42556 Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules and Regulations

DEPARTMENT OF COMMERCE

Bureau of the Census

15 CFR Part 30

[Docket No. 980716180–0030–03]

RIN 0607–AA20

Foreign Trade Statistics Regulations:

Amendment to Clarify Exporter (U.S.

Principal Party in Interest) and

Forwarding or Other Agent

Responsibilities in Preparing the

Shipper’s Export Declaration or Filing

Export Information Electronically

Using the Automated Export System

and Related Provisions

AGENCY: Bureau of the Census,

Commerce.

ACTION: Final rule.

SUMMARY: The Bureau of the Census

(Census Bureau) is amending the

Foreign Trade Statistics Regulations

(FTSR) to clarify the responsibilities of

exporters and forwarding or other agents

in completing the Shipper’s Export

Declaration (SED), or filing the

information electronically using the

Automated Export System (AES), and to

clarify provisions for authorizing

forwarding or other agents to prepare

and file a paper SED or file the export

information electronically using the

AES on behalf of a principal party in

interest. This rule also clarifies

provisions on electronic transmissions

of intangible transfers of software and

technology; updates provisions related

to mail shipments and certain related

SED exemptions; notifies the public that

in the near future the Census Bureau

will revise appropriate ‘‘exporter’’ fields

on the paper SED forms and the AES

record to read ‘‘U.S. principal party in

interest,’’ and require the reporting of

the U.S. principal party in interest

Employer Identification Number (EIN)

or other identification number on the

SED or AES record; clarifies what

information should be listed in these

newly revised blocks and the equivalent

fields on the AES record; and clarifies

provisions for providing import

verification information to the Census

Bureau.

DATES: Effective Date: This rule is

effective July 10, 2000.

Grace Period: A 90 day grace period

will apply to the requirements set forth

in this rule. Until October 10, 2000,

Shipper’s Export Declarations will be

accepted with information that complies

with the rules prior to July 10, 2000.

FOR FURTHER INFORMATION CONTACT:

Requests for additional information

should be directed to C. Harvey Monk,

Jr., Chief, Foreign Trade Division, U.S.

Census Bureau, Room 2104, Federal

Building 3, Washington, DC 20233–

6700, by telephone on (301) 457–2255,

or by fax on (301) 457–2645.

SUPPLEMENTARY INFORMATION:

Background

The Census Bureau is responsible for

collecting, compiling, and publishing

trade statistics for the United States.

These data are used by various Federal

Government agencies and the private

sector for planning and policy

development. In order to accomplish its

mission, the Census Bureau must

receive accurate statistical information

from the trade community. The

Shipper’s Export Declaration (SED) and

the Automated Export System (AES)

records are the primary vehicles used

for collecting such trade data, and the

information contained therein is used

by the Census Bureau for statistical

purposes only and is confidential under

the provisions of Title 13, United States

Code (U.S.C.), Section 301(g). The

Census Bureau’s primary objective in

this rule is to ensure the accuracy of its

trade statistics and to clarify reporting

responsibilities for all parties involved

in export transactions.

As such, the Census Bureau is

amending the Foreign Trade Statistics

Regulations (FTSR), 15 Code of Federal

Regulations (CFR) Part 30, to clarify

responsibilities of exporters and

forwarding or other agents in

completing the SED, to notify the public

that in the near future the Census

Bureau will revise the title of the

‘‘exporter’’ blocks on the paper SED

forms and the ‘‘Exporter’’ field on the

AES record from reading ‘‘Exporter’’ to

read ‘‘U.S. principal party in interest,’’

and to clarify in this rule what

information should be listed in these

newly revised blocks and the equivalent

fields on the AES record. This rule

defines new terms, including ‘‘U.S.

principal party in interest’’ and ‘‘routed

export transaction,’’ and clarifies

existing ones (notably the definition of

‘‘exporter’’) for purposes of completing

the SED or AES record. The rule

clarifies provisions for authorizing a

forwarding or other agent to prepare and

file an SED or the AES record on behalf

of a principal party in interest.

The Census Bureau initially

published a notice of proposed

rulemaking on this subject in the

Federal Register on August 6, 1998 (63

FR 41979). As a result of comments

received on that proposed rulemaking

and subsequent discussions with the

Bureau of Export Administration (BXA),

the Census Bureau decided to issue a

supplementary notice of proposed

rulemaking to address the issues raised

during the comment period and to

further clarify provisions contained in

that notice of proposed rulemaking. The

Census Bureau published a

supplementary notice of proposed

rulemaking in the Federal Register on

October 4, 1999 (64 FR 53861). The BXA

also published a notice of proposed

rulemaking in the Federal Register on

October 4, 1999 (64 FR 53854) revising

the Export Administration Regulations

(EAR) regarding the responsibilities of

the parties to an export transaction,

routed export transactions, SEDs, and

export clearance. Subsequent to the

publication of those notices in the

Federal Register, the Census Bureau

and BXA participated in numerous

meetings, conferences, and seminars

with the trade community to explain

more clearly the provisions of the

proposed rules and to resolve questions

and concerns of the trade community.

BXA is also revising appropriate

sections of the EAR in a final rule

published elsewhere in this issue of the

Federal Register. The EAR will conform

to the provisions of the FTSR in

reference to clarifying the

responsibilities of exporters and

forwarding or other agents in

completing the SED, and BXA also will

issue changes to the EAR to simplify

export clearance.

In addition to issuing final rules on

the provisions addressed in the

proposed rulemakings, the Census

Bureau and BXA also are issuing final

rules in these notices to amend

provisions regarding the reporting of

value of exports in export transactions,

exports of mail shipments via the U.S.

Postal Service, amending certain

provisions for miscellaneous

exemptions and exports transhipped

through Canada to a third destination,

provisions regarding the electronic

transmission of software and technology

and other intangible transfers, and

provisions for providing import

information to the Census Bureau.

The Census Bureau is amending the

FTSR to specify that electronic

transmissions to be received outside the

United States and other intangible

transfers, such as downloaded software

and technology, are not subject to the

FTSR, but may be subject to export

control requirements under other laws

and regulations. The Census Bureau is

further amending the FTSR to clarify

making corrections to SEDs submitted to

the U.S. Postal Service and to increase

the value limitation for mail shipments

that do not require an SED or AES

record from $500 or under to $2,500 or

under. The Census Bureau is also

amending the FTSR to clarify certain

Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules and Regulations 42557

miscellaneous exemption provisions

and provisions for exports transshipped

through Canada to be consistent with

the EAR and to include a provision

requiring importers to provide certain

import information to the Census

Bureau to verify the accuracy of import

data.

Response to Comments

The Census Bureau received 18

comments on the supplementary notice

of proposed rulemaking published in

the Federal Register on October 4, 1999

(64 FR 53861). A general response was

sent to each respondent addressing their

concerns with a notation that a more

detailed response to the comments

would be contained in the final rule.

The Census Bureau revised certain

provisions in the final rule to address

the concerns of the respondents and to

more clearly explain our requirements.

The major concerns addressed in the

comments and the Census Bureau’s

response are as follows:

1. Specify that the information

required on the SED or AES record is for

statistical purposes. There is concern

among commentors that the Census

Bureau did not clearly specify that the

information reported on the SED or AES

record is for statistical purposes. The

Census Bureau is specifying in the

regulation text of this rule, in § 30.4(a),

that the information reported on the

SED or AES record is used by the

Census Bureau for statistical purposes

only. The provisions contained in this

part apply only to statistical reporting

requirements. However, it must be

understood that the SED or AES record

is a dual purpose document/format used

by the Census Bureau for statistical

purposes and by the BXA and other

government agencies for export control

purposes.

