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Understanding Your Compliance Report – Part 1

Fri Aug 27 2010
Eric Gauthier
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As I have written on this blog previously, the Automated Export System Branch (AESB) has various tools for companies to ensure that their filing practices are in compliance with the Foreign Trade Regulations (FTR). One of the most important tools is the compliance report.

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The report is sent on a monthly basis via e-mail to your company’s account administrator. The e-mail includes a message explaining the purpose of the report and how you can analyze it. The specific shipments filed and the compliance rate for your company are detailed in the text attachment that’s included with the e-mail.

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How is this information useful to your company? What steps should a company take after reading the report?

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Below is an example of a compliance report.

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Let’s take a look at the information included in the report.

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The first section includes three lines that indicate the number of shipments filed in the AES by your company for the last three statistical months. The last line of this section will indicate the percent of change in the number of shipments from the current to the previous statistical month.

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The next section of the report includes three lines that indicate the number of compliance alerts for the last three statistical months.

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The last line of this section will indicate the most important detail of the report: the compliance rate for the current statistical month. 

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The Compliance Rate is calculated by:

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The AESB considers a 95% compliance rate or above as satisfactory. If your company has a compliance rate less than 95%, it’s considered unacceptable and the AESB will work with your company to achieve an acceptable compliance rate. The AESB will assist in determining what could be causing the low rates. For example, it’s possible that shipments are being filed with the incorrect departure dates. Compliance rates can also be affected if your company is adding commodity lines to a shipment after the departure date. Your organization needs to verify the information, take action in resolving the issues that generate a low compliance rate and work with the AESB on how to improve that rate.

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The AESB has developed the AES Best Practice Manual. This manual provides a variety of best practices that have been compiled as a result of visits to companies with an acceptable compliance rate of over 95%. Utilizing some of the best practices found in this manual can assist and ensure that your company achieves and maintains a 95% compliance rate or above, as well as to maintain compliance with the FTR.

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For the next time, we will take a look at the most common scenarios that result in compliance alerts and what your company can do to avoid receiving these alerts. Stay tuned!

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