Expeditors International of Washington, Inc. (EXPD) Earnings Call Transcript & Summary

Good morning, everybody. Thanks for joining us. If you are here for...

Good morning.

If you are here for the Export Compliance Webinar, you're in the right spot. I'm going to give everybody just a minute to get logged in here and make sure everybody has their coffee and are ready to go. While we do that, just going to go over a few ground rules and cover some topics. So my name is Crystal Woods. I am the North West Regional sales office and I'm based out of the Seattle office. So thank you again, everybody, for joining us. This webinar today is going to run about 50 minutes, and we'll leave 10 minutes at the end for Q&A. Everybody is on mute, but we would love for you to ask questions. But please put them in the Q&A box and Barb and I will get to them at the end of the webinar. And if for some reason there is questions that we can't get to or we need to look into them further, we have -- we will follow up with you. So don't worry, we will make sure that you are taken care of. So we are not able to record this webinar, but we will be sending out the presentation materials following the webinar. So following the webinar, you will be getting an e-mail from me with a survey, and we would love to get your feedback so that we can hear about classes that you would love to see in the future or if there were material and information that you didn't get on this webinar, but you would like to see in the future. So we would love for you to take that quick survey just quick 6 questions. And then once you do that, you will be linked to the presentation material, so you can download that information and use it for reference. So with that, I am going to introduce our speaker. So if you were here for Export Compliance, you're in the right spot. So thank you so much for joining us today. We have Barb Madden. Barb has been with Expeditors for 25 years. She is our export compliance specialist, and she is on our compliance team. She's based of our Seattle branch. She has held various roles within the branch. She's been part of the ocean import and export teams as well as the air export team, part of the account management team and most recently, is now the export complaint specialist since 2012 and now as part of the compliance team since March of 2019. So yes, we are in very experienced hands here. So with that, I am going to turn it over to Barb, so we can get started.

Hello, everyone. Thank you all for joining and taking time out of this busy season. Let's just -- I'm going to start kind of slowly and go through some objectives. We're wanting to understand why the government controls exports. We're going to go through and recognize exporter compliance responsibilities, exporter as well as U.S. PPI, and we'll go through all that terms later. And we're going to go through the Shipper's Letter of Instruction or also known as the SLI and the electronic export information data elements, which we always refer to that as the EEI. And we will also finish with understanding the purpose of the EEI and the penalties for late filings. And again, please, if you have questions, log them in the chat as you come up with them, so we can get those answered for you. So what is an export? It is anytime you are sending goods out of a country, in this case, out of the U.S. Any items from the U.S. to a foreign destination. And yes, Canada is a foreign destination as well as Mexico. It is considered an export even if the goods are leaving temporarily if they are not for sale such as a gift or a sample. And if they are going to wholly owned U.S. subsidiaries in another country that is still considered an export. A foreign origin item exported in other words, a foreign origin item that you imported or the goods were imported in the [indiscernible] are being reexported, transmitted or transshipped through the U.S. or return it from the U.S. to its foreign country of origin are all subject to export controls. Why does the government control exports? Various reasons, of course, national security interests, control for domestic short supply. Most recently, the biggest one was during the pandemic in 2020 with the PPEs. We had to be careful and research when masks, gloves, other items were being exported out of the U.S. to make sure that the supply was still good within the U.S. We were not able to export some of those items until customs and the government deemed that we were good in the U.S. first and then enforcement of U.S. foreign policy. Some of the reasons why government oversees these exports on why these regulations are in place. The purpose of export control laws are to restrict exports of goods and technology that could contribute to the military potential of adversaries. So some items are considered dual-use items that can be used for civil purposes and for military purposes. So those items are controlled and the government keeps an eye on what goods are being exported, to whom they're going to and what their uses may be. We are also trying to prevent proliferation of weapons of mass destruction, including nuclear, biological and chemical. We are looking at controlling to prevent terrorism and to comply with U.S. trade agreements and trade sanctions against other countries. Government agencies who regulate exports. There are quite a few. The most common ones that we see on the export side is the U.S. Department of Commerce, Bureau of Industry and Security, the Export Administration Regulations where most of these regulations are held. The U.S. Census Bureau, they also keep an eye on the goods that are exported out of the U.S., U.S. goods exported versus foreign items that are exported and the foreign trade regulations. Under the Department of State, you will find those items that are more commonly associated with export licenses, the Director of Defense Trade Controls and ITAR, International Traffic in Arms Regulations, and ITAR is the one that looks like the export of military items. The U.S. Treasury under OFAC, Office of Foreign Asset Controls and they are -- I'm sorry, they are the ones that issue sanction regulations. So those are the ones that look at goods that may be going to a sanctioned country. And then you have the U.S. Department of Justice, ATF, DEA and the Nuclear Regulatory Commission. We don't handle at Expeditors a lot of nuclear items. We have a person that is trained in doing that, but that's not really something that we see a lot of. In fact, I don't recall seeing anything in my 25 years with Expeditors under their regulatory commission. So Crystal, we have a poll question before I go to the next slide.