2. Specify and clarify the

documentation and documentation

sharing responsibilities of the

forwarding or other agents in a routed

export transaction. There is some

concern and confusion among

commentors that the Census Bureau did

not clearly specify the documentation

and documentation sharing

responsibilities of forwarding or other

agents, especially in a routed export

transaction. The Census Bureau is

specifying, in the regulation text of this

rule in § 30.4(b)(c), the reporting and

documentation responsibilities of all

parties involved in export and routed

export transactions. The Census Bureau

is further specifying, in the regulation

text of this rule in § 30.4(c)(2), the

documentation sharing responsibilities

of the forwarding or other agent in a

routed export transaction. In a routed

export transaction the forwarding or

other agent, upon request by the

exporter (U.S. principal party in

interest), is responsible for providing

the exporter (U.S. principal party in

interest) with documentation verifying

that the information provided by the

exporter (U.S. principal party in

interest) was accurately reported on the

SED or AES record. The Census Bureau

will not dictate the format by which this

documentation should be made

available between the parties. The new

regulation does not impose any

additional documentation requirements

on any party. The documentation

provisions stated in the regulation are

provisions currently specified in § 30.11

of this Part.

3. Clarify the liability concerns of the

Exporter (U.S. principal party in

interest) in a routed transaction. There

is concern among commentors regarding

the liability of the exporter (U.S.

principal party in interest) especially in

a routed export transaction, when the

foreign principal party in interest

(foreign buyer) authorizes a U.S.

forwarding or other agent to act on its

behalf in facilitating the export

transaction and prepare and file the SED

or AES record. The new regulations

clearly address the liability concerns of

all parties in an export and routed

export transaction and provide more

protection to the exporter (U.S.

principal party in interest) than they

have under the current regulations. The

new regulations, for the first time,

clearly specify in writing, in the

regulation text itself, the specific

reporting and documentation

responsibilities of the exporter

(principal party in interest) in

§ 30.4(c)(1) and the forwarding or other

agent in § 30.4(c)(2) in a routed export

transaction. Specifically, in a routed

export transaction, the exporter (U.S.

principal party in interest) is only

responsible for providing basic

commodity information and their

Internal Revenue Service (IRS),

Employer Identification Number (EIN)

to the forwarding or other agent. The

forwarding or other agent is responsible

for obtaining a power of attorney or

written authorization from the foreign

principal party in interest and

preparing, signing, and filing the SED or

AES record based on the information

obtained from the exporter (U.S.

principal party in interest) and other

parties to the transaction. The exporter

(U.S. principal party in interest) is only

responsible and liable for the

information it is required to provide the

forwarding or other agent in § 30.4(c)(2)

of the FTSR.

4. Add a second block/field to the

SED or AES record for the

manufacturer/seller or other responsible

party. There was a request from some

commentors for the Census Bureau to

add another block to the paper SED and

another field to the AES record for the

manufacturer/seller or other related

party to the transaction. This addition

would essentially duplicate information

the Census Bureau currently collects

and would increase the reporting

burden on the public. For statistical

reporting purposes the Census Bureau is

only interested in capturing data on the

entity that either sold or made available

the goods for export abroad. That person

is considered the exporter (U.S.

principal party in interest), or for

statistical reporting purposes on the

SED or AES record, the U.S. principal

party in interest. In addition, the Census

Bureau believes that the public

comments requesting the addition of

another block on the SED were based

upon the misconception that the party

listed in the ‘‘Exporter’’ block of the

SED or AES record was the person liable

for the export under the EAR and the

FTSR. The fact of the matter is that all

parties that participate in an export

transaction are liable for their own

actions or inactions, whether they are

listed on the export forms or not. In the

near future, a revision to the title of the

exporter blocks on the paper SED and

equivalent fields of the AES record will

be revised from reading ‘‘Exporter’’ to

read ‘‘U.S. principal party in interest,’’

and ‘‘Exporter’s EIN (IRS) No.’’ to read

‘‘U.S. principal party in interest’s EIN

(IRS) No.’’ Both BXA and the Census

Bureau have the same definition for

‘‘principal party in interest,’’ therefore

this revision will alleviate the confusion

over the ‘‘Exporter’’ block of the SED or

AES record.

5. Exporter’s concern on providing

their Internal Revenue Service Employer

Identification Number (EIN) to the

forwarding or other agent in a routed

transaction. There is some concern

among commentors about providing

their EIN to a U.S. forwarding or other

agent especially in a routed transaction.

The requirement for reporting the

exporter’s EIN has been part of export

regulatory requirements since 1980. The

Census Bureau uses the EIN to identify

the specific company exporting

merchandise from the United States.

Company names are usually varied and

the Census Bureau needs a more

definitive identifier for this purpose.

The appropriate fields on the SED and

AES record will be revised to require

the reporting of the U.S. principal party

in interest’s EIN or other ID number. In

42558 Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules and Regulations

addition, a company’s EIN is reported

on numerous business and financial

documents to verify the identity of a

specific business entity. The EIN on the

SED or AES record is kept strictly

confidential and is not released to any

other party. Section 30.91 of the FTSR

specifically prohibits the disclosure of

information on the SED or AES record

to anyone except the exporter or his

agent by those having possession of or

access to any copy for official purposes.

The forwarding or other agent is not

permitted to release copies of the SED

or AES record to any other party for

unofficial purposes.

6. Clarify provisions on preparing

SEDs for consolidated or containerized

shipments. There is some concern

among commentors on the implication

the new regulations will have on

consolidated or containerized

shipments. The current regulations

require the consolidator or forwarding

or other agent to prepare a separate SED

or AES record for each shipment in the

container, i.e., all merchandise being

sent from one exporter to one consignee,

to a single country of destination, on a

single carrier, on the same day. Under

the new regulation, the consolidator or

forwarding or other agent cannot be

listed as exporter on the SED or AES

record, but will need a separate SED or

AES record by individual exporter (U.S.

principal party in interest) for each

shipment in the container.

7. Clarify conformity of documents

provisions. There is also some concern

among commentors about the

conformity of documentation

requirements for export documents. The

only conformity of documents

requirement is contained in § 758.4(b) of

the EAR and states that when a license

is issued by BXA, the information

entered on related export control

documents (e.g., the SED, bill of lading

or air waybill) must be consistent with

the license. Complying with the

conformity of documents requirement in

the EAR would have been a problem

with the term ‘‘Exporter’’ in the exporter

blocks on the paper SED and on the

equivalent field of the AES record, but

with the pending revision of the paper

SED and AES record to revise the title

of this block/field to ‘‘U.S. principal

party in Interest,’’ this will no longer be

a concern.

Program Requirements

The Census Bureau is amending Title

15, Code of Federal Regulations (CFR),

Part 30, to address the issues raised by

commentors to the supplementary

notice of proposed rulemaking to: (A)

Define the term ‘‘exporter,’’ for purposes

of completing the SED or AES record, as

the U.S. principal party in interest in

the export transaction; (B) Clarify the

reporting responsibilities of the U.S.

principal party in interest and the

forwarding or other agent in completing

the SED or AES record; (C) Clarify

provisions for authorizing a forwarding

or other agent to prepare and file an SED

or file the information electronically

using the AES; and (D) Clarify the

documentation and compliance

responsibilities of parties involved in

the export transaction. For purposes of

this rule, all references to preparing and

filing the paper SED also pertain to

preparing and filing the AES electronic

record.

This rule clarifies the responsibilities

of the exporter (U.S. principal party in

interest) and the forwarding or other

agent in preparing the SED or AES

record. For export shipments, the

Census Bureau recognizes ‘‘routed

export transactions’’ as a subset of

‘‘export transactions.’’ A routed export

transaction is where the foreign

principal party in interest authorizes a

U.S. forwarding or other agent to

facilitate export of items from the

United States.

The ‘‘exporter’’ and ‘‘EIN’’ fields on

the SED and AES records are being

revised to read U.S. principal party in

interest.’’ For purposes of completing

the SED or AES record, use the

definition found in section 30.4(a)(1) of

the FTSR for ‘‘Exporter (principal party

in interest)’’ to determine who should

be listed in the new ‘‘U.S. principal

party in interest’’ block/field of the SED

or AES record. The FTSR defines the

term exporter (U.S. principal party in

interest) as the person in the United

States that receives the primary benefit,

monetary or otherwise, of the export

transaction. Generally, that person is the

U.S. seller, manufacturer, order party, or

foreign entity. The foreign entity must

be listed as the U.S. principal party in

interest on the SED or AES record, if it

is in the United States when the items

are purchased or obtained for export.

