U.S. Customs and Border Protection (CBP) implemented Electronic Export Information (EEI) filing in AES on July 2, 2008, and penalties for noncompliance were issued starting February 1, 2009. All information in the export declaration submitted to CBP must be complete and accurate, regardless of whether the exporter is approved for pre- or post-departure filing.
AES Filing Rules and Requirements
The EEI is the replacement of the paper-based Shipper’s Export Declaration (SED). Exporters must transmit the EEI in AES for all commercial shipments valued at over $2,500 going to countries other than Canada. Regardless of value, the EEI filing requirement is also mandatory for all shipments that require a license/permit, shipments containing rough diamonds, USML or ITAR shipments, and shipments going to Cuba, Sudan, Syria, North Korea and Iran. Exporters sending shipments containing their personal/household goods valued at over $2,500 to a destination other than Canada must also file the EEI in the AES.
It is the responsibility of the U.S. Principal Party in Interest (USPPI), or the individual who benefits the most from the export transaction (usually the exporter or seller), to prepare and file the EEI in the AES or AESDirect in ACE. The exporter may also authorize a third party filer such as a carrier, freight forwarder, shipping agent or service provider to file the EEI.
EEI filing deadlines depend on the mode of transport and type of commodity/export. For example, shipments on the USML (U.S. Munitions List) of the ITAR (International Trade in Arms Regulations) require EEI filing earlier than non-USML shipments. In general, CBP must validate and receive the EEI filing no later than two hours before export for non-ITAR shipments and no later than eight hours before export for ITAR shipments.
Exporters must understand the filing timeframes to avoid penalties, repeat violations and seizure of shipments. Exporters should also obtain the correct Schedule B number for the commodity from the Census Bureau and report it in the AES. The Schedule B number is used to identify and track the goods being exported.
Common Violations and AES Filing Penalties
Monetary and criminal penalties may be issued to exporters who fail to file complete, true, accurate and timely EEI in the AES. Penalties may also be issued for parties that use the AES for illegal activities. Late filing, incorrect filing or non-filing of EEI is a violation of the Foreign Trade Regulations (FTR) and subject to a fine of $1,100 per day up to a maximum of $10,000.
Late EEI Filing
One of the most common reasons for receiving a fine or penalty is late filing of the EEI. Late filing occurs when the EEI is filed beyond the due time and date. EEI filed later than 10 days after the due date is considered a non-filing or failure to file. EEI that is filed after CBP discovers and communicates the violation to the exporter is also considered failure to file. The penalty for late filing is $1,100.00 per day up to a maximum of $10,000.00 and possible imprisonment for up to five years.
Failure to File
Failure to file is when CBP discovers that there is no record in the AES for an export transaction, and the discovery is communicated to the USPPI, exporter or agent before the violation is corrected. In addition, EEI filed later than 10 days after the due date is considered a failure to file, regardless of whether or not it was discovered by CBP. The fine for failure to file is $1,100.00 per day and up to a maximum of $10,000.00.
Errors in the EEI Filing
Another reason for penalties is errors in the EEI. Examples of common errors are reporting the wrong HTS/Schedule B Code, vague or incorrect description of the goods, reporting incorrect value, wrong USPPI and consignee, wrong port of export, failure to cite the license code or number, failure to obtain a Power of Attorney for EEI transmission, failure to indicate a routed export transaction, and failure to correct EEI errors as they are discovered. Failure to send the proof of filing (ITN or exemption citation) to the carrier is also a violation. AES will send a notification message when there is an error in the EEI filing. Failure to correct the error and re-submit the filing may lead to fines up to $10,000.
Failure to Keep Records
CBP and the Census Bureau require USPPIs, exporters, carriers and agents to retain ITNs and export documents for five years. Failure to do so is a violation of FTR and subject to penalties. CBP may conduct audits from time to time to verify whether the exporter or business reported accurate export information in the AES.
Penalties for Carriers
Exporting carriers may also receive penalties for violations such as late eManifest filing, failure to report the proof of filing or exemption citation in the export manifest, and failure to communicate to the USPPI/exporter changes to the export date and port of export. The maximum penalty amount for noncompliant carriers is $10,000. For late export manifest filing, the penalty is $1,000 per day for each day late, up to $10,000 per violation. If there are mitigating factors, the carrier may receive a fine at the lower end of the mitigation range. If there are aggravating factors, the penalty is assessed at the high end of the mitigation range.
Mitigation Filing Penalties
In some cases, mitigation of penalties is possible. If mitigating factors (first-time filer, history of good cooperation with CBP, isolated incident, voluntary disclosure of failure to file, etc.) exist, the penalty may be mitigated at the lower end of the penalty range. If aggravating factors (several errors in the EEI, intentional violation, frequent violations in the past three years, absence of export compliance processes, etc.) exist, the penalty may be mitigated at the high end of the penalty range.
For example, a first time filer may receive a fine of $750 for failure to file, while a repeat offender may receive $2000 to $10,000 for the same violation. A first-time late filer may receive a $250 fine if mitigating factors exist and $1,100 or more per day if there are aggravating factors.
Avoid AES Filing Penalties with GeTS Solutions
To avoid AES filing penalties, make sure to file complete and timely EEI in the AES and provide your carrier with the ITN (proof of filing citation) or exemption legend long before the submission deadline. Another way to boost compliance and avoid penalties is to work with a trusted, CBP-approved service provider.
Global eTrade Services (GeTS) is a leader in global trade facilitation, with many years of experience in export management and customs compliance optimization for U.S. exporters. GeTS offers AES filing solutions based on the software-as-a-service model.
GeTS AES service allows exporters to file EEI quickly and receive AES notifications via a web-based application or software integrated with in-house systems. GeTS AES features secure corporate accounts, 24/7 customer support, report generation, advanced integration, and multiple plans and connectivity options.
GeTS can also file export data directly to CBP on your behalf. We process requests via fax or email and send confirmation of acceptance from CBP by phone, email or SMS. Filers with an AESDirect Exporter Account can track submissions and notifications online.