Commerce Officials 'Satisfied' With Progress on Routed Export Rule, but It's Still on Hold

“We're satisfied with where we are with the draft” of the rule, said one Commerce official, speaking under the condition of anonymity as part of a policy for career officials at the BIS annual update conference. Both the Census Bureau and the Bureau of Industry and Security “feel very strongly that our respective drafts are in a good place.”

The rule, which is expected to propose changes to the process around assigning filing responsibilities to forwarders and to address information sharing among parties in routed export transactions, has faced years of delays under multiple administrations, partly because it hasn’t been viewed as a priority (see 2312150006 and 2006020049).

Census and BIS, which are working on the rule together, began making progress under the Biden administration (see 2312150006), and got the rule “actually really pretty close before the transition” to the Trump administration, one official said. But they have since had to pause.

“I don't know of anybody that thinks that it’s a bad idea, but it's not ever anybody's top policy priority,” the official said. “And so it’s very unfortunately been kind of elbowed off to the back burner, really, over years now.”

The official said the draft rule is “down in the clearance stage” for both Census and BIS. “We think that you all will be pleased with what is in the" rule, another official said.

But they also stressed they don’t have a timeline to publish. They said they will work on “educating the leadership” in the new administration to try to convince them that the rule should be released soon, adding that they’re eager to ask for public comment on it.

“We could put this out and think we've created the greatest thing since sliced bread, and you all [could] say this is the stupidest idea we've ever heard. But at least that is a reaction,” the official said. “Hopefully, we can get some traction to move that forward.”

Census also plans to reconsider a 2021 proposed rule that would have required U.S. parties filing electronic export information for foreign-produced goods to declare the origin for their item under a new data element in the Automated Export System (see 2112140033). The agency didn’t finalize those changes because it heard from companies and trade groups that it would lead to costly compliance challenges (see 2203160026, 2301230008 and 2309130002).

“We'll be revisiting country of origin,” the official said. “We will be reevaluating it once we can have the time and resources to focus on that.”

Until then, the agency’s priority is finalizing an October proposed rule that will change how the agency regulates in-transit shipments that are first imported through the U.S. from foreign countries before being exported to another foreign destination (see 2410300040), the official said. The rule would expand the types of parties that qualify under those export scenarios as the U.S. Principal Party in Interest -- to include warehouses, storage facilities or foreign-trade zones -- which is the party responsible for submitting export filings in AES.

Census isn’t sure when the final rule will be published, “but we were given the green light to move forward, which is a positive thing,” a Commerce official said.

The agency is updating portions of the rule to take into account public comments, the official said, including requests to clarify “how to handle some of the USPPI scenarios that we proposed” in the rule.

“Really, at this time, it's just us finalizing it, making sure that we didn't miss anything,” the official said.