Understandably, this concept of a routed transaction is risky and generates many questions. Let’s try to answer those questions and mitigate the risk.
The Foreign Trade Regulations (FTR) defines a routed export transaction as, “an export transaction in which the foreign principal party in interest (FPPI) authorizes a U. S. agent to facilitate the export of a shipment from the U. S. and to prepare and file electronic export information (EEI).” Routed export transactions are a risk in that these transactions shift the control of the movement of the goods and the filing of the EEI from the U. S. Principal Party in Interest (USPPI) to the FPPI. The FPPI directs the movement of the goods out of the U. S. and authorizes the U. S. agent to file the Automated Export System record for the shipment. Though the FPPI is “controlling” the export transaction, the USPPI is still responsible for providing their name, address, and all the commodity information to the filing agent (see FTR section 30.3(e) for a detailed listing of the items).
To ensure that the EEI is filed accurately and to reduce your risk in this type of transaction, you should ask the FPPI to authorize you to file the EEI.
Key points about routed transactions:
- The FPPI controls the movement of the goods out of the U. S.
- The FPPI provides the authorization to a U. S. agent to prepare and file the EEI.
- The USPPI provides information to the U. S. agent regarding the shipment or can file the EEI, if they have received authorization from the FPPI.
Routed export transactions can be challenging, but if you adhere the key points discussed above, you will mitigate the risk involved in these transactions.
What is the meaning of POA?
POA = Power of Attorney
Hello Carlos, it means Power of Attorney.
POA is the acronym for Power of Attorney.
Per the above: “The Foreign Trade Regulations (FTR) defines a routed export transaction as, “an export transaction in which the foreign principal party in interest (FPPI) authorizes a U. S. agent to facilitate the export of a shipment from the U. S. and to prepare and file electronic export information (EEI).””
My question is if in contract of sale the USPPI assumes the responsibilty of Export Clearance but not to facilitate the export would this still be defined as a routed transaction? Does the USPPI still need to obtain a POA from the FPPI to file the AES?
To anwer to your question. If the USPPI assumes the responsibility of export clerance, it is not an routed transaction.
In a routed transaction, the FPPI is determining how the goods will be exported from the U.S. Therefore, if the transaction does not meet the definition of how the FTR defines a routed transaction, then the transaction will be considered a standard export transaction. The contract of sale does not determine if the transaction will be routed.
Also, Per the FTR 30.3(e), Responsibilities of parties in a Routed Transaction, a POA or written authorization must be provided to the authorized agent or the USPPI to file the EEI from the FPPI. Therefore, yes, a POA must be provided to the USPPI from the FPPI to file the AES.
On the Census webpage there is an example for written authorization between the USPPI and an US Agent but not between an Agent and the FPPI or the USPPI and the FPPI. Is there another location that were an example can be found for these?
Is it only routed if the shipment meets both criteria? : 1:FPPI controls movement 2:FPPI authorizes agent to file EEI
For example: While we know sales terms don’t necessarily correlate whether it is routed or not, what do you make of this case: a shipment shipping under FCA terms, the USPPI would have responsibility for clearance while FPPI is controling the routing. Correct? Or is it routed because the FPPI is controlling the routing?
To sum up, my question is, which determines whether it is routed: who controls the routing or who authorizes the EEI? Or do both need to be controlled by the FPPI before the shipment is considered for being a routed transaction?
There was a previous blog specifically written to clarify the responsibilities of parties in a routed export transaction. Please go to the following link for more details: http://globalreach.blogs.census.gov/2010/04/01/clarification-of-routed-export-tansactions/
It is understood that the USPPI will always be known as the shipper/exporter for obligations of the EEI filing in an Routed Export Transaction, however, is it also true that obligation of being shown as shipper/exporter does not exist for the USPPI when it comes to export documentation such as the ocean or air bill of lading ? In other words, the duly authorized US agent acting in behalf of the FPPI and who is facilitating the actual export should be indicated as the shipper/exporter, correct ?
The parties of the transaction do not change because it is a routed transaction. The USPPI is still the person or entity in the U.S. that receives the primary benefit from the transaction. For more information see section 30.3(b)(2) of the Foreign Trade Regulations.
I need to know Who is going to be the shipper / exporter in the field of the exporter in a routed export transaction?
If a foreign buyer consolidates freight from more than one US seller, AES must be filed for each USPPI, correct? If a USPPI requests proof of AES filing (for routed transactions) and is not given the proof and suspects the filings may be incorrect, what liability do they have?
@ Jennifer
Yes, you are correct. Based on your question, there would be multiple shipments if there are multiple US sellers, based on the definition of a shipment, one US seller shipping to one foreign consignee on one day, on one carrier. In a routed transaction, the US agent is required to provide a copy of data elements provided by the USPPI. It’s important for the USPPI to retain that documentation.
If you are having trouble getting documentation from the US agent, make sure you contact the Regulations, Outreach and Education Branch on 800-549-0595 Opt. 3. They can assist you.
We are the USPPI (a commercial EAR99 company), with a Korean customer. We have a shipment that is FOB, UNEX. UNEX is one of our vendors and is located in Korea as well. This shipment is considered a drop shipment from our vendor, however, our customer is going to arrange the pickup. Are we as the USPPI responsible for the Commercial Invoice and Packing List? Or just the Commercial Invoice?
I keep going round and round on who should supply what document.
@Elizabeth
If the foreign party, the Korean customer is paying you for the product, then yes, you are the USPPI. However, the Foreign Trade Regulations do not govern the invoice or packing list related to the export transaction, only what’s reported in the AES. You may want to touch base with your local Customs office to get their advice as to which documents should be included with the shipment.
risks what happens if Routed Export Transaction is not done well
why is so hard to get the POA from the freight forwarder? Most of the US agent dont even know what I am talking about?
Would it still be considered a Routed Transaction if it’s an import into the USA? Given the USPPI would complete all shipping documentaiton for the shipper overseas.
Hi Alex,
In this case, I think the concept of Routed Export Transaction is being misinterpreted. A Routed Export Transaction is when the Foreign Principle Party in Interest (FPPI) authorizes a U.S. agent (such as a freight forwarder) to facilitate the export of items (not import) from the United States and to prepare and file the Electronic Export Information (EEI) to the Automated Export System (AES). If you have any other questions regarding Routed Export Transactions, please call 1-800-549-0595, option 3 or e-mail askregs@census.gov.