There you go. We'll be wait up for a minute.

I'm just curious where you guys are at. I know I'm all finished.

Oh, I'm sorry. I have the...

Oh, that's okay.

I have the export compliance on.

Oh, yes, that's right. Okay. Sorry. All right.

I forgot the fun one. We can do that right after this one.

That's okay. We can do that later. Okay. So I'm just curious to see how many people on this call actually transmit your export declarations directly through AESDirect? Or how many of you use a forwarder Expeditors or another forwarder to transmit on your behalf? I'm just kind of curious to see where you guys are at.

Give everybody a few more seconds. We have a little over half. All right. Let me close it out and share the details. Here we go. There you go.

Oh, that's great. About half and half. I was thinking it would be more of heck no but okay. Good to know. So this should be pretty good as we go through the rest of the slides to see where you guys -- let me close. Can I pull that? Okay. U.S. export compliance. Basically, we want to know what, where and who. So what are you exporting? Know your product. There's a link there to the current Schedule B chapters, knowing if your product has an export's commodity control number or is on the commodity control list. Those are the ECCN and CCL are for dual-use items. Where are your goods going? The embargo countries, Cuba, Iran, Syria, North Korea, if it is going to one of those locations, you almost likely need to have approval from the government to ship your goods to those locations. And who is your customer? Does the product make sense? For example, if you're sending high-performance computers to a bakery, I would ask some more questions that it seems a little weird. Of course, bakeries do use computers, but do they need high performance computers? What will your customers be doing with the products? You don't have to give them the third degree on that, but if you're a bakery purchases high-performance computers, you might want to ask a few more questions. And is your party -- is your customer on any denied, restricted or prescribed parties list? So with Expeditors, we vet all of the parties to a transaction through MK denials for denied party screening. We do this to protect ourselves and to protect our customers to make sure that if you are sending goods to a person, a party, a company, banks, if they're part of the letter of credit shipment that these are not denied parties. And it's very helpful if -- as the export person with your company that maybe you guys do the same thing or have some way to vet your customers and the parties involved in the transactions. And part of that is we are constantly reviewing in the background, all of the customers that we have within our system, and we may be able to ship to...

Hey, Barb. Can you...

I had muted.

Thank you.

What did you hear me last say?

No, I'm trying to remember, I apologize. Maybe back up a few sentences.

