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Apparel | Newsletter |
| 10 + 2 What Does It Mean For You? |
|
January 10, 2008
CBP states that this additional information, which would be submitted by way of a CBP-approved electronic data interchange system, will further improve the ability of CBP to identify high-risk shipments in order to prevent the smuggling of terrorist weapons into the U.S. and ensure cargo safety and security. The proposed regulations are specifically intended to fulfill the requirements of Section 203 of the Security and Accountability for Every (SAFE) Port Act of 2006 and Section 343(a) of the Trade Act of 2002, as amended by the Maritime Transportation Security Act of 2002. Overview of Proposed Rule Request For Comments CBP states that written comments on the proposed rule are due by March 3, 2008, and may be submitted on all aspects of the proposal. Comments may be submitted via the Federal eRulemaking portal: http://www.regulations.gov, or by mail to Border Security Regulations Branch, Office of Trade, U.S. Customs and Border Protection, 1300 Pennsylvania Avenue, NW. (Mint Annex), Washington, DC 20229 (see proposed rule for specific submission instructions). Following is summary of the proposed rule: Importer Security Filing (SF) Elements Under the proposed regulations an importer Security Filing (SF) would be required for almost all shipments, and include 10 elements for each good listed at the 6 digit Harmonized Tariff Schedule (HTS) number, at the lowest bill of lading level (i.e., at the house bill of lading level, if applicable), unless exempted. The current approved electronic data interchange systems for the importer SF are the Automated Broker Interface (ABI) and the Vessel Automated Manifest System (AMS). CBP states that if it approves a different or additional electronic data interchange system, CBP will publish notice in the Federal Register. The proposed required data for the importer SF are as follows:
CBP adds that the manufacturer (or supplier) name and address, country of origin, and commodity HTS number will be required to be linked to one another at the line item level, and that a single importer SF can satisfy multiple bills of lading. However, the manufacturer (or supplier) name and address, country of origin, and commodity Harmonized Tariff Schedule (HTS) number elements must be linked to one another at the line item level. Updating Or Withdrawal of an Importer Security Filing Under the proposed regulations, the party who filed the Importer Security Filing will be required to update the filing if, after the filing and before the goods arrive within the limits of a port in the United States, there are changes to the information or more accurate information becomes available. The proposed regulations allow for the withdrawal of an Importer Security Filing when a shipment is no longer intended to arrive within the limits of a port in the United States. Carrier Data Elements The proposed regulation will require carriers to submit 2 additional pieces of information in order to enhance the security of the maritime environment. The additional information includes: (1) a vessel stow plan used to transmit information about the physical location of cargo loaded aboard a vessel bound for the U.S; and (2) container status messages, which report container movements and changes in status (e.g., empty or full). Because the proposed requirements for carriers and importers are different in scope and timing, they are presented separately from the importer SF in the NPRM. The balance of this summary will focus on the importer SF requirements. Importer SF Would be Required 24 Hours Prior to Loading (Except for FROB) CBP is proposing to require importers, or their designated agent, to transmit an importer SF to CBP for cargo other than FROB (Foreign cargo remaining on board), no later than 24 hours before cargo is laden aboard a vessel destined to the U.S. For FROB the importer is construed as the carrier. Because FROB is frequently laden based on a last-minute decision by the carrier, the importer SF for FROB would not be required 24 hours prior to lading; rather, the SF for FROB would be required any time prior to lading. Submission of All Required Elements by One Party, Use of Agent CBP is proposing to require that one party aggregate and submit all required importer SF elements. CBP is also proposing to allow importers to designate an agent of the importer’s choosing to submit the importer SF (this could be a licensed Customs broker or foreign freight forwarder). CBP is not, however, requiring the use of an agent. CBP notes that the importer is ultimately responsible for the timely, accurate, and complete submission of the importer SF. CBP added that while it understands that some business practices may need to be altered to timely obtain the required information for the importer SF, CBP does not anticipate that the changes would be unduly burdensome. To facilitate