Did you know that shipments from the 50 U.S. states to Puerto Rico and the U.S. Virgin Islands generally requires an Electronic Export Information (“EEI”) filing under the U.S. Census Bureau’s Foreign Trade Regulations? This article provides an overview of Foreign Trade Regulations export filing requirements generally, outlines the requirements for Puerto Rico and the U.S. Virgin Islands, and outlines what you can do to optimize your export compliance.
Foreign Trade Regulations
The U.S. Census Bureau’s mission is to serve as the nation’s leading provider of quality data about its people and economy. The Census Bureau’s Trade Regulations Branch in the Economic Management Division is chiefly responsible for enforcing the Foreign Trade Regulations. The Foreign Trade Regulations (15 CFR. Part 30) require certain exporters to file export information with the U.S. Census Bureau. They detail requirements for filing export information, explain filing procedures, and establish penalties for noncompliance. The regulations require export information to be filed on the Automated Export System (“AES”). The information submitted by exporters on to AES is known as EEI.
EEI filings are required for a wide variety of circumstances, including:
- Exports valued at more than $2,500 to any destination except Canada
- Exports that require an export license under the Export Administration Regulations (“EAR”)
- Exports on the EAR’s Commerce Control List (“CCL”) and destined for China, Russia, or Venezuela
- Exports subject to the EAR and destined for a country in Country Group E:1 or E:2 (currently, Cuba, Iran, North Korea, and Syria)
- Exports subject to the International Traffic in Arms Regulations (“ITAR”)
- Exports containing rough diamonds
Export Filing Requirements for Shipments to Puerto Rico & the U.S. Virgin Islands
The U.S. Foreign Trade Regulations include filing requirements for shipments from any of the 50 U.S. states to the “extended United States,” a region that comprises Puerto Rico and the U.S. Virgin Islands. Although you do not have to file EEI when sending products state to state, you do have to do so when shipping goods from the United to Puerto Rico and the U.S. Virgin Islands if the shipment at issue meets the $2,500 per Schedule B / HS code threshold or other Census Bureau filing requirement.
However, for shipments from the extended United States (United States, Puerto Rico, and U.S. Virgin Islands) to other U.S. territories, filings are not required. The following are the U.S. territories to which export filings are not required when shipped from the extended United States:
- American Samoa
- Baker Island
- Howland Island
- Jarvis Island
- Johnston Atoll
- Kingman Reef
- Midway Islands
- Navassa Island
- Northern Mariana Islands
- Palmyra Atoll
- Wake Island
The policy reasons for requiring EEI filing requirements for shipments to Puerto Rico and the U.S. Virgin Islands include:
- Demand for data to analyze those economies
- Use data to compile Gross Domestic Product (“GDP”)
It should be noted that despite the requirement for EEI filing requirements for shipments from the United States’ 50 states to Puerto Rico and the U.S. Virgin Islands, these shipments are still classified as domestic shipments.
Below is a diagram that demonstrates the differing EEI filing requirements for shipments from the United States’ 50 states to 1) the extended United States, 2) other U.S. territories, 3) Canada, and 4) foreign countries. Shipments from the United States’ 50 states to the extended United States (Puerto Rico and the U.S. Virgin Islands) do require EEI filings; shipments from the United States’ 50 states to other U.S. territories do not require EEI filings; shipments from the United States’ 50 states to Canada generally do not require EEI filings; and, finally, shipments to foreign countries do require EEI filings
EEI filings are generally required for the following shipments:
|United States||Foreign Countries|
|United States||Puerto Rico|
|United States||U.S. Virgin Islands|
|Puerto Rico||United States|
|Puerto Rico||Foreign Countries|
|Puerto Rico||U.S. Virgin Islands|
|U.S. Virgin Islands||Foreign Countries|
|U.S. Foreign Trade Zone||Puerto Rico|
|U.S. Foreign Trade Zone||U.S. Virgin Islands|
|U.S. Foreign Trade Zone||Foreign Countries|
EEI filings are generally not required for the following shipments:
|U.S. Virgin Islands||United States|
|U.S. Virgin Islands||Puerto Rico|
|United States||Other U.S. Territories* including:|
|Puerto Rico||Other U.S. Territories* (as listed above)|
|U.S. Virgin Islands||Other U.S. Territories* (as listed above)|
|Other U.S. Territories||United States|
What You Can Do
If you are exporting goods subject to filing requirements under the Foreign Trade Regulations, we propose you should:
- Develop an effective export compliance plan
- A key foundation of proactive and effective export compliance requires the development of an export compliance plan. An export compliance plan establishes a set of procedures for your organization to ensure that everyone is on the same page about how standard processes work, who is responsible for what, how to identify violations, what to do when violations occur, etc. An export compliance plan helps build consciousness in your organization that compliance is critical – both to avoid costly penalties and to protect national security. Diaz Trade Law helps exporters create export compliance manuals that help prove you have a process in place to classify your merchandise correctly, vet your customers and ensure you can prove you can take compliance seriously and implement all the important great weight mitigating factors. Diaz Trade Law has significant experience in developing and enhancing export compliance plans for organizations. Additionally, Diaz Trade Law can assist your business in auditing and improving your current plan so that it is in its best shape.
- Engage in regular export compliance training
- A foundation of a strong export compliance program is export compliance training. Training is important because it (1) ensures that all employees understand the export regulations and reinforces internal policies and procedures, (2) demonstrates to federal government agencies that your business is proactive about export compliance, and (3) avoids your business from being subject to costly penalties and even criminal liability. Fortunately, export compliance training can be highly tailored to meet your company’s needs. All your training events include assessments for comprehension, certificates for successful participation, and ample opportunities for Q&A. For your next export compliance training event, trust Diaz Trade Law to provide highly-effective, engaging training.
- Thoroughly vet your proposed export transaction
- Unsure whether a proposed export transaction violates the Foreign Trade Regulations or other export control laws? Diaz Trade Law has significant experience vetting your potential transaction against U.S. export control laws and in assisting clients to properly file their EEI. Through research and due diligence, Diaz Trade Law ensures that your transaction won’t get you in trouble later down the road.
- Request authorization when necessary
- BIS or DDTC export authorization is required for many export transactions of controlled goods. Diaz Trade Law has significant experience in vetting proposed transactions to determine whether BIS or DDTC authorization is required. Furthermore, Diaz Trade Law assists clients by filing export license applications on their behalf.
- Engage in mitigation and corrective actions
- If your business has violated U.S. export control laws, there is a lot you can do to mitigate penalties and prevent future violations. Diaz Trade Law has significant experience representing businesses in dealing with the U.S. Commerce Department’s Bureau of Industry & Security and the Census Bureau. Specifically, Diaz Trade Law has successfully assisted clients in (1) submitting voluntary self-disclosures to mitigate penalties, (2) negotiated agreements with BIS and Census, and (3) built corrective action systems to help ensure that your business does not make the same violation again.
Check out our Bloomberg Law article on Submitting a Voluntary Self-Disclosure to the U.S. Census Bureau.
Diaz Trade Law has significant experience in a broad range of export compliance matters. To learn more about the services we offer, contact us at firstname.lastname@example.org or call us at 305-456-3830.