AAEI Says Proposed EAR Routed Export Changes Burdensome for Exporters
The Commerce Department’s Bureau of Industry and Security (BIS) proposal to modify the Export Administration Regulations (EAR) may fail to address the inherent export compliance problems with “routed export transactions,” said American Association of Exporters and Importers President Marianne Rowden in comments on the proposed rule dated April 7. Under the proposal, in transactions where the foreign principal party in interest (FPPI) is the exporter, currently known as a "routed export transactions" (i.e., where the foreign party serves as the exporter), the FPPI would have to direct its U.S. agent to share certain transaction information with the U.S. Principal Party in Interest (USPPI) (see 14020524). But even if authorized, that information is often difficult to get from the FPPI's U.S. agent, said Rowden.
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The FPPI often uses its freight forwarder as the U.S. agent. "However, because the USPPI does not have any formal relationship with the FPPI's freight forwarder it is extremely difficult or impossible to obtain this information after the export transaction has occurred," said AAEI. "While this is particularly problematic with small freight forwarders, many of our members have also experienced similar problems in obtaining EEI filings from large freight forwarders when the FPPI is responsible for the export transaction."
Because of that difficulty, implementing the change would require the USPPI to divert precious resources. The "significant time" that would have to be expended to get the filings, as well as the diversion of "much needed resources" from more pressing export compliance matters, should be taken into account in any analysis of the economic impact the proposed regulations would have on U.S. exporters, said AAEI.