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USPPI – How To Identify This Key Entity in Export Transactions
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USPPI – How To Identify This Key Entity in Export Transactions
Who is the USPPI?
When reporting exports, the identification of the U.S. Principal Party in Interest (USPPI) is often in question. The USPPI is the person or legal entity in the United States that receives the primary benefit, monetary or otherwise, from an export transaction.
The following parties can be the USPPI:
- U.S. seller (wholesaler or distributor) of goods for export
- U.S. manufacturer (if selling the goods for export)
- U.S. order party (if directly negotiated between the U.S. seller and foreign buyer and received the order for the export of the goods)
- U.S. customs broker (obtains clearance of goods through customs)
- Foreign entity (if physically in the United States to purchase or obtain the goods)
Helpful tips to identify the USPPI
The USPPI remains the same regardless of whether the transaction is standard or routed. For more information on the differences between standard and routed transactions, please see Clarification of Routed Transactions.
The exchange of funds does not need to occur for an entity to be the USPPI. For example, a U.S. company exporting goods at no cost (i.e., donations, replacement parts) to a subsidiary abroad would be the USPPI.
Identification scenarios ̶
Scenario 1:
Company A in the United States manufactures lamps. Once assembled, the lamps are sold to Company B in the United States. Company C in Canada places an order with Company B and authorizes Company B to export the lamps to the ultimate consignee in France.
Company B is the USPPI because it received the primary benefit from the foreign buyer. The transaction between Companies A and B is a domestic transaction.
Scenario 2:
A representative from Company A in Mexico is in the United States buying electronics from Company B. After making the purchase, Company A’s representative authorizes Company C in the United States to file Electronic Export Information in the Automated Export System and move the electronics on Company ‘s behalf. Company A’s representative returns to Mexico.
Company A’s representative is the USPPI because they were physically in the United States at the time the goods were purchased.
Scenario 3:
Company A in the United States stores bamboo stalks in a warehouse on behalf of a Foreign Principal Party in Interest. While in the warehouse, Company A converts the bamboo stalks into fishing rods. Who is the USPPI and why?
Company A is the USPPI because it was responsible for converting the bamboo stalks into fishing rods, changing the classification.
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