Basic Export
Documentation
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Agenda
• Information You Need In Advance
• Mandatory Filing of Electronic Export Information
• Automated Export System (AES)
• Automated Commercial Environment (ACE)
• Invoices
• Bill of Lading/Airway Bill
• Packing List
• Other Documents
• Shipment Review
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Information You Need Before Shipping
1. HS Code – Schedule ‘B’ Number
2. Export Control Classification
Number (ECCN)
3. USPPI / FPPI
4. Other Shipment Details
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HS Code – Schedule ‘B’ Number
•HS = Harmonized System
•Cooperation between most countries of the world
•6 to 10 digit number used for categorizing products in international
commerce
•First 6 digits – identical for every country
•Last 4 digits – country-specific sub-categories
•AKA:
•Harmonized Tariff Code
•HTS Code = Harmonized Tariff System
•“Schedule B Number” – 10 digit codes for US exports
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Breakdown of HS Code
Example: HS #9608.10
Chapter 96 = Miscellaneous Manufactured Articles
Agricultural Products are lower number Chapters - 01 to 24
Heading 9608 = Pens
Subheading 9608.10 = Ballpoint pens
Subheading 9608.20 = Felt tip pens and markers
If there are no more subdivisions, ending will be 0000
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HS Code – Schedule ‘B’ Number
http://www.census.gov/foreign-trade/schedules/b/
•Schedule C – Country codes
•Schedule D – Ports in the US
•Schedule K – Foreign ports
•Supplying a destination-country classification code on your
commercial invoice is a business decision by your corporation.
•The decision to report this destination HS on your commercial
invoice can be driven by the payment terms of the
order/shipment.
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Basic Information you need before shipping
•ECCN – Export Control Classification Number
•An ECCN is a specific alpha-numeric code that identifies the level
of export control for articles, technology and software (collectively,
"Items")
that are exported from member states of the Wassenaar
Arrangement, including the United States.
•The ECCN that applies to any specific item is determined by
referring to the Commerce Control List,
•Bureau of Industry and Security,
www.bis.doc.gov
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Commerce Control List (CCL)
http://www.access.gpo.gov/bis/ear/ear_data.html
• Contains certain items subject to
licensing authority of BIS
• Lists items by Export Control
Classification Number (ECCN)
• (e.g. 3A001, 3A994)
• Identifies technical parameters
• If not on CCL, use EAR99
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United States Principal Party in Interest (USPPI)
• U.S. person or entity that is the primary benefactor (monetarily or
otherwise) from an export transaction.
•U.S. Seller (wholesaler or distributor)
•U.S. Manufacturer
•U.S. Order Party
• Unless the transaction is a “routed transaction” as defined in the
Export Administration Regs.
• In a “routed transaction” the Foreign Principal Party in Interest (FPPI)
can give its designated Freight Forwarder power of attorney or written
authorization to act as the exporter on its behalf.
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FPPI Risk
• Foreign Trade Regulations considers the exporter to always be the USPPI. A
foreign party can also be the exporter if it is in the U.S. at the time of export.
• “Routed transactions” regulations are found in the EAR under 15 CFR
758.3 and in the FTSR under 15 CFR 30.4. It is important to
understand the regulations regarding “routed transactions.”
• A USPPI that allows the FPPI to designate the freight forwarder can be
under some compliance risk as the freight forwarder may perceive its
allegiance to be with the FPPI.
• Additionally the FPPI generally directly or indirectly pays the freight
forwarder for the movement of its freight.
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Other Shipment Details
•Freight Forwarder
•Port of Export
•Destination Country
•Mode of Transport
•Carrier / Transportation Company / Vessel Name
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Other Shipment Details
•Value – The value shall be the selling price of the goods including
inland or domestic freight, insurance, and other charges to the U.S. For
details, see Foreign Trade Regulations 30.6 (a)(17).
•Consignee
•Company Info
•Ultimate Consignee Type
•Direct Consumer – a non-government institution,
enterprise, or company that will consume or use the
exported good.
