Routed exports
A seller agreed to export an item to me by delivering to my shipping line and that he would provide a commercial invoice (we export >US$1.5M each year). Because the item exceeds USD $2500 it is treated as a formal export and requires an EEI to be filed on the ACE system. Unfortunately, the seller did not provide a commercial invoice and is now not answering me. I cannot export without the seller providing the information mandated by Federal government.
If he fails to provide that information the item will be left in limbo and subject to confiscation by CBP. If that happens the seller will be subject to a very large fine because the USPPI (seller) is compelled by law to provide the information. Briefly, the info is Name and Address of seller, EIN, State of Origin, Schedule B Code, Description of Item, Quantity, Weight.
Sellers on Ebay may imagine that once they have delivered to a recipient or their agent that is it. However, the Federal law is explicit that no person or entity can abrogate the requirement to provide this information and file an EEI regardless of any reason (even if they did not know the item was being exported).
It turns out that the seller appears to have been fraudulently trading (trading under a defunct company and EIN). Again huge fines and up to 25 year imprisonment.
I really just want to get the information I need to export. I do not want to get the seller into trouble with the authorities, have to pay heavy fines or be imprisoned. Any idea what I should do to avoid that kind of escalation?
ryry-jj
·8 months agoSo it sounds like you bought an item to be used commercially and exported into your country, but you didn't buy it from a commercial dealer. Based on your country's laws and regulations that item may never make it out of customs...this isnt the sellers fault, they may have mislead you into thinking they were commercial when you asked for a commercial invoice, but they very well had no idea what one was.
As mentioned very well above by @lacemaker3, this is now between you, your FF and your country's customs dept.
jerzykol1
OP8 months agoYou have it all wrong. Please reread the thread.
lacemaker3
·8 months ago@jerzykol1
Where was the item shipped to? Was the seller exporting the item, or was he delivering the item to your agent's address (your "shipping line") in the USA?
It's important to know this information, in order to be able to help you with this.
jerzykol1
OP8 months agoYes he advertises export and new it was being shipped outside the US. He promised in writing to provide a commercial invoice but may not have understood what that was?!?!
lacemaker3
·8 months agoYou did not answer the questions.
I do have an explanation for you, but I need you to confirm what the actual situation was, to make sure that I have interpreted the situation correctly. There are a couple of possibilities here.
Was the shipping address in the USA, a freight forwarder, and if so what state?
Or was the shipping address in the Turks and Caicos? If so, how was it shipped?
(eBay International Shipping is not available for purchases over US$2500 including shipping.)
Were you in the USA when you made the purchase, and arranged for it to be exported?
What was the item number that you purchased?
jerzykol1
OP8 months agoThe shipping address is a registered shipping line in Miami, Florida, USA.
The Ebay account is a foreign address in the Turks and Caicos Islands.
It was not shipped using the ebay International Shipping service, it is unreliable to our destination.
Neither myself or my corporation were in the USA at the time or ordinarily.
The item was a plate compactor for several thousand dollars... it would not be appropriate to give further details.
Note, ebay is fully aware that many items are exported through third party freight forwarders. In fact the have a list of addresses in Florida that are tax exempt provided the items are delivered by common carrier. ie we do not pay sales tax, but do not have a resellers certificate or any other certificate to exempt us from tax.
I say this to make the point that ebay is encouraging exports of this nature. Amazon a few years back went to the Supreme Court with these export compliance type issues. There suggested that they only market to the USA and not other countries. They were asked if they were aware of foreign sales and if so for how long? They were then asked what steps they had taken to prevent export sales from their US website? At that point Amazon conceded the case. Since then Amazon have not attempted to prevent export sale in fact the reverse. It is big business for them. Following that case ebay made changes to bring them into compliance for export sales.
Our business is export import. We are fastidious to avoid non-compliance issues or fines. Many ebay sellers are ill informed.
lacemaker3
·8 months ago@jerzykol1
Thank you for providing that information.
As you said in your title this was a routed export transaction. That means that this transaction was arranged by you, outside the USA, acting as the Foreign Principal Party in Interest (FPPI).
https://www.census.gov/newsroom/blogs/global-reach/2010/04/clarification-of-routed-export-tansactions.html
You were responsible to authorize a US party (your freight forwarder, in this case) to act on your behalf to file the Electronic Export Information (EEI) to the Automated Export System (AES). Presumably, you have already given the freight forwarder a Power of Attorney and received a signed copy of the POA back from them, accepting this authorization to file the EEI on your behalf. Or other written authorization such as a Shipper's Letter of Instruction (SLI).
