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Clarification to October 2010 Newsletter – DSP-5 licenses in the AES

Posted By rosannatorres On April 4, 2012 @ 7:25 am In Foreign Trade Regulations | 6 Comments

By: Omari Wooden

Based on the Foreign Trade Regulations (FTR) section 30.2(a)(1)(iv) [1], any export shipment requiring a U.S. Department of State, Directorate of Defense Trade Controls (DDTC) license or that is subject to the International Traffic in Arms Regulations (ITAR) must be reported in the Automated Export System (AES), regardless of value or destination. In the October 2010 AES Newsletter [2], I wrote an article titled, “Advice for reporting a DSP-5 license in the AES.” The article was intended to clarify the reporting requirements based on the fields in the AES as compared to the information contained on the DSP-5 license.

Today, I specifically want to provide clarification related to the End User and Ultimate [3]Consignee field. As I mentioned in the article, there is no End User field in the AES; however, the Ultimate Consignee may be the End User. Based on the FTR 30.1, the definition of the Ultimate Consignee, “the person, party, or designee that is located abroad and actually receives the export shipment. This party may be the end user or Foreign Principal Party in Interest (FPPI).” Based on the definition in the FTR, box 14 on the DSP-5 license, “Foreign End User” will need to be shown as the Ultimate Consignee in the AES.

Be sure to review the requirements found in both the FTR and the ITAR when reporting the DSP-5 licensed shipments in the AES.

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6 Comments To "Clarification to October 2010 Newsletter – DSP-5 licenses in the AES"

#1 Comment By Cherril Glazer On April 4, 2012 @ 8:37 pm

Now you’ve really confused me. If we are not shipping to the end user but are shipping to a forein consignee or foreign intermediate consignee (either blocks 16 or 18 under the license), we don’t show the foreign consignee or the foreign intermediate consignee on the AES but show the end user? The above clarification is not so clear.


#2 Comment By Danielle R. On April 5, 2012 @ 9:34 am

Could you clarify: based on FTR, the ultimate consignee should be the party who receives the export goods, not necessarily the end-user, correct? To me this contradicts your last line which says, based on this definition from FTR, the end-user listed on DSP-5 license box 14 needs to be listed as the ultimate consignee.
What if, for example, a product shipped under DSP-5 license is shipped to foreign party who further manufactures the product and then delivers the new end product to the end-user (shown in box 14) at a later date? The foreign manufacturer is receiving the goods, but they are not the end-user in box 14.

#3 Comment By Global Reach Omari On April 17, 2012 @ 9:34 am

Each export transaction is unique and in some cases there are details that have to be clarified before an accurate answer is provided. One of the conceptual challenges with this requirement is that the DSP-5 license and the AES record don’t overlap perfectly. For example, the DSP-5 has end user and foreign consignee, but the AES requires company’s to report the ultimate consignee. In many cases we would expect to see where the goods are initially delivered, but in licensed shipments, in particular DSP-5 licenses in this case, we require the end user in box 14.

In addition, for the country of ultimate destination, per Foreign Trade Regulations 30.6(a)(5)(i) states, Country of ultimate destination… (i) “shipments under an export license or license exemption… for shipments under an export license issued by the Department of State, DDTC, or the Department of Commerce, BIS, the country of destination shall conform to the country of ultimate destination shall conform to the country of ultimate destination as shown on the license. In the case of a Department of State license, the country of ultimate destination is the country specified with the respect to the end user.”

@ Danielle R – In the example you provided, you state that the goods are shipped to a manufacturer who “further manufactures the product and then delivers the new end product to the end-user…” Based on the requirements of who actually receives the goods, in specific cases of licensed shipments, the end-user in box 14 shall be reported.

#4 Comment By Scott Barney On August 30, 2012 @ 2:05 pm

Then who will be reported as the intermediate consignee? If there is an end user noted on the license, and this entity is noted as the ultimate consignee on the EEI, would the ship to party be noted as the intermediate consignee or would the ultimate consignee on the license be noted as the intermediate consignee on the EEI?

#5 Comment By Global Reach Omari On September 13, 2012 @ 9:22 am

Thank you for the question… I would report the intermediate consignee as listed on the license. Based on FTR 30.6(b)(2) for intermediate consignee, it states “The intermediate consignee is the person named as such on the export license…”

#6 Comment By William E. Prince/Retired/US Customs and Border Protection On August 31, 2013 @ 7:00 am

To add my comment to the above discussion. In some cases the end user cannot be determined in a practical situation. An example would be a shipment of handguns being exported to a firearms dealer for resale to the public in general. In actuality the dealer should only be designated as the ultimate consignee since it is impossible to determine an end user in this situation. Personally, if I had the option of making a choice I would choose following the requirements of the ITAR.

Article printed from Global Reach Blog: http://globalreach.blogs.census.gov

URL to article: http://globalreach.blogs.census.gov/2012/04/04/clarification-to-october-2010-newsletter-dsp-5-licenses-in-the-aes/

URLs in this post:

[1] Foreign Trade Regulations (FTR) section 30.2(a)(1)(iv): http://www.census.gov/foreign-trade/regulations/index.html

[2] October 2010 AES Newsletter: http://www.census.gov/foreign-trade/aes/aesnewsletter102010-en.pdf

[3] Image: http://globalreach.blogs.census.gov/files/2012/04/Receive-Package-web.jpg