Expeditors International of Washington, Inc. Status update

All right. I think we'll let people keep trickling in here, and we'll get started. Welcome, everyone, to our Getting it Right EEI Basics and Denied Party Screening webinar. We are super excited for you guys to be here. There's some great content prepared. Before I kick it off to our host or our speakers to proceed with content, we will just make sure that we have some housekeeping items out of the way. I'm your host, Alex, along with Natalia Juan and Cherokee Ford. We will be in the background just monitoring everything. If you have any questions, you can direct them to us afterwards. But content-wise, expect it'll be about 45 to 50 minutes with a little bit of time at the end for questions. Please submit your questions in the Q&A box.

It should be on the bottom of your screen by the React and the chat in the Q&A. Direct your questions there. We'll be monitoring throughout as we go, but we will be answering them at the end. If we don't answer your question for whatever reason, we will make sure that we'll be able to follow up with you. The webinar will be recorded, and you will get access to a recording of the materials right when we send a feedback survey after the webinar. That should come out within a couple of hours after we're done. You'll see that invite come from Cherokee Ford. We really appreciate you guys taking the time to fill that out. It helps us plan content in the future that's relevant to your supply chain needs.

Please be sure to take that, and then you'll get a copy of the webinar and a copy of the PDF presentation. Watch out for that. If for whatever reason you don't get it, again, you can reach out to myself, Cherokee Ford, or Natalia Juan or your Expeditors representative, and we will get those over to you. I think that's all for me.

Okay, I'll start with introductions. My name is Connie Rodriguez, and I am the Region Trade Compliance Manager based in Miami, Florida. I cover the Southeast region. Been with Expeditors for 26 years, and I'm a licensed customs broker, but I'm also here to hopefully present on denied party screening to help you out in your customs, in your business. I'm going to turn it over now to Sila to introduce herself.

Perfect. Thank you, Sila. Hi. Hello, everyone. My name is Sarah Smith. I'm the Regional Trade Compliance Manager for our South Central region. I sit in Houston, Texas. Been with the company for about 14 years, almost 10 of which have been in compliance with Expeditors, and I'm very excited to be with you today, talk about a really great foundational topic in the export landscape, both with EEI basics and party screening. With that, we're going to get going. I'm very excited to be talking about this material today. The agenda looks a little long. Bear with us. It's going to be as exciting as we can make it. But we're going to have some building blocks within EEI basics and party screening, and we're going to get started with denied party or EEI basics.

As I mentioned, foundational information, almost like a bunch of puzzle pieces that are going to build put together to then kind of paint the picture of EEIs, okay? And I'll get to the lovely, elusive EEI and some definitions here in a minute. But for starters, want to talk about some governing authorities that are involved with this process. This isn't an exhaustive list, but these are some of the main players that we wanted to discuss. First, you have the U.S. Census Bureau. The U.S. Census Bureau, you may or may not recognize within the U.S., is both involved with people statistics and economic statistics. Their involvement here is just that. It is to collect statistical information regarding exports from the U.S., and they regulate that through the EEI and through their Foreign Trade Regulations or the FTR.

Similar to what they're doing with collecting information about statistics on households, incomes, population, things of that nature, it's very similar on the export side with the transaction of where are things going, who's it going to, how much of it's going there. Next, you have the Bureau of Industry and Security, and they do their governance via the Export Administration Regulations. In particular, this is to control the export of dual use items. Dual use items are material or technology that have both commercial and military application. An example that I like to use here is a drone. Let's say you can go to Best Buy and buy a drone, fly it in your backyard, fly it in your park. Nobody's really the wiser, not really an issue potentially at hand. But let's say an entity wanted to export drones to a foreign entity, foreign country.

There may be military application for that drone, therefore that drone may be controlled under these regulations, and that would be something that would be pertinent in the EEI process. Next, you have the Office of Foreign Assets Control. They administer and enforce economic and trade sanctions based on our U.S. policies, security goals, et cetera. This is going to be something that is going to be pertinent to what Connie is talking about later in terms of party screening and different lists. The main list with Office of Foreign Assets Control is your SDN, maybe you've heard of that, or Specially Designated Nationals list. That's going to be where those come into play. Additionally, you have Department of State. Department of State is regulating defense article and the exports thereof.

These are items that are inherently military in nature, therefore, the Department of State via the ITAR regulations, the International Traffic in Arms Regulations, want to govern those commodities and where they're going and the nature of the transaction. Lastly, you have the U.S. Customs and Border Protection. U.S. Customs, USCBP, CBP, they get called different things, and there's lots of acronyms and alphabet soup, so I'm going to do my best to make those less elusive. U.S. Customs and Border Protection enforces export regulations on behalf of these agencies. Okay? As mentioned at the top, this is not an exhaustive list. This is not the only entities that are involved. Depending on the nature of your goods, there may be DEA, or the Drug Enforcement Agency, or the NRC, the Nuclear Regulatory Commission, right?

You are an expert on your goods that you're exporting, and knowing what entity would be involved with a transaction is a key part of exporting compliantly. From here, we're going to talk about some EEI fundamentals. I like to think of these as building blocks as well in a process, right? What is an export? Simply put, to send or transport goods out of the country. Right? It sounds simple enough. In the nature of it is a simple concept. What does that mean when exporting out of the U.S.? That is where the EEI, or the Electronic Export Information, comes into play. The EEI is an electronic declaration required by the U.S. government for exports of certain goods. Okay? You know you're exporting, you know your goods qualify to need an EEI, and we're going to talk about some of that as we go on in the slide deck.

Like I said, it's puzzle pieces that fit together as we go. You know you need to do an EEI. Where does that EEI need to be filed with the government? That's the Automated Export System, or AES. That's the centralized digital system used by exporters to electronically declare their international shipments. Census and USCBP are the ones that manage that system. Okay? From there, once you've filed an AES, you get an Internal Transaction Number or an ITN. Think of it kind of like your tracking number. This is a number that's generated automatically and assigned to the shipment, and it's proof of filing. Okay? That is your receipt.

A couple of major call-outs here overall is, you know you have an export. You know you need to file that EEI. In AES, where it is filed, while you are able to potentially file direct in the AES system, for example, like Expeditors, we do not file directly in their system. We have the ability through software connections to file systemically in our system and transmit to the government to file that EEI and get those ITNs back. This is the kind of map, if you will, of the steps of the process, but we are going to really focus just on the EEI itself and some of the details surrounding EEIs. So when is an EEI required? Major caveat, it can be sometimes, it can be all the time. It is an it depends. There are a lot of different elements and nuances to this information.