US Customs Announces New Data Requirements For All Ocean Cargo

US Customs and Border Protection (“CBP”) recently issued an interim final rule requiring new data for imports of ocean cargo.  The rule is known as “10+2” because it calls for ten additional data items from U.S. importers and two data items from carriers.  CBP also refers to this program as the Importer Security Filing and Additional Carrier Requirements (“ISF”).  This rule has been long expected and subject to intense scrutiny from industry groups prior to the recent notice.  As a result, several of the provisions are less burdensome on importers than earlier proposals would have been.  Some of the data required will be readily available and relatively easy for importers to provide.  However, this will not be true of all data elements in all situations.  What is clear is that for all shipments, the new rule will require importers of ocean cargo to work even more closely with brokers and freight forwarders to make sure that the required data is provided, as required, in advance.  Moreover, while CBP has announced its intention to be “flexible” and show enforcement restraint for up to one year, the agency expects importers will use that time to make whatever operational changes are necessary to meet the requirements of this rule.

In the Security and Accountability for Every (“SAFE”) Port Act of 2006 and other recent laws, Congress directed CBP to issue regulations requiring the electronic transmission of additional data elements for improved high-risk targeting for cargo prior to loading at foreign seaports.  CBP issued a proposed rule in January of 2008.  The agency received over 200 comments, with many commenters arguing that CBP’s initial proposal was too broad, burdensome or unworkable. 

On November 24, 2008, CBP published its interim final rule, which includes a number of changes from the January notice.

First, the interim final rule delays full enforcement by one year, and lowers the penalty for violations to $5,000, rather than the total dollar value of the contents of the container.  The interim final rule is effective as of January 26, 2009.  However, for the twelve months following this date, CBP has said it will “show restraint” in enforcing this interim final rule, and will “take into account difficulties that importers may face in complying with the rule as long as importers are making a good faith effort and satisfactory progress toward compliance.”

Second, the interim final rule provides some flexibility by delaying the deadline for submission of two data points, namely the container stuffing location and the name of the consolidator who stuffed the container.  Importers must provide this information 24 hours prior to a container’s arrival at a US port (rather than 24 hours before lading, as was originally proposed). 

Finally, for four other “flexible” data points, CBP will accept incomplete information at the time of shipping.  These four data points are: (1) the name of the manufacturer or supplier of the cargo; (2) the “ship to party” or the ultimate recipient of the cargo after clearing US customs; (3) the Harmonized Tariff Schedule number; and (4) the country of origin. 

The interim final rule still, however, requires importers to provide the following four pieces of data 24 hours prior to lading: (1) the seller; (2) the buyer; (3) the importer of record number or foreign trade zone applicant identification number; and (4) the consignee number(s).  In addition, carriers must provide CBP with vessel stow plans and container status messages.

As noted above, the interim rule becomes effective on January 26, 2009.  CBP has requested comments on the interim rule by June 1, 2009.  However, comments are only invited “on only the six data elements for which CBP is providing some type of flexibility.”  CBP states that during the first year of “flexible” enforcement and upon receipt of comments, the agency will “examine compliance costs” and “the benefits of collecting the data” and will “determine whether to eliminate, modify or maintain these requirements.”

The complete notice from CBP is available at: http://edocket.access.gpo.gov/2008/pdf/E8-27048.pdf.

CBP fact sheets and a FAQ are available at: http://www.cbp.gov/xp/cgov/trade/cargo_security/carriers/security_filing/.

If you have any questions on U.S. Customs or import procedures, please contact: Greg McCue at gmccue@steptoe.com or 202.429.6421 and Cecily Rose at crose@steptoe.com or 202.429.6496.