I will. I will. So as far as knowing who your customers are, we do screening in the background for all of our customers and parties to transactions continuously. They are continuously running in the background. And it's very helpful to make sure that we are also following export compliance guidelines and regulations. And we always suggest it's helpful for our customers if they have a program as well to vet these customers, their customers in the background also. There are times when we have sent a shipment to somebody one day and then the next day or 2 days after we go to the same customer, but in the background, something has become denied or conditional and we need to look into it further. So it is an ongoing examination and these change daily, they can change daily. So it's not like a once and done. We're continuously doing this for our ability and to keep you guys and us exporting as well. All right. mandatory data elements, and this is in the FTR 15 CFR Part 30. These are all very -- if you file your own EEIs, then all this should look very similar and very -- you should know this right off the top of your head, for sure. There were changes in October of 2014. Those are highlighted in red. Most often, the constant need type and that is a reseller, a direct user, government or other. Basically, is the person that is receiving or the company that are receiving these goods? Are they a reseller? Are they actually going to consumer use the goods? Is it a government agency? Or do you not exactly know maybe they're a reseller and the direct user, so you're not sure which one it is, that would be other. FTZ identifier, foreign trade zone. If goods are coming out of a foreign trade zone and moving [ in bond ], that is required to be entered now. And if your goods are moving on a license, then there is a place within the EEI screens to include the license value. And those are under license codes C30 or licensed codes S05, S61 and S73. Those are licensed codes, and those are the ones that require values to be entered. Everything else is really pretty standard as far as the data elements. All right. The Expeditors SLI. This is a copy of our SLI that we use. It has drop-downs. It's very easily to be filled out, and it includes all of the data elements that are required in one area. An SLI for Expeditors is used as a onetime POA. If we do not currently have an import power of attorney or an export power of attorney on file for your company, we will ask that you fill out this SLI that gives us the onetime POA to transmit and process the shipment for you. And while it is not required, if we have powers of attorney, it is extremely helpful for our operations teams because it gives them all of the information for this export and allows them to fill out the EEI quickly. All the information is in one spot. If we do have powers of attorney, of course, it is fine if this information is listed on a commercial invoice, if it's included in an e-mail, it's just really, really helpful, and I believe most of our teams we'll ask that the exporters fill this out. Again, it's not required if we have power of attorney for you, but it's extremely helpful to have all of the information in one spot. And there is a completion guide that we can provide, if needed, that explains each one of these numbered items here. The U.S. Principal Party in Interest. This is the party that is exporting the goods and/or the U.S. party that is selling the goods to the foreign receiver or the foreign party overseas. And there are responsibilities that are listed in the FTR and the citations are listed here. Oh, I'm Sorry. [ That was happy quick ]. So the USPPI has the majority of the responsibilities, and we will go through what a standard and a routed transaction is in the next slide. So as far as that goes in a routed transaction, the foreign party buying the goods will request to ship with their forwarder, and they will provide authorization for that forwarder to file the EEI. The USPPI is always responsible for providing the required data elements. So whether it's a routed or a standard transaction, the USPPI is the one that will provide those previously mentioned EEI data elements to the forwarder. Also, for the license determination, in a routed transaction, the FPPI can provide its -- I've very seldom seen this happen. But there is a citation in EAR that makes that possible. But for the most part, the USPPI would be responsible for data elements license determination, obtaining the export license and for record keeping, of course. So if there's any questions on that, please let me know. So foreign export transaction. In a standard transaction, the foreign principal party in interest, usually the receiver, but it could be the buying agent as well, places the order to the U.S. party. The U.S. party will then make arrangements with their forwarder and the EEI is filed and shipped to the foreign party. This is pretty standard, obviously, standard export transaction. And that's what I think most people deal with. However, a routed export transaction is where the foreign buyer is saying, "Hey, I'm going to buy these goods from you in the U.S., but I want you to use my forwarder". So they will tell the USPPI, here's my order, and here's the authorized agent that I want you to move these goods with. And then their forwarder, the USPPI will provide the exports filing information, the EEI data elements to that agent and the goods are shipped to the FPPI. All right. When is an EEI required? For the FTR 30.36 and 30.2, it's required when exporting goods from the U.S., Puerto Rico and the U.S. Virgin Islands to another country. It is also required when exporting goods from the U.S. to Puerto Rico or the U.S. Virgin Islands. And while those are territories of the U.S. census and the U.S. government want to see those goods as a transaction and transmit it through AES and through customs. Guam is a territory as well, but that is not required by customs to show an export transaction. So it's a little bit different. Puerto Rico and Virgin Islands are required to hit transmission. And if there is any commodities value at over $2,500 or have controls in the type of commodity use and destination, et cetera. So as we stated previously, if it's going to a sanctioned country, if it's a controlled product that could be for dual use then -- and it is valued at over $2,500 per Schedule B number, then yes, those need to be filed as well. All right. This is [ Ginger ]. She's getting ready to go on a truck. When is an EEI not required? The exemptions include shipments to Canada. Human remains, pets when you're taking them on a plane as baggage and put them up under your seat. Comat, when you're sending correspondence material from U.S. to another place, those may have an exemption to it. And if your value -- if the value of the goods per Schedule B is less than $2,500. So you may have multiple Schedule B numbers, multiple commodities that you're exporting. If any one