AES Letter to Census/Customs on Proposed AES Regulations--April 12, 1999

April 12, 1999
U.S. Customs Service
Office of Regulations and Rulings
Regulations Branch
Suite 3000
1300 Pennsylvania Avenue NW
Washington, DC 20229

Director, Bureau of Census
Room 2049
Federal Building 3,
Washington, DC 20233
Re: AES Notice of Proposed Rulemaking, February 12, 1999
(Federal Register Volume 64, Number 29, pp7412 - 7427)

To whom it may concern,

On behalf of the Joint Industry Group (JIG) and its membership, these comments are submitted to US Customs and the Census Bureau with respect to the referenced proposed rulemaking regarding the Automated Export System (AES).

JIG is a member-driven coalition of over one hundred fifty Fortune 500 companies, brokers, importers, exporters, carriers, trade associations, and law firms actively involved in international trade. We both examine and reflect the concerns of the business community relative to current and proposed international trade-related policies, actions, legislation, and regulations and undertake to improve them through dialogue with the Executive Branch and Congress. JIG membership represents more than $350 billion in trade.

The JIG AES and Transportation Committees have reviewed the AES proposed rules, and we find that they accurately represent the four options agreed upon in the Interest Based Negotiations for exporters and their agents to report Shippers Export Declaration (SED) data to Census. We believe that the four options give all exporters a reasonable means by which to provide statistical data on exports from the United States. These choices have sufficient flexibility to allow exporters to report electronically and provide post-departure data if they elect to do so.

However, we feel there are some minor changes that should be made to the proposed process and regulations that would provide for more standardization, increase reporting flexibility, and further reduce the number of hard copy SEDs filed under Option#1:

We do not believe there is a compelling reason to require filers under Option#3 to provide the remaining data within five business days of the date of exportation. Since Option #4 filers are required to file within ten business days of exportation, we think the requirement should be standardized to require Option #3 and Option #4 filers to file within ten business days of exportation. Option #3 filers have the same invoicing and documentation challenges as Option#4 filers – to obtain a rated bill of lading from the carrier, finalize the export documentation package, and calculate the FAS value for the SED. This cannot always be accomplished in five business days.

In addition, some exporters could be filing some commodities under Option#3 and others under Option#4 in the same filing period, or on the same exporting vessel. For standardization, simplicity, and programming purposes, it just makes more sense to have one reporting deadline instead of two.

We question the need to have exporters who are approved for Option #4 file licensed shipments as option #2 or #3. Option #4 was conceived as a "blanket" process for an exporter to submit all data post departure. Requiring the Option #4 exporter to make exceptions in his reporting process will only encourage the exporter to file hard copy export declarations for all licensed shipments. This discourages automation and will create more manual data entry work for Census. We do not see the need for pre-departure reporting for Option #4 filers, since the license itself is permission to export.

Also, in light of the concerns over flexibility and the inability to make changes in the AES system mentioned in the GAO report, we believe that AERP should not be sunsetted until AES has been tested and deemed an operational success for a decent interval. If there are any significant problems or added exporter costs with the AES system, the only alternative is paper and no one, government or trade, is prepared to revert to paper after 30 years of electronic reporting. We think shutting off AERP before AES has been fully tested over an adequate timeframe is potentially costly to government and industry.

In relation to the success of AES, we are also very concerned about the reliability of AES when the volume of exporters convert from AERP to AES. We are aware that AES and ACE are separate programs, but they both run off the same hardware and communication links. If funding for ACE development, including needed hardware and communications upgrades, fails, future ACS blackouts may affect AES operations. In light of the investment the trade community has already made and is being asked to make for automated reporting, funding for all automation must be a high priority for Customs and the administration. Customs must raise the standard of its programming, its planning, its cost justifications, and its ability to deliver automation systems to its customers.

In closing, we believe the revised AES processes as proposed are workable, reasonably follow the business process, and provide enough flexibility to give exporters and freight forwarders an opportunity to report SED data in an automated environment. While we are concerned that exporters and freight forwarders may not have sufficient time to program and test for AES before AERP is sunsetted in less than nine months, we hope that the exporting community will now embrace AES and there will be a reduction in hard copy SEDs as we move into the next millennium.

Sincerely,

Lea Johnson, Chairman

JIG AES Committee