In the first part of this series, How to Determine the USPPI, we discussed the definition and history behind the U.S. Principal Party in Interest (USPPI). In this article, we’ll talk about what the USPPI is responsible for in an export transaction.
Once you have an understanding of who the USPPI is, the next step is to make sure you understand what your responsibilities as a USPPI are. Even if you’re not going to board the ship and go overseas, you must make sure you’re doing these things in order to stay compliant and maintain your legal responsibility.
1. Determine who has jurisdiction over your products.
This is the first step in export compliance. What you determine about jurisdiction will set the stage for the actions you can and can’t take, and it will determine whether you will or will not face any export restrictions or licensing requirements. Our article, Who Has Jurisdiction over Your Exports?, has some valuable advice for determining jurisdiction, including the steps you should take to make the determination.
2. Classify your items.
Once you’ve determined who has jurisdiction over your exports, you’ll need to classify your items.
- You’ll need to classify your products based on Schedule B or the U.S. Harmonized Tariff Schedule (HTS).
- You’ll also need to determine if your product needs a license based on the Commerce Control List’s ECCN or ITAR’s U.S. Munitions List. Whether your product needs a license or not depends on its technical characteristics, the destination, the end users and the end uses.
We know you’d like to spend as little time as possible classifying your items. However, you also know how important it is to do the job correctly. Instead of spending hours trying to figure out regulations, our Trade Wizards can take the headache out of the process and get you up and running quickly.
You can quickly search for the correct Schedule B number, HS code, or ECCN number using our Product Classification Trade Wizard. Then, you can identify if your product needs a license using our Export Controls Wizard. (And you can try them both for free!)
3. File through AES or authorize your forwarder to file on your behalf.
You’re responsible for filing Electronic Export Information (EEI) into the Automated Export System (AES) or authorizing your forwarder to file through AES on your behalf.
You can sign a power of attorney or Shipper’s Letter of Instruction (SLI) to do this. According to the NCBFAA, “POAs should specify the responsibilities of the parties with particularity and should state that the forwarder has the authority to act on behalf of the Principal Party in Interest as its true and lawful agent for purpose of filing the EEI in accordance with the laws and regulations of the U.S. On routed export transactions, authorization is the responsibility of the Foreign Principal Party in Interest (FPPI).”
To learn more about this process, check out our white paper, Filing Your Export Shipments Through AES.
4. Provide data to the forwarder, so they can file through AES.
If you choose to use a freight forwarder to file through AES on your behalf, you should make sure you’re giving them the most accurate data you can. For example, if the forwarder uses the wrong Tax ID number and your shipment is audited, the audits may show shipments you have nothing to do with. However, you are liable for the mistake!
For routed export transactions, the USPPI must provide the following data to the authorized freight forwarder or other agent in order for the freight forwarder to file through AES:
- The name and address of the USPPI.
- The employer identification number or other tax identification number of the USPPI.
- The point of origin for the merchandise awaiting exportation.
- The appropriate merchandise code, Domestic (D) or Foreign (F).
- The appropriate Schedule B number.
- The appropriate Schedule B description of commodities.
- The appropriate quantity and unit of measure.
- The appropriate value.
- The appropriate export control classification number (ECCN) or enough technical information to determine the ECCN.
5. Do your due diligence on your customers.
One of the most important responsibilities you have is to make sure the end users of your products aren’t restricted. Because you are ultimately responsible and liable for every transaction, you can’t self-blind or think someone else is going to do the job.
One of the most important things you can do to prepare for this is to attend the BIS’s Complying With U.S. Export Controls seminar. This two-day program provides an in-depth examination of the EAR and covers information exporters need to know to comply with U.S. export control requirements on commercial goods. You should also read Don’t Let This Happen To You, a BIS publication that outlines export requirements and provides real-life examples of penalties.
Additionally, there are dozens of lists you should check regularly, which, although time-consuming, is absolutely critical to the success of your exporting operation. Or, you can use Shipping Solutions export document software—we check and update the lists in real time for you, so your documentation is always up to date. Click here to try it for free.
By making sure you take care of each of these five things on every export transaction, you can avoid penalties and delays in your shipment and payment.