§ 123.22 Filing, retention, and return of export licenses and filing of export information.(a) Any export, as defined in this subchapter, of a defense article controlled by this subchapter, to include defense articles transiting the United States, requires the electronic reporting of export information. The reporting of the export information shall be to the U.S. Customs and Border Protection using its electronic system(s), or directly to the Directorate of Defense Trade Controls (DDTC), as appropriate. Before the export of any hardware, via a license or other authorization, the DDTC registered applicant/exporter, or an agent acting on the filer's behalf, must electronically submit export information to U.S. Customs and Border Protection, unless electronic reporting is unavailable, in which case U.S.

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Customs and Border Protection will issue instructions ( see of this section). In addition to electronically providing the export information to U.S. Customs and Border Protection before export, all mandatory supporting documentation (e.g., attachments, certifications, proof of filing in U.S. Customs and Border Protection's system(s) such as the Internal Transaction Number (ITN)) must be submitted electronically, unless electronic reporting of such information is unavailable, in which case U.S.

Customs and Border Protection will issue instructions.(1) If necessary, an export may be made through a port other than the one designated on the license if the exporter complies with the procedures established by U.S. Customs and Border Protection.(2) When a defense article is temporarily exported from the United States and subsequently moved from one destination authorized on a license to another destination authorized on the same or another temporary license, the applicant, or an agent acting on the applicant's behalf, must ensure that U.S. Customs and Border Protection decrements both temporary licenses to show the exit and entry of the hardware.(b) Filing and reporting of export information -(1) Filing of export information with the U.S. Customs and Border Protection. Before exporting any hardware controlled by this subchapter using a license or exemption, the DDTC registered applicant/exporter, or an agent acting on the filer's behalf, must electronically file the export information with U.S. Customs and Border Protection in accordance with the following timelines:(i) Air or truck shipments.

The export information must be electronically filed at least 8 hours prior to departure.(ii) Sea or rail Shipments. The export information must be electronically filed at least 24 hours prior to departure.(2) Emergency shipments of hardware that cannot meet the pre-departure filing requirements.

Customs and Border Protection may permit an emergency export of hardware by truck or air by a U.S. Registered person when the exporter is unable to comply with the Electronic Export Information (EEI) filing timeline in of this section. The applicant, or an agent acting on the applicant's behalf, must provide documentation required by the U.S.

Customs and Border Protection and this subchapter. The documentation provided to U.S.

Customs and Border Protection must include the Internal Transaction Number (ITN) for the shipment and must be accompanied by an explanation for urgency. The export filing via U.S.

Customs and Border Protection's electronic system(s) must be made at least two hours prior to any departure by air from the United States. When shipping via ground, the filing in U.S. Customs and Border Protection's electronic system(s) must be made when the exporter provides the articles to the carrier or at least one hour prior to departure from the United States, when the permanent export of the hardware has been authorized for export:(i) In accordance with of this subchapter, or(ii) On a valid license, and the ultimate recipient and ultimate end-user identified on the license is a foreign government.(3) Reporting of export information on technical data and defense service. When an export is being made using a DDTC authorization (e.g., technical data license, agreement or a technical data exemption provided in this subchapter), the DDTC registered exporter will retain the license or and provide the export information electronically to DDTC as follows:(i) Technical data license. Prior to the permanent export of technical data licensed using a Form DSP-5, the applicant shall electronically provide export information using the system for direct electronic reporting to DDTC of export information and self-validate the original of the license.

Exports of copies of the licensed technical data should be made in accordance with existing exemptions in this subchapter. Should an exemption not apply, the applicant may request a new license.(ii) Manufacturing license and technical assistance agreements. Prior to the initial export of any technical data and defense services authorized in an agreement the U.S. Agreement holder must electronically inform DDTC that exports have begun. In accordance with this subchapter, all subsequent exports of technical data and services are not required to be filed electronically with DDTC except when the export is done using a U.S.

Records of all subsequent exports of technical data shall be maintained by the exporter in accordance with this subchapter and shall be made immediately available to DDTC upon request. Exports of technical data in furtherance of an agreement using a U.S. Clipp store serial podcast. Port shall be made in accordance with of this subchapter and made in accordance with the procedures in paragraph (b)(3)(iii) of this section.(iii) Technical data and defense service exemptions. In any instance when technical data is exported using an exemption in this subchapter (e.g., 125.4(b)(4), 126.5) from a U.S.