The foreign entity must then follow the

provisions for preparing and filing the

SED or AES record specified in §§ 30.4

and 30.7 of the FTSR, pertaining to the

U.S. principal party in interest. In most

cases, the forwarding or other agent is

not a principal party in interest.

Keep in mind, however, that the EAR

defines the exporter as the person in the

United States who has the authority of

a principal party in interest to

determine and control the sending of

items out of the United States (see EAR

15 CFR Part 772). In some transactions,

this definition permits the forwarding or

other agent to apply for a license and be

the exporter, as defined in the EAR.

The person who signs the SED must

be in the United States at the time of

signing. If a U.S. manufacturer sells

merchandise directly to a foreign

principal party in interest for export, the

U.S. manufacturer must be listed as the

U.S. principal party in interest on the

SED or AES record. If a U.S.

manufacturer sells merchandise, as a

domestic sale, to a U.S. buyer

(wholesaler/distributor) and that U.S.

buyer sells the merchandise to a foreign

principal for export, the U.S. buyer

(wholesaler/distributor) must be listed

as the U.S. principal party in interest on

the SED or AES record. If a U.S. order

party, as defined in § 30.4(a)(1)(iii) of

this rule, arranges for the sale and

export of merchandise to a foreign

principal party in interest directly, the

U.S. order party must be listed as the

U.S. principal party in interest on the

SED or AES record. When a foreign

entity is in the United States when the

items are purchased or obtained for

export it is the exporter (U.S. principal

party in interest) and must be listed as

the U.S. principal party in interest on

the SED or AES record. The foreign

entity must then follow the provisions

for preparing and filing the SED or AES

record specified in §§ 30.4 and 30.7

pertaining to the U.S. principal party in

interest.

The forwarding or other agent is that

person in the United States who is

authorized by a principal party in

interest to perform the services required

to facilitate the export of items from the

United States. The forwarding or other

agent must be authorized by the

exporter (U.S. principal party in

interest), or in the case of a routed

export transaction, the foreign principal

party in interest. In a routed export

transaction, the forwarding or other

agent may be the exporter for

compliance purposes under the EAR.

However, the forwarding or other agent

is never the ‘‘U.S. principal party in

interest’’ on the paper SED or in the

‘‘U.S. principal party in interest’’ field

of the AES record, except when the

forwarding or other agent acts as an

‘‘order party.’’

The exporter (U.S. principal party in

interest) can prepare and file the SED or

AES record, or it can authorize a

forwarding or other agent to prepare and

file the SED or AES record on its behalf.

If the exporter (U.S. principal party in

interest) authorizes a forwarding or

other agent to complete the SED or AES

record on its behalf, the exporter (U.S.

principal party in interest) is

responsible for: (A) Providing the

forwarding or other agent with the

information necessary to complete the

SED or AES record; (B) Providing the

Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules and Regulations 42559

forwarding or other agent with

authorization to complete the SED or

AES record, in the form of a power of

attorney or written authorization, or

signing the authorization block printed

on the paper SED (block 23 on

Commerce Form 7525–V or block 29 on

Commerce Form 7525–V–ALT); and (C)

Maintaining documentation to support

the information provided to the

forwarding or other agent for completing

the SED or AES record.

The forwarding or other agent, if

authorized by a principal party in

interest, is responsible for: (A) Preparing

the SED or AES record, based on

information received from the exporter

(U.S. principal party in interest) or other

parties in the transaction; (B)

Maintaining documentation to support

the information reported on the SED or

AES record; and (C) Upon request,

providing the exporter (U.S. principal

party in interest) with a copy of the

export information filed in the form of

a completed SED, an electronic

facsimile, or in any other manner

prescribed by the exporter (U.S.

principal party in interest).

In a routed export transaction, where

a foreign principal party in interest

designates a U.S. forwarding or other

agent to act on its behalf to prepare and

file the SED or AES record, the exporter

(U.S. principal party in interest) must

provide the forwarding or other agent

with the following information to assist

them in preparing the SED or AES

record: (1) Name and address of the U.S.

principal party in interest; (2) U.S.

principal party in interest’s IRS, EIN; (3)

Point of origin (State or Foreign Trade

Zone (FTZ)); (4) Schedule B description

of commodities; (5) Domestic (D),

foreign (F), or Foreign Military Sale

(FMS) (M) code; (6) Schedule B

Number; (7) Quantity/unit of measure;

(8) Value; (9) Upon request by the

foreign principal party in interest or its

agent, the Export Control Classification

Number (ECCN) or with sufficient

technical information to determine the

ECCN; and (10) Any information that it

knows will affect the determination of

license authority.

Note: For Items 9 and 10, where the foreign

principal party in interest has assumed

responsibility for determining and obtaining

license authority, the EAR sets forth the

information sharing requirements that apply

at 15 CFR 758.3(c) of the EAR.

In a routed export transaction, the

forwarding or other agent is responsible

for preparing, signing, and filing the

SED or AES record based on

information received from the exporter

(U.S. principal party in interest) and

other parties involved in the

transaction. In addition to reporting the

information provided by the exporter

(U.S. principal party in interest) on the

SED or AES record, the forwarding or

other agent must provide the following

export information on the SED or AES

record: (1) Date of exportation; (2) Bill

of lading/airway bill number; (3)

Ultimate consignee; (4) Intermediate

consignee; (5) Forwarding or other agent

name and address; (6) Country of

ultimate destination; (7) Loading pier;

(8) Method of transportation; (9)

Exporting carrier; (10) Port of export;

(11) Port of unloading; (12)

Containerized; (13) Weight; (14) ECCN;

(15) License Authority; and (16)

Signature in the certification block on

the paper SED (block 24 on Commerce

Form 7525–V and block 36 on

Commerce Form 7525–V–ALT). In a

routed export transaction, the exporter

(U.S. principal party in interest) must be

listed as the U.S. principal party in

interest on the SED or the AES record.

Note: For items 14 and 15 where the

foreign principal party in interest has

assumed responsibility for determining and

obtaining license authority, the EAR sets

forth the information sharing requirements

that apply at 15 CFR 758.3(c) of the EAR.

In a routed export transaction, the

forwarding or other agent is responsible

for: (A) Obtaining a power of attorney or

written authorization from the foreign

principal party in interest to act on its

behalf; (B) Preparing, signing, and filing

the SED or AES record based on

information received from the exporter

(U.S. principal party in interest) and

other parties involved in the

transaction; (C) Maintaining

documentation to support the

information reported on the SED or AES

record, and (D) Upon request, providing

the exporter (U.S. principal party in

interest), with appropriate

documentation verifying that the

information provided by the exporter

(U.S. principal party in interest) in

interest was accurately reported on the

SED or AES record.

The FTSR places primary

responsibility for compliance of the SED

and AES requirements on the exporter

(U.S. principal party in interest) in an

export transaction and on the

forwarding or other agent in a routed

export transaction. However, the FTSR

also considers all parties involved in the

transaction responsible for the truth,

accuracy, and completeness of the

information reported on the SED or AES

record. The parties to the transaction

must provide the forwarding or other

agent with the information necessary to

correctly prepare the paper SED or to

file the data electronically using the

AES. As always, documentation must be

maintained by all parties involved in

the transaction to support the

information reported on the SED or the

AES record.

All parties that participate in

transactions subject to the FTSR are

responsible for compliance with the

FTSR. In all cases where a violation of

the FTSR occurs, the documentation of

all parties involved in the transaction

must be made available to the proper

enforcement officials to determine the

liability and responsibility for the

export violation pursuant to FTSR

§ 30.11. Acting through a forwarding or

other agent or delegating or redelegating

authority does not in and of itself

relieve anyone of their compliance

responsibility.

