By Chris Gillis Dec6 2019 / American Shipper
Agriculture shippers and forwarders work with CBP and Census in an effort to eliminate $5,000-$10,000 penalties for minor export data filing errors in the Automated Export System.
U.S. Customs and Border Protection officials have taken to calling penalties for minor export information filing mistakes in the Automated Export System (AES) “parking tickets,” but it’s much more than that to America’s exporters of agriculture products.
The Washington, D.C.-based Agriculture Transportation Coalition (AgTC) said its member exporters and freight forwarders are being unfairly assessed “punitive penalties ($5,000 to $10,000) for minor, generally inconsequential documentation mistakes,” which can make the difference between a profitable export or a financial loss.
“Sure, you can mitigate these penalties with CBP to $500 or $1,000, but that takes a lot of time and effort on the part of the ag exporter or forwarder,” said AgTC Executive Director Peter Friedmann in an interview.
CBP and Census began imposing these penalties for export data errors in 2008 to enforce mandatory filing in AES. Prior to this, AES was a voluntary system and exporters could still submit paper Shipper’s Export Declarations to the agencies as proof of export. AES has allowed CBP and Census not only to better detect and target illicit exports but also minor data errors.
Friedmann said many AES data errors are the result of the current export filing regulations not lining up with the commercial realities of ocean and rail freight transportation for agricultural products.
For example, at the ports of Seattle and Tacoma, which commercially operates today as a single port authority, the Northwest Seaport Alliance, it is not uncommon for containership operators to switch from a terminal in Seattle to another in Tacoma. The exporter or forwarder that already filed its export data in AES is often unaware of these changes, which can result in a $5,000 penalty per shipment from CBP for the “wrong” departure port.
“This is happening to AgTC members and others with Tacoma and Seattle, since the ports are still viewed by Census as distinct ports,” Friedmann said. “We are working with the Northwest Seaport Alliance, CBP and Census and believe a solution is possible.”
Friedmann said simple typos have resulted in significant penalties for agriculture shippers and forwarders. In one recent example, he explained a shipper had all the details of the export correct in its AES filing, including the departure date and port and the exact harmonized tariff schedule number of the cargo, for six shipments. However, in the description, the shipper had a typo instead of “cotton.” CBP imposed a $10,000 fine for each typo. The shipper was able to work with the agency to eventually reduce the penalty to a single fine of $250.
Friedmann praised the extra efforts that CBP and Census officials are now making to understand and remedy the plight of these export data error penalties on case-by-case basis. “The real solution is being developed by CBP officials working with exporters,” he said.
For years, agriculture exporters moving soybeans, grains and corn by rail across the North Dakota border to Canada’s Vancouver seaport for export has been receiving multiple $5,000 fines from CBP for the wrong date of export when the railroad delayed the border crossing. The AgTC contacted CBP officials in Washington, D.C., to explain the rail situation on the northern border and the agency agreed to extend the allowable window for border crossing dates from four to 10 days, eliminating the “errors” and fines, Friedmann said.
Friedmann lauded CBP’s James Swanson and Thomas Overacker for leading the agency’s initiative to automate the export manifest process. “They recognize and are working to create a comprehensive solution to this problem,” he said.