Foreign Trade Regulations (FTR): New Filing Requirement and Clarifications to Current Requirements, 71187-71190 [2021-26874]

Agencies

• Census Bureau
• DEPARTMENT OF COMMERCE

[Federal Register Volume 86, Number 238 (Wednesday, December 15, 2021)]
[Proposed Rules]
[Pages 71187-71190]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-26874]


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DEPARTMENT OF COMMERCE

Census Bureau

15 CFR Part 30

[Docket Number: 211117-0237]
RIN 0607-AA59


Foreign Trade Regulations (FTR): New Filing Requirement and 
Clarifications to Current Requirements

AGENCY: Census Bureau, Commerce Department.

ACTION: Notice of proposed rulemaking.

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[[Page 71188]]

SUMMARY: The Census Bureau is proposing to amend its regulations to 
reflect new export reporting requirements related to the country of 
origin. Specifically, the Census Bureau is proposing to add a 
conditional data element, country of origin, when Foreign origin is 
selected in the Foreign/Domestic Origin Indicator field in the 
Automated Export System (AES). In addition to the new export reporting 
requirement, the proposed rule would make remedial changes to the FTR 
to improve clarity and to correct errors.

DATES: Written comments must be received on or before February 14, 
2022.

ADDRESSES: You may submit comments by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
The identification number for this rulemaking is identified by RIN 
0607-AA59; or
     By email directly to [email protected]. Include 
RIN 0607-AA59 in the subject line.
    All comments received are part of the public record. No comments 
will be posted to https://www.regulations.gov for public viewing until 
after the comment period has closed. Comments will generally be posted 
without change. All Personally Identifiable Information (for example, 
name and address) voluntarily submitted by the commenter may be 
publicly accessible. Do not submit confidential business information or 
otherwise sensitive or protected information.

FOR FURTHER INFORMATION CONTACT: Lisa E. Donaldson, Chief, Economic 
Management Division, Census Bureau by phone (301) 763-7296 or by email 
[email protected]. Additionally, Stephanie L. Studds, Chief, 
Economic Indicator Division, Census Bureau by phone (301) 763-2633 or 
by email ste[email protected].

SUPPLEMENTARY INFORMATION:

