“Big Changes to the Foreign Trade Regulations — Including Some Big Mistakes”

Author:  Jim Bartlett, Law Office of James E. Bartlett III, PLLC, Washington, DC, and Partner, Full Circle Compliance, BV, Bruchem, Netherlands; 202-802-0646 or JEBartlett@JEBartlett.com.

The amendments to the Foreign Trade Regulations (FTR) made April 19, 2017, by 82 FR 18383-18393, take effect tomorrow, July 18th.  This is a major change of over 100 sections of the FTR, the regulation from the Bureau of the Census that requires statistical reporting of most exports from the United States under the Automated Export System and the filing of Electronic Export Information (EEI) reports.  Most of the changes are related to implementing the International Trade Data Systems (ITDS), the means by which the data collection of U.S. Government agencies will be incorporated into the design of the Automated Commercial Environment (ACE).

The changes made in this Final Rule are as follows:
  – Amend the proposed rule to remove the definition and filing requirement for the used electronics indicator.
  – Section 30.1(c) is amended to revise the definition of “Carrier” to include a Non Vessel Operating Common Carrier (NVOCC) as an example of a carrier because the Automated Export System Trade Interface Requirements allows the Standard Carrier Alpha Code of a NVOCC to be reported.
  – Section 30.1(c), is amended to add the definition of “U.S. Postal Service customs declaration form” to identify the shipment document used for exports by mail.
  – Section 30.1(c), is amended to revise the definition of “Commercial loading document” to include the U.S. Postal Service customs declaration form as an example of a commercial loading document.
  – The note to Sec. 30.2(a)(1)(iv) is amended to add Country Group E:2 to ensure consistency with the Export Administration Regulations (EAR).
  – Section 30.2(c) is amended to clarify the application and certification process by dividing the section based on the filing method, AESDirect or methods other than AESDirect. As a result, the title was amended to read as “Application and Certification Process” as opposed to “Certification and Filing Requirements.”
  – Section 30.3(e)(2) is amended to add language requiring the authorized agent to provide the filer name in addition to the Internal Transaction Number (ITN) and date of export as proposed in the NPRM, when requested by the U.S. Principal Party in Interest in a routed transaction.
  – Section 30.4(b)(2)(v) is amended to read “mail” rather than “mail cargo” and the phrase “filing citation or exemption legend” will be revised to read “proof of filing citation, postdeparture filing citation, AES downtime filing citation, exemption or exclusion legend.”
  – Section 30.8(a) is amended to more accurately reflect U.S. Postal Service operations.
  – Section 30.16(d) is amended to add Country Group E:2 to ensure consistency with the EAR.
  – Section 30.28 is amended to add language removed from 30.28(c) to the opening paragraph.
  – Section 30.29(a)(2) is amended by clarifying that a license value is only required to be reported for shipments licensed by a U.S. Government agency.
  – Section 30.29(b)(2) is amended to replace the term “commercial document” with the defined term “commercial loading documents”.
  – Section 30.37(y) is amended to add Country Group E:2 to ensure consistency with the EAR.
  – Delete Appendices B, C, E and F because the Appendices were initially created to assist the trade in transitioning from the Foreign Trade Statistics Regulations (FTSR) to the FTR and are no longer necessary. As a result of deleting Appendices B, C, E, and F, Appendix D is redesignated as Appendix B.
Unfortunately, the FTR amendments going into effect tomorrow contain numerous errors. Census will probably correct them in an FTR Letter in a few days, then follow with an official Federal Register corrective notice. Among the errors are:
(1) Appendix B was deleted by the amendment, but FTR § 30.6(a)(18), Export information code, states, “For the list of the codes see Appendix B.” The Export Information Codes, previously in Part II of Appendix B, no longer exist, yet § 30.6(a)(18) still directs the reader to Appendix B, which is now titled “Appendix B to Part 30-AES Filing Citation, Exemption and Exclusion Legends,” and contains no Export Information Codes.
(2) Appendix C was deleted by the amendment, but the FTR still references “Appendix C” in § 30.52.
(3) Appendix D was renamed as Appendix B, and there is no longer an Appendix D, but references to “Appendix D” remain in FTR § 30.1(c), § 30.4(c)(3), § 30.7(b), and § 30.8.
(4) The Federal Register editors in 2013 inserted an Editorial Note following section 30.1, explaining that they could not incorporate the Kimberly Process Certificate (KPC) amendment because of inaccurate amendatory instructions. Today’s new version leaves that 4 year-old error message in place.
Would you like a printed copy of the FTR?  Although GPO’s “e-CFR” Internet edition will update the on-line edition of the FTR in a few days, the most usable version of the FTR is FCC’s version, Bartlett’s Annotated FTR (“The BAFTR”), available for downloading today in Word format from Full Circle Compliance.  Distributed as a Word file, you can read it on your laptop or print it out to 148 pages for your 3-ring binder. The BAFTR contains the full text of the regulation plus all FTR amendments, FTR Letters, Notices, a huge Index, and footnotes containing case annotations, practice tips, and Census/AES guidance.  The footnotes also point out the many errors in the official text.  Subscribers receive revised copies every time the FTR is amended. The BAFTR is available by annual subscription from the Full Circle Compliance website.  BITAR subscribers are entitled to a 25% discount on subscriptions to the BAFTR.
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