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The Export Administration Regulations (EAR) place legal responsibility on all persons who have information, authority or functions relevant to carrying out export transactions subject to the EAR. Forwarding agents may have compliance responsibilities under the EAR even when their actions are dependent upon information or instructions given by those who use their services. However, hiring a forwarding or other agent (hereafter “agent”) to perform various tasks does not necessarily relieve a party of its compliance responsibilities.
On July 10, 2000, the Bureau of Industry and Security published amendments
to the EAR affecting relevant sections to the EAR, including: Section 748.5,
regarding parties to a transaction, Part 758 on export clearance, and relevant
definitions in Part 772. Shipper’s Export Declarations (SEDs) must comply
with the amended regulations by October 10, 2000.
Primary responsibility for compliance with the EAR falls on the “principal
parties in interest” (PPI) in a transaction. Generally, the PPIs in
an export transaction are the U.S. seller and the foreign buyer.
In a “routed export transaction,” in which the foreign PPI authorizes a U.S. agent to facilitate the export of items from the United States, the U.S. PPI may obtain from the foreign PPI a writing in which the foreign PPI expressly assumes responsibility for determining licensing requirements and obtaining authorization for the export. In this case, the U.S. agent acting for the foreign PPI is the “exporter” under the EAR, and is responsible for determining licensing authority and obtaining the appropriate license or other authorization for the export.
An agent representing the foreign PPI in this type of routed export transaction must obtain a power of attorney or other written authorization in order to act on its behalf.
In a routed export transaction, if the U.S. PPI does not obtain from the
foreign PPI the writing described above, then the U.S. PPI is the “exporter”
and must determine licensing authority and obtain the appropriate license
or other authorization.
In a routed export transaction in which the foreign PPI assumes responsibility
for determining the appropriate authorization for the export, the EAR require
the U.S. PPI to furnish the foreign PPI and its agent, upon request, with
the correct Export Control Classification Number (ECCN) or sufficient technical
information to determine the ECCN. In addition, the U.S. PPI must provide
the foreign PPI and its agent with any information that it knows will affect
the determination of license authority.
In a transaction that is not a routed export transaction, if the U.S. PPI authorizes an agent to prepare and file the export declaration on its behalf, the U.S. PPI is the “exporter” under the EAR and is required to :
(A) provide the agent with the information necessary to complete the SED; (B) authorize the agent to complete the SED by power of attorney or other written authorization, or by signing the authorization block on the SED; and (C) maintain documentation to support the information provided to the agent for completing the SED.
If authorized by either the U.S. or foreign PPI, the agent is responsible for:
Agents are responsible for the representations they make by signing an export declaration. Moreover, no person may proceed with any transaction knowing that a violation has occurred, is about to occur or is intended to occur in connection with it. It is the agent’s responsibility to understand its obligations.
Agents, especially those acting as the “exporter,” should understand the “Know Your Customer” Guidance and Red Flags found in Supplement No. 1 to Part 732 of the EAR. Agents and exporters should decide whether there are red flags, inquire about them, and ensure that suspicious circumstances are not ignored.
Both the agent and the PPI which has hired it are responsible for the correctness of each entry made on a SED. Good faith reliance on information obtained from the PPI can help protect an agent, but the careless use of pre-printed “No License Required” forms or unsupported entries can get an agent into trouble.
An agent should avoid making commodity classifications for which it lacks technical expertise, and should obtain support documentation for ECCNs and other material.
If you have reason to believe a violation is taking place or has occurred, you may report it to the Department of Commerce by calling its 24 hour hot line number: 1 (800) 424-2980. Or if you prefer use our Web form to submit a confidential tip. [Please note that use of the form will not generate any return e-mail to you so that the information you submit will remain confidential.]