CBP issues interim rule on 10+2

  U.S. Customs and Border Protection in a change of heart has issued an interim, rather than final, rule for an advance importer security filing intended to provide early intelligence to cargo screeners about the parties handling international ocean shipments.

   The so-called 10+2 rule requires importers to submit 10 pieces of advance shipping data 24 hours prior to loading at a foreign port, and ocean carriers to provide two streams of information about the status of containers under their control. Industry groups are worried that the controversial rule may add huge data collection and information technology costs to doing business.

   According to an advance copy of the document, there are four major differences between the proposed and enterim final rule.CBP is giving importers additional flexibility by providing a range of acceptable responses for certain data elements (manufacturer, ship-to-party, country of origin and commodity code number) that may be difficult to obtain early on from foreign suppliers, but can subsequently be updated until the 24-hour deadline. As such, the importer or its agent, for example, could identify a manufacturer as one of three typically used and then provide more precise information about the specific supplier in an update.

   The agency also said the container stuffing location and consolidator's name should be provided as early as possible, but will be accepted up until the 24-hour pre-loading deadline.

   CBP removed from its proposal the requirement that breakbulk cargo be included in vessel stow plans.

   And compliance penalties were changed from the value of the merchandise to $5,000 per violation.

   Provisions were also made for the creation of an importer security filing bond.

   The importer security filing will go into effect 60 days from publication in the Federal Register on Tuesday. CBP said it plans a one-year phased enforcement period after the effective date to give companies time to adjust to the rule before penalties are issued.

   An interim rule has the full force and effect of law, but allows agencies to gather extra public comment and make revisions before issuing a final rule. CBP will collect comments on the rule through June 1, 2009.

   As recently as three weeks ago, CBP officials rejected the possibility of an interim rule and a pilot program to test in a controlled fashion how importers can collect and electronically transmit the new data elements. Officials said they don't see any benefit to stringing out implementation by starting with a small group of volunteer importers doing data exchanges in a controlled rather than real-world environment.

   The National Association of Manufacturers, American Association of Exporters and Importers, the Pacific Coast Council of Customs Brokers and Freight Forwarders Associations, and several other groups have spent the past few months heavily lobbying Congress and the administration for a 10+2 pilot program before the rule's full-scale implementation.

   The groups claim that conducting a demonstration program on a limited scale will allow for developing best practices that can be shared with importers for collecting and electronically transmitting the new data elements, and prevent the agency's systems and personnel from being overwhelmed by the crush of thousands of daily data transmissions all at once.

   About two-dozen congressmen, including House Ways and Means Committee Chairman Charles Rangel, weighed in recently urging CBP to issue an interim rule and conduct an initial prototype program.

   There is no provision in the rulemaking, however, for a pilot project. CBP said the purpose of the interim rulemaking process is to accept feedback and evaluate the data elements to identify potential compliance difficulties. The agency will conduct a comprehensive review of the data filing process for both large and small enterprises. The analysis will also cover compliance costs for various industry segments, the impact of the flexible filing approach, barriers to submitting the data 24 hours prior to lading, and the benefits of collecting the data. The Department of Homeland Security, in coordination with the White House, will then determine whether to eliminate, modify or maintain the requirements.

   CBP said it will begin a series of regional seminars at seaports around the country beginning with the Port of New York and New Jersey, as well as the Port of Boston, 30 days after publication and ending in the twin ports of Los Angeles and Long Beach 135 days after publication.

Source: American Shipper