARY: New Foreign Trade 

Regulations (FTR) issued by the U.S. 

Census Bureau require Postal Service 

revisions to its mailing standards and 

customs label requirements for 

customers mailing items internationally. 

DATES: Effective November 2, 2009. 

FOR FURTHER INFORMATION CONTACT: Rick 

Klutts, 813–877–0372. 

SUPPLEMENTARY INFORMATION: On 

September 30, 2008, the U.S. Census 

Bureau implemented statutory 

requirements for the electronic filing of 

export information through the Census 

Bureau’s Automated Export System 

(AES) or its AESDirect Web site for 

various international shipments where a 

Shipper’s Export Declaration (SED) was 

previously required. The new Foreign 

Trade Regulations mandate that 

Electronic Export Information (EEI) be 

filed when any type of goods contained 

in a shipment (per Schedule B Export 

Codes at http://www.census.gov/foreigntrade/schedules/b) is valued at more 

than $2,500 or requires an export 

license under U.S. law, subject to 

certain exceptions. 

These Postal Service standards are 

consistent with the Foreign Trade 

Regulations (15 CFR part 30) and 13 

U.S.C. Chapter 9, as amended by the 

Foreign Relations Authorization Act of 

2002, Public Law 107–228. 

In addition, items mailed as gift 

parcels or humanitarian donations to 

certain countries designated as State 

Sponsors of Terrorism must comply 

with the conditions for License 

Exception ‘‘GFT’’, or else customers 

may be required to obtain an export 

license from the U.S. Department of 

Commerce, Bureau of Industry and 

Security. The definitions and 

limitations on such gift parcels and 

humanitarian donations are set forth in 

the Commerce Department’s Export 

Administration Regulations at 15 CFR 

740.12 and part 746. The Postal Service 

standards for endorsing qualifying items 

as gift parcels or humanitarian 

donations are consistent with the Export 

Administration Regulations (15 CFR 

740.12(a)(3)(ii) and 758.1(d)). 

Requirements for Sending an 

International Shipment 

Effective November 2, 2009, 

customers mailing outbound 

international shipments containing 

goods are responsible for providing an 

Exemption and Exclusion Legend, Proof 

of Filing Citation (PFC), or AES 

Downtime Citation. Goods mailed to 

APO/FPO/DPO (DMM 703.2) addresses 

are not subject to this standard. Section 

30.71 of the Federal Trade Regulations 

establishes civil and criminal penalties 

for customers who fail to electronically 

file their export information when 

required, or to comply with the Foreign 

Trade Regulations in any other way. 

Electronic Export Information Filing; 

Proof of Filing Citation 

Subject to exemptions and exclusions, 

as set forth below, electronic filing of 

export information and a Proof of Filing 

Citation (PFC) are required when: 

1. Any type of goods contained in a 

shipment (per Schedule B Export Codes 

at http://www.census.gov/foreign-trade/ 

schedules/b) is valued at more than 

$2,500. 

2. The package is shipped to certain 

countries designated as State Sponsors 

of Terrorism (see Country Group E:1 in 

the Export Administration Regulations, 

15 CFR Part 740, Supplement No. 1) and 

does not qualify as a ‘‘gift parcel or 

humanitarian donation’’ under 15 CFR 

740.12. As of August, 2009, these 

countries are: 

a. Cuba. 

b. Iran. 

c. People’s Democratic Republic of 

Korea (North Korea). 

d. Sudan. 

e. Syrian Arab Republic (Syria). 

3. The package requires an export 

license. To determine if an export 

license is required, go to http:// 

www.export.gov/regulation/index.asp or 

call: 1–800–USA–TRAD(E). 

When any of these three 

circumstances apply, it is the mailer’s 

responsibility to electronically file 

export information before mailing; a 

paper Shipper’s Export Declaration 

(SED) is no longer accepted. Electronic 

export information is filed through the 

U.S. Census Bureau’s Automated Export 

System (AES) or AESDirect Web site 

utilizing the following steps: 

• Log on to http://www.aesdirect.gov 

and follow the instructions for 

registering and completing the AES 

Certification Quiz. 

• The ‘‘Port of Export’’ code for 

shipping through the Postal Service is 

‘‘8000’’. 

• The ‘‘Mode of Transport’’ is ‘‘Mail’’. 

• The carrier should be left as 

‘‘SCAC/IATA,’’ and the conveyance 

name fields should remain blank. 

• After the mailer has successfully 

filed the electronic export information, 

the mailer will be provided with an 

alphanumeric Internal Transaction 

Number as confirmation. When mailing, 

the PFC will consist of the letters ‘‘AES’’ 

followed by the Internal Transaction 

Number (ITN): for example, ‘‘AES 

X20080930987654’’. 

Note: If the AES system is down, call 1– 

800–549–0595, option 1. 

AES Downtime Citation 

If export information filing is required 

but AES or AESDirect is unavailable, 

the goods may be shipped but the mailer 

is responsible for providing the 

appropriate AES Downtime Citation. 

This citation includes the word 

‘‘AESDOWN,’’ the mailer’s AES filer 

identification number, and the date: for 

example, ‘‘AESDOWN 123456789 09/ 

30/2009’’. 

Exemption and Exclusion Legends 

If no class of goods within the 

package is valued at more than $2,500 

and an export license is not required, 

the customer should enter the 

exemption code ‘‘NOEEI 30.37(a)’’ on 

the customs declaration form, unless the 

goods are being shipped to Cuba, Iran, 

North Korea, Sudan, or Syria. If one or 


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