OMG.
All the acronyms we use in exporting can make you feel a little overwhelmed. If you’re a little unsure how the FPPI fits into this alphabet soup, you’re not alone. Here’s what you need to know about the Foreign Principal Party in Interest (FPPI) in plain English.
When most people talk about exporting, they use simple terms to define the various parties in the transaction. The exporter is the person or organization that is selling the goods to a foreign buyer. That foreign buyer is the ultimate consignee; the person who ultimately receives the goods. It all seems simple and very straight forward.
But as we know, export transactions aren’t always that simple. What if the seller is sending the goods to an agent of the buyer who is located in the United States who will then forward it onto the ultimate consignee? Who is the exporter? Who is the ultimate consignee?
The U.S. Foreign Trade Regulations (FTR) details when electronic export information (EEI) must be filed through the Automated Export System (AES), and it outlines specific responsibilities of each of the parties in that transaction. Because of that, the definition of each party needs to be precise.
The FTR defines a U.S. Principal Party in Interest (USPPI), which may or may not be the same entity as the U.S. person or organization selling the goods. (See my blog post explaining who is the USPPI.) And the FTR defines the FPPI, who is the foreign buyer of the goods and may be the ultimate consignee.
For purposes of this article, we are concerned about the responsibilities the FTR assigns an FPPI who requests to have their merchandise delivered by the U.S. seller to another location within the United States. This is called a routed export transaction, which you can learn more about in the article, Standard vs. Routed Export Shipment: What's the Difference?
Here’s the official definition outlined on the U.S. Census Bureau website:
The FPPI is the party shown on the transportation document to whom final delivery or end-use of the goods will be made. This party may be the ultimate consignee. Generally the FPPI is the foreign buyer of the goods that are purchased or obtained for export. In a routed export transaction the FPPI is responsible for facilitating the movement of the cargo and authorizing a U.S. agent (freight forwarder) or the U.S. Principal Party in Interest to file the export information.
In a routed export transaction the FPPI is responsible for these things:
Meanwhile, it’s the responsibility of the USPPI to provide the buyer's forwarder with the necessary export information, including their EIN, in order to file through AES. The forwarder will supply the transportation information.
In one word: compliance.
A routed export transaction requires that the person who files through AES resides in the U.S., which obviously excludes the FPPI. The FPPI must give their U.S. agent (typically their freight forwarder) or the USPPI authorization to prepare and file the EEI through AESDirect on their behalf.
In the Census Bureau’s Global Reach blog, they recommend that the USPPI request the POA to file through AES on behalf of the FPPI. I wholeheartedly agree. By filing through AES even in a routed export transaction, the USPPI can be assured that the EEI is filed accurately and reduce their risk.
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This article was first published in February 2015 and has been updated to include current information, links and formatting.