Background

    The Census Bureau is responsible for collecting, compiling, and 
publishing export trade statistics for the United States under the 
provisions of Title 13, United States Code (U.S.C.), Chapter 9, Section 
301. While the Census Bureau is the official source for U.S. 
international trade statistics, the Census Bureau works in partnership 
with U.S. Customs and Border Protection (CBP) to collect data regarding 
both exports and imports. Additionally, the Census Bureau is 
responsible for publishing the Foreign Trade Regulations (FTR) that set 
the export reporting requirements for Electronic Export Information 
(EEI). The EEI is made up of mandatory, conditional, and optional data 
elements. The purpose of this rulemaking is to add a conditional data 
element, country of origin, when Foreign origin is selected in the 
Foreign/Domestic Origin Indicator field in the EEI. The FTR defines 
foreign goods as goods that were originally grown, produced, or 
manufactured in a foreign country, then subsequently entered into the 
United States, admitted to a U.S. Foreign Trade Zone (FTZ), or entered 
into a CBP bonded warehouse, but not substantially transformed in form 
or condition by further processing or manufacturing in the United 
States, U.S. FTZs, Puerto Rico, or the U.S. Virgin Islands.
    Under Section 301 of Title 13 U.S.C., the Secretary of Commerce is 
authorized to collect and publish import and export information 
considered necessary or appropriate ``to foster, promote, develop, and 
further'' domestic commerce. Executive Order (E.O.) 14017, ``America's 
Supply Chains,'' sets forth the U.S. Government policy to build 
resilient and diverse supply chains that increase domestic production, 
diversify the supply of goods, feature redundancies, ensure adequate 
stockpiles, and leverage the American manufacturing base and workforce. 
(86 FR 11849; March 01, 2021). E.O. 14017 establishes a multi-agency 
approach, which includes the Department of Commerce, in assessing and 
identifying critical supply chain components and gaps in domestic 
production filled by foreign nations that instead supply these goods. 
These activities and broader supply chain analysis are necessary and 
appropriate in furthering domestic commerce. Under the authorities in 
Chapter 9 of Title 13, the Secretary of Commerce proposes to collect 
data on the entry and origin of foreign goods into the United States to 
improve the foreign trade statistics produced by the Census Bureau.
    Currently, foreign trade statistics do not provide insight 
sufficient to identify the gaps in domestic product and supply, 
evaluate supply chains, or address trade imbalances. U.S. Government 
agencies and private entities need accurate and complete foreign trade 
statistics to create and monitor trade agreements, formulate trade 
policy, assess U.S. supply chain issues, and identify and address trade 
imbalances. Agencies and the private sector also use foreign trade 
statistics to identify new markets for U.S. goods and services 
globally.
    The current Foreign/Domestic Origin Indicator field in the 
Automated Export System (AES) creates significant data challenges and 
limitations in using the trade statistics produced by the Census Bureau 
and other Federal agencies because the Indicator does not capture the 
country of origin. Currently, U.S. agencies rely on foreign trade 
partners to share the data they collect on the foreign and domestic 
origin of goods. This reliance limits U.S. agencies' ability to 
identify asymmetry in imports and exports of goods, as any asymmetry 
must be inferred by evaluating the data acquired from foreign trading 
partners with the data collected on U.S. imports by CBP.
    The collection of the Country of Origin field in AES for reexports 
would eliminate the reliance on information provided by foreign 
partners, thereby increase the accuracy and timeliness of the foreign 
trade statistics used to monitor trade agreements and policy to assist 
in assessing U.S. supply chain issues. The collection also would assist 
U.S. Government agencies that use these statistics to reconcile trade 
imbalances between the United States and our partner countries. The 
U.S. Statistical Agencies collaborate globally to identify and 
understand data asymmetries between one country's imports and the other 
country's exports statistics.
    By augmenting the Country of Origin field for exports in the AES, 
the Census Bureau could produce trade statistics equivalent to the data 
collected globally. The increased granularity in data collected through 
a Country of Origin field would significantly improve the accuracy of 
asymmetry evaluation as well as the creation, negotiation, and 
evaluation of U.S. trade agreements and the ability to monitor goods 
within U.S. supply chains. These data can provide critical insight to 
U.S. supply chain issues, as the economy emerges from the pandemic. 
Additionally, many of our trading partners require and collect a 
detailed country of origin on their imports and exports. In consulting 
with the Organisation for Economic Co-operation and Development and 
other countries globally, the Census Bureau learned that this 
information is mandatory for their collection. Through research 
conducted with exporting companies, the Census Bureau has determined 
that these data are available and can be provided by exporters, within 
an estimated 12-18 months to update internal and/or proprietary 
computer systems, and/or the technology they utilize to implement the 
required changes to the AES.
    Therefore, the Census Bureau is proposing to collect the Country of 
Origin field on reexports to create official statistics.

[[Page 71189]]

    The Census Bureau understands that the addition of country of 
origin for reexports may have implications for the trade in filing in 
the AES and complying with the FTR.
    The Census Bureau is seeking public comments from data users, 
businesses and others to assess this proposed change on foreign trade 
statistics. Below are questions to consider when providing feedback to 
this proposed rule; however, any pertinent feedback not captured by 
these questions is welcome.
    1. Describe potential uses of the Census Bureau's statistical data 
of international trade.
    2. Describe the potential value of adding country of origin to the 
EEI if using the Census Bureau's statistical data of international 
trade.
    3. If a stakeholder utilized or managed proprietary software to 
communicate with the AES, how long would it need to potentially add the 
Country of Origin field?
    4. How long would a company who utilizes or manages proprietary 
software need to make programming changes to potentially add the 
country of origin field to its interface to AES?
    5. Are there business practices that a company would need to 
implement in order to come into compliance with the reporting of the 
Country of Origin field?
    6. How would the country of origin be identified when companies 
store or warehouse goods of multiple origins together?