total for one Schedule B number is less than $2,500 then you can mark that as a low-value item, and that item is not required to be transmitted. And the next slide, it's kind of crazy. There's a lot of information on here. So I'll go through this slowly. And honestly, I audit files, export files for our export teams. And I have to refer back to this slide myself, sometimes when I'm auditing. So low-value exemptions can be applied when all commodities for a specific Schedule B number are under $2,500, and all commodities are either domestic or foreign origins. So you have one Schedule B number. Part of that Schedule B number is domestic and part of that Schedule B number is a foreign origin. Each one is right around $1,500. So the total of that is $3,000 for one Schedule B, which intuitively, you think you'd have to transmit. But because they are a different origin, domestic versus foreign, you would file each line separately and each one would be a low-value designation. So it wouldn't have to be transmitted. In this case, the second example, same Schedule B number again, different domestic versus foreign and different values. So here, the domestic is $3,000, so you would actually report that. That would be a transmittable item. The second line is $1,500 under $2,500, so that would be listed on your EEI, but it would not be transmitted. And then the third one, again, you have the same Schedule B number, domestic, a couple of foreign items. This 5A992, that's an export commodity control number. So it's goods that could be of dual-use. Same number, same number. Goods would be $2,500. So intuitively, you would say, "Oh, same Schedule B number, same ECCN, over $2,500 or more. However, it goes back to the foreign and domestic". The domestic line item is low value. Here, you have same Schedule B, 2 foreign, 2 different ECCNs, you would report both of those because they are both foreign and they are the same Schedule B number. So this is where a lot of people kind of get messed up is -- and honestly, I would think that sometimes too is, "Oh, it's the same, they're different". So I would file both of those, and that would be correct. Very confusing. Again, I keep this slide handy because sometimes I can confuse myself. The low-value exemption cannot be applied when you have items that are ECCN in the 600 series or the 9515 series and that 9x right here is either an A, a B, so it's not 9x, that x is going to be one of the letters of the commodity control list and the ECCN list. Any items that require a Bureau of Industry and Security license, Department of State licensed, items that might have a state-licensed exemption. And anything that is under the drug enforcement, the DEA permit, nuclear permit or any other license from a federal government agency, all of those regardless of value would need to be transmitted. Items of self-propelled vehicles and anything on this commerce control list to China, Russia and Venezuela. And that last item is fairly new as of 1 year to 1.5 years ago that regardless of value, if you have goods going to China, every line needs to be transmitted. There is no low-value exemption same with Russia and Venezuela. And you can find the exemptions to that listed under paragraph C4 of the EAR Section 758.1. So we do have some of this information listed here for you. It's very good to keep this little guy handy. All right. So when we're transmitting EEIs, only the USPPI or the agent has access to the AES record. It is prohibited to share the EEI information with foreign government or entity or other parties for nonofficial purposes. So we've been asked before on routed transactions, the foreign Part B is asking for a copy of the AES transmission. We are not allowed to provide that to them. Even though it's routed, the USPPI is the one that provides the EEI data elements. And we will only provide that EEI document, that transmission document to the USPPI. So if USPPI wants to share, then that's up to them, but Expeditors will not share that EEI transmission document with any other party other than the USPPI listed on there. EEI filing requirements. So there are time lines associated within the time frame that you need to file the EEI before they are considered a late transmission. So for ocean, it's 24 hours prior to loading the cargo on the vessel. So if we have a COB of 12:05 and the vessel has departed but the EEI transmission isn't done until 12:06, that will be noted as a late filing, and there are penalties listed on the right-hand side for each of those. Air shipments are -- it must be transmitted 2 hours prior to the scheduled departure. For rail in the U.S., it's 2 hours prior to the time the train arrives at the border. And so as you can imagine, with rail crossing the border, they have a schedule, but do we know that they arrive on schedule? No. So we always try to transmit anything going via rail up to Canada, you generally will transmit that as soon as we get the information so that it is transmitted long before the truck or the rail crosses the border and trucks or truck shipments are 1 hour prior to the arrival at the U.S. border. So our process is if we have something trucking north to Canada or south to Mexico as soon as we have all the information from the USPPI, and we have the details we need to transmit, we will transmit at that time based on the scheduled departure. We're not waiting to hear. We will transmit right away. Penalties, $1,100 for each day of delinquency, but not more than $10,000 per violation. So if you have multiple conveyances, you have maybe 2 trucks on 1 AEI, that's $1,100 for each day for each conveyance. It can get pretty spendy if something is not transmitted a week, 2 weeks, that's 14 days times to $1,100, it's not good. A penalty of not more than $10,000 may be imposed for filing false, misleading information or any other information that may further any illegal activity. So basically, that is if it's a mistake, it could be a penalty of $10,000, but that's like if you knowingly file false misleading information, a penalty of $10,000 may be imposed as well. And then in U.S. general penalties under the EAR. If it's civil, it's up to $500,000 and criminal can be $1 million up to 10 years imprisonment. For the FTR, civil is $10,000, criminal is $10,000 or imprisonment for not more than 5 years or both per violation. And then for the ITAR, it's $500,000 for individuals plus seizure or forfeiture of goods and debarment for licensing or government contracting. So this is the military part of it. And then if it's criminal, it's up to $1 million and up to 10 years imprisonment. So there are some pretty hefty fines for misleading and providing information that is not correct willfully. Mistakes happen, obviously. But if it's willful, that's when the criminal penalties apply. And then we have -- here's all the references and the links. You will get this with a copy of this presentation. But Crystal, you want to do that first call. We'll do it right now.