This notice further clarifies provisions

for using a power of attorney or written

authorization when a principal party in

interest authorizes a forwarding or other

agent to prepare and file the SED on its

behalf and when the SED information is

filed electronically using the AES.

Suggested formats for a power of

attorney and a written authorization for

executing a SED are available upon

request from the U.S. Census Bureau,

Foreign Trade Division.

This rule further specifies in § 30.4(f)

the requirement that the SED be

prepared in English. This provision is

already included in the Census Bureau’s

instructions for completing the SED and

this rule will simply include that

requirement in the CFR.

In addition, this amendment clarifies

the provision in § 30.7(d)(2) that a

foreign entity, if in the United States

when the items are purchased or

obtained for export, must be listed as

the U.S. principal party in interest on

the SED or AES record and follow the

provisions as specified in this part

pertaining to the U.S. principal party in

interest. In such situations, when the

foreign entity does not have an EIN or

Social Security Number (SSN), a border

crossing number, passport number, or

any number assigned by U.S. Customs is

required to be reported on the SED or

the AES record. On the paper SED, the

appropriate number should be preceded

by the symbol ‘‘T.’’ On the AES record,

the appropriate AES identifier code, as

specified in the Automated Export

System Trade Interface Requirements

(AESTIR) must be reported. Using

another’s EIN or SSN is prohibited.

In addition to addressing the issues

contained in the supplementary notice

of proposed rulemaking (addressed

above), this rule is also amending the

FTSR to: (A) Include provisions on

electronic transmission of software and

technology; (B) Amend the provision for

reporting value in an export transaction;

(C) Include revisions to provisions

42560 Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules and Regulations

concerning mail shipments and certain

related SED miscellaneous exemptions;

(D) Clarify provisions for exports of

items subject to the EAR that are

transhipped through Canada to a third

destination; and (E) Clarify provisions

for providing import verification

information to the Census Bureau. The

specific revisions to the FTSR to include

these changes are detailed in this rule.

In order to clarify the provisions of

the FTSR with regards to the export

reporting requirements for electronic

transmissions and intangible transfers of

software and technology, the Census

Bureau is including a new section,

30.1(d), to the FTSR to state that

electronic transmissions to be received

outside the United States and other

intangible transfers, such as

downloaded software, and technology,

are not subject to the provisions of the

FTSR, but may be subject to export

control requirements under other laws

and regulations. Such transmissions and

transfers are outside the scope and

control of the Census Bureau and the

FTSR. The FTSR only covers shipments

of tangible/physical merchandise.

The Census Bureau is amending

§ 30.7(q), Value, to clarify the provision

for reporting value information on the

SED or AES record in an export

transaction. In all export transactions

the selling price or value to be reported

on the SED or AES record is the U.S.

principal party in interest’s price to the

foreign principal party in interest.

In order to update the Census

Bureau’s provisions on mail shipments

currently included in the FTSR, the

Census Bureau is clarifying provisions

contained in § 30.16 for submitting

corrections to SEDs that were initially

submitted through the U.S. Postal

Service. The Census Bureau is directing

that all corrections to SEDs filed

through the U.S. Postal Service be sent

directly to the Census Bureau’s National

Processing Center in Jeffersonville,

Indiana. The Census Bureau is also

increasing the value limitation for goods

exported through the mail that do not

require a SED or AES record from $500

or under to $2,500 or under. This will

bring all mail exports under the same

provisions as for all other exports.

Therefore, the Census Bureau will

remove and reserve § 30.54, Special

exemptions for mail shipments, as it is

no longer necessary.

The Census Bureau is amending

§ 30.55, Miscellaneous exemptions, by

revising paragraphs (g) and (h), and by

adding paragraphs (n) and (o).

Paragraphs (g) and (h) are being revised

to make the FTSR language consistent

with EAR revisions. Paragraph (n) will

state that a SED or AES record is not

required for exports of software and

technology that does not require an

export license, except that a SED or AES

record is required for mass market

software. For purposes of the FTSR,

mass market software is defined as

software that is generally available to

the public by being sold from stock at

retail selling points or directly from the

software developer or supplier, by

means of over the counter transactions,

mail order transactions, telephone

transactions, or electronic mail order

transactions, and designed for

installation by the user without further

substantial technical support by the

developer or supplier. Paragraph (o) will

state that a SED or AES record is not

required for any intangible exports of

software and technology, such as

downloaded software and technical

data, including technology and software

that requires an export license and mass

market software exported electronically.

This rule is amending § 30.58 to

revise the phrase ‘‘validated export

license’’ to read ‘‘license’’ in paragraph

(c)(1) and by adding paragraph (c)(6) for

exports of items subject to the EAR that

will be transhipped through Canada to

a third country.

This rule also will include a provision

to § 30.70, Statistical information

required on import entries, to require

importers to provide certain import

information to the Census Bureau to

verify the accuracy of import data. This

is being included to ensure the

cooperation of the importer in

responding to requests from the Census

Bureau when resolving problems or

errors on import documents.

The revisions contained in this final

rule are consistent with the provisions

contained in the final rule issued by the

BXA in its revisions to the EAR

regarding the export control

responsibilities of exporters and

forwarding or other agents. The

Department of the Treasury concurs

with the provisions contained in this

final rule.

Changes to the Proposed Rule

In order to comply with comments

received from the trade community, and

to update the FTSR to clarify all of the

items discussed above, minor revisions

were made to the proposed rule. These

revisions are not substantial and reflect

changes required to clarify the concerns

of commentors to the supplementary

notice of proposed rulemaking and to

make minor updates to the FTSR to

reflect changes the Census Bureau and

the BXA are making to harmonize the

FTSR and the EAR. The changes to the

proposed rule are as follows:

(1) Section 30.1 is amended by adding

paragraph (d) to clarify that electronic

transmissions and other intangible

transfers of software and technology are

not subject to the provisions of the

FTSR.

(2) Section 30.4(a) is amended by

including clarifying language to specify

that the information reported on the

SED or AES record is used by the

Census Bureau for statistical reporting

purposes only and that for purposes of

this part the provisions apply only to

statistical reporting requirements.

(3) Section 30.4(a)(1) is amended by

including clarifying language to specify

that the person listed in the previously

designated ‘‘exporter’’ block of the

paper SED or in the ‘‘exporter’’ field on

the AES record must be the U.S.

principal party in interest; and adding

paragraph (iv) to clarify provisions for

when a foreign entity must be listed as

U.S. principal party in interest on the

SED or AES record.

(4) Section 30.4(a)(1)(iii) is amended

by adding the definition for order party

in the regulation text and removing

order party as a footnote.

(5) Section 30.4(b)(1) Designating a

forwarding or other agent in export

transactions is removed and the

provisions included in the Exporter

(U.S. principal party in interest)

responsibilities in export transactions,

which is now designated Section

30.4(b)(1).

(6) Section 30.4(b)(3) is now

designated Section 30.4(b)(2)

Forwarding or other agent

responsibilities.

(7) Section 30.4(c)(1) Designating a

forwarding or other agent in routed

export transactions is removed and the

provisions included in the Forwarding

agent responsibilities in routed export

transactions, that is now designated

Section 30.4(c)(2). Section 30.4(c)(2)

Exporter (U.S. principal party in

interest) responsibilities in routed

export transactions is now designated

section 30.4(1). Section 30.4(c)(3)

Forwarding agent responsibilities in

routed export transactions is now

designated Section 30.4(c)(2).

(8) Section 30.4(c)(1) is amended by

adding clarifying language to specify the

documentation requirements of the

exporter (U.S. principal party in

interest) in a routed export transaction

and to reference the current

documentation provisions as specified

in § 30.11.