Program Requirements

    To comply with the requirements of the Foreign Relations Act, 
Public Law 107-228, the Census Bureau is amending relevant sections of 
the FTR to revise or clarify export reporting requirements. Therefore, 
the Census Bureau is correcting 15 CFR part 30 by making the following 
correcting amendments:
     Revise Sec.  30.2(d)(3) to remove the language, ``(See 
Subpart B of this part for export control requirements for these type 
of transactions.),'' as the exclusion overrides the export control 
requirements.
     Revise Sec.  30.3(e)(1) to add the proposed data element, 
``Country of origin,'' to the list of required data elements that need 
to be provided by the U.S. Principal Party in Interest (USPPI) in a 
routed export transaction.
     Revise Sec.  30.6(a)(1)(iii) to clarify that when the Dun 
and Bradstreet Number (DUNS) is reported as the USPPI ID, the Employer 
Identification Number (EIN) of the USPPI also is required to be 
reported in the Automated Export System.
     Revise Sec.  30.6(b)(3) to amend the Foreign Trade Zone 
(FTZ) identifier to allow for 9-digits. The increased number of digits 
is required because of the increase in the number of subzones.
     Revise Sec.  30.6(b)(18) to add the conditional data 
element ``Country of origin.'' The ``Country of origin'' will be the 
code issued by the International Standards Organization and reported 
when Foreign origin is selected in the Foreign/Domestic Origin 
Indicator field in the Automated Export System.
     Revise Sec.  30.37(u) to remove and reserve the exemption 
for technical data. This exemption is covered under Sec.  30.2(d)(3), 
making the exemption redundant.
     Revise Sec.  30.55 to remove the citation ``19 CFR 103.5'' 
and add in its place ``19 CFR part 103.''
     Revise Sec.  30.71 to amend the Note to paragraph (b) to 
address the yearly adjustments for civil penalties as a result of 
inflation.
     Revise Sec.  30.74 to amend paragraph (c)(5) to remove 
information that may become outdated and referencing the Census Bureau 
website to obtain the most current method for submitting a Voluntary 
Self-Disclosure.

Rulemaking Requirements

Regulatory Flexibility Act

    The Chief Council for Regulation of the Department of Commerce has 
certified to the Chief Counsel for Advocacy, Small Business 
Administration that this proposed rule will not have a significant 
economic impact on a substantial number of small entities.
    In the current Foreign Trade Regulations (FTR), the Electronic 
Export Information (EEI) shall be filed through the Automated Export 
System (AES) for all exports of physical goods. The AES is the 
electronic system for collecting Shipper's Export Declaration (SED) (or 
any successor document) information from persons exporting goods from 
the United States, Puerto Rico, Foreign Trade Zones located in the 
United States and Puerto Rico, the U.S. Virgin Islands, between the 
U.S. and Puerto Rico, and to the U.S. Virgin Islands from the United 
States or Puerto Rico. In the proposed revisions, export shipments with 
the Foreign origin selected in the Foreign/Domestic Origin Indicator 
field will be required to report the country of origin.
    In 2020, there were 33,716,623 total number of export records. Of 
these 33,716,623 records, 23.45% (7,907,049 records) had exports 
reported with a Foreign origin indicator by the authorized agent or the 
USPPI. The Census Bureau has conducted research over the last year and 
contacted 58 U.S. companies across 16 different industries (including 
major freight forwarders). These companies represented the top 10% by 
dollar value of exports reported under 31 Harmonized Tariff Schedule 
(HTS) codes with a Foreign origin indicator. The Center for Economic 
Studies provided the Census Bureau with questions related to these 
companies' current ability to adhere to the country of origin 
requirement. Based on the feedback to the inquiry, the Census Bureau 
believes this proposed rule will not create any economic impact on all 
companies including a substantial number of small entities.