There you go. I've got it launched up.

Thank you so much.

Give you a second to breathe and then I will read those questions out for you. We have 3 in the box for you. [indiscernible]

Okay. Cool. And yes, I am all done. Almost all ramped. I'm an overachiever. I can't help it.

All right. Going to end it and launch it. So you guys can see those results. All right. So we have a few questions in here. I'll read those off for you. Okay. So one is regarding the POA. So if a POA is provided to a forwarder so an SLI is no longer required, does this also give authorization for the forwarder to file the AES?

So if the forwarder has a power of attorney for the U.S. exporter -- can you read that again?

Yes. If a POA is provided to a forwarder, so an SLI is no longer required. Does this also give authorization for the forwarder to file the AES?

Yes. If Expeditors has an import power of attorney signed by the U.S. exporter, that also works for U.S. exports. If we have an export's power of attorney and a limited export power of attorney, that also applies for U.S. exports, and that gives Expeditors the authorization to process and transmit the EEI on the USPPI's behalf.

Perfect.

The SLI does a onetime if we do not have any POA in -- on file for that U.S. exporter.

Okay. So I have a couple on the low-value exemption slide. So the value exemption example. Since the report will look different than the commercial invoices, do we have to submit an explanation?

The reports. I'm not sure what reports that -- is that referring to the SLI?

Maybe -- maybe they can...

Yes, whoever has submitted that -- what kind of report are you referring to?

Okay.

And then I could...

[ See that pop back in the box all ]...

Okay. And then I can probably answer that more concisely.

Okay. So the other one is if the shipment has multiple lines, but only one line is required for EEI filing, do all the lines need to be filed or just the one line?