(9) Section 30.4(c)(2) is amended by

clarifying the responsibilities of the

forwarding or other agent in a routed

export transaction, and by adding

specific language, in the regulation text,

to clarify the documentation and

Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules and Regulations 42561

documentation sharing responsibilities

of the forwarding or other agent in a

routed export transaction, as referenced

in § 30.11. In a routed export

transaction, upon request of the exporter

(U.S. principal party in interest), the

forwarding or other agent must provide

the exporter (U.S. principal party in

interest) with documentation verifying

that the information provided by the

exporter (U.S. principal party in

interest) was accurately reported on the

SED or AES record.

(10) Section 30.7(d)(1) and (2) is

amended by clarifying that for purposes

of completing the SED or AES record,

the exporter (U.S. principal party in

interest) must be listed as the ‘‘U.S.

principal party in interest,’’ that the U.S.

principal party in interest’s EIN or other

identification number be reported on

the SED or AES record, and clarifying

reporting responsibilities of a foreign

entity who is in the United States when

conducting an export transaction, and

not possessing an EIN or SSN. In such

situations, the foreign entity is required

to report a border crossing number, a

passport number, or any other number

assigned by U.S. Customs on the SED or

AES record in lieu of the EIN or SSN.

(11) Section 30.7(q) Value, is

amended by clarifying the provision for

reporting value information in an export

transaction. In all export transactions

the selling price or value to be reported

on the SED or AES record is the U.S.

principal party in interest’s price to the

foreign principal party in interest.

(12) Section 30.16 is amended by

revising provisions for submitting

corrections to SEDs for mail exports

filed with the U.S. Postal Service. The

Census Bureau will require that, in the

case of mail exports, exporters submit

corrections to SEDs directly to the

Census Bureau’s National Processing

Center in Jeffersonville, Indiana. Current

regulations require that corrections be

submitted through the Postmaster at the

post office where the export was mailed.

(13) Section 30.54, Special

exemptions for mail shipments, is

removed and reserved from this part.

This section is no longer necessary since

the Census Bureau is raising the value

limitation for when a SED or AES record

is not required from $500 or under to

$2,500 or under. This change in the

value requirement for mail exports,

brings mail exports under the same

provisions as for all other exports and

no further special exemptions are

required.

(14) Section 30.55(g) is amended by

updating and clarifying language to

reflect the Bureau of Export

Administration’s, Export

Administration Regulations for License

Exception GFT for single gift parcels.

(15) Section 30.55(h) is amended by

making the FTSR language consistent

with EAR provisions.

(16) Section 30.55 is further amended

by adding paragraphs (n) and (o).

Paragraph (n) will state that a SED or

AES record is not required for exports

of technology and software that does not

require a license, except that a SED or

AES record is required for mass market

software. For purposes of the FTSR,

mass market software is defined as

software that is generally available to

the public by being sold from stock at

retail selling points or directly from the

software developer or supplier, by

means of over the counter transactions,

mail order transactions, telephone

transactions, or electronic mail order

transactions, and designed for

installation by the user without further

substantial technical support by the

developer or supplier. Paragraph (o) will

state that a SED or AES record is not

required for any intangible exports of

software and technology, such as

downloaded software and technical

data, including technology and software

that requires an export license and

intangible mass market software

exported electronically.

(17) Section 30.58 is amended by

revising the phrase ‘‘validated export

license’’ to read ‘‘license’’ in paragraph

(c)(1) and by adding paragraph (c)(6) to

include provisions for the export of

items subject to the EAR that will be

transshipped through Canada to a third

destination.

(18) Section 30.70 is amended by

adding provisions to require importers

to provide certain import information to

the Census Bureau to verify the

accuracy of import data.

Rulemaking Requirements

This rule is exempt from all

requirements of Section 553 of the

Administrative Procedure Act because it

deals with a foreign affairs function (5

U.S.C.), 553(a)(1)).

Regulatory Flexibility Act

Because a notice of proposed

rulemaking is not required by 5 U.S.C.

553 or any other law, a Regulatory

Flexibility Analysis is not required and

has not been prepared (5 U.S.C. 603(a)).

Executive Orders

This rule has been determined to be

significant for purposes of Executive

Order (E.O.) 12866. This rule does not

contain policies with Federalism

implications sufficient to warrant

preparation of a Federalism assessment

under E.O. 13132.

Paperwork Reduction Act

Notwithstanding any other provision

of law, no person is required to respond

to, nor shall a person be subject to a

penalty for failure to comply with, a

collection of information subject to the

requirements of the Paperwork

Reduction Act (PRA) unless that

collection of information displays a

current valid Office of Management and

Budget (OMB) control number. In

accordance with the PRA, 44 U.S.C.,

Chapter 35, this rule’s collections of

information are cleared by the OMB

under OMB Control Number 0607–0152.

This rule will not impact the current

reporting-hour burden requirements as

approved under that OMB Control

Number. We will furnish report forms to

organizations included in the survey,

and additional copies are available on

written request to the Director, U.S.

Census Bureau, Washington, DC 20233–

0101.

List of Subjects in 15 CFR Part 30

Economic statistics, Exports, Foreign

trade, Reporting and recordkeeping

requirements.

For the reasons set out in the

preamble, 15 CFR Part 30 is amended as

follows:

PART 30—FOREIGN TRADE

STATISTICS

1. The authority citation for 15 CFR

Part 30 continues to read as follows:

Authority: 5 U.S.C. 301; 13 U.S.C. 301–

307; Reorganization Plan No. 5 of 1950 (3

CFR 1949–1953 Comp., 1004); Department of

Commerce Organization Order No. 35–2A,

August 4, 1975, 40 CFR 42765.

Subpart A—General Requirements—

Exporters

2.–3. Section 30.1 is amended by

adding paragraph (d) to read as follows:

§ 30.1 General statement of requirement

for Shipper’s Export Declarations.

* * * * *

(d) Electronic transmissions and

intangible transfers. Electronic

transmissions to be received outside the

United States and other intangible

transfers, such as downloaded software,

technical data, and technology, are not

subject to this part, but may be subject

to export control requirements under

other laws and regulations. See 15 CFR

parts 730 through 774 of the EAR.

4. Section 30.4 is revised to read as

follows:

§ 30.4 Preparation and signature of

Shipper’s Export Declaration (SED).

(a) General requirements (SED). For

purposes of this part, all references to

42562 Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules and Regulations

preparing and filing the paper SED also

pertain to preparing and filing the AES

electronic record. The SED or AES

record is a dual purpose document used

by the Census Bureau for statistical

reporting purposes only, and by the

Bureau of Export Administration (BXA)

and other government agencies for

export control purposes. For purposes of

this part, the provisions apply only to

statistical reporting requirements. The

Shipper’s Export Declaration (SED) or

the AES record must be prepared and

signed by a principal party in interest or

by a forwarding or other agent

authorized by a principal party in

interest. The person who signs the SED

must be in the United States at the time

of signing. That person, whether

exporter (U.S. principal party in

interest) or agent, is responsible for the

truth, accuracy, and completeness of the

SED or AES record, except insofar as

that person can demonstrate that he or

she reasonably relied on information

furnished by others. The Census Bureau

recognizes ‘‘routed export transactions’’

as a subset of export transactions. A

routed export transaction is where the

foreign principal party in interest

authorizes a U.S. forwarding or other

agent to facilitate export of items from

the United States. See paragraph (c) of

this section for responsibilities of

parties in a routed export transaction.

(1) Exporter (U.S. principal party in

interest). For purposes of completing the

paper SED or AES record in all export

transactions, the exporter (U.S.

principal party in interest) is listed as

the ‘‘U.S. principal party in interest’’ on

the SED or AES record. In all export

transactions, the person listed in the

U.S. principal party in interest block on

the paper SED or in the U.S. principal

party in interest field of the AES record

is the exporter (U.S. principal party in

interest) in the transaction. The U.S.

principal party in interest is the person

in the United States that receives the

primary benefit, monetary or otherwise,

of the transaction. Generally that person

is the U.S. seller, manufacturer, order

party, or foreign entity. The foreign

entity must be listed as the U.S.

principal party in interest on the SED or

AES record, if it is in the United States

when the items are purchased or

obtained for export. The foreign entity

must then follow the provisions for

preparing and filing the SED or AES

record specified in §§ 30.4 and 30.7

pertaining to the U.S. principal party in

interest. In most cases, the forwarding or

other agent is not a principal party in

interest.