You already shared this link to a fact sheet that describes this authorization to be your responsibility as the FPPI, (and also outlines the seller's responsibility as the USPPI):
https://www.ncbfaa.org/docs/default-source/commercial-documents-templates/usppi-export-responsibility-info-sheet07012025.pdf?sfvrsn=22204491_20
Yes, the seller is U.S. Principal Party in Interest (USPPI) in this transaction, but they are not primarily responsible for filing the EEI because they did not arrange the export transaction, or choose or authorize the freight forwarder to act on their behalf. That was your responsibility and authorization, as the FPPI. Your freight forwarder is acting on your behalf.
The seller was responsible for providing information to the freight forwarder according to your authorization, but the seller cannot provide information if they don't have it.
From what you have said, the seller provided most of the requested information, except perhaps for an Employer ID Number (EIN). The seller said they are not (currently) a business, and do not have an EIN, so they can't provide one.
You said that this means that the seller committed fraud and tax evasion, but that is absolutely not correct.
In the USA, eBay sellers are not required to be registered as businesses. Many eBay sellers in the USA (perhaps most of them) operate as Sole Proprietors, which may or may not be registered businesses.
Even if they are registered as businesses, not all businesses in the USA are required to have an Employer ID Number. Only those who are employers are required to have an EIN, meaning those who have at least one employee. Many businesses in the USA do not have employees and are not required to have an EIN. Some businesses may get an EIN for other reasons, but it is not required unless they employ someone to work for them.
Sole Proprietors submit their tax returns under their personal Tax ID Number, which is called an SSN (Social Security Number). They are not required to share this number in most cases, except with the IRS (US Internal Revenue Service) and with payment processors that process payments on the seller's behalf. The SSN is extremely confidential, and is not supposed to be shared with anyone unless it is absolutely required. An SSN cannot be used as a substitute for an EIN.
The bottom line here is that your non-business seller is not required to have an EIN, and if they don't have one, then they can't provide one to your freight forwarder.
You have authorized your freight forwarder to file the EEI on your behalf, and they (the freight forwarder) are responsible for doing so, even if the seller is not able to provide all the information that the freight forwarder expected the seller to provide.
Your freight forwarder is in the best position to figure out how to go forward with this. Presumably, they are registered and eligible to file the EEI through the Automated Export System (AES), and are experienced at this. Which your seller, as a small non-business eBay seller, is neither eligible nor qualified to do.
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In addition to all of that, this was an eBay transaction and is governed by the eBay User Agreement. This states that:
https://www.ebay.com/help/policies/member-behaviour-policies/user-agreement?id=4259#section8
The Uniform Commercial Code (UCC) has been adopted by all states in the USA. It covers a lot of things, but as far as the transfer of ownership of goods is concerned, the UCC states that ownership of goods is transferred to the buyer when the goods are delivered (or made available) to the buyer at the shipping address that the buyer provided to the seller at checkout. eBay does not support other agreements, and will enforce the user agreement as written, if eBay gets involved.
Once the item(s) were delivered to the shipping address you provided to the seller, the title transferred to you, and the item(s) became your property. If you then export the item(s), that is entirely your responsibility, and the eBay seller is not involved in the export process. You would then be both the exporter and the importer of record.
This is the legal position, in the USA, that you are currently in. It is governed by the eBay User Agreement (which you agreed to by using the eBay.com site), and the Utah Uniform Commercial Code.
It sounds as though your seller has done everything he can do to support you with this, and has provided all the information he has available. The seller is not legally required to provide information that he doesn't have available, and which he is not legally required to have at all.
I would recommend that you not try to purchase such high-value goods through eBay for export in the future, unless your freight forwarder can figure out how to process the paperwork on your behalf.
Also, for your information, even if the goods were lower value and were eligible for shipping with eBay International Shipping (eIS), according to the eIS terms and conditions, it is only to be used for personal transactions, not commercial transactions. You should not try to purchase commercial goods for export if they are being shipped through eIS. You may not be able to get a commercial invoice for them.
https://pages.ebay.com/internationalshippingprogram/buyer/terms/ (Paragraph 4 c.)
jerzykol1
OP8 months agoWith respect to:
"The seller was responsible for providing information to the freight forwarder according to your authorization, but the seller cannot provide information if they don't have it.