So if you have multiple lines and you have multiple lines and by that, I mean multiple Schedule B numbers, and you have one Schedule B number that is of high value or is a controlled commodity or has a license that would be transmitted. The other lines -- so the way Expeditors' system works versus the AESDirect. I've worked in both of them. In AESDirect, if you're filing your own, it doesn't give you an area to include low-value lines, so you wouldn't have any work to include low-value Schedule Bs. For Expeditors, we are able to list low-value exemptions in our system, which we do. What happens then is on the bills of lading, the airway bill, the ocean bill, the ITN number is listed for the item that was transmitted and then there's a secondary item on the bill of lading that shows that there was no EEI per low value current exemption. So it shows that there was lines that were transmitted and then that the reliance that were of low value or another exemption. AESDirect does not have that, but Expeditors does. So long story short, if you're filing an AESDirect, you are only going to be logging those line items that require transmission that are of high-value, controlled commodities, licenses, et cetera, you would not need to list that second low value or any of the low-value items. Hopefully, that's clear.

Perfect. Okay. So when we have a routed export transaction, AES is filed by a customer freight forwarder, we as an exporter, and we are the USPPI, how can we control the accuracy of filing an AES by designated freight forwarder? If something is correct -- incorrect, are we responsible?

Yes. So we, as Expeditors when we receive your SLI or the export filing EEI data elements for routed transaction, we will list that in the EEI, and we will transmit and the USPPI receives a copy of the AES transmission. So you should be receiving from the forwarder from Expeditors. Generally, it's a copy of the bill of lading, airway bill, ocean bill, a copy of the AES transmission. Maybe a copy of the quotes. All of that is generally included in the invoice pocket, so you have your invoice and you have all the backup. If you see something on the AES transmission that was transmitted by Expeditors and there is an incorrect value or an incorrect Schedule B or whatever you would go back to Expeditors and say, "Hey, I noticed this is not correct". And we would change that and make that correction and retransmit and then provide you with the retransmitted copy. Now if it was a mistake by Expeditors that results in some kind of a late filing, then we would go back and Expeditors would be responsible for that. If you -- if the exporter realizes after the fact, after the shipment has departed and they realized, "Oh c***, we gave them the wrong Schedule B or if something changed within that in the USPPI has given information that may not have been correct and it results in a late filing then that -- if there is a penalty as such generally, those are -- they would come to Expeditors and then we will work with the USPPI on that". So there's not always a penalty assessed. Sometimes there is sometime there isn't, but we would look at that, and we would provide you with the information that we transmitted on your behalf based on the information received. Hopefully, that makes sense.

Okay. So I have another one, routed transactions. What does it mean for customs? Do they pay extra attention on this type of transaction?

I don't believe they pay extra attention on a routed transaction, that is based on who is giving authority for the forwarder to transmit and move the shipments on whose behalf. So who do we have authorization from? If it's routed, we need to have a routed shipment instruction, a routed exports POA from the foreign party. If we're receiving shipment on behalf of the USPPI and we're their chosen forwarder, then we would have power of attorney from that party. So it's not necessarily that customs pays more attention to it, it's who is granting the authority for the foreign -- I'm sorry, who is granting authority to the forwarder to transmit and file and move the shipments.

Okay. So I have the next one. I have the low-value filing for China, Russia and Venezuela. I was aware that's only applicable for items other than EAR99 or did that change?

That did not change for Expeditors. We have given instruction to our operators for those countries listed to transmits the items of low value regardless of ECCN. So if it's an EAR99, our teams are still processing, and we've done that just as a local policy, a local branch policy to make sure that there are -- mistakes are very limited to missing and not transmitting something that should have been transmitted. So you are correct. If it is -- if it's a commodity control number other than EAR99, then it must be transmitted. If it's EAR99 or there is no ECCN provided, then the low-value exemption can happen. We just err on the side of being conservative and making sure that everything is transmitted.

Okay. The next couple are a little bit more about training and what we can provide. So there's one on what type of support does Expeditors provide with ECCN, HTS and licensing for shippers.

