Shippers Export Declaration: USPPI, is the responsible party the buyer, the seller, or neither?
When reporting exports, every so often the question about who is the USPPI arises. What is the USPPI you asked? The USPPI or the U.S. Principal Party in Interest is the person or legal entity in the United States that receives the primary benefit, monetary or if not, from an export transaction. The USPPI remains the same regardless of whether the transaction is standard or routed, also the exchange of funds does not need to occur for an entity to be the USPPI.
Who can be the USPPI? Let’s see! The USPPI is commonly the seller located in the US, in the instance that the U.S. seller is negotiating directly with a foreign buyer and receives the order for the export of the goods, whether or not the seller is actually the manufacturer or not. The following parties can also be the responsible party identified as the USPPI, a foreign entity; that is, if physically in the United States that is purchasing or obtaining the goods. Secondly, it can be the U.S. Customs Broker, which obtain the clearance of goods through customs.
Let’s breakdown this USPPI ordeal with a small case that will help in an instance in which we will identify who the USPPI is.
Let’s say there’s a company that resides in the United States and manufactures phone cases. Once these phone cases are assembled and ready to ship, the phone cases are sold to another company which also resides in the United States. A third company which resides in New Zealand places an order with the company that purchased these phone cases from the first company in the U.S. and authorizes the company to export the phone cases to the ultimate consignee in New Zealand.
In the above scenario, the company that exported the phones cases to New Zealand is the USPPI because it received the primary benefit from the foreign buyer. The transaction between the two companies that reside in the United States is considered a domestic transaction.
I hope this information provides more clarity on who the USPPI is in an export transaction. Please do not hesitate to contact your us at 717-626-1107 or email@example.com if you need additional information.