(i) If a U.S. manufacturer sells

merchandise directly for export to a

foreign principal party in interest, the

U.S. manufacturer must be listed as the

U.S. principal party in interest on the

SED or AES record.

(ii) If a U.S. manufacturer sells

merchandise, as a domestic sale, to a

U.S. buyer (wholesaler/distributor) and

that U.S. buyer sells the merchandise for

export to a foreign principal party in

interest, the U.S. buyer (wholesaler/

distributor) must be listed as the U.S.

principal party in interest on the SED or

AES record.

(iii) If a U.S. order party directly

arranges for the sale and export of

merchandise to a foreign buyer, the U.S.

order party must be listed as the U.S.

principal party in interest on the SED or

AES record. The order party is that

person in the United States who

conducted the direct negotiations or

correspondence with the foreign

principal party in interest and who, as

a result of these negotiations, received

the order from the foreign principal

party in interest.

(iv) If a foreign entity is in the United

States when the items are purchased or

obtained for export, it is the exporter

(U.S. principal party in interest) and

must be listed as the U.S. principal

party in interest on the SED or AES

record (see § 30.4(a)(1)).

Note to paragraph (a)(1): The EAR defines

the ‘‘exporter’’ as the person in the United

States who has the authority of a principal

party in interest to determine and control the

sending of items out of the United States (see

15 CFR Part 772 of the EAR). For statistical

purposes the Foreign Trade Statistics

Regulations (FTSR) have a different

definition of ‘‘exporter’’ from the Export

Administration Regulations (EAR). Under the

FTSR the ‘‘exporter’’ will always be the U.S.

principal party in interest. For purposes of

licensing responsibility under the EAR, the

U.S. agent of the foreign principal party in

interest may be the ‘‘exporter’’ or applicant

on the license, in certain routed export

transactions (see 15 CFR 758.3 of the EAR).

(2) Forwarding or other agent. The

forwarding or other agent is that person

in the United States who is authorized

by a principal party in interest to

perform the services required to

facilitate the export of items from the

United States. The forwarding or other

agent must be authorized by the

exporter (U.S. principal party in

interest) or, in the case of a routed

export transaction, the foreign principal

party in interest to prepare and file the

SED or the AES record. In a routed

export transaction, the forwarding or

other agent can be the exporter for

export control purposes under the EAR.

However, the forwarding or other agent

is never the ‘‘U.S. principal party in

interest’’ in the U.S. principal party in

interest block on the paper SED or in the

‘‘U.S. principal party in interest’’ field

of the AES record unless the forwarding

or other agent acts as an ‘‘order party.’’

(See paragraph (a)(1)(iii) for definition

of order party)

(3) Principal parties in interest. Those

persons in a transaction that receive the

primary benefit, monetary or otherwise,

of the transaction. Generally, the

principals in a transaction are the seller

and the buyer. In most cases, a

forwarding or other agent is not a

principal party in interest.

(b) Responsibilities of parties in

export transactions. (1) Exporter (U.S.

principal party in interest)

responsibilities. (i) The exporter (U.S.

principal party in interest) can prepare

and file the SED or AES record itself, or

it can authorize a forwarding or other

agent to prepare and file the SED or AES

record on its behalf. If the exporter (U.S.

principal party in interest) prepares the

SED or AES record itself, the exporter

(U.S. principal party in interest) is

responsible for the accuracy of all the

export information reported on the SED

or AES record, for signing the paper

SED, filing the paper SED with U.S.

Customs, or transmitting the AES record

to U.S. Customs.

(ii) When the exporter (U.S. principal

party in interest) authorizes a

forwarding or other agent to complete

the SED or AES record on its behalf, the

exporter (U.S. principal party in

interest) is responsible for:

(A) Providing the forwarding or other

agent with the export information

necessary to complete the SED or AES

record;

(B) Providing the forwarding or other

agent with a power of attorney or

written authorization to complete the

SED or AES record, or signing the

authorization block printed on the paper

SED (block 23 on Commerce Form

7525–V and block 29 on Commerce

Form 7525–V-ALT); and

(C) Maintaining documentation to

support the information provided to the

forwarding or other agent for

completion of the SED or AES record, as

specified in § 30.11.

(2) Forwarding or other agent

responsibilities. The forwarding or other

agent, when authorized by an exporter

(U.S. principal party in interest) to

prepare and sign the SED or prepare and

file the AES record in an export

transaction, is responsible for:

(i) Accurately preparing the SED or

AES record based on information

received from the exporter (U.S.

principal party in interest) and other

parties involved in the transaction;

(ii) Obtaining a power of attorney or

written authorization to complete the

SED or AES record, or obtaining a paper

SED with a signed authorization from

Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules and Regulations 42563

the exporter (U.S. principal party in

interest);

(iii) Maintaining documentation to

support the information reported on the

SED or AES record, as specified in

§ 30.11; and

(iv) Upon request, providing the

exporter (U.S. principal party in

interest) with a copy of the export

information filed in the form of a

completed SED, an electronic facsimile,

or in any other manner prescribed by

the exporter (U.S. principal party in

interest).

(c) Responsibilities of parties in a

routed export transaction. (1) Exporter

(U.S. principal party in interest)

responsibilities. In a routed export

transaction where the foreign principal

party in interest authorizes a U.S.

forwarding or other agent to prepare and

file the SED or AES record, the exporter

(U.S. principal party in interest) must

maintain documentation to support the

information provided to the forwarding

or other agent for preparing the SED or

AES record as specified in § 30.11 and

provide such forwarding or other agent

with the following information to assist

in preparing the SED or AES record:

(i) Name and address of the U.S.

principal party in interest;

(ii) U.S. principal party in interest’s,

IRS, EIN;

(iii) Point of origin (State or FTZ);

(iv) Schedule B description of

commodities;

(v) Domestic (D), foreign (F), or FMS

(M) code;

(vi) Schedule B Number;

(vii) Quantity/unit of measure;

(viii) Value;

(ix) Upon request from the foreign

principal party in interest or its agent,

the Export Control Classification

Number (ECCN) or sufficient technical

information to determine the ECCN; and

(x) Any information that it knows will

affect the determination of license

authority.

Note to paragraph (c)(1): For items in

paragraph (c)(1)(ix) and (x) of this section,

where the foreign principal party in interest

has assumed responsibility for determining

and obtaining license authority, the EAR sets

forth the information sharing requirements

that apply at 15 CFR 758.3(c) of the EAR.

(2) Forwarding or other agent

responsibilities. In a routed export

transaction, the forwarding or other

agent is responsible for; obtaining a

power of attorney or written

authorization from the foreign principal

party in interest to prepare and file the

SED or AES record on its behalf;

preparing, signing, and filing the SED or

AES record based on information

obtained from the exporter (U.S.

principal party in interest) or other

parties involved in the transaction;

maintaining documentation to support

the information reported on the SED or

AES record, and upon request by the

exporter (U.S. principal party in

interest), provide appropriate

documentation to the exporter (U.S.

principal party in interest) verifying that

the information provided by the

exporter (U.S. principal party in

interest) was accurately reported on the

SED or AES record. The forwarding or

other agent must also provide the

following export information on the

SED or AES record:

(i) Date of exportation;

(ii) Bill of lading/airway bill number;

(iii) Ultimate consignee;

(iv) Intermediate consignee;

(v) Forwarding or other agent name

and address;

(vi) Country of ultimate destination;

(vii) Loading pier;

(viii) Method of transportation;

(ix) Exporting carrier;

(x) Port of export;

(xi) Port of unloading;

(xii) Containerized;

(xiii) Weight;

(xiv) ECCN;

(xv) License Authority;

(xvi) Signature in the certification

block on the paper SED (block 24 on

Commerce Form 7525–V and block 36

on Commerce Form 7525–V–ALT). In a

routed export transaction the exporter

(U.S. principal party in interest) must be

listed as U.S. principal party in interest

on the SED or on the AES record;

Note to paragraph (c)(2): For items in

paragraph (c)(2)(xiv) and (xv) of this section,

where the foreign principal party in interest

has assumed responsibility for determining

and obtaining license authority, the EAR sets

forth the information sharing requirements

that apply at 15 CFR 758.3(c) of the EAR.

