Forwarders support legislation to license AES filers

Forwarders support legislation to license AES filers A long-time spokesman for the U.S. freight forwarding industry told House lawmakers on May 20 that proposed legislation to license filers who use the federal government's Automated Export System is a positive step toward enhancing export data integrity and regulatory compliance.
   The 2008 Securing Exports Through Coordination and Technology Act (H.R. 5828) legislation 'provides assurance to the government that the filers of AES data have the requisite skills, knowledge and professionalism to merit this trust, by requiring filers to be licensed,' testified Peter H. Powell Sr., senior counselor to the National Customs Brokers and Forwarders Association of America, before the House Foreign Affairs' subcommittee on terrorism, nonproliferation and trade.

Powell

   'Candidly, it may seem unusual for a professional association to embrace licensure for its members,' Powell said. 'This position becomes more plausible in light of our years of experience working with the Bureau of Census.'
   Census uses the data in AES to compile the country's trade statistics, while Customs and Border Protection employs the information to stop illicit exports before they leave the country. Other agencies, such as the Bureau of Industry and Security, Directorate of Defense Trade Controls, Office of Foreign Asset Controls, Energy Department and Nuclear Regulatory Commission, use AES for various export control purposes.
   It's estimated that forwarders facilitated 78 percent of the $1.62 trillion in U.S. exports in 2007.
   In April, Reps. Don Manzullo, R-Ill., and Adam Smith, D-Wash., introduced the bill to help 'clarify' aspects of AES for legitimate exports and crack down on those exporters and forwarders who try to evade the system's controls to facilitate illegal shipments.
   In addition to licensing AES filers, the legislation calls for strengthened criminal and administrative prosecution of exporters who attempt to circumvent the electronic export controls.
   Licensing AES filers is nothing new. The Census Bureau's Foreign Trade Division proposed a similar procedure in early 2003. While the concept was generally well received by forwarders then, the Commerce Department found limitations in the program and Census subsequently shelved it.
   Powell said HR 5828's licensure provisions are 'not unduly burdensome,' noting in the proposed legislation that:
   ' Each company must have a licensed individual responsible for oversight and control of those employees who file shipper's export declaration information with AES.
   ' Loss of a license is protected by reasonable due process of procedures.
   ' Acquisition of a license by a U.S. citizen or permanent resident is 'within the reach of those who meet qualification requirements reasonably expected of a responsible filer.'
   Other industry members testifying before the House subcommittee approved of the legislation's call to license AES filers.
   'Currently law enforcement officers can review large numbers of transactions by using a search engine in the AES database,' said Mark Menefee, counsel to law firm Baker & McKenzie and former director of the BIS Office of Export Enforcement. 'This can be a very effective enforcement technique.

Menefee

   'But these efforts are undercut by the high percentage of inaccurate AES records being filed,' he said. 'It is the old database problem of 'garbage in, garbage out.' By establishing a licensing requirement for AES filers, as well as a 'pay as you go' training fund, the bill would greatly improve the accuracy of data input into AES, thereby enabling law enforcement to do its job better.'
   Arthur Shulman, general counsel to the Wisconsin Project on Nuclear Arms Control, added that the proposal should include an option for the federal regulators to suspend licenses and block access to the system to those filers who violate the export control or AES rules.
   Powell said the NCBFAA's Education Foundation would develop the curriculum to educate its forwarder members to qualify for a license and then to meet Census' continuing education requirements. For those who are not members of the NCBFAA, he said Census has the authority under the proposed legislation to conduct similar training for those seeking a license.
   However, a CBP official told the House subcommittee that licensing AES filers would be an unnecessary process once the soon-to-be-published rules mandating the use of AES takes effect.

Owen

   'The proposed creation of a new licensing regime would place an unneeded burden on the exporting community, since currently anyone can register to use AES, or AESDirect, an Internet-based module of AES,' said Todd Owen, CBP's executive director of cargo and conveyance security. 'Further, it could slow the flow of commerce and potentially strain CBP resources, if CBP were required to validate whether an exporter was licensed or not prior to clearing export cargo.'