the importer SF, CBP is proposing to create a new 19 CFR 143.1(b) to state that for importer SF purposes, any party may participate in ABI solely for the purposes of filing the importer SF if that party fulfills the eligibility requirements contained in proposed new 19 CFR 149.5. Proposed 19 CFR 141.3(b) explains that if a party other than a customs broker or an importer submits the importer SF, no portion of the importer SF can be used for entry or entry summary purposes. CBP is also creating a new 19 CFR 143.1(c) which states that for other purposes, upon approval by CBP, any party may gain access to ABI for other purposes, including transmission of protests, forms relating to in-bond movements, and applications for FTZ admission. CBP also noted that while the importer is required to provide the HTS number at the 6 digit level, it may choose to submit the HTS number up to the 10 digit level. Importers will be required to use the 10 digit HTS number if they plan to use the importer SF as part of their Customs Entry filing. If an importer chooses to use elements of the importer SF used for entry purposes, the importer SF would have to be self-filed by the importer or filed by a licensed customs broker. If an importer chooses to use a foreign freight forwarder as an agent for importer SF purposes, the importer would need to provide this data to that party at the line item level in sufficient time to allow the foreign freight forwarder to file the importer SF no later than 24 hours before cargo is laden aboard a vessel destined to the U.S. CBP Would Provide Electronic Acknowledgement of Filer's Submission CBP stated that it would provide, to the filer, electronic acknowledgement that the filer’s submission has been received according to ABI and AMS standards. However, ABI and AMS filers will not have the ability to query whether an importer SF is complete, the actual data elements, or the identity of the party who filed the elements. CBP stated that it believes that communication between importers, as defined in the proposed regulations, and their designated agents will be sufficient to inform the importer regarding the completeness and contents of a filing. When All the Required Elements Are Not Known at Time of Importer SF In response to comments that for some transactions not all required elements will be known at the time of shipment (e.g. carnets, direct duty paid (DDP)/direct duty unpaid (DDU) shipments, consigned goods, returned goods, samples) CBP stated that the examples provided would not be automatically exempt from submitting all the required importer data elements. CBP stated that the proposed regulations require the importer, as defined in the proposed regulations, or its authorized agent, to submit the data elements of the importer SF. If an importer does not know a data element that is required pursuant to the proposed regulations and CBP guidance, the importer must take necessary steps to obtain the information. CBP added that if an importer believes that a required importer SF data element does not exist for a non-exempt transaction type (e.g. carnets, etc.), the importer should request a ruling from CBP prior to the time required for the importer SF. CBP explained that if the filing is for a shipment type that CBP has specifically designated exempt from an element or elements, CBP will allow the filer to designate the filing as one of several "exemption" types, including foreign cargo remaining on board (FROB), immediate exportation (IE), and transportation and exportation (T&E) in-bond shipments. (See below for details.) Handling of Bulk and Break Bulk Cargo Under the proposed regulations, importers of bulk cargo would be exempt from the proposed importer and carrier requirements if the bulk cargo is also exempt from the 24 hour rule. (See 19 CFR 4.7(b)(2).) As for break bulk cargo, CBP states that for importer SF purposes, it is proposing to model the treatment of approved break bulk cargo on the 24 hour rule’s treatment of it in 19 CFR 4.7(b)(2). As a result, the importer SF for break bulk cargo would be required 24 hours prior to arrival in the U.S. Importers of break bulk cargo must still report 24 hours in advance of loading any containerized or non-qualifying break bulk cargo they will be importing. Importer SF Would be Required for In-Bond FROB, IE, T&E, Not for IIT CBP is not proposing to require an importer SF for IIT shipments. In-bond. CBP is proposing to require an importer SF for all other shipments arriving in the U.S. by vessel, including FROB and in-bond shipments, unless specifically exempted under the proposed regulations. FROB. Under the proposed regulations, an importer SF would be required for foreign-cargo-remaining-on-board (FROB), but because FROB is not destined to be received in the U.S., the carrier would be required to only submit five data elements: booking party name and address, foreign port of unlading, place of delivery, ship to name and