[Federal Register: July 23, 2003 (Volume 68, Number 141)]
[Proposed Rules]
[Page 43573-43606]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23jy03-14]
[[Page 43573]]
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Part II
Department of Homeland Security
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Bureau of Customs and Border Protection
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19 CFR Parts 4, 103, 113 et al.
Required Advance Electronic Presentation of Cargo Information; Proposed
Rule
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DEPARTMENT OF HOMELAND SECURITY
Bureau of Customs and Border Protection
19 CFR Parts 4, 103, 113, 122, 123 and 192
RIN 1515-AD33
Required Advance Electronic Presentation of Cargo Information
AGENCY: Customs and Border Protection, Homeland Security.
ACTION: Proposed rule.
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SUMMARY: This document proposes to amend the Customs Regulations to
provide that Customs and Border Protection (CBP) must receive, by way
of a CBP-approved electronic data interchange system, information
pertaining to cargo before the cargo is either brought into or sent
from the United States by any mode of commercial transportation (sea,
air, rail or truck). The cargo information required is that which is
reasonably necessary to enable high-risk shipments to be identified so
as to prevent smuggling and ensure cargo safety and security pursuant
to the laws enforced and administered by CBP. The proposed regulations
are specifically intended to implement the provisions of section 343(a)
of the Trade Act of 2002, as amended by the Maritime Transportation
Security Act of 2002.
DATES: Written comments must be received on or before August 22, 2003.
ADDRESSES: Written comments are to be addressed to the Bureau of
Customs and Border Protection (CBP), Office of Regulations and Rulings,
Attention: Regulations Branch, 1300 Pennsylvania Avenue, NW.,
Washington, DC 20229. Submitted comments may be inspected at CBP, 799
9th Street, NW., Washington, DC during regular business hours.
Arrangements to inspect submitted comments should be made in advance by
calling Mr. Joseph Clark at (202) 572-8768.
FOR FURTHER INFORMATION CONTACT:
Legal matters: Glen E. Vereb, Office of Regulations and Rulings,
(202) 572-8724;
Trade compliance issues:
Inbound vessel cargo: Kimberly Nott, Field Operations, 202-927-
0042;
Inbound air cargo: David M. King, Field Operations, 202-927-1133;
Inbound truck cargo: Enrique Tamayo, Field Operations, 202-927-
3112;
Inbound rail cargo: Juan Cancio-Bello, Field Operations, 202-927-
3459;
Outbound cargo, all modes: Erika Unangst, Field Operations, 202-
927-0284;
For economic impact issues: Daniel J. Norman, Field Operations,
202-927-4305.
SUPPLEMENTARY INFORMATION:
Background
Section 343(a) of the Trade Act of 2002 (Public Law 107-210, 116
Stat. 933, enacted on August 6, 2002), as amended by section 108 of the
Maritime Transportation Security Act of 2002 (Public Law 107-295, 116
Stat. 2064, enacted on November 25, 2002), and codified at 19 U.S.C.
2071 note, requires that the Secretary endeavor to promulgate final
regulations not later than October 1, 2003, that provide for the
mandatory collection of electronic cargo information by the Customs
Service (now part of the Bureau of Customs and Border Protection
(CBP)), either prior to the arrival of the cargo in the United States
or its departure from the United States by any mode of commercial
transportation (sea, air, rail or truck). Under section 343(a), as
amended, the information required must consist of that information
about the cargo which is determined to be reasonably necessary to
enable CBP to identify high-risk shipments so as to prevent smuggling
and ensure cargo safety and security pursuant to the laws that are
enforced and administered by CBP.
Consequently, for the purposes set forth in section 343(a), as
amended, and within the parameters prescribed in the statute, as
highlighted below, this document proposes to amend the Customs
Regulations in order to require the advance electronic transmission of
information pertaining to cargo prior to its being brought into, or
sent from, the United States.
CBP Authority for Issuance of Proposed Rule
When the Trade Act of 2002 was enacted (Public Law 107-210; August
6, 2002), CBP was part of the Department of the Treasury as the Customs
Service. Thereafter, the Homeland Security Act of 2002 was enacted
(Public Law 107-296; November 25, 2002), which created the Department
of Homeland Security (DHS). Section 403 of the Homeland Security Act
(the Act) transferred to the newly created Department the functions,
personnel, assets, and liabilities of the Customs Service, including
the functions of the Secretary of the Treasury relating thereto.
Customs, later renamed as CBP, thereby became a component of DHS.
Furthermore, the Department of the Treasury recently issued an order
(Treasury Order 100-16, dated May 15, 2003) delegating to DHS certain
Customs revenue functions that were otherwise retained by the Treasury
Department under sections 412 and 415 of the Act. In accordance with
the Homeland Security Act and this transfer and delegation of
functions, certain matters, such as this proposed rule which is
designed to ensure cargo safety and security rather than revenue
assessment, now fall solely within the jurisdiction of DHS.
Therefore, inasmuch as CBP is an integral component of DHS, and in
view of the subject functions transferred/delegated in this regard from
Treasury to DHS, this proposed regulation is being issued by CBP with
the approval of DHS. Nevertheless, CBP has also coordinated the
development of this proposed rule jointly with the Treasury Department.
Statutory Factors Governing Development of Regulations
Under section 343(a), as amended, the requirement to provide
particular cargo information to CBP is generally to be imposed upon the
party likely to have direct knowledge of the required information.
However, where doing so is not practicable, CBP in the proposed
regulations must take into account how the party on whom the
requirement is imposed acquires the necessary information under
ordinary commercial practices, and whether and how this party is able
to verify the information it has acquired. Where the party is not
reasonably able to verify the information, the proposed regulations
must allow the party to submit the information on the basis of what it
reasonably believes to be true.
Furthermore, in developing the regulations, CBP, as required, has
taken into consideration the remaining parameters set forth in the
statute, including:
[sbull] The existence of competitive relationships among parties
upon which the information collection requirements are imposed;
[sbull] Differences among cargo carriers that arise from varying
modes of transportation, different commercial practices and operational
characteristics, and the technological capacity to collect and transmit
information electronically;
[sbull] The need for interim requirements to reflect the technology
that is available at the time of promulgation of the regulations for
purposes of the parties transmitting, and CBP receiving and
[[Page 43575]]
analyzing, electronic information in a timely fashion;
[sbull] That the use of information collected pursuant to these
regulations is to be only for ensuring cargo safety and security and
preventing smuggling and not for determining merchandise entry or for
any other commercial enforcement purposes;
[sbull] The protection of the privacy of business proprietