OMB - Supporting Statement A

SUPPORTING STATEMENT

U.S. Department of Commerce

U.S. Census Bureau

Automated Export System (AES) Program

OMB Control No. 0607-0152

1. Justification

1. Necessity of the Information Collection

The clearance under Office of Management and Budget Number 0607-0152 covers the AESDirect Record Formats (Attachment A) and related documents, including AES Letter of Intent (Attachment B), Automated Commercial Environment Exporter Account Application and Quick User Guide (Attachment C), AES Certification Statements (Attachment D), and AESDirect User Guide (Attachment E). In addition, Public Comments (Attachment F), and List of Schedule B Numbers for the Used Electronics Indicator (Attachment G) are included as supporting documentation. With this submission, the Census Bureau is requesting continued clearance with revisions for the Automated Export System (AES) program.

The Census Bureau requires mandatory filing of all export information via the Automated Export System (AES). This requirement is mandated through Public Law 107-228 of the Foreign Trade Relations Act of 2003. This law authorizes the Secretary of Commerce with the concurrences of the Secretary of State and the Secretary of Homeland Security to require all persons who file export information according to Title 13, United States Code (U.S.C.), Chapter 9, to file such information through the AES.

The AES is the primary instrument used for collecting export trade data, which are used by the Census Bureau for statistical purposes. The AES record provides the means for collecting data on U.S. exports. Title 13, U.S.C., Chapter 9, Sections 301-307, mandates the collection of these data. The regulatory provisions for the collection of these data are contained in the Foreign Trade Regulations (FTR), Title 15, Code of Federal Regulations (CFR), Part 30. The official export statistics collected from these tools provide the basic component for the compilation of the U.S. position on merchandise trade. These data are an essential component of the monthly totals provided in the U.S. International Trade in Goods and Services Press Release, a principal economic indicator and a primary component of the Gross Domestic Product (GDP). Traditionally, other federal agencies have used the Electronic Export Information (EEI) for export control purposes to detect and prevent the export of certain items by unauthorized parties or to unauthorized destinations or end users. This information is noted in the AESDirect User Guide located in Attachment E.

Since 2013, the Census Bureau and the U.S. Customs and Border Protection (CBP) have implemented the following enhancements to the AES: (1) added Bureau of Industry and Security (BIS) Export Control Classification Numbers (ECCNs) and increased edits and validations between License Codes and ECCNs; (2) developed six new license codes, three of which allow corrections to licensed shipments identified in voluntary self-disclosures and the remaining three are used to identify shipments involving .y 600 Series ECCN items, support for the Cuban people, and Australia International Traffic in Arms Regulations (ITAR) Exemptions; (3) developed a new filing option indicator for the Advanced Export Information pilot program to indicate a partial or complete commodity shipment filing; (4) adjusted the Foreign Trade Zone Indicator to accept seven characters instead of five; and (5) migrated the AES to the Automated Commercial Environment (ACE) platform to modernize the technology and adhere to the requirements of developing a single window in accordance with Executive Order 13659, Streamlining the Export/Import Process for America's Businesses, through the International Trade Data System. The AES will be accessed via a portal in ACE. Once the Notice of Proposed Rulemaking titled Foreign Trade Regulations (FTR): Clarification on Filing Requirements, is published, the following enhancements may be implemented in the AES: (1) develop an original Internal Transaction Number (ITN) field; and (2) develop a used electronics indicator.

The changes identified in this Final Rule will require the addition of two data elements in the AES. The added data elements include the original ITN and the used electronics indicator. The original ITN field is an optional data element and is utilized if the filer creates an additional AES record for a shipment that was previously filed. The next data element added is the used electronics indicator, which is a conditional data element. The indicator will be used to improve information on the quantity and destination of used electronics. These revisions should not affect the average three-minute response time for the completion of the AES record. The time required to complete the new fields in the AES record is offset by constant advances in technology and heightened knowledge of filers. In addition, repetitious information can be entered automatically via templates and profiles, and the number of data entry sections has been reduced to improve the functionality of the AES. Completing these fields will not significantly affect respondent burden since the original ITN field is an optional data element and not required for all submissions. The used electronics indicator is a conditional field, which will only be required for 75 out of the approximately 9,000 Schedule B numbers and will affect less than one percent of commodities exported. See Attachment G for a list of the Schedule B numbers affected.

In addition to the two new proposed data elements that will be added to the AES, the Census Bureau added language to include the new timeframes for split shipments addressed in FTR Letter #6, Notice of Regulatory Change for Split Shipments. In practice, the export trade community currently adheres to the split shipment filing timeframes. The Census Bureau also revised language to reflect the two options for filing EEI. The two options are filing via AESDirect or filing to the AES mainframe. Finally, the Census Bureau added language to the FTR to ensure consistency with the Bureau of Industry and Security (BIS) Export Administration Regulations (EAR) based on the Export Control Reform. These clarifications do not impose new reporting requirements.

2. Needs and Uses

The information collected via the Automated Export System (AES) conveys what is being exported (description and commodity classification number), how much is exported (quantity, shipping weight, and value), how it is exported (mode of transport, exporting carrier, and whether containerized), from where (state of origin and port of export), to where (port of unloading and country of ultimate destination), and when a commodity is exported (date of exportation). The identification of the U.S. Principal Party in Interest (USPPI) shows who is exporting goods. The USPPI and/or the forwarding or other agent information provides a contact for verification of the information.

The information is used by the U.S. Federal Government and the private sector. The Federal Government uses every data element on the AES record. The Census Bureau published the Interim Final Rule “Foreign Trade Regulations (FTR): Clarification on Uses of Electronic Export Information” to describe how EEI will be accessed and utilized under the International Trade Data System (ITDS). The ITDS was established to eliminate the redundant information collection requirements, efficiently regulate the flow of commerce and to effectively enforce laws and regulations relating to international trade. It establishes a single portal system for the collection and distribution of standard electronic import and export data required by all participating federal agencies. In addition, the rule allows federal agencies with appropriate authority to access export data in the AES and ensure consistency with the Executive Order 13659, Streamlining the Export/Import Process for America’s Businesses issued on February 19, 2014.

The data collected from the AES serves as the official record of export transactions. The mandatory use of the AES enables the Federal Government to produce more accurate export statistics. The Census Bureau delegated the authority to enforce the FTR to the BIS’s Office of Export Enforcement along with the Department of Homeland Security’s CBP and Immigrations and Customs Enforcement (ICE). The mandatory use of the AES also facilitates the enforcement of the Export Administration Regulations for the detection and prevention of exports of high technology commodities to unauthorized destinations by the BIS and the CBP; the International Traffic in Arms Regulations (ITAR) by the U.S. Department of State (State Department) for the exports of munitions; and the validation of the Kimberly Process Certificate for the exports of rough diamonds.

Other Federal agencies use these data to develop the components of the merchandise trade figures used in the calculations for the balance of payments and GDP accounts to evaluate the effects of the value of U.S. exports; enforcing U.S. export laws and regulations; to plan and examine export promotion programs and agricultural development and assistance programs; and to prepare for and assist in trade negotiations under the General Agreement on Tariffs and Trade. Collection of these data also eliminates the need for conducting additional surveys for the collection of information as the AES shows the relationship of the parties to the export transaction (as required by the Bureau of Economic Analysis). These AES data are also used by the Bureau of Labor Statistics as a source for developing the export price index and by the U.S. Department of Transportation for administering the negotiation of reciprocal arrangements for transportation facilities between the United States and other countries. Additionally, a collaborative effort amongst the Census Bureau, the National Governors’ Association and other data users resulted in the development of export statistics requiring the state of origin to be reported on the AES. This information enables state governments to focus activities and resources on fostering the exports of goods that originate in their states.

Export statistics collected from the AES aid private sector companies, financial institutions, and transportation entities in conducting market analysis and market penetration studies for the development of new markets and market-share strategies. Port authorities, steamship lines, airlines, aircraft manufacturers, and air transport associations use these data for measuring the volume and effect of air or vessel shipments and the need for additional or new types of facilities.

The implementation of quality standards is an integral part of the pre-dissemination review by the Census Bureau (fully described in the Census Bureau’s Information Quality Guidelines). In addition, information quality is incorporated into the clearance process required by the Paperwork Reduction Act.

3. Use of Information Technology

The Automated Export System (AES) was developed jointly by the Census Bureau and CBP. It is an information gateway for both the Census Bureau and CBP to improve the timeliness and accuracy of export trade statistics, improve customer service, ensure compliance with and enforcement of export laws, and to provide for paperless reporting of export information.

There are 61,500 AES filers submitting export information for 304,223 USPPIs. These AES submissions represent approximately 1,268,235 export records monthly which is 100 percent of non-Canadian export transactions. An AES record is not required for exports to Canada, except for shipments that are license-controlled, contain rough diamonds, used self-propelled vehicles, or are en route through Canada destined for a third country. Under the terms of a Memorandum of Understanding (MOU) with Canada, the Census Bureau uses Canadian import data as a replacement for U.S. export information. Including automated Canadian data, the Census Bureau receives all of its information from electronic sources. The AES improves the accuracy and timeliness of processing trade statistics. In the AES, system edits prohibit entry of invalid information and corrections must be made before these data are accepted and processed. As a result, AES records have less than one tenth of a percent error rate.

4. Efforts to Identify Duplication

To prevent duplication, Executive Order 13659, Streamlining the Export/Import Process for America’s Businesses, was issued on February 19, 2014. The Executive Order initiated the development of the International Trade Data System (ITDS). The ITDS will allow businesses to electronically transmit data required by participating agencies for the import and export through a single portal system, “single window.” The Automated Export System (AES) was migrated to the new platform in order to comply with this Executive Order.

In order to prevent duplication, the Census Bureau maintains ongoing contact with other federal agencies involved in collecting information on export or export control functions. The Census Bureau has representatives on various ITDS working groups to ensure that export data collected by the Census Bureau are not duplicated by other agencies and that the agencies who use the export data that is collected in the AES adheres to the Census Bureau statutory and regulatory guidelines on access, use, release, and confidentiality. In addition, the Census Bureau keeps up with policy and regulatory changes being made by other federal agencies to ensure that they comply with the guidelines listed previously and do not duplicate information currently being collected by the Census Bureau.

5. Efforts to Minimize Burden

The Automated Export System (AES) is accessible via a free Internet application. The AES provides online registration (Automated Commercial Environment (ACE) Exporter Account Application) and a User Guide which provides assistance in filing export information electronically. It also provides users the capability to recall a previous record for use as a template to create subsequent records.

Information is constantly gathered from the AES for use by U.S. Customs and Border Protection (CBP), the Census Bureau, other federal agencies, and the export community. In 2014, the AES migrated to the ACE to update the system’s technology and platform while complying with Executive Order 13659. The ACE will become the primary system through which the international trade community will submit import and export data and documentation required by all Federal agencies. The new platform was developed to streamline the export and import processes. Additionally, the functionality of AESDirect has been improved by reducing the number of data entry sections from seven to four by grouping similar elements in one view.

Export information and transportation data collected from the AES provide complete, timely, and accurate data. This is accomplished by using the edit fields that are in place in the AES. For example, if an error occurs while filing export information, it must be corrected immediately while the filer is entering the information, otherwise the system will not confirm that the transaction is valid and accepted.

Several agencies including the Census Bureau, CBP, BIS, and the U.S. Department of State are involved in an extensive outreach and education effort to ensure that the trade community is aware of the export filing requirements in order to improve compliance. The Census Bureau also partners with private organizations and trade associations to provide additional educational opportunities to those involved in the export process. Additionally, the Census Bureau has ongoing efforts to inform the trade community about new trade trends and regulatory changes that can affect business operation practices. As a result of these efforts, the following tools are made available: (1) export training videos; (2) the Global Reach blog; (3) updated user guides which detail proper procedures for creating the AES record, sending the AES record to the AES, retrieving the AES record to verify and/or update export information, printing the AES record and deleting the AES record; and (4) webinars, which provide training on new regulations, changes to filing requirements, as well as compliance reviews. Currently, these efforts have resulted in increased compliance and improved the quality of information filed in the AES. Currently, 99.5% of filers have a compliance rate of 95% or higher.

Under the terms of a MOU signed by the CBP, the Census Bureau, Statistics Canada, and Canadian Customs, the United States can substitute Canadian import statistics for U.S. export statistics. Conversely, the MOU enables Canada to substitute U.S. import statistics for Canadian exports to the United States. This exchange eliminates the filing of over eight million AES records annually.

6. Consequences of Less Frequent Collection

Less frequent collection of export statistics would result in the loss of data that is currently released monthly. This would adversely affect the release of the monthly U.S. International Trade in Goods and Services Report (including U.S. trade balance figures) and the Bureau of Economic Analysis’ (BEA) Advance Estimate of Gross Domestic Product (GDP).

Should the Census Bureau begin to release the official export statistics on a quarterly basis, information currently released around 30 calendar days after the month of export would be delayed an additional 90 calendar days. This could greatly impact the publication of the merchandise trade balance, produced by the Federal Government, which is one of the most sensitive and closely watched of the principal economic indicators. The Council of Economic Advisors, Congress, the Trade Policy Agencies, the press, and financial markets focus great attention on the monthly release. Slight movements in the trade balance affect public policy, financial decisions, Congressional actions, and market movements. The trade deficit is one of the most important economic issues in recent years.

In addition, BEA uses merchandise trade figures in their advance GDP estimate. GDP measures the value of goods and services produced in the U.S. economy and is critical to the Federal Reserve, businesses, and policymakers around the world. Undercoverage of exports will reduce the accuracy of the advance GDP and lead to greater revisions to the second and third estimates of GDP.

Separating the Automated Export System (AES) record from the actual export movement of a shipment would disallow the use of the AES record as a tool to be used for export control purposes by the CBP, the ICE, the BIS, the State Department, or any other federal agency utilizing the information for detecting and preventing the export of high technology commodities to unauthorized destinations.

7. Special Circumstances

The collection of export information from the Automated Export System (AES) record is conducted in a manner consistent with the Office of Management and Budget guidelines except that the response is required more frequently than on a quarterly basis. The USPPI must present the AES proof of filing citation, postdeparture filing citation, exemption or exclusion citation to the exporting carrier prior to export. However, for shipments between the United States and Puerto Rico the AES proof of filing citation, postdeparture filing citation, exemption or exclusion citation must be presented to the carrier by the time the shipment arrives at the port of unloading. In addition, where the U.S. Customs and Border Protection (CBP) requires that a manifest be filed, the US Principal Party in Interest, or its authorized agent, must provide the outbound carrier with a proof of filing citation, postdeparture filing citation, AES downtime citation, exemption or exclusion legend, for annotation on the carrier’s outward manifest (19 United States Code). This is because the information is necessary to obtain current data for the monthly balance of trade, and is used on an ongoing basis by the CBP, the Bureau of Industry and Security, and the U.S. Department of State for export control purposes. However, for shipments between the United States and Puerto Rico, the AES proof of filing citation, postdeparture filing citation, or exemption citation must be presented to the carrier by the time the shipment arrives at the port of unloading.

8. Consultations Outside the Agency (Census Bureau)

The Census Bureau has an established email list of more than 119,840 individuals and businesses that export. We inform these contacts of any developments or changes within this data collection program and frequently receive feedback by email, telephone, or in writing from these entities.

The Census Bureau’s International Trade Management Division maintains a Website and blog that is accessible over the Internet. It provides up-to-date information on all major developments relating to the Automated Export System (AES), and changes to the Foreign Trade Regulations (FTR) and filing requirements. The trade community uses these sites and other federal agency’s websites extensively to keep informed on current export trade policies as they pertain to developments regarding the preparation and filing of exports.

The Census Bureau regularly participates in seminars and conferences sponsored by various trade organizations and other government agencies, such as the National Customs Brokers & Forwarders Association of America, the Joint Industry Group, the National Council on International Trade & Development, the Industry Sector Advisory Committees, International Trade Administration, and others. These seminars and conferences educate the trade community on the export filing requirements as it pertains to the FTR, Title 15 Code of Federal Regulations, Part 30. These seminars and conferences address numerous topics such as how to maintain compliance with the U.S. export regulations, accurately preparing the AES record, filing through the AES, and classifying commodities. Although these programs are not specifically designed to elicit public response, the seminars do provide a means of obtaining the public’s views on statistical regulations governing exports. Comments received at these various conferences and seminars are on an individual basis, informal in nature and not for building a consensus. Participation in these conferences enables the Census Bureau to keep the trade community informed of current regulatory policy decisions and allow for the exchange of information. The Census Bureau conducts workshops across the United States to provide hands-on training on the use of the AES.

On August 20, 2015, the Census Bureau published a Notice (Page 50597-50598, Citation 80 FR 50597) in the Federal Register inviting public comments on the Census Bureau’s proposed information collection, the AES program. Two commenters expressed concerns in response to this notice, one commenter provided complete support, and four commenters provided partial support. The first two commenters wanted to know why the HTS/Schedule B numbers that will be affected by the used electronics indicator were not identified. Additionally, one of these commenters disagreed that the addition of the two new data elements (original ITN field and used electronics indicator) would not impact the filing burden. The third commenter strongly supports the continued collection of export data in order to provide the public with useful export data and supports the addition of the two data elements in order to improve the accuracy of export statistics. The fourth commenter agreed with the addition of the two data elements but required clarification on whether a compliance alert would generate when reporting an original ITN and suggested defining “used” and “electronics” in the FTR. The fifth commenter agreed to the addition of the Original ITN, but rejected the proposed addition of a used electronics indicator stating that the inclusion of this indicator does not support the objectives of Executive Order 13693 and that the term “electronic” is too vague and could be misinterpreted. The sixth commenter agreed with implementing the Original ITN field but believes the used electronics indicator would be too burdensome on trade unless it applied to specific Schedule B numbers only. The sixth commenter agreed with the proposed clarification on filing EEI for shipments containing a specific or general license from the Office of Foreign Assets Control. Lastly, the seventh commenter disagreed with the proposed addition of a used electronics indicator because the Executive Order applies only to the management of waste produced by Federal Agencies and is not a justifiable in comparison with the burden on exporters.

The Census Bureau has reviewed these comments and provides the following response. At the time of the publication of the Proposed Information Collection Notice the specific HTS/Schedule B numbers were not known. However, the Census Bureau has since determined there are 75 Schedule B numbers that will be affected by this change (see Attachment G). In addition, the two proposed data elements will have no effect on the average estimate of three minutes to file an AES transaction. The original ITN is an optional data element, which means that the filer is not required to provide this information, however, the filer may choose to provide the original ITN in order to provide additional information that may decrease the issuance of unnecessary penalties. The used electronics indicator is a conditional data element and impacts less than one percent of commodities exported. Only 75 out of approximately 9,000 Schedule B numbers will be affected by this change. To add clarity, the Census Bureau proposed a definition for “used electronics,” which is included in the Notice of Proposed Rulemaking titled Foreign Trade Regulations (FTR): Clarification on Filing Requirements. The Census Bureau has conferred with the Environmental Protection Agency (EPA) in order to address the commenter’s concern that the inclusion of the indicator does not support the objectives of Executive Order (EO) 13693. Therefore, the EPA states that the EO requires that the Federal Government “promote electronics stewardship by establishing, measuring and reporting by… employing environmentally sound practices with respect to the agency’s disposition of all agency excess or surplus electronic products.” In order to fulfill this obligation, the EPA believes adding the indicator will help federal agencies better understand the flow of used electronics, within the US as well as exports to foreign countries. For example, this indicator would assist EPA under the Resource Conservation and Recovery Act (RCRA), 42 USC 6901 et seq., to achieve one of the objectives of RCRA which is “minimizing the generation of hazardous waste…by encouraging process substitution, materials recovery, properly conducted recycling and reuse, and treatment.” 42 USC 6902(a). Moreover, EPA has authority under RCRA 8003 (42 USC 6983) to “develop, collect, evaluate, and coordinate information” related to solid and hazardous waste management and activities. Additionally, the National Strategy for Electronics Stewardship that the White House released in July 2011, specifically requires the federal agencies to “improve information on trade flows and handling of used electronics, and share data with federal and international agencies.”

Based on the comments received, the Census Bureau has removed proposed language to clarify filing requirements for general and specific licenses issued by the Office of Foreign Assets Control since Section 30.2(a)(1)(iv)(F) addresses the requirement to file EEI for shipments containing goods licensed by any federal government agency.

9. Paying Respondents

The Census Bureau does not pay respondents to provide the AES information.

10. Assurance of Confidentiality

The Automated Export System (AES) record is exempt from public disclosure by statute, Title 13, United States Code (U.S.C.), Chapter 9, Section 301(g), and exemptions in the Freedom of Information Act, Title 5, U.S.C., Sections 552 (b)(3) and (b)(4). Public Law 96-275 amended Section 301 by adding Paragraph (g) to provide that “Shipper’s Export Declarations (or any successor document), wherever located, shall be exempt from public disclosure unless the Secretary determines that such exemption would be contrary to the national interest.” Department Organization Order 35-2A, Section 3.01a, delegated the authority to make the national interest determination to the Director of the Census Bureau. The statutory responsibility to protect information filed in the AES is implemented in the Foreign Trade Regulations, Title 15, Code of Federal Regulations, Part 30.60.

During the AES registration process, filers must certify that all statements made and information provided is true and correct and that the penalty provisions for violations of the U.S. laws that may be imposed (referenced on the AES record) as related to exportation are understood. In addition, the filing of complete and accurate export information via the AES is mandatory under Chapter 9, Title 13, U.S.C.

11. Justification for Sensitive Questions

The AES records do not contain any questions of sensitive nature.

12. Estimate of Respondent Burden

The following table shows the total annual responses, and the time required to collect information and to complete the Automated Export System (AES) record. The hours per response also include time required for record keeping.

Annual Hours Per = Total Hours

Responses Response

AES 15,218,820 .05 760, 941

The estimate of approximately three minutes (.05 hours) per electronic AES submission is based on historical records and an examination of an electronic submission. We estimate that approximately one quarter to one third of the information reported in the AES is repetitious and can be automatically inserted on each electronic submission. An example of such repetitious information is the name, address, and Employer Identification Number of the USPPI. Many automated filing respondents extract preexisting information from their electronic databases eliminating the need to repeatedly enter duplicate information. Additionally, the estimate represents an average time and accounts for a wide variety of circumstances.

Respondent Cost Burden Hours Cost

AES Record 760,941 @ $19.35/hour $14,724,208

The estimate of $19.35 per hour is roughly based on the wages of the cargo and freight agents responsible for preparing the AES record. The estimate was derived from the U.S. Department of Labor’s occupational employment statistics.

13. Estimate of Cost Burden

The Census Bureau expects that varying costs will be incurred for respondents submitting Automated Export System (AES) records. For respondents that use the AESDirect, the only cost involved is a personal computer and access to the Internet. Since this investment would be used for more than AES purposes, the cost of this investment would be minimal.

Respondents that prefer to develop or purchase software that connects to the AES, must submit a Letter of Intent (Attachment B) to the Census Bureau to participate in the AES. Typically, there is an initial cost in developing the software that connects to the AES. For respondents who purchase pre-developed software packages, the cost is usually between $1,000 and $4,200. We estimate that approximately 356 U.S. Principal Parties in Interests or, more likely agents, such as freight forwarders that service many exporters using this process, will purchase compatible software within the next three years. Using $2,600 as an average cost, we estimate this initial software procurement will cost the export community about $925,600. Some filers may also program the linking process into their existing programs, which is generally less expensive than purchasing or developing new software. Further, purchasing of outside freight forwarder services, if utilized by respondents, is part of usual and customary business practices and not specifically required for this information collection. The increase in cost is attributed to the development of more sophisticated software that allows for multiple users and the ability to handle high volume. Additionally, developers have consolidated software packages, which decreases the number of software options and increases the cost.

14. Cost to Federal Government

The Census Bureau bears the primary federal cost of the Automated Export System (AES) Program. Since the collection of export data is an integrated program, detailed costs are not available for each individual AES record. The export statistics program in the International Trade Management Division is estimated to cost $8.8 million for fiscal year 2015. The number of AES records received by the Census Bureau varies from reporting period to reporting period (monthly) depending upon international economic activity.

15. Reason for Change in Burden

The burden associated with this collection is being decreased by 149,174 hours due to an adjustment in the number of annual responses. The decrease in burden is due to a decrease in the total annual responses from 18,202,308, in the previous OMB submission, to 15,218,820. The decrease in responses was the result of an increase in consolidated shipments.

16. Project Schedule

The Census Bureau processes export data reported on the AES record for publication in categories outlined in the regular foreign trade statistics program. These data are collected and published monthly, approximately 24-28 calendar days after the month covered.

17. Request to Not Display Expiration Date

We do not wish to display an expiration date within the AES because AES software is vendor developed. To include an expiration date within AES-based software would impose extensive and costly changes on AES software vendors and filers.

18. Exceptions to the Certification

There are no exceptions.

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