address, and commodity 6 digit Harmonized Tariff Schedule (HTS) number. IE, T&E. Under the proposed regulations, an importer SF would be required for immediate exportation (IE) and transportation and exportation (T&E) in-bond shipments. Because IE and T&E shipments are not destined to remain in the U.S., CBP is proposing to require the party taking delivery in the U.S. to only submit the same five data elements as in the case of FROB. Diversions of IE, T&E. CBP adds that it is proposing to amend the regulations to require that, if at the time of submission of the importer SF, the goods are intended to be moved in-bond as an IE or T&E shipment, but later a decision is made to divert the goods, permission to divert the in-bond movement to a port other than the listed port of destination or export or to change the in-bond entry into a consumption entry would be required to be obtained from the port director of the port in which the original in-bond documents were filed. Such permission would only be granted upon receipt by CBP of a complete importer SF. No Exemption for Tier 3 C-TPAT Members Because the importer SF will be used to assess the risk of individual shipments, CBP has determined that all cargo arriving to the U.S. by vessel, regardless of the parties involved, will be subject to the importer SF requirements. Tier 3 Customs-Trade Partnership Against Terrorism (C-TPAT) members will not be exempt from the importer SF requirement nor allowed to submit fewer data elements than non-tier 3 importers. Liquidated Damages For Violations Of Importer SF Requirements In its proposed rule, CBP agrees to use the data “exclusively for ensuring cargo safety and security and preventing smuggling’’ and not for “determining merchandise entry or for any other commercial enforcement purposes.” However, in order to provide a clear enforcement mechanism for the proposed requirements, CBP is proposing to amend regulations covering bond conditions to include agreements to pay liquidated damages for violations of the new proposed regulations. The proposed regulations would add a new condition to those provisions in 19 CFR 113.62 required to be included in a basic importation and entry bond. Specifically, CBP is proposing to include a condition whereby the principal agrees to comply with the proposed Importer Security Filing requirements. If the principal fails to comply with the proposed Importer Security Filing requirements, the principal and surety (jointly and severally) would pay liquidated damages equal to the value of the merchandise involved in the default. CBP is also proposing to amend the bond conditions for violations of the advance cargo information requirements under the Trade Act regulations in order to make the liquidated damages amounts for those violations consistent with the liquidated damages amounts for violations of the proposed requirements. Protection of Confidential Information Presented to CBP CBP agrees that Importer security filing, vessel stow plan, and container status message information should be confidential, except to the extent required by law. CBP is proposing to amend 19 CFR 103.31a to include the Importer Security Filing elements (including the importer of record number), vessel stow plan information, and container status message information to the list of information that is per se exempt from disclosure under 19 CFR 103.12(d), unless CBP receives a specific request for such records pursuant to 19 CFR 103.5, and the owner of the information expressly agrees in writing to its release. 10+2 Filing Requirement to be Phased-In CBP states that it will adopt a phase-in enforcement process similar to what was utilized when the 24-Hour Rule and Trade Act regulations were implemented. Depending on the circumstances, CBP stated that it may take an "informed compliance" approach following the effective date of this rule. Through the phase-in enforcement process, CBP states that it will work with the trade to ensure informed compliance, issue FAQs, and make other outreach efforts. Please contact George R. Tuttle, III at geo@tuttlelaw.com or (415) 288-0428 if you would like more information on the subject of this newsletter. George R. Tuttle, III is an attorney with the Law Offices of George R. Tuttle in San Francisco. The information in this article is general in nature, and is not intended to constitute legal advice or to create an attorney-client relationship with respect to any event or occurrence, and may not be considered as such. Copyright © 2008 by Tuttle Law Offices. All rights reserved. Information has been obtained from sources believed to be reliable. However, because of the possibility of human or mechanical error by our offices or by others, we do not guarantee the accuracy, adequacy, or completeness of any information and are not responsible for any errors, omissions, or for the results obtained from the use of such information. |
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