Executive Orders

    This proposed rule has been determined to not be significant for 
purposes of Executive Order 12866. This proposed rule does not contain 
policies with federalism implications sufficient to warrant preparation 
of a federalism assessment under Executive Order 12612. This proposed 
rule has been determined to be not significant for the purposes of 
Executive Order 14017 ``America's Supply Chains.''

Paperwork Reduction Act

    Notwithstanding any other provisions of law, no person is required 
to respond to, nor shall a person be subject to, a penalty for failure 
to comply with a collection of information subject to the requirements 
of the Paperwork Reduction Act (PRA) unless that collection of 
information displays a valid Office of Management and Budget (OMB) 
control number.
    This proposed rule covers collections of information subject to the 
provisions of the PRA, which are cleared by OMB under OMB Control 
Number 0607-0152--Automated Export System (AES) Program.
    This proposed rule will not impact the current reporting-hour 
burden requirements as approved under OMB Control Number 0607-0152 
under provisions of the PRA. The proposed rule will not require any 
revisions to the information sought under OMB Control Number 0607-0152.
    Ron S. Jarmin, Acting Director, Census Bureau, approved the 
publication of this notice of proposed rulemaking in the Federal 
Register.

List of Subjects in 15 CFR Part 30

    Economic statistics, Exports, Foreign trade, Reporting and 
recordkeeping requirements.

    For the reasons set out in the preamble, the Census Bureau is

[[Page 71190]]

proposing to amend 15 CFR part 30 as follows:

PART 30--FOREIGN TRADE REGULATIONS

0
1. The authority citation for 15 CFR part 30 continues to read as 
follows:

    Authority: 5 U.S.C. 301; 13 U.S.C. 301-307; Reorganization plan 
No. 5 of 1990 (3 CFR 1949-1953 Comp., p.1004); Department of 
Commerce Organization Order No. 35-2A, July 22, 1987, as amended, 
and No. 35-2B, December 20, 1996, as amended; Public Law 107-228, 
116 Stat. 1350.

0
2. Amend Sec.  30.2 by revising paragraph (d)(3) to read as follows:


Sec.  30.2  General requirements for filing Electronic Export 
Information (EEI).

* * * * *
    (d) * * *
    (3) Electronic transmissions and intangible transfers.
* * * * *
0
3. Amend Sec.  30.3 by revising paragraphs (e)(1)(ii) and (vii) through 
(xii) and adding paragraph (e)(1)(xiii) to read as follows:


Sec.  30.3   Electronic Export Information filer requirements, parties 
to export transactions, and responsibilities of parties to export 
transactions.

* * * * *
    (e) * * *
    (1) * * *
    (ii) USPPI's EIN or DUNS.
* * * * *
    (vii) Country of origin.
    (viii) Schedule B or HTSUSA, Classification Commodity Code.
    (ix) Quantities/units of measure.
    (x) Value.
    (xi) Export Control Classification Number (ECCN) or sufficient 
technical information to determine the ECCN.
    (xii) All licensing information necessary to file the EEI for 
commodities where the Department of State, the Department of Commerce, 
or other U.S. Government agency issues a license for the commodities 
being exported, or the merchandise is being exported under a license 
exemption or license exception.
    (xiii) Any information that it knows will affect the determination 
of license authorization (see subpart B of this part for additional 
information on licensing requirements).
* * * * *
0
4. Amend Sec.  30.6 by revising paragraphs (a)(1)(iii) and (b)(3) and 
adding paragraph (b)(18) to read as follows:


Sec.  30.6  Electronic Export Information data elements.