From what you have said, the seller provided most of the requested information, except perhaps for an Employer ID Number (EIN). The seller said they are not (currently) a business, and do not have an EIN, so they can't provide one."
There are no circumstances that the seller cannot provide the information, failure to do so is a serious offence without exception. In the event the seller does not have an EIN number, they can obtain one in 15 minutes via phone for this very circumstance. See this link https://www.census.gov/newsroom/blogs/global-reach/2018/01/employer_identificat.html and https://www.census.gov/foreign-trade/regulations/trb_obtaining_an_ein.pdf.
I started this thread to assist sellers because eBay has not provided a guide. eBay should make the information in this thread required reading for all sellers that authorize exports and shipment to freight forwarders. Just to be clear, once the required data elements are provided by the seller their part is over, but not quite the seller/USPPI still has liability for the compliance of the export process. That is where there is a risk for sellers. Not all freight forwarders and foreign buyers properly understand the process or care. Every seller should request confirmation that the EEI has been filed correctly from the freight forwarder for their records. The freight forwarder is required by law to provide the confirmation in writing.
Also note that exports that are below US2500 in one Schedule B may require the formal process because the are on the ECCN (restricted exports that must be licensed). Graphic cards are an example of often restricted items that are often exported illegally. Again if the parties know what they are doing they will find the process a little cumbersome but not that difficult.
I have resolved my issue with the seller amicably though communication. If you are a seller and you get into this predicament do not stick your head in the sand. Communication is key, as is positive feedback. Positive feedback is particularly important if you are able to resolve difficulties. I have been doing this for 25+ years and by now I should have some idea of what I am doing. I agree it is risky buying high value items for export on eBay the seller must have impeccable feedback and a reasonable high volume to even consider it.
Note: If you have an old defunct company do not be tempted to use or trade under its name and use its EIN. It will land you in serious trouble with up to 25 years imprisonment for fraudulent trading. It is also prohibited by eBay (you must be who you say you are).
All is well that ends well.
jerzykol1
OP8 months agoJust a note on title transfer. In a routed export transaction title is not relevant to the statutory requirements that are governed under Federal law. State law or eBay terms and conditions have no standing or operation if contrary to Federal law.
In and export the shipping address is the final consignee in whatever that country that may be. Title does not transfer until the Bill of Lading release is signed when the goods are delivered to the consignee. The freight forwarder is just a bailee bailor relationship as you have with any other transportation logistics common carrier.
Just as when you hand a package to FedEx there is no title transfer until it is delivered. However, transportation may include many steps and different carriers. Title is only transferred at the end of those steps and it is delivered to the consignee. This applies regardless of who is directing the shipment or who is paying for transportation. Counterintuitively, it also applies regardless of whether the seller had knowledge of where the final consignee was or that the item was being exported. Thus, there is no discrepancy between Federal law and the Utah code.
Paragraph 4 of buyer terms applies to the eBay International Shipping service, not routed exports through a freight forwarder. If the foreign buyer is a reseller or using the goods for a commercial purpose they should not use "eBay International Shipping" option. I would never use it anyway because it does not work properly.
It comes down to a simple situation there are two options in the routed export situation:
Provide the necessary data elements or face prosecution and possible confiscation or;
Agree with the buyer to return the item for a refund.
If you were not made aware that it was an export and the item is returned, you should be entitled to recover your shipping costs and potentially further damages for other costs.
What you have to understand is there are absolutely no exceptions or other ways. If the item is exported (before any use) you MUST provide the data elements, even if you had no idea it was happening.
This is the essentially automated process of what happens if you refuse...
What happens if USPPI (Seller) refuses:
If a U.S. Principal Party in Interest (USPPI) refuses to provide necessary export information (such as ECCN, Schedule B/HTS codes, value, or origin) for Electronic Export Information (EEI) filing, it creates a serious compliance issue, as the USPPI is legally obligated to provide this data under the Foreign Trade Regulations (15 CFR Part 30).
Here is what happens and the steps that should be taken:
1. Consequences for the USPPI
• Legal Violations: Failure to provide information or providing false information is a viola􀆟on of the Foreign Trade Regulations (FTR), making the USPPI subject to civil and criminal penalties.