So we can't give training and tell you what to do, but we -- let me -- give me one second here. Let me go back, one. So what we normally do if an exporter is fairly new or needs additional assistance. The -- this BIS gov right here, the contacts, this will -- there's export counselors in -- there's 2 in Northern California and 1 in Washington, D.C. And we can refer you, there's a phone number and/or an e-mail address, that you can contact the BIS. They will ask you your Schedule B number. What your commodity is? What it's generally used for? Where it's going? Who it's going to? They'll just ask you some questions and then they can help you determine if your products or where it's being sent to may require an export license. If it's an EAR99, no license required. Anyone I've ever referred to for the context of BIS have told me that they're very wonderfully helpful there -- they've had no problems. Other than that, we can refer you to, again, the trade regulations and Schedule Bs. We can't tell you what a Schedule B number is, but we can help guide you with the Schedule B chapters of where you may find what your products might be classified as. But for liability purposes, we can guide you, but we cannot tell you or actually give you a specific training on export licenses or ECCN classifications or anything like that. But all of these listed here on these references are all extremely helpful, and we can help guide.

Perfect. The other question asked about certifications and training you do recommend for new people to export compliance. So I'm guessing some of those also might be under these references as well.

Yes. And I believe there's some third-party companies that can do export training. But honestly, I refer everyone to the BIS contacts and the Schedule B, both of these, the Schedule B chapters. They're listed out chapters 1 through, I think it's 96 or 97, and it's listed out going from very raw materials like live animals in Chapter 1 to very manufactured materials and everything in between. So other than that, I don't really have -- and I don't know of any third parties that offer export "training" but we do with Expeditors offer. This is just very basic export compliance basics. I think we have offered in the past like an export 201, which goes a little bit further into what ECCN numbers are and how they're classified, and it goes a little bit more in-depth as a webinar. That might be helpful. If we offer that again next year, we'll make sure and send that out.

Perfect. So I haven't seen a response to the low-value exemption example yet. So maybe we can go back to that question. The last one I have is can you talk about HS (sic) [ HTS ] versus Schedule B with regards to AES reporting?

Yes. Okay. This is always fun. So the harmonized tariff schedule are generally used for imports. HTS is used for imports, Schedule B is used for exports. They are both ten digit numbers. And some HTS can be used for export Schedule Bs. They're used on both sides. Every January, the Schedule B, HTS gets updated. And I don't know why and I don't know how and I don't know who determines this census or the government or how are they figure this out? But in January, when numbers are updated an HTS that you used on the Schedule B that was accepted in December of the previous year may no longer be applicable in January of the following year. It's been replaced for some reason somehow. But the biggest difference between the HTS and the Schedule B, the first 6 digits are generally the same with HTS and Schedule B. It's the last 4 digits that may be different, mostly because on the import side, those last 4 digits to break down the commodity with respect to duties and taxes. So if it's textiles, it goes into the percentage of cotton or spandex or whatever. Again, I'm not fully trained in the import system, but I know those last 4 digits on the HTS import side relate to specific commodity makeup and refer to these and that's how the duties and taxes are assessed. On the export side, you may have the first 6 digits and then 0000 because on the export side, there are no taxes and duties assigned to exporting, so just may be others. So those 0s include others. So that may just be gloves, other, something like that. It's less monetarily defined. But some can be used HTS and Schedule B and some are HTS-only and cannot be used as an export Schedule B. Hopefully, that makes sense.

Well, great. Thank you. That is the last one in there. So I'll just cover a couple of things in case there's any more last minute questions that come up. And again, if there's something that we missed or you think about later on after we close out the webinar, there is a spot on the survey. You'll get that shortly following this webinar. And there's just a quick 7-question survey, and you can ask another question if you have some more or if you have some more specifics for Barb that you would hope that she could answer for you. So again, thank you, everybody, for joining us. This is the last basics webinar for the year. We have one more that corporate is putting on. It's a delivery management one next week. So the -- once the presentation materials come out, there's a link if you want to register for that. So stay tuned for 2023 quarter 1 webinars. Those are coming up soon. So thank you again for joining everybody, and thanks, Barb, for your time.

Thank you.

And again, anything else, please just put it in our survey, and we'll be happy to get back to you. Okay?

Yes. Thanks, everyone, for taking your time and happy holidays.

Have a great day, everybody. Thanks for joining.