* * * * *
    (a) * * *
    (1) * * *
    (iii) USPPI identification number. Report the Employer 
Identification Number (EIN) of the USPPI. If the USPPI has only one 
EIN, report that EIN. If the USPPI has more than one EIN, report the 
EIN that the USPPI uses to report employee wages and withholdings, and 
not the EIN used to report only company earnings or receipts. Use of 
another company's EIN is prohibited. If a USPPI reports a DUNS, the EIN 
is also required to be reported. If a foreign entity is in the United 
States at the time goods are purchased or obtained for export, the 
foreign entity is the USPPI. In such situations, when the foreign 
entity does not have an EIN, the authorized agent shall report a border 
crossing number, passport number, or any number assigned by CBP on 
behalf of the foreign entity.
* * * * *
    (b) * * *
    (3) FTZ identifier. If goods are removed from a FTZ and not entered 
for consumption, report the FTZ identifier. This is the unique 9-digit 
alphanumeric identifier assigned by the Foreign Trade Zone Board that 
identifies the FTZ, subzone or site from which goods are withdrawn for 
export.
* * * * *
    (18) Country of origin. If the goods exported are of foreign origin 
and have undergone no change in form or condition or enhancement in 
value by further manufacturing in the United States, U.S. FTZs, Puerto 
Rico, or the U.S. Virgin Islands, report the foreign country in which 
the commodities were grown, produced, manufactured, or substantially 
transformed. For commodities with multiple origins, report the foreign 
country of the commodity with the greatest value. If the USPPI does not 
know the foreign country where the goods originated from, the country 
of origin to be shown is the last foreign country, as known to the 
USPPI at the time of shipment from the United States, from which the 
goods were shipped in their present form. Report the country of origin 
using the code issued by the International Standards Organization.
* * * * *


Sec.  30.37   [Amended]

0
5. Amend Sec.  30.37 by removing and reserving paragraph (u).
0
6. Amend Sec.  30.55 by revising the introductory text to read as 
follows:


Sec.  30.55  Confidential information, import entries, and withdrawals.

    The contents of the statistical copies of import entries and 
withdrawals on file with the Census Bureau are treated as confidential 
and will not be released without authorization by CBP, in accordance 
with 19 CFR part 103 relating to the copies on file in CBP offices. The 
importer or import broker must provide the Census Bureau with 
information or documentation necessary to verify the accuracy or 
resolve problems regarding the reported import transaction.
* * * * *
0
7. Amend Sec.  30.71 by designating the note to paragraph (b) as note 1 
to paragraph (b) and revising the note to read as follows:


Sec.  30.71  False or fraudulent reporting on or misuse of the 
Automated Export System.

* * * * *

    Note 1 to paragraph (b):  The civil monetary penalties are 
adjusted for inflation annually based on The Federal Civil Penalties 
Inflation Adjustment Act of 1990 (Pub. L. 101-410; 28 U.S.C. 2461), 
as amended by the Debt Collection Improvement Act of 1996 (Pub. L. 
104-134) and the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015 (Section 701 of Pub. L. 114-74). In 
accordance with this Act, as amended, the penalties in Title 13, 
Chapter 9, Sections 304 and 305(b), United States Code are adjusted 
and published each year in the Federal Register no later than 
January 15th.

0
8. Amend Sec.  30.74 by revising paragraph (c)(5) to read as follows:


Sec.  30.74   Voluntary self-disclosure.

* * * * *
    (c) * * *
    (5) Where to make voluntary self-disclosures. The information 
constituting a Voluntary Self-Disclosure or any other correspondence 
pertaining to a Voluntary Self-Disclosure may be submitted to the U.S. 
Census Bureau, Branch Chief, Trade Regulations Branch by methods 
permitted by the Census Bureau. See www.census.gov/foreign-trade for 
more details.
* * * * *

    Dated: December 7, 2021.
Sheleen Dumas,
Department PRA Clearance Officer, Office of the Chief Information 
Officer, Commerce Department.
[FR Doc. 2021-26874 Filed 12-14-21; 8:45 am]
BILLING CODE 3510-07-P