Recordkeeping for Aviation Exports – What Do You Need to Retain?

Exporters must maintain records as proof of compliance with U.S. government regulations for a minimum of 5 years.  During this retention period, these retained records may be requested by Customs and Border Protection (CBP), or the Bureau of Industry and Security (BIS), Census, or any other U.S. Government Agency that has jurisdiction over your export.  This can be a daunting task and I have seen businesses that failed to retain such records.  This article seeks to provide some guidance on the scope and length of your recordkeeping obligations as an exporter.

What records should be kept, you ask? The Export Administration Regulations (EAR) provides a list of records that must be retained.

  1. Export control documents.  Examples include license and license application, AES record, dock receipt, 7512 forms, and antiboycott reports. The only exception is a party that submits documents electronically to BIS via the SNAP-R system; these parties are not required to retain copies of submitted documents. Note:  I would not count on this and I would be sure to keep all copies for reference purposes.
  2. Memoranda.  Examples include written records of business communications, reminders, agreements, and contracts.
  3. Notes.
  4. Correspondences.  Chances are, there are emails concerning your transaction.  These are supposed to be retained.
  5. Contracts.  A series of communications that result in an agreement may be considered a contract.
  6. Invitations to bid.  This could include any RFP/RFQ.
  7. Books of account.  This means accounting records, which may be used to defend against an audit.
  8. Financial records.  All formal records of the financial activities of a business or person.
  9. Restrictive trade practice or boycott documents and reports.
  10. Notifications from BIS.  This includes notification from BIS of an application being returned without action, of an application being denied, of the results of a commodity classification or encryption review request conducted by BIS.
  11. Other records pertaining to any other transaction subject to BIS regulations (pursuant to 15 C.F.R. § 762.1).
  12. Any other record that is required to be retained under other BIS regulations.  There is a partial list of these regulations in 15 C.F.R. § 762.2(b).

I said that you have to retain these documents for at least five years.  What does this mean?  Export Regulations state 5 years from the latest of the following times:

  1. The date of export from the U.S.
  2. The date of any known re-export, transshipment, or diversion. If you are shipping to a overseas broker, then you may need to start the clock when the broker re-exports the articles.
  3. The date of the termination of the transaction, whether formally in writing or by any other means. If the articles are returned under an RMA, then you still need to keep the records for five years from the return.
  4. In the case of records of pertaining to transactions involving restrictive trade practices or boycotts, the date the regulated person receives the boycott-related request or requirement.

Another caveat: if any U.S. government agency makes a formal (or informal) request for records before that 5 year period is up, or give you any reason to believe that the record may be relevant to a court action, then that record may not be destroyed or disposed-of.  If this happens, make sure you get legal advice about the disposition of the records, in order to avoid an allegation of spoliation.

There is a list of records that are exempt from the recordkeeping requirements; however  some of these records may need to be retained because of other reasons (including other regulatory systems and your own quality assurance system).  These include:

  • Inspection certificate (but some documents like a raw materials certification may need to be retained under other provisions like your written quality system);
  • Warranty certificate (but if it is part of the contract then it may need to be retained);
  • Packing material certificate (but certificates like a shipper’s declaration of dangerous goods may be required to retained under other laws);
  • Goods quality certificate (but some documents like 8130-3 tags may need to be retained under other provisions like your written quality system);

Don’t forget that other agencies may have other overlapping retention requirements and you must comply with all such requirements.  For example, under the State Department regulations, 22 C.F.R. § 123.22 of the International Traffic in Arms Regulations (ITAR) explains that the exporter of ITAR-controlled defense articles must file information prior to export and then under 22 C.F.R. § 122.5 must retain records for a period of five years from the expiration of the license or other approval.

As always, if you need help, contact us and we can work with you on developing the right systems for compliance!

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