On November 25, 2008, U.S. Customs and Border Protection (CBP) published in the Federal Register an “interim final” rule implementing the Importer Security Filing (ISF) and Additional Carrier Requirements rule – commonly referred to as the “10+2 Rule.” The new regulations, which are the result of requirements in the SAFE Port Act that was signed into law on October 13, 2006, apply to ocean vessel shipments only, and require importers to submit 10 new elements of advance shipping data 24 hours prior to loading at a foreign port. In addition, ocean carriers must also provide two new pieces of information about the status of containers under their control.1
Effective Date is January 24, 2009; Public Comments Accepted Until June 2009
The rule will become effective on January 24, 2009. However, CBP will “show restraint” in its enforcement of the rule for a period of one year after the effective date, provided that importers are making “satisfactory progress” toward compliance and “a good faith effort” to comply with the rule. Comments will be accepted on the interim rule up to June 1, 2009.
Revised Rules Allow Some Additional Flexibility in Reporting Certain Data Elements
The interim rule is similar to the notice of proposed rulemaking, which was published in the Federal Register on January 2, 2008, but there are several notable distinctions. For example, the interim final rule provides for flexibility in the timing or interpretation of six of the data elements among the 10 required from shippers.
Specifically, CBP is allowing importers to provide a range of acceptable responses to the following required ISF elements: (1) the Manufacturer (or supplier); (2) “Ship to” party; (3) Country of origin; and (4) Commodity HTSUS number. For example, the interim rule would allow an importer to identify as a manufacturer one of three possible manufacturers when at the time of the initial filing the importer has not yet been able to confirm which party is the correct manufacturer for that shipment.
In addition, an importer could provide, in lieu of the country of origin, the country where the final stage of production took place if the importer makes a good faith effort to determine the country of origin but is unable to do so. Importers will be required to update their filings with respect to these data elements as soon as more precise information becomes available, but no later than 24 hours prior to arrival at a U.S. port. With respect to the container stuffing location and the identity of the consolidator, CBP is requiring that the carrier submit these elements “as early as possible,” but no later than 24 hours prior to arrival in a U.S. port.
CBP is allowing this increased flexibility to permit it to conduct a structured review and analysis of these elements. CBP will evaluate the difficulties importers have in complying with the interim rule with respect to these elements, the compliance costs for the rule and the barriers and benefits to submitting the required data at least 24 hours prior to lading. For that reason, CBP is soliciting additional comments specifically with respect to these six elements. The comments must be received on or before June 1, 2009.
Other Significant Changes
CBP has revised the liquidated damages provision of the proposed rule from a maximum of the value of the merchandise to $5,000 per violation with a $100,000 cap for vessel carriers and all other conveyance arrivals. In addition, the requirement that break bulk cargo be included on the vessel stow plans has been removed from the interim final rule. Finally, an additional bond requirement has been added. The proposed rule in January added several new bond conditions. The interim rule has also now added language amending Basic Custodial bond conditions.
CBP Public Outreach
CBP plans to conduct extended outreach activities with the trade, including seminars and roundtable discussions at all of CBP’s major seaports of entry and other ports as needed, beginning in Newark/New York and Boston 30 days after publication, and continuing throughout the country for a period of about 4 months.