Effective Date: The new guidelines are effective February 1, 2009 for violations which occur on or after February 1, 2009.
Subject: Penalties for Violations of Automated Export System (AES) Mandatory Filings
Summary: The authority to issue and collect penalties is delegated to CBP with the maximum penalty for civil violations capped at $10,000 per violation.
Penalties may be accessed for: 1) failing to file, 2) delay in filing, 3) filing false or ‘misleading’ information into AES or 4) failure of the export carrier to provide certain documents or information to CBP. Each of these categories has its own penalty and mitigating guidelines.
Penalties can be assessed against any ‘culpable party’ involved in the transaction including the: 1) U.S. Principal Party in Interest, 2) Foreign Principal Party in Interest, freight forwarder, authorized agent (including broker) and carrier. The penalty may be assessed against multiple ‘culpable parties’ in a single AES transmission, e.g. against the USPPI and the carrier. Since penalties are assessed by AES transmission the fact that a single transmission contains multiple violations, e.g. incorrect consignee and incorrect value, only one penalty would be assessed. However, additional penalties can be assessed if CBP determines that other substantive violations have occurred, e.g. goods are counterfeit.
Penalties are assessed based on the party’s history of prior violations.
Mitigation Outline:
1) Failing to File:
1st recorded offense: $750 - $2,500
2nd recorded offense: $1,000 - $3,500
3rd recorded offense: $1,500 - $5,000
4th recorded offense: $2,000 - $10,000
2) Late Filing:
1st recorded offense: $250 - $1,500 (per day)
2nd recorded offense: $500 - $2,500 (per day)
3rd recorded offense: $750 - $3,500 (per day)
4th recorded offense: $1,100 - $10,000 (per day up to $10,000)
3) Other Violations: including providing false or incorrect information, failure to obtain power of attorney, failure to cite proper license exception, etc.
1st recorded offense: $500 - $2,500
2nd recorded offense: $750 - $3,500
3rd recorded offense: $1,000 - $5,000
4th recorded offense: $2,000 - $10,000
4) Carrier Penalties:
1st recorded offense: $500 - $2,500
2nd recorded offense: $750 - $3,500
3rd recorded offense: $1,000 - $5,000
4th recorded offense: $2,000 - $10,000
Each of the above categories identifies various violations as well as providing for mitigating and aggravating factors which are to be taken into consideration when assessing a penalty.
These new guidelines represent a significant emphasis on ensuring compliance with AES filing requirements and they heighten the penalties that will be assessed for violation of these requirements.
Exporters are strongly advised to review the detailed regulations carefully to ensure that they fully understand what constitutes a violation under this provision.