Background

Federal agencies should amend their rules so that some export data elements are submitted by carriers and others are submitted by exporters, an advisory group recently told U.S. Customs and Border Protection.

In a white paper summarizing years of work on modernizing the export reporting process, a Commercial Customs Operations Advisory Committee working group comprising both government and private-sector members said it had analyzed each data element submitted in the electronic export information and the export manifest, defining who currently submits it and which entity has the most accurate information. Concluding that the owner of the data would possess the most accurate data (a finding supported by a review of rail manifest data in 2020 and 2021), the working group said the following data elements should be required from the carrier and come from the manifest instead of the EEI filer: date of transport, method of transportation, conveyance name/carrier, carrier identification, port of export, and foreign port of unlading.

These data elements are currently the responsibility of the EEI filer, which must obtain them, file them, check with the carrier for final details, and submit the final data received via EEI. The working group noted that if the data elements are given incorrectly or not at all by the carrier it is the filer, not the carrier, that is subject to CBP fines. While filers frequently protest those fines (another administrative burden) and CBP usually mitigates them, filers are still left with “quite a large fine” for “bad data coming from the carrier.” In addition, the mitigated amounts supersede the costs incurred by CBP to process the penalties.

The working group said changing the responsibility for these data elements from the EEI to the manifest would be part of a broader progressive filing model that distinguishes between shipment and transportation information and allows each to be submitted at different times. This would “enable CBP to effectively target, identify, and mitigate risks while simultaneously minimizing disruption to cargo operations,” the working group said, “thus facilitating the  movement of legitimate cargo.”

In conjunction with this change, the working group said CBP should impose fewer penalties for “inconsistencies in data that is not critical to the targeting process” and instead focus on “preventing negligent disregard of U.S. export control laws and regulations or a consistent inability to file required data accurately and on time.” For example, the working group suggested that CBP impose holds instead of penalties to allow filers to correct clerical errors, said no penalties should be issued against filers voluntarily updating previously submitted information or submitting voluntary prior disclosures of export violations, and called for penalties to be mitigated based on the filer’s history of compliance or membership in trusted trader programs.

For more information on export filing requirements please contact attorney Kristine Pirnia via email.

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