In a Federal Register notice published on February 6, 2014, the Bureau of Industry and Security (BIS) issued a proposed ruling to clarify the accountabilities under the Export Administration Regulations (EAR) for export transactions where the foreign principal party in interest (FPPI) is responsible for the export of items subject to EAR, also known as routed transactions. As the EAR and Foreign Trade Regulations (FTR) currently contain different definitions of routed transactions, the proposed ruling amends the terminology for such transactions in the EAR, removing the term “Routed Export Transaction” and replacing it with the term “Foreign Principal Party Controlled Export Transaction”.

According to the notice, “These revisions will clarify the responsibilities that accrue to each party engaged in a transaction subject to the EAR, and will provide clearer instructions for USPPIs wishing to delegate responsibility for license requirement determinations and licensing to the FPPI and its U.S. agent. Further, this type of transaction would be defined as a “Foreign Principal Party Controlled Export Transaction.”

The proposed rule further clarifies that the USPPI will continue to act as the exporter and will be responsible for applying for a license to the BIS, when required, even if the FPPI is handling the export of the goods out of the United States. If authorized, the FPPI's designated U.S. agent may also apply for a license under certain conditions as detailed in the proposed rule.

Comments must to be submitted to BIS before April 7, 2014.

The Federal Register notice can be accessed online here.