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Foreign Trade Regulations Amended to Reflect Sharing of Export Data Under ITDS

Friday, August 22, 2014
Sandler, Travis & Rosenberg Trade Report

The Census Department has issued an interim final rule amending the Foreign Trade Regulations to reflect changes related to the implementation of the International Trade Data System and subsequent changes to access to electronic export information. This rule is effective as of Aug. 22 and comments on it are due no later than Oct. 21.

EEI is the electronic equivalent of the export data formerly collected on the Shipper’s Export Declaration and includes information such as the exporter’s name, address and identification number as well as detailed information concerning the exported product. Traditionally, Census states, other federal agencies have used EEI for export control purposes to detect and prevent the export of certain items by unauthorized parties or to unauthorized destinations or end users. EEI is exempt from public disclosure unless the Department of Commerce determines that such exemption would be contrary to the national interest.

Census states that because ITDS will establish a single portal system for the collection and distribution of standard electronic import and export data required by all participating federal agencies, the Automated Export System will include export information collected under other federal agencies’ authority, which is subject to those agencies’ disclosure mandates. In addition, access and use of EEI by other federal agencies will increase under ITDS.

As a result, this rule clarifies provisions on the confidentiality of EEI to allow federal agencies with appropriate authority to access export data in AES. The ultimate goal, Census states, is to facilitate the legitimate sharing of export data to both help ensure the efficient and timely flow of exports and protect U.S. interests in export controls and enforcement.

Use of EEI by Federal Agencies. Under this rule, EEI may be viewed and used by federal agencies authorized to use export data for official purposes, which includes the following.

-  improving compliance with U.S. export laws and regulations

- detecting and preventing violations of export, census, customs, homeland security, national resource and other laws, regulations and treaties

- analysis to assess threats to U.S. and international security, such as money laundering, and other potential violations of U.S. and foreign criminal laws

- enforcement of U.S. export-related laws and regulations

- investigation and prosecution of possible violations of U.S. export-related laws and regulations

- proof of export for enforcement of laws relating to exemption from or refund, drawback or other return of taxes, duties, fees or other charges

- analyzing the impact of proposed and implemented trade agreements and fulfilling U.S. obligations under such agreements

- preparation of statistics

Disclosure of EEI. Census may provide EEI to the U.S. principal party in interest or its authorized agent for compliance and audit purposes, but such disclosure will be limited to that information provided to AES by the USPPI or the authorized agent. In addition, USPPIs and their authorized agents or representatives may not disclose the official report of the EEI submitted to the U.S. government in any amount or form for non-official purposes, which include (1) in support of claims for exemption from federal or state taxation (with certain exceptions), (2) to the U.S. Internal Revenue Service for purposes not related to export control or compliance, (3) to state and local government agencies and non-governmental entities or individuals for any purpose, and (4) to foreign entities or foreign governments for any purpose.

EEI collected and accessed by Census is exempt from public disclosure unless DOC determines that such exemption would be contrary to the national interest. If disclosure is deemed to be in the national interest, DOC must take such safeguards and precautions to limit dissemination as deemed appropriate under the circumstances. In determining whether an exemption is contrary to the national interest, the maintenance of confidentiality and national security must be considered as important elements of national interest.

Penalties. Any federal government officer, employee, contractor  or agent who discloses confidential EEI except as provided for in this rule will be subject to civil penalties.

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