Code change

AES won’t allow code 32 for no-licensed required export shipments from April 1    No joke, April 1 will be the first day that exporters and freight forwarders using the U.S. government’s Automated Export System will no longer have access to AES code C32 for so-called “No License Required” (NLR) export shipments.
   Filers who attempt to report in C32 after the expiration will receive an error message from AES.
   The Commerce Department’s Census Bureau and Bureau of Industry and Security announced in a proposed rulemaking June 9 that they were doing away with AES License Code C32. Several industry groups, according to the agencies, pressed for C32’s elimination to reduce “confusion associated with having two NLR license types in AES,” and thus a final rulemaking, with a 180-day phase-in period, was announced Oct. 1.
   C32 has been effectively rolled into a single AES license code, C33. The agencies said License Code C33 will be used for NLR shipments, except for those classified with Export Control Classification Numbers (ECCNs) 600-series and 9X515 having a “.y” paragraph, which will continue to be designated as NLR under AES code C60.
   With this change, Census and BIS said the U.S. Principal Parties in Interests (USPPIs) and their authorized filing agents (AES filers) must still comply with ECCN reporting requirements for NLR designated shipments under license type C33 as prescribed in the Commerce Department’s Export Administration Regulations.
   The agencies further explained that items which have a reason for control other than antiterrorism should report “No License Required (C33)” as the licensing type in the AES filing.
   Not everyone agrees that getting rid of License Code C32 in AES eliminates redundancy.
   “This was not redundant,” said Paul DiVecchio, principal of DiVecchio & Associates, a Boston-based export compliance consultancy. “By having separate AES codes for controlled items versus decontrolled items forced the exporter to take the time to fulfill their compliance obligations.”
   These obligations include determining the jurisdiction of the exported commodities, knowing whether the classification for the products are on the Commerce Control List or not, determining whether a license is required for the commodity to the country of ultimate destination, and making a clear entry for enforcement oversight.
   DiVecchio also warned that BIS has lost a valuable data tool in its export enforcement arsenal.
   “There’s no incentive for companies to comply with the change,” he said.