The Canadian car buyer and the new U.S. Automated Export System

September 22, 2014

With some shame I have plagiarized the following article from the excellent Winnipeg Free Press because I’m pretty sure it’s important to all Canadian gearheads.

Rod
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By: Ashley Prest
Posted: 05/6/2014
WINNIPEG FREE PRESS

If you are planning to buy a used vehicle in the United States and bring it home to Canada, a new U.S. government rule means a bit more legwork. If you don’t do it, it could cost you a lot more money.

What is the Automated Export System?

The Automated Export System (AES) is a mandatory filing requirement by the U.S. Census Bureau of Electronic Export Information (EEI). The exporter or authorized agent must file the vehicle’s EEI information using AES.

From AES, the importer (or authorized agent) will receive an Internal Transaction Number (ITN) number in a confirmation message. This number must be presented to U.S. Customs to bring the vehicle into Canada. (www.riv.ca)

The rule requires electronic export information (EEI) to be filed for any used “self-propelled vehicles” — any automobile, truck, tractor, bus, motorcycle, motor home, agricultural machinery, construction equipment or any other kind of special-use machinery designed for running on land — through the U.S. Government’s automated export system (AES).

“Starting April 5, the exporter in the U.S. is required to file automated export system information. They have to report to the U.S. Census to tell them who they are, what they’re sending, whom it’s going to, in a nutshell,” said Trevor Franzmann, sales and marketing manager at A.D. Rutherford International, a Winnipeg customs broker who works with customers on both sides of the U.S./Canada border.

“This is absolutely making it more difficult to buy a vehicle in the U.S. and bring it across the border.”

Statistics Canada’s international accounts and trade division figures for 2013 showed there were 1,332 self-propelled vehicles imported to Manitoba alone from the U.S., for a total value of about $44 million. Across Canada in 2013, there were 18,441 vehicles brought in from the U.S., for a total value of more than $555 million.

Since April 5, self-propelled vehicles exported from the U.S. to Canada are no longer exempt from AES filing. The filing must take place 72 hours prior to crossing the border.

A fine up to $10,000, under the U.S. Census Bureau foreign trade regulations, can be levied for failing to submit the AES information.

“It’s excessive, to say the least. The bottom line is it (the vehicle purchased) is not going to be allowed in the country (Canada) if you don’t file your AES filing,” Franzmann said.

An “informed compliance” period is in place until Oct. 2, giving people time to figure out the new requirements. Franzmann said Canadian buyers of vehicles from the U.S. should start complying right now or risk having the vehicle held up at the border.

“People should also be aware that, even though there is informed compliance right now, U.S. Customs has the right to deny you entry if you don’t file the AES,” he said.

Once the AES filing has been completed, an internal transaction number (ITN) will be assigned. The importer or a customs broker needs to present that number to U.S. Customs and Border Protection to bring the vehicle across the border.

“Simply, it ends up being the Canadian (buyer’s) responsibility to make sure AES filing is done, because that vehicle is not going to get into the country (Canada) unless you are provided with an ITN, an internal transaction number,” Franzmann said.

A potential problem is that to complete the AES filing, the U.S. seller is required to have a federal tax identification number called an EIN. Private individuals in the U.S. might not have an EIN number but, under the new rule, the American seller will have to get one to comply with the AES filing.
That means taking the time to apply to the U.S. Internal Revenue Service, and some private sellers don’t want to do that.

“What we’re telling our customers is find out if the seller has or will get an EIN number. If the seller won’t, don’t buy or get your money back,” Franzmann said.

Another possible point of confusion is which person is ultimately responsible for the AES filing.

Dale Kelly, chief of the U.S. foreign trade division, said that can vary with the location of the Canadian purchasing the vehicle.

“If the person from Canada (the importer) is actually in the U.S. at the time the goods are purchased or obtained for export, then that person/company/individual is considered the U.S. principal party in interest and responsible for the filing of the AES,” Kelly said in a telephone interview from Washington, D.C.

“Only if the merchandise was sold by a U.S. person or company and the Canadian person never came to the U.S., then that U.S. company would be considered the U.S. principal party in interest.”

Canadians importing a vehicle must be prepared to meet all requirements at the U.S. border in addition to paying fees and taxes. Canadian Border Services Agency spokeswoman Esme Bailey said Canadians should contact the CBSA before they plan to import a vehicle by calling 1-800-461-9999 and visiting the website http://www.cbsa-asfc.gc.ca.

ashley.prest@freepress.mb.ca
Republished from the Winnipeg Free Press print edition May 6, 2014 A6

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One Response to “The Canadian car buyer and the new U.S. Automated Export System”

  1. Brian S. Says:

    The regulatory change has indeed caught a lot of people by surprise. Importers shouldn’t have too much trouble finding an authorized agent to meet the new U.S. requirements, but it does add another expense and a bit of hassle to the process.


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