U.S. Customs and Border Protection (CBP) recently released a draft proposal on advance
information that may be required of importers and carriers in international trade. Members of the
international trade community should carefully review this draft proposal. As part of the agency’s
strategy to refine and expand elements of its strategy to take additional steps to secure trade, the
“10+2” Proposal would add new advance trade data elements that will affect all maritime cargo
destined for the United State by imposing additional reporting requirements on importers and
carriers. As detailed below, CBP is seeking comments on this draft proposal until February 5, 2007.

“10+2” Creates New Responsibilities, Potential Problems

Ever since CBP was made a part of the Department of Homeland Security in 2003, CBP has been
required to pursue two goals – (1) securing border security and (2) facilitating legitimate trade. The
implementation of these particular security measures imposed by the Congress, however, have the
potential to impose restrictions on legitimate trade.

CBP has stated that it selected the “10” proposed new data elements because of their probative
value and because of their ready availability in current logistics processes. Certain proposed
elements, however, are not a part of the current data set that is required for importation (such as
information concerning the original manufacturer). In addition, the draft proposal presumes that the
importer is the party most likely to have direct knowledge of the 10 new data elements. But this is
not always the case. For example, it is often difficult for an importer to know in advance exactly
when a particular shipment is being made and will be loaded on a particular ship or when that
particular ship will sail. An importer purchasing from a trading company may not always know the
identity of the original manufacturer of the goods. Moreover, an importer who relies on a third
party/agent could ultimately be liable for the quality and accuracy of the information,
notwithstanding the fact that it has relied on a third party for the original information, and another
third party to transmit the information.

The Draft Proposal

CBP’s draft proposal would add new data elements to the 24-hour advance notification rule that is
currently in place for imported merchandise that arrives at U.S. ports by sea. The additional
information requirements in the proposal are designed to enhance CBP’s risk assessment
capabilities by allowing the agency to separate higher-risk shipments that would require increased

This “10+2” proposal is in response to a congressional directive embodied in the SAFE Port Act,
which was signed into law in October 2006 (P.L. 109-347). Section 203 of the SAFE Port Act requires CBP to “require the electronic transmission … of additional data elements for improved
high-risk targeting … to be provided as advanced information with respect to cargo destined for
importation into the United States prior to loading of such cargo on vessels at foreign ports.”

Even before the enactment of the SAFE Port Act, the Department had begun an internal review of
its targeting and inspection processes. The 24-hour rule currently in place basically requires data
elements that are contained on an ocean carrier’s or non-vessel operator’s cargo declaration 24
hours before containers are loaded on ships bound for the United States. The “10+2” proposal aims
to enhance CBP’s security screening abilities by relying on data supplied by trade entities (without
having to resort to physically examining every cargo container destined for the United States.
(Note: H.R. 1, which the House of Representatives passed on January 9, would implement a 100
percent screening requirement for ocean cargo in five years. It is unclear how this provision will fare
in the Senate, and whether, if passed by both Houses of Congress, the President will sign or veto
such legislation).

The “Ten”

CBP proposes to add the following ten data elements –

  1. Manufacturer name and address
  2. Seller name and address
  3. Container stuffing location
  4. Consolidator name and address
  5. Buyer name and address
  6. Ship to name and address
  7. Importer of record number
  8. 8. Consignee number
  9.  Country of origin of the goods
  10. Commodity classification (6-digit
    tariff schedule number)

Under the proposal, importers or their agents must provide these data elements via the Automated
Manifest System or Automated Broker Interface 24 hours prior to vessel loading.

The “Plus-Two”

CBP is also proposing to add the following two additional data sets:

  1. Container status messages (comprised of five data elements); and
  2. Vessel stow plan (comprised of nine data elements).
    Under the proposal, this additional information will be required to complete the security filing that is
    already provided by ocean carriers.

CBP Seeks Comments on this Pre-Proposed Draft Rule

With respect to the “10+2” proposal, CBP has specifically called for comments concerning the:

  • Advance trade data elements; 
  •  Parties most likely to have direct knowledge of each element; 
  • Technology necessary for parties to transmit the data in a timely fashion; Impact on the flow of commerce, including explanations of the existing commercial practices of
    affected parties and the changes to those practices that would be necessary in order to comply
    with the requirements proposed in CBP's draft proposal; and 
  • Necessity for transition periods between promulgation of the regulations and the effective date
    of the regulations.

It is important for members of the trade community to carefully assess the feasibility and impact of
the proposal on their operations, and to communicate any anticipated problems to the agency.

Comments will be accepted through February 5, 2007, after which CBP will prepare the proposal
for publication in the Federal Register as a part of a formal rulemaking procedure. If you would like
assistance, please contact the attorney with whom you work or one of the attorneys below who
specializes in customs matters.