(d) Information on the Shipper’s

Export Declaration (SED) or Automated

Export System (AES) record. The data

provided on the SED or AES electronic

record shall be complete, correct, and

based on personal knowledge of the

facts stated or on information furnished

by the parties involved in the export

transaction. All parties involved in

export transactions, including U.S.

forwarding or other agents, should be

aware that invoices and other

commercial documents may not

necessarily contain all the information

needed to prepare the SED or AES

record. The parties must ensure that all

the information needed for completing

the SED or AES record, including

correct export licensing information, is

provided to the forwarding or other

agent for the purpose of correctly

preparing the SED or AES record as

stated in this section.

(e) Authorizing a Forwarding or other

agent. In a power of attorney or other

written authorization, authority is

conferred upon an agent to perform

certain specified acts or kinds of acts on

behalf of a principal (see 15 CFR

758.1(h) of the EAR). In cases where a

forwarding or other agent is filing export

information on the SED or AES record,

the forwarding or other agent must

obtain a power of attorney or written

authorization from a principal party in

interest to file the information on its

behalf. A power of attorney or written

authorization should specify the

responsibilities of the parties with

particularity, and should state that the

forwarding or other agent has authority

to act on behalf of a principal party in

interest as its true and lawful agent for

purposes of the export transaction in

accordance with the laws and

regulations of the United States.

(f) Format requirements for SEDs: The

SED shall be prepared in English and

shall be typewritten or prepared in ink

or other permanent medium (except

indelible pencil). The use of duplicating

processes, as well as the overprinting of

selected items of information, is

acceptable.

(g) Copies of SEDs: All copies of the

SEDs must contain all of the

information called for in the signature

space as to name of firm, address, name

of signer, and capacity of signer. The

original SED must be signed in ink, but

signature on other copies is not

required. The use of signature stamps is

acceptable. A signed legible carbon or

other copy of the export declaration is

acceptable as an ‘‘original’’ of the SED.

5. Section 30.7 is amended by revising

paragraphs (d), (e) and (q)(1) to read as

follows:

§ 30.7 Information required on Shipper’s

Export Declarations.

* * * * *

(d) Name of the U.S. principal party

in interest and U.S. principal party in

interest’s Employer Identification

Number (EIN). For purposes of

completing the paper SED or AES

record the exporter (U.S. principal party

in interest) is the U.S. principal party in

interest. The name and address

(number, street, city, state, ZIP Code) of

the U.S. principal party in interest and

the U.S. principal party in interest’s EIN

shall be entered where requested on the

SED or AES electronic record. The EIN

shall be the U.S. principal party in

interest’s own and not another’s EIN.

(1) Name of the U.S. principal party

in interest. In all export transactions, the

person listed in the U.S. principal party

in interest block on the SED or in the

U.S. principal party in interest field on

42564 Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules and Regulations

the AES record must be the exporter

(U.S. principal party in interest) in the

transaction. The U.S. principal party in

interest is the person in the United

States that receives the primary benefit,

monetary or otherwise, of the export

transaction. Generally that person is the

U.S. seller, manufacturer, order party, or

foreign entity, if in the United States

when the items are purchased or

obtained for export. The foreign entity

must then follow the provisions for

preparing and filing the SED or AES

record specified in §§ 30.4 and 30.7

pertaining to the U.S. principal party in

interest. (See § 30.4 for details on the

specific reporting responsibilities of

exporter (U.S. principal party in

interest)).

(2) U.S. principal party in interest’s

Employer Identification Number (EIN).

An exporter (U.S. principal party in

interest) shall report its own Internal

Revenue Service (IRS) EIN in the U.S.

principal party in interest’s (IRS) EIN

block/field on the SED. If, and only if,

no IRS EIN has been assigned to the

exporter (U.S. principal party in

interest), the exporter’s (U.S. principal

party in interest) own SSN, preceded by

the symbol ‘‘SS,’’ must be reported on

the paper SED. On the AES record the

appropriate SSN symbol must be

reported. When a foreign entity is in the

United States when the items are

purchased or obtained for export it is

the exporter (U.S. principal party in

interest). In such situations, when the

foreign entity does not have an EIN or

SSN, a border crossing number, passport

number, or any number assigned by U.S.

Customs must be reported on the SED

or the AES record. On the paper SED,

the appropriate number should be

preceded by the symbol ‘‘T.’’ On the

AES record, the appropriate AES

identifier code as specified in the

Automated Export System Trade

Interface Requirements (AESTIR) must

be reported. Use of another’s EIN or SSN

is prohibited.

(e) Forwarding or other agent. The

name and address of the duly

authorized forwarding or other agent (if

any) of a principal party in interest must

be recorded where required on the SED

or AES record. (See § 30.4 for details on

the specific reporting responsibilities of

forwarding or other agents).

* * * * *

(q) Value. (1) In general, the value to

be reported on the Shipper’s Export

Declaration or AES record shall be the

value at the U.S. port of export (selling

price or cost if not sold, including

inland freight, insurance, and other

charges to U.S. port of export) (nearest

whole dollar; omit cents figures). The

‘‘Selling price’’ for goods exported

pursuant to sale, and the value to be

reported on the SED or AES record, is

the exporter’s (U.S. principal party in

interest) price to the foreign principal

party in interest, net any unconditional

discounts from list price, but without

deducting any discounts which are

conditional upon a particular act or

performance on the part of the

customer. Commissions to be paid by an

exporter (U.S. principal party in

interest) to his agent abroad, or to be

deducted from the selling price by the

agent abroad should be excluded. For

goods shipped on consignment without

a sale actually having been made at the

time of export, the ‘‘selling price’’ to be

reported on the SED or AES record is

the market value at the time of export

at the United States port from which

exported.

* * * * *

6. Section 30.16 is amended by

revising the first sentence to read as

follows:

§ 30.16 Corrections to Shipper’s Export

Declarations.

The Exporter (U.S. principal party in

interest) (or its agent) must report

corrections, cancellations, or

amendments to information reported on

Shipper’s Export Declarations to the

Customs Director at the port of

exportation (or, in the case of mail

shipments directly to the U.S. Census

Bureau, National Processing Center,

Attention: Foreign Trade Section, 1201

East 10th Street, Jeffersonville, Indiana

47132) as soon as the need to make such

correction, cancellation, or amendment

is determined.***

Subpart D—Exemptions from the

Requirements for the Filing of

Shipper’s Export Declarations

§ 30.54 [Removed and reserved]

7. Section 30.54 is removed and

reserved.

8. Section 30.55 is amended by

revising paragraphs (g) and (h), adding

paragraphs (n) and (o), and removing

the authority citation at the end of the

section, to read as follows:

§ 30.55 Miscellaneous exemptions.

* * * * *

(g) Shipments of single gift parcels as

authorized by the Bureau of Export

Administration under License

Exception GFT, see 15 CFR 740.12 of

the EAR.

(h) Except as noted in paragraph (h)(2)

of this section exports of commodities

where the value of the commodities,

shipped from one exporter to one

consignee on a single exporting carrier,

classified under an individual Schedule

B number, is $2,500 or less.

(1) This exemption applies to

individual Schedule B commodity

numbers regardless of the total

shipment value. In instances where a

shipment contains a mixture of

individual Schedule B commodity

numbers valued $2,500 or less and

individual Schedule B commodity

numbers valued over $2,500, only those

commodity numbers valued $2,500 or

more need be reported on a Shipper’s

Export Declaration or AES record.