• Administrative Penalties: Violations can result in penalties of up to $374,474 per violation (as of Jan 2025) or twice the value of the transaction, whichever is greater.
• Denial of Export Privileges: The Bureau of Industry and Security (BIS) may deny export privileges, prohibiting the party from participating in any way in transactions subject to the Export Administration Regulations (EAR).
• Detention of Cargo: U.S. Customs and Border Protec􀆟on (CBP) may hold shipments if the required information is not filed in the Automated Export System (AES).
2. Actions for Freight Forwarders/Agents
If a USPPI refuses to provide data in a "routed" transaction, the authorized agent (freight forwarder) should:
• Document the Refusal: Maintain records of the request for information and the refusal for at least five years.
• Contact the Census Bureau: If the USPPI sill refuses to cooperate, the forwarder can contact the U.S. Census Bureau’s Trade Regulations Branch (TRB) for assistance.
• File an e-Allegation: The agent can submit the violation to CBP through their e-Allegations program.
• Refuse the Shipment: Under the "no docs-no load" principle, carriers often refuse to load cargo that lacks proper documentation.
3. Procedures for Routed Transactions
In a routed transaction, even if the Foreign Principal Party in Interest (FPPI) directs the shipping, the USPPI is still required to provide the authorized agent with:
• The EIN/Tax ID of the USPPI.
• The ECCN or EAR99 classification.
• All other necessary data elements for the EEI.
If the USPPI refuses, they cannot "disclaim" their obligation, as they are considered the exporter of record under the EAR.
kensgiftshop
·8 months agoIf it was being shipped to a freight forwarder, the seller wasn't exporting the item, the freight forwarder was.
The seller shipped to to a US address.
It was the freight forwarder that shipped it to your country, not the seller.
jerzykol1
OP8 months agoYou do not understand the Federal laws that apply. There is what is defined the US Principle Party in Interest (USPPI) who is the US party that is the principle beneficiary of the transaction. You are correct that the freight forwarder is the exporter (as agent for the foreign buyer), but the compliance responsibility does not primarily fall on the exporter. The USPPI is exclusively required by law to provide the export data under Schedule C of the Federal Trade Regulations (FTR) and the Export Administration Regulations (EAR).
Many sellers in the USA fall into the same thinking as you have. You sold it in the USA and delivered in the USA and you have no further responsibility... That could not be more wrong. In fact, even if the seller had no idea it was going to be exported and even for that matter even the buyer initially did not intend to export, the USPPI is still required to provide the statutory information when it is requested. If the information is refused by the seller it is considered a serious offence with astronomical fines and potentially imprisonment. The other parties (the freight forwarder and the foreign buyer) have no liability because they have not done anything wrong. They have merely asked for information legitimately required for export. The really is no rational reason to refuse to provide it, unless you are a criminal or a fugitive.
caldreamer
·8 months agoIf this purchase was made on EBAY, you can go to your PURCHASE HISTORY and click CONTACT SELLER. If the Seller does not respond to you, you can "get their attention" by opening a DID NOT RECEIVE ITEM case against them. You can write a note describing exactly what "documentation you need". Seller will see this and hopefully respond.
Good luck to you!
simba6
·8 months agoOther than inform them what they need to do, unless you can in some way provide the paperwork don't see what else you can do. Do you have a shipping broker that can help? Over seas trade is a real mess..............
jerzykol1
OP8 months agoI wrote this on the sellers side because there is not enough information to sellers that ship for export via freight forwarders as you stated or using Ebay's export service. Many Ebayers do not know that they can inflict huge penalties on themselves for failing to provide some simple information. The sellers (USPPIs) cannot abrogate their responsibility or contract out of it. Ebay terms and conditions do not prevent the operation of law. There is a quick summary here https://www.ncbfaa.org/docs/default-source/public-access-documents/usppi-export-responsibility-info-sheet-152722.pdf?sfvrsn=22204491_2
For private individuals selling they would have to obtain an EIN (it takes 15 minutes). For businesses it should be no problem at all because they will have an EIN already. If you are on Ebay and hope to avoid tax and ghost the IRS... do not do export transactions.
I got into trouble because I assumed that the seller was a Bona fide business and they were experienced in exports. As it turned out they went out of business several years ago and have continued trading on the down low illegally. If they provide the information required, it will alert the authorities and result in their conviction for tax evasion and fraudulent trading. I am basically screwed.