International Legal Affairs: V7N6


AES – The Automated Export System

As computing systems get more advanced, there are increased opportunities to automate previously mundane or tedious tasks. In automating common tasks, systems are able to better screen data for errors and process data more efficiently than the prior manual systems. The U.S. Government has discovered that automating systems in the import and export arena makes transactions easier and faster, without sacrificing screening and compliance checks. Within the past several years, ATF has implemented an E-forms systems for digital submission of common forms, to include the ATF Form 6 import permit application. Although partially automated, ATF still accepts the bulk of data submissions the old-fashioned way – via written paper submission of forms.

The U.S. State Department has required electronic submission of export license applications for several years, but has gone a step further in that it no longer accepts paper submissions in any form. Initial registration, submission of export licenses, Commodity Jurisdiction requests, and General Correspondence are all now accepted via an on-line electronic portal. It only makes sense that a similar system would be set up for outbound export shipments.

The need to declare outbound export shipments is not new. Prior to AES, the system was paper based, labor intensive, and prone to errors. Launched in 1995, AES is a joint venture between U.S. Customs, the Census Bureau, the U.S. Commerce Department, the U.S. State Department, other Federal agencies, and the export trade community. AES is the system by which an exporter notifies U.S. Customs of a pending export shipment. Export information is collected electronically and edited immediately, and errors are detected and corrected at the time of filing, thereby eliminating reporting errors. Since 1997, AES has been available for all outbound vessels (air or ocean) at all ports throughout the United States.

Until recently, AES was not well known outside of the export industry. It should be noted that AES filings are required for all exports of a commercial nature – regardless of commodity. An AES filing is not limited only to small arms and ammunition. AES filings are required for the export of vehicles, olive oil, and binoculars, for examples. Nevertheless, this article provides examples of AES requirements as it relates to the small arms industry.

Recently, the U.S. State Department, (in its desire to automate all aspects of its operations) determined that temporary exports of firearms outside of the United States must be reported via AES. Previously, hunters heading out of the U.S. would file a CBP Form 4457, and have their firearms inspected by U.S. Customs prior to leaving the country. Upon return, presentation of the completed Form 4457 would be sufficient to allow the firearms back into the country. This scenario changes with the requirement of an AES filing prior to travel. As a portal intended for industry, a basic test must be completed prior to registering for access to the AES portal. Once online, the system is not difficult to navigate with some experience and knowledge of export procedure. For the casual traveler, filing an AES report is not easy, nor practical. Because there is little reason for the casual international hunter to become AES trained, U.S. Customs announced that its officers will help travelers with firearms fill out CBP Form 4457 “to ensure that no traveler attempting to legally take their firearm out of the country experiences significant delays.”

What about permanent exports? Not all firearm parts require an FFL to manufacture. Some firearms, namely those manufactured prior to 1898 (or replicas of pre-1898 firearms,) do not require an export license. While there may be no ATF or State Department oversight over these items, an AES filing would still be required prior to export. As an example: A replica pre-1898 Blunderbuss rifle would require no ATF paperwork to build, and could be exported without an export license from the U.S. State Department. But, if the blunderbuss was shipped outside of the U.S., an AES filing would be required. Similarly, there are export license exemptions for small transaction that do not exceed $500. Filing an AES filing places U.S. Customs on notice that the shipment is outbound, allows U.S. Customs to confirm that the transaction fits within the confines of the exemption, and helps the exporter ensure compliance with U.S. export regulation and law.

Failure to file with AES prior to shipping will often result in seizure of the shipment and a potential fine. The minimum fine levied by U.S. Customs for an AES violation is $500, and escalates upward quickly. Failure to pay the fine usually results in surrender (and loss) of the goods being shipped.

Automation on the part of the Government will continue to increase. Automated systems are getting better at verifying compliance, at a lower cost, and with greater efficiency than manual verification. The AES is but one means for the Government to ensure compliance with export law, whether by verifying the quantity and value of the items being exported, or the proper use of an exemption. The scope of automation sometimes seems to be over-reaching – namely in the case of the temporary export of a firearm by a U.S. hunter. Nevertheless, automation allows Customs and other Federal agencies to focus on more important aspects of law enforcement, and allows U.S. exporters to effectively and efficiently ship their products worldwide.

Mr. Wong is a Washington licensed attorney. He regularly provides legal counsel to the firearm and defense industry via his law firm, The Firearms Law Group. Mr. Wong also maintains Hurricane Butterfly, an import/export company that assists U.S. firearm manufacturers and foreign buyers wade through the regulatory morass of U.S. import/
export regulations.

The guidance provided within this article was correct and current at the time it was written. Policies and regulations change frequently. The preceding article is not intended as legal advice, and should not be taken as legal advice. If the reader has specific legal questions, seek competent legal counsel.