•Government Entity – a government-owned or
government-
controlled agency, institution, enterprise, or company.
•Reseller – a non-government reseller, retailer, wholesaler,
distributor, distribution center or trading company
•Other/Unknown
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Valuation
•Transaction Value (TV) is the first, and most important, method of
valuation referred to in the Valuation Agreement
•Definition - the price paid or payable by the buyer to the seller for
the imported goods (with some deduction/additions).
•Valuation Code states that customs valuation shall, except in specific
circumstances, be based on the actual price of the goods to be valued,
which is generally shown on the invoice.
•Valuation must conform to commercial realities and not use arbitrary or
fictitious values.
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Valuation
•Cases where Customs authorities have reason to doubt the truth or accuracy of
declared values:
•Customs may ask the importer to provide further explanation that the
declared values represent the total amount actually paid or payable.
•If doubt still exists, Customs may decide that the value cannot be determined
according to the TV method
NOTE - You declare value(s) on your AES export filing
and then again when shipment is presented for
import processing
» MAKE SURE YOUR VALUE IS CORRECT BEFORE
RELEASING THE SHIPMENT.
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INCOTERMS
•Incoterms are standardized definitions of commonly used shipping and
trade terms that cover issues such as control of goods and financial
responsibilities such as payment of cargo insurance and freight.
•Most common examples: Ex-Works, FOB, CIF
•Incoterms provide traders with a common set of rules outlining each
party’s obligations, thus reducing misunderstandings.
•The International Chamber of Commerce (ICC) establishes and
publishes the Incoterms.
•To use the terms correctly, trade practitioners should consult the ICC
for the complete, authorized Incoterm definitions.
•http://www.iccwbo.org/incoterms/id3045/index.html
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Shipper’s Export Declaration (SED) to
Automated Export System (AES) to
Automated Commercial Environment (ACE)
•The SED was a USG export document, form 7525-V, submitted to U.S. Customs and
Border Protection (CBP) for almost every export shipment of commodities from the
U.S.
•This multipurpose document gathered export statistical information for U.S. Census
and export compliance declaration information for U.S Immigration and Customs
Enforcement (ICE), BIS’ Office of Export Enforcement (OEE) and the Office of Defense
Trade Controls Compliance and Enforcement Division.
•Filing of SED is no longer permitted (as of July 2, 2008).
•Electronic Export Information (EEI).
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AES – Transitioning to ACE
• Web Sites: www.cbp.gov/trade/automated
https://www.cbp.gov/trade/aes
• Have an Import ACE Account
• Trade Account Owner (TAO) requests export functionality based on
EIN
• Do not have an Import ACE Account
• Establish new account at www.cbp.gov/ACE by completing the
ACE Exporter Account registration
• Single EIN: Register for an ACE Account and a Top Account
with a Trade Account Owner will be created
• Multiple EINs: TAO must add additional EINs after registration
• If ACE Export Reports authorization is desired, must be
requested for all EINs associated with account.
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Using the ACE Secure Data Portal
Select “Apply for an Account” link
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ACE Exporter Account Form
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Accessing ACE and Automated Systems
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Receive Account ID Email Information
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ACE Timeline
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Filing Requirements
Generally filing is required for the
following:
• Any export containing one or more
commodities, classified according to
Schedule B Number in Field 22, that is
valued at more than $2,500 (except to
Canada).
• Any shipment that contains a licensed
export (including to Canada).
• Any export subject to the ITAR
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Electronic Export Information EEI
Four different to submit Electronic Export Information.
1. Submit on your own behalf
2. Vender software specifically designed and approved to submit EEI
3. Paid ACE service provider
4. Create your own ACE program
The two levels of filing EEI are Pre-Departure and Post-Departure
• Pre-Departure (formally called option 2) calls for all EEI to be
submitted in specific minimum time frames before the export
• Post-Departure (formally called option 4) allows most filing of EEI as
soon as available but before ten days after the export.
• Post-Departure reporting privileges requires that the USPPI be
approved by the Census Bureau, CBP, BIS and DDTC.
