New AES Filing Requirement Seen as Potentially Burdening US Companies
The Census Bureau’s proposal to add a new country of origin data element in the Automated Export System (see 2112140033) could place a significant burden on some U.S. exporters, said Ted Murphy, a trade lawyer with Sidley Austin. Murphy said he expects businesses and at least one trade association to push back on the rule in comments due next month. “I can't imagine anyone who's going to write in favor of this proposal,” Murphy said in an interview.
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In the December proposal, Census said it wants to require U.S. exporters of foreign-produced goods to start declaring the country of origin for their item through a new “conditional” data element in AES. Although the agency said the rule will “not create any economic impact on all companies,” it also said exporters will need 12 to 18 months to update their systems to come into compliance.
Companies are expected to tell Census that the new requirement could strain their compliance systems and increase costs, all for a data element that could instead be collected by the government from trading partners. “It actually would be a big deal for many, many companies to track the country of origin of their export,” Murphy said. He said smaller companies in particular may not have the resources to track that information.
Census said it needs the data from U.S. companies because the government relies too heavily on trade partners to share their country of origin information. The proposed requirement would give the government more data to better assess supply chain issues, trade imbalances and foreign markets, the agency said.
But that justification strikes some as unclear, Murphy said, and will be questioned by U.S. companies. “How does requiring specific country of origin information for exports address any of those concerns?” Murphy said in a December email to clients to alert them of the public comment period, part of which fell during the recent holiday break. “It is hard to see how the proposed solution of requiring exporters to provide this additional data actually addresses the problems Census has identified.”
Murphy said the requirement will likely be “an expensive proposition” for many companies, many of which likely won’t be convinced the data is necessary. “Census says in the notice that they don't think this will impose any burden on companies, and that's just flatly wrong,” Murphy said. “I think there’s a pretty fundamental misunderstanding about how much of a burden this will be for companies.” A Census spokesperson said the agency will evaluate feedback after the comment period closes Feb. 14.