Following a painfully slow start, Customs' program to automate the filing of export documentation is starting to gain momentum.

An increasing number of exporters, especially those who turn their export documentation work over to freight forwarders, are saving time and money by utilizing the Automated Export System.''We're happy with the progress on AES. We want to participate in the process,'' said Bill Maron, director of ocean exports at A.N. Deringer Co. in Valley Stream, N.Y.

AES is still a divisive issue in the forwarding community. While the National Customs Brokers & Forwarders Association of America has endorsed it, pockets of opposition remain, especially within the Pacific Coast Council of Customs Brokers and Freight Forwarders.

Both Customs and the trade community agree that AES is still not the user-friendly system everyone hoped it would be. The issue of pre-departure filing - that is, how much information must be filed before a shipment leaves the country - continues to be a problem.


Customs and the trade community have reached an impasse on this issue, and have agreed to work out a solution through a dispute-resolution system known as interest-based negotiations.

Exporters, freight forwarders and attorneys who specialize in Customs work will join agency representatives in interest-based negotiations set to begin in early April.

In this type of bargaining, the two sides do not take positions on issues that separate them. Rather, they state their interests and needs, and a neutral facilitator, usually a private contractor who specializes in interest-based negotiations, helps the two sides develop a mutually acceptable solution.

It's ironic that the disagreement over AES would have come to this point, when virtually everyone agrees that the filing of export documentation must be automated.

The filing of import documents has been automated for more than a decade, and today 98 percent of all entries are processed electronically. Customs brokers agree that a return to the old, paper-intensive system of filing and processing entry documents would stop imports dead in their tracks.

Customs was late in pushing for automation in the export trade. Unlike imports, which produce billions of dollars each year in duties, exports generate very little revenue for the government. However, the accurate and timely filing of export documentation has other implications, including national security and the gathering of export statistics, so Customs is under pressure to improve the system.

The government estimates that U.S. exports are underreported by $19 billion to $44 billion a year, due to lax enforcement of the filing of shipper export declarations. Private sector estimates place the discrepancy closer to $70 billion.

The trade community also agrees that it could reduce its paperwork burden, improve the accuracy of its shippers export declarations, eliminate duplicative filing of documents to multiple government agencies and save time and money if export documents were filed electronically. The main problem, according to exporters and freight forwarders, is that they cannot supply all of the information Customs and the Department of Census require before a shipment leaves the country. For the purposes of compiling accurate export statistics, they add, Census doesn't even need the information pre-departure.


As far as Customs is concerned, though, pre-departure filing is crucial to its enforcement efforts. Preventing the illegal export of munitions and advanced technology that can be used by enemy nations to develop weapons is an important responsibility for Customs. Also, Customs wants to prevent the export of stolen automobiles and money generated through illegal means, such as the sale of narcotics.

If Customs is to do its job properly, it must have advance information on the cargo, exporter, port of embarkation, destination and so forth. Once a shipment leaves the country, it is too late.

The inability of Customs and the trade to get together on key issues involving AES is demonstrated by the experience ocean carriers have had. A carrier coalition has presented Customs with a formal plan in which carriers would submit electronically to Customs all of their booking information and some manifest information that would satisfy the agency's requirements for pre-departure data. In return, the carriers want Customs to create a 100 percent paperless environment. Also, they want Customs to make exporters rather than carriers liable for any fines associated with the late filing of shippers export declarations, said Greg Bakalich, director of project management at Maersk Inc.

Relieving carriers of liability for penalties would require a change in the law, however, and Customs has yet to submit legislation that would accomplish this, Mr. Bakalich said. ''We've heard a lot of lip service, but we've gotten nothing in writing,'' he said.

Customs has offered exporters some relief through a program known as AES-PASS (Post Departure Authorized Special Status). Most exporters that qualify for AES-PASS are required to furnish Customs with only two data items pre-departure. They can then file the rest of the information contained on the shippers export declaration post-departure.


Not everyone can qualify for AES-PASS, however. Exporters who do qualify have a good record of Customs compliance and they deal in low-risk, often repetitive shipments, to low-risk nations. AES-PASS is ideal for exporters of agricultural goods. Those commodities are often sold in transit, so the exporter does not always know the consignee or even the destination pre-departure.

Continued refinement of AES, and the introduction last year of AES-PASS, have produced a noticeable increase in electronic filing of export documentation, said Pat Morris, Customs' director of marketing for AES. Plans to roll out State Department licensing for AES should result in another spurt in participation. Exporters of aircraft and munitions should find the licensing program beneficial, Ms. Morris said.

The goal of Census and Customs is to eliminate the filing of 100,000 paper documents a month by Oct. 1, and that goal appears to be within reach, she added. ''We expect that over the next six months there will be a significant increase in AES participation,'' Ms. Morris said.

Participation in AES is voluntary, but exporters and forwarders are under the gun. A traditional and popular system of electronic filing that allows exporters to send post-departure information once a month is set to expire next year. When the Automated Export Reporting System ends, exporters who are using AERP will have the choice of either joining AES, or going back to the manual filing of heir documentation.

The key to participation in AES has been the freight forwarding community. The documents of 4,500 exporting companies are being filed under AES, but most of the filing is being done by 50 or 60 freight forwarders who represent multiple exporters, Ms. Morris said.

Since forwarders are so important to the process, Customs is working with them to develop an AES air cargo module. Try though it did, Customs was unable to win the support of air carriers for AES.

''Air carriers rejected Customs' proposals for pre- and post-departure filing of information, so development of AES for air is basically on hold,'' said Camille Polimeni, program manager for Customs National Outbound Process.

Customs is scheduled to meet with freight forwarders in April to discuss development of an AES air module. ''If we're successful with the forwarders, then maybe we can move to the carriers,'' she said.