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Predeparture deadlines
• Vessel cargo - twenty-four hours prior to loading cargo at the U.S. port where the
cargo is laden.
• Air cargo including transportation by Air Express Couriers – no later than two (2)
hours prior to the scheduled departure time of the aircraft.
•Truck cargo - no later than one (1) hour prior to the arrival of the truck at the United
States border.
•Rail cargo - no later than two (2) hours prior to the time the train arrives at the U.S.
border.
•Mail and cargo shipped by other methods, except pipeline – no
later than two (2) hours prior to exportation. (See § 30.46 for filing deadlines for
shipments sent by pipeline.)
•All other modes - no later than two (2) hours prior to exportation.
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Postdeparture
• Postdeparture filing takes into account that complete information on export
shipments may not always be available prior to exportation.
• For example, for exports of seasonal and agricultural commodities, only
estimated quantities, values, and consignees may be known prior to
exportation.
•Postdeparture filing is only available for approved USPPIs.
•Only USPPI may apply for postdeparture filing privileges by submitting a
postdeparture filing application.
•An authorized agent may not apply on behalf of a USPPI.
•No later than ten calendar days from the date of exportation.
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Step 2: Create New Shipment
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Shipments in AES
A shipment is defined as merchandise
1. Shipped from one USPPI
2. To one consignee
3. In a single country of destination,
4. On a single carrier,
5. On the same day,
6. Valued over $2,500 per Schedule B, or when a license is required.
• Shipment Reference Number (SRN) - This is a unique alphanumeric number,
up to 17 digits, used to identify each shipment.
• Can be a purchase order (PO) number, a customer number, a company name,
a Bill of Lading number, or a phrase that identifies that shipment -- such as
“6
piece boxes" or “birthday gift for John.“
• If you re-use a previous Shipment Reference Number, the system will generate
a Fatal Error. To prevent this, you can establish a unique format to create
Shipment Reference Numbers and maintain a log of those already used.
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Shipments in AES
• ITN (Internal Transaction Number) is a confirmation number that
proves a shipment has been accepted by AES. This number is unique
for every shipment and must be provided to the U.S. Customs and
Border Protection (CBP) at the port of export.
• Exporters must cite the ITN on the first page of the bill of lading, air
waybill, and/or other commercial loading documents.
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Sections in Each Shipment
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Power of Attorney
Power of Attorney is required for:
• Freight Forwarders acting on your company’s behalf
• Brokers acting on your company’s behalf for
processing/submitting import documents in order for
your
product to enter into the commerce of a country
• Allowing your freight forwarder or a third party to
submit your AES Direct export filings
REMEMBER any third party acting on your behalf must sign a POA
and you should have a Confidentially agreement in place to ensure
that your information is legally safeguarded from being shared with
a third party.
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Coming Up…
• Invoices
• Bills of Lading/Airway Bill
• Packing List
• Other Documents
• Shipment Review
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Other Export Documents: Pro-forma Invoice
•'Proforma Invoice' is a preliminary bill of sale sent to buyers in advance
of a shipment or delivery of goods.
•States a commitment from the seller to sell goods to the buyer at
specified prices and terms.
•Sales quotes are prepared in the form of a pro-forma invoice which is
different from a commercial invoice. It is used to create a sale and is
sent in advance of the commercial invoice.
•The content of a pro-forma invoice is almost identical to a commercial
invoice and is usually considered a binding agreement although the
price might change in advance of the final sale.
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Sample
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Pro-forma Invoice
• In some countries, customs may accept a pro-forma
invoice to get goods released from customs if the
required commercial invoice is not available at the time
when filing entry documents at the port of entry.
• The U.S. Customs and Border Protection, for example,
uses pro-forma invoices to assess duty and examine
goods, but the importer on record is
required to post a bond and produce a commercial
invoice within 120 days
from the date of entry.
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Commercial Invoice
• A commercial invoice is a document used when shipping to foreign
locations provided by the shipper/exporter which allows for
Customs declaration.
