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Navigating Routed Exports: Compliance Challenges and Responsibilities

In the complex landscape of routed exports, compliance is crucial yet fraught with challenges. As outlined by Paul DiVecchio, today's export climate is messy, with varying interpretations of regulations and responsibilities. Key issues include detentions, seizures, and investigations, often stemming from improper AES filings or outdated licensing information. Exporters and freight forwarders must work closely to ensure complete and accurate information, manage compliance risks, and adapt to changing regulations. This guide emphasizes accountability, training, and effective communication between parties to navigate the complexities of export compliance successfully.

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Navigating Routed Exports: Compliance Challenges and Responsibilities

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  1. MA. EXPORT CENTER Routed Exports Presented by : Paul Divecchio –DiVecchio & Associates Phone: (617) 513-3230, Fax: (508) 393-3645 Email: pauldivec@earthlink.net

  2. “ROUTED FREIGHT” - CURRENT CLIMATE IT’S A MESS! BUT IT’S CHANGING

  3. FTR TODAY – COMPLIANCE • AMBIGUITY of Interpretation • ROUTED – FPPI HAS TOO MUCH AUTHORITY • Enforcement Oversight - INCONSISTENT

  4. Today’s Reality Comply to current FTR - Risk Enforcement Issues: * DETENTIONS * SEIZURES * INVESTIGATIONS TAKE CONTROL: “NEVER Allow the FPPI Export Compliance Control”

  5. U.S. Customs • Major Discrepancies: - Failure to file AES - No notification on Bill of Lading when AES not required - No generic product description on AES - Mishandling of State Dept. shipments by the Freight Forwarder - “old” or invalid licensing information - No licensing information - Values on AES “UNDERVALUED” - Suspicious transaction! Rerouted freight-USPPI not Aware

  6. FTR REGS. – PROPOSED A GOOD START!!!: • FPPI name change - FPPCET • USPPI MUST Provide Export Control Info: • * Licensing Jurisdiction – State vs, Commerce • * Licensing Classification • * License Requirements • Addition – Must Identify Ultimate Consignee Type of Business • Option #4 “Post Departure Filing – 10 Days to 5 Days

  7. COMPLIANCERESPONSIBILITIESEXPORTER & FORWARDER

  8. KEY COMPLIANCE RISKS BOTH USPPI & FORWARDER • NO POA FOR EXPORT TRANSACTIONS! • CLASSIFYING PRODUCTS FOR CUSTOMERS • NO RESTRICTED PARTY REVIEWS • CHANGING USPPI’S INFO • SLOPPY AES ENTRIES • EMBARGOES – DIVERSIONS • ANTIBOYCOTT COMPLIANCE

  9. FREIGHT FORWARDER’S ROLE • First source of information for new exporters • Last line of defense - documentation & prohibitions • Attitude and knowledge of forwarding staff - can be a marketing advantage or liability CREDIBILITY !

  10. Exporter’s Responsibility • Issue a proper POA (Power-of-Attorney) • Provide the Forwarder with: • COMPLETE AND ACCURATE INFORMATION • - Description of Product(s) - License Information - Correct Values < Coordinate and Cooperate >

  11. Forwarder’s Responsibility • When in Doubt - Check it Out! NOT • When in Doubt - ship it out! - Hold the Shipment -

  12. Export Regulatory Compliance Forwarder - Shipper Relationship • What is the Forwarder’s main focus with regard to Export Compliance? • Looking out for forwarder best interest • Looking out for forwarder best interest = looking out for the Exporter’s best interest • When the forwarder knows what they are doing, they know what to do to protect the best interest of the exporter.

  13. How does a good Forwarder approach Export Compliance? • Know your Compliance Responsibility …and to make sure that there is a consistent understanding and message throughout the Company. • Training and compliance reviews • Following the exporter’s instructions but asking questions • Looking for “Red Flags” • Offering guidance to exporters

  14. Focus on Customer Implementation • During the implementation process: • Connect the Forwarder and Exporter Compliance People • Are the products on the Commerce Control List, or ITAR • Who will be filing data into AES? • When and how will the USPPI required information be provided to the forwarder? • What information will the exporter need back. When, how often?

  15. Exporter - Forwarder Relationship • The Exporter must hold the freight forwarder accountable. • Memo to all forwarders (including those nominated by the overseas buyer “routed”) insisting on the following: - No changes/document substitution without prior authority - Forwarder to review export documents for: - Completeness and accuracy (HOLD) - Affirmation that a copy of the “completed” SED (or AES print-out if requested) will be returned • Forwarder to acknowledge receipt and affirm compliance & Indemnify exporter, if at fault !

  16. EVERYONE'S ACCOUNTABLE

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