Port, the exporter must provide the export data electronically to DDTC. A copy of the electronic notification to DDTC must accompany the technical data shipment and be made available to the U.S. Customs and Border Protection upon request. Note to paragraph ( b)(3)( iii):Future changes to the electronic reporting procedure will be amended by publication of a rule in the Federal Register. Exporters are reminded to continue maintaining records of all export transactions, including exemption shipments, in accordance with this subchapter.(c) Return of licenses. Licenses issued by the Directorate of Defense Trade Controls are subject to return requirements as follows:(1) A license issued electronically by DDTC and electronically decremented by U.S.

Customs and Border Protection through its electronic system(s) is not required to be returned to DDTC. A copy of the license must be maintained by the applicant in accordance with of this subchapter.(2) Licenses issued by DDTC but not decremented by U.S. Customs and Border Protection through its electronic system(s) (e.g., oral or visual technical data releases) must be maintained by the applicant in accordance with of this subchapter.(3) A license issued by DDTC but not used by the applicant does not need to be returned to DDTC, even when expired.(4) A license revoked by DDTC is considered expired and must be handled in accordance with paragraphs (c)(1) and (c)(2) of this section.

DSP-5 Scenario based on real eventsYour company has been working for months, maybe even years to cultivate a contract to manufacture your company’s first satellite for a Singapore Cellular Provider. It’s a $10,000,000 contract and your manufacturing team has just completed the final product. Months ago, you were given a forecast of when the product would be available to export, you then were given the responsibility to file the DSP-5 with the Directorate of Defense Trade Controls (DDTC), and you’ve done a spectacular job getting that prepared and ready.This is your first DSP-5 but you’ve had many experiences with DSP-73s, all went off without a hitch, and this will be no different, right?You covered all your bases, you’ve got the hard copy ready to lodge/decrement, and you can do so at any port. The most exciting part is your company trusts you completely to get the job done, and you know you can.You contact the Forwarder and arrange the export, enter the info in your Global Trade Management system, and transmit the shipment info via AES.

You then prepare the packet and send over to Customs via your broker as you’ve done a thousand times before. Now it’s just sit back and wait for that receipt to come back with your green light to ship. Seamless, simple.You now notice it’s been a few days and it doesn’t normally take this long; customs must be backlogged, you think. You wait another day. Your broker contacts you in the late afternoon, asking “Where is the freight located?” Wait, why are they asking this? Their reply, “Customs called, they would like to know the location of your shipment.” You provide the information, after all you know this is typical in the realm of Customs Compliance, they want to see how beautiful our $10M Satellite is; you then provide the location to your broker, who then provides it to the Officer at CBP who was requesting the information.A few more days go by and the phone rings, it’s Officer what’s his name from Customs, obviously calling to compliment you on a job well done. The Officer identifies himself, he then begins to take a tone of authority “Sir, I am calling to notify you that you are in Violation of Ch.

22 part 123 of the ITAR regulations § 123.22 (a) (1), you have filed your AES prior to lodging your license and we will be seizing your shipment; we’ll contact you with a formal notification soon.”Dumbfounded, you then respond, “Thank you” and disconnect the call. Your heart sinks, an overwhelming sense of doom comes over you and you wonder where you went wrong. It has to be a mistake right? AES Filing Requirements – It’s in the detailsYou quickly grab the regulations and it is right there, clear as day§ 123.22 Filing, retention, and return of export licenses and filing of export information.(a) (1) Filing of licenses and documentation for the permanent export of hardware. For any permanent export of hardware using a license (e.g., DSP-5, DSP-94) or an exemption in this subchapter, the exporter must, priorto an AES filing, deposit the license and provide any required documentation for the license or the exemption with the U.S. Customs and Border Protection.The CBP Officer was right and you just got your company’s most profound accomplishment in decades seized by Customs because you pressed that AES button to transmit.

You then have to notify your company of the oversight, and hope for the best.This is based on actual events, names, articles and scenarios were changed to protect their privacy.(GTS) out of the box license determination strategy is not initially setup to prevent blunders with the handling of certain license aspects your team may or may not know about. SAP GTS is however, certainly capable of being modified to take this and many other scenarios into consideration when processing a license. Hard blocks can be configured to prevent this exact situation.It is always encouraged to ensure you have all your bases covered, before initiating the AES Filing, especially in situations where a high profile article is concerned.