(2) This exemption does not apply to

exports:

(i) Destined for Cuba, Iran, Iraq, Libya,

North Korea, Serbia (excluding Kosovo),

Sudan and Syria.

(ii) Requiring a Department of

Commerce license (15 CFR Parts 730

through 774 of the EAR).

(iii) Requiring a Department of State,

Office of Defense Trade Controls export

license under the International Traffic

In Arms Regulations (ITAR) (22 CFR

Parts 120 through 130).

(iv) Subject to the ITAR but exempt

from license requirements.

(v) Requiring a Department of Justice,

Drug Enforcement Administration

export permit (21 CFR Part 1312). This

exemption shall be conditioned upon

the filing of such reports as the Bureau

of the Census shall periodically require

to compile statistics on $2,500 and

under shipments.

* * * * *

(n) Exports of technology and

software as defined in 15 CFR Part 772

of the EAR that do not require an export

license, except that an SED or AES

record is required for mass market

software. For purposes of the FTSR,

mass market software is defined as

software that is generally available to

the public by being sold at retail selling

points, or directly from the software

developer or supplier, by means of over

the counter transactions, mail order

transactions, telephone transactions, or

electronic mail order transactions, and

designed for installation by the user

without further substantial technical

support by the developer or supplier.

(o) Intangible exports of software and

technology, such as downloaded

software and technical data, including

technology and software that requires an

export license and mass market software

exported electronically.

9. Section 30.58 is amended by

revising the phrase ‘‘validated export

license’’ to read ‘‘license’’ in paragraph

(c)(1), and by adding paragraph (c)(6) to

read as follows:

Federal Register / Vol. 65, No. 132 / Monday, July 10, 2000 / Rules and Regulations 42565

§ 30.58 Exemption for shipments from the

United States to Canada.

* * * * *

(c) * * *

(6) For all exports of items subject to

the EAR (15 CFR Parts 730 through 799)

that will be transhipped through Canada

to a third destination, that would

require an SED, AES record, or

Commerce license if shipped directly to

the final destination from the United

States (see § 30.55(h)(2), including

exports of items subject to the EAR that

will be transhipped through Canada to

Cuba, Iran, Iraq, Libya, North Korea,

Serbia (excluding Kosovo), Sudan, and

Syria.

Subpart F—General Requirements—

Importers

10. Section 30.70 is amended by

redesignating footnote 9 as footnote 7

and adding a sentence before the last

sentence of the introductory text to read

as follows:

§ 30.70 Statistical information required on

import entries.

* * * Upon request, the importer or

import broker must provide the Census

Bureau with information or

documentation necessary to verify the

accuracy or resolve problems regarding

the reported import transaction received

by the Census Bureau.* * *

* * * * *

Dated: June 29, 2000.

Kenneth Prewitt,

Director, U.S. Census Bureau.

[FR Doc. 00–16895 Filed 7–6–00; 8:45 am]

BILLING CODE 3510–07–P

DEPARTMENT OF COMMERCE

Bureau of Export Administration

15 CFR Parts 732, 740, 743, 748, 750,

752, 758, 762, 772, and 774

[Docket No. 990709186–0128–02]

RIN 0694–AB88

Parties to a Transaction and Their

Responsibilities, Routed Export

Transactions, Shipper’s Export

Declarations, the Automated Export

System (AES), and Export Clearance

AGENCY: Bureau of Export

Administration, Commerce.

ACTION: Final rule.

SUMMARY: The Bureau of Export

Administration is revising the Export

Administration Regulations (EAR) to

clarify the responsibilities of parties to

export and reexport transactions, the

filing and use of Shipper’s Export

Declarations, Destination Control

Statement requirements, and other

export clearance issues. In addition, this

rule adds information about the scope

and requirements for the Automated

Export System (AES) Option 4

provision.

DATES: Effective Date: This rule is

effective July 10, 2000.

Grace Period: A 90 day grace period

will apply to the requirements set forth

in this rule. Until October 10, 2000,

Shipper’s Export Declarations will be

accepted with information that complies

with the rules prior to July 10, 2000.

FOR FURTHER INFORMATION CONTACT:

Sharron Cook, Regulatory Policy

Division, Bureau of Export

Administration, at (202) 482–2440.

For additional information on the

AES in general, please contact: C.

Harvey Monk, Chief Foreign Trade

Division, U.S. Census Bureau, (301)

457–2255, fax (301) 457–2645, e-mail:

c.harvey.monk.jr@census.gov

For information about obtaining BXA

approval to use AES Option 4 for items

subject to the EAR, contact: Tom

Andrukonis or Donald Lyles, Director,

Office of Enforcement Analysis, Bureau

of Export Administration, (202) 482–

4255, fax (202) 482–0971, e-mail:

tandruko@bxa.doc.gov

SUPPLEMENTARY INFORMATION:

Background

The Bureau of Export Administration

(BXA) is amending the Export

Administration Regulations (EAR) in

order to simplify and clarify the export

clearance process and facilitate

compliance. The amendment promotes

flexibility so that parties to transactions

subject to the EAR may structure their

transactions freely, consistent with

national security and foreign policy

objectives.

In this final rule, BXA defines new

terms, including ‘‘principal parties in

interest’’, ‘‘routed export transaction’’,

and ‘‘end-user’’, and clarifies existing

ones (notably the definition of

‘‘exporter’’). The amendments ensure

that for every transaction subject to the

EAR, some party to the transaction is

clearly responsible for determining

licensing authority (License, License

Exception, or NLR), and for obtaining

the appropriate license or other

authorization. The amendments also

encourage communication among all

parties to a transaction to ensure that

each party knows its responsibilities in

order to comply with the EAR.

For export control purposes the

exporter has generally been the seller.

An export transaction, however, has two

principal parties in interest: a U.S. party

and a foreign party—usually the seller

and the buyer. In a ‘‘routed export

transaction,’’ the foreign principal party

in interest agrees to terms of sale that

may include assuming responsibility for

export licensing. This rule provides that

when the foreign principal party

expressly assumes responsibility in

writing for determining license

requirements and obtaining necessary

authorization, that foreign party must

have a U.S. agent who becomes the

‘‘exporter’’ for export control purposes.

Without such a written undertaking by

the foreign principal, the U.S. principal

is the exporter, with all attendant

responsibilities.

In addition to clarifying export

licensing responsibilities, this rule

institutes a requirement that the export

licensee communicate license

conditions to those parties to whom

conditions apply and, when required by

the license, obtain written

acknowledgment of receipt of the

conditions. This new provision is part

of BXA’s License and Enforcement

Action Program (LEAP), which is

designed to enhance compliance with

the EAR.

In addition, these amendments

significantly revise the first six sections

of Part 758 of the EAR by reorganizing,

streamlining and clarifying necessary

provisions while deleting unnecessary

or redundant provisions. Section 758.1

consolidates into one section the export

control-related provisions pertaining to

the SED or AES record. In consolidating

these provisions into one section, BXA

has eliminated those that are already

contained in the FTSR, or that were

otherwise unrelated to export controls.

Section 758.2 provides new rules for

BXA’s AES Option 4 approval process.

Commenters asked that this be added to

the final regulation. Section 758.3

clarifies and consolidates provisions

relating to the responsibilities of the

parties, and § 758.4 consolidates, but

does not significantly change,

provisions concerning the use of an

export license. Section 758.4, which

contained very specific provisions

relating to conformity of documents, has

been greatly simplified in the interest of

flexibility, and moved to section 758.5.

Former sections 758.5 (general

destination control requirements) and

§ 758.6 (destination control statement)

have been combined and reduced to one

paragraph at § 758.6.

Lastly, section 762.7 is amended to

add language that clarifies that BXA has

legal authority to issue subpoenas

requiring individuals to appear and

testify during the investigatory phase of

an export case. The authority for this is

found in both the Export Administration