• A commercial invoice identifies the HTS codes for the products being
imported which are used in the Customs clearance process for
assessment of duties and taxes to said import.
• A commercial invoice is a bill for the goods from the seller to the
buyer and are used to determine the true value of goods when
assessing duties and taxes.
• A commercial invoice looks very much like an invoice any seller
might provide to a buyer domestically. However, a commercial
invoice is used by the buyer for import clearance and therefore has
more information than a sales invoice.
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Commercial Invoice
• Ship From” information - Company name and address
• Ship To” - Company name and address
• INCOTERMS
• On commercial invoice you must declare the ECCN and HS
Code.
• Actual part numbers
• Quantities being shipped per line item
• Value of product being shipped
• Value times quantity per line item (extended value)
• Country of Origin of each line item (product)
• Commercial Description (not scientific name)
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Commercial Invoice
• AES ITN number must be recorded on document when
applicable
• If a Letter of Credit is involved make sure that your
Commercial Invoice,
Packing List, and applicable Airway bills have all
required information
documented per letter of credit requirements
• Optional - Purchase Order Number
• Export reporting where applicable
• And document pertaining to export transactions,
license applications and approvals
• License Exceptions, Exemptions and documents
in support of bulk licenses and agreements
• Export shipping documents
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Instructions
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Commercial Invoice Destination Control Statement
• Use of the appropriate Destination Control Statement (DCS) is
required on Commercial Invoice, ITAR for defense articles on the
USML or from the EAR for items on the CCL.
• For approved ITAR items the DCS (ITAR, Part 123.9b) is:
These commodities are authorized by the U.S. Government for
Export only to (country of ultimate destination) for use by (end user).
They may not be transferred, transshipped on a non continuous
voyage, or otherwise be disposed of in any other county, either in
their original form or after being incorporated into other end-items,
without the prior written approval of the U.S. Department of State.
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Commercial Invoice Destination Control Statement
• The approved EAR DCS (EAR, Part 758.6) is:For approved ITAR items
the DCS (ITAR, Part 123.9b) is:
These commodities, technology or software were exported from the
United States in accordance with the U.S. Department of commerce.
Diversion contrary to U.S law prohibited
This is the minimum that the DCS must state. Generally it is reprinted
on all invoices. In addition to the invoice the DCS is required to be
on the bill of lading, airwaybill, or other export control document
that accompanies the shipment from its point of origin in the U.S. to
the ultimate consignee or end-user abroad.
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Bill of Lading, Airway Bill
• Bills of Lading and Airway Bills are shipping documents.
• The ocean bill (Ocean Bill of Lading) is customarily prepared by the freight
forwarder from information that is supplied by the seller.
• A truck bill of lading (as for Canada or Mexico) is usually prepared by the
seller.
• The airway bill may be prepared by the freight forwarder or seller.
• Document shows the shipment information (verses the commercial
information from the invoice).
• Destination
• Consignee
• Shipping Company
• Ports or airports to be used
• Whether the shipment is freight prepaid or freight collect
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Bill of Lading
• A contract between the owner of the goods and the carrier (as
with domestic shipments).
• For vessels, there are two types: a straight bill of lading, which is
non-negotiable, and a negotiable or shipper's order bill of lading.
• The latter can be bought, sold, or traded while the goods are in
transit.
• The customer usually needs an original as proof of ownership to
take possession of the goods.
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Airway Bill
• Air freight shipments require Airway bills, which can
never be made in negotiable form.
• Airway bills are shipper-specific (i.e. USPS, Fed-
Ex, UPS, DHL, etc).
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Export Packing List
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Other Documents
• Some other documents are often required on an export shipments
because they are documents prepared in the U.S. that are needed
for import clearance into destination country. It is the responsibility
of the importer to advise the exporter of what is required.
• Certificate of Origin (COO) - Sometimes a COO is required to
prove the origin of the goods. The country of origin could be the
U.S. but could be from another country.
• Origin = location of last substantial transformation
• COO may require stamp from Chamber of Commerce
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Other Documents
Certifications for Free Trade Agreements
• Special certificates may be required to qualify for tariff benefits
under free trade agreements (FTAs) that the US has with certain
countries.
• Some certificates of origin including those required by NAFTA
(North American Free Trade Agreement) and the FTA’s with Israel
and Jordan, are prepared by the exporter.
• Others including those required by the FTA’s with Australia, CAFTA
countries, Chile and Morocco, are importer’s responsibility).
• For more information on FTAs see: Export.gov/fta
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Other Documents Inspections
• Inspection Reports - Import regulations in some countries will
require that an inspection be performed before your goods leave
your shipping location, and a report prepared by a professional
inspector.
• Inspection certification is required by some purchasers and
countries in order to attest to the specifications of the goods
shipped. This is usually performed by a third party and often obtained
from independent testing organizations.
• Pre-shipment Inspection Companies: SGS, Intertek, Bureau Veritas
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Other Documents Safety
• Certificate of Free Sale - Certificate of free sale may be required by
some countries and are issued for biologics, food, drugs, medical
devices, cosmetics and veterinary medicine.
• More information is available from the Food and Drug
Administration, www.fda.gov, also known as Certificate to Foreign
Governments.
• Health authorities in some states as well as some trade associations
also issue Certificates of Free Sale. i.e. California Dept. of Public
Health, www.cdph.ca.gov
• Certificate of Analysis: A certificate of analysis is required for seeds,
grain, health foods, dietary supplements, fruits and vegetables, and
pharmaceutical products.
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Other Documents Dangerous Goods
• Dangerous Goods Certificate- Exports submitted for handling by air
carriers and air freight forwarders classified as dangerous goods need
to be accompanied by the Shipper’s Declaration for Dangerous Goods
required by the International Air Transport Association (IATA). The
exporter is responsible for accuracy of the form and ensuring that
requirements related to packaging, marking, and other required
information by IATA have been met.
• For shipment of dangerous goods it is critical to identify goods by
proper name, comply with packaging and labeling requirements (they
vary depending upon type of product shipper and country shipped to).
More information on labeling/regulations is available from the
International Air Transportation Association or
Department of
Transportation
– HAZMAT websites.
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Other Documents Temporary Shipments
• ATA CARNET/Temporary shipment certificate
• An ATA Carnet a. k. a. "Merchandise Passport" is a document
that facilitates the temporary importation of products into
foreign countries by eliminating tariffs and value-added taxes
(VAT) or the posting of a security deposit normally required at
the time of importation.
• In U.S. - Corporation for International Business,
www.atacarnet.com
• Certificate of Registration - US Customs Form 4455
•Used for shipments going out of US temporarily in order to
avoid duties upon return
•Value of any improvements or repairs done abroad are subject
to duties
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Export Reviews
• All exports should be screened prior to release
from the shipping department to ensure that
the product is allowed to be shipped to the
destination country or destination end-user
• Any or all export licenses related to the
product being shipped
must be applied and any license exceptions or
special provisions must be adhered to.
• You must report on your Commercial Invoice
or Pro-forma Invoice all export indicators or
references to said Export License
(EAR99, ENC etc.)
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Export Reviews
• Company organizations that might be involved in the export review process
• Sales and Marketing Teams
• Order Management
• Research and Development
• Country Controllers
• Shipping Department/Logistics
• IT groups within your organizations
• Trade Compliance Team
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Supplying Correct Information
Supplying the correct information is essential for a smoothly
handled order. We need to:
1. Properly manage export controls
1. Furnish accurate documents needed for import clearance at
destination
2. Properly route the shipment to destination
3. Ensure that the commercial invoice and other documents are
done correctly so that your company is paid in full and on time
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Where to find forms
•Export.gov
•www.unzco.com
•Shipping Company
•Freight Forwarder
•Customs Broker
Documents:
•Travel with your shipments
•May also be transmitted electronically based on requirements of your customer
•Copies may have to be shipped ahead of time to the sponsoring bank if a Letter of
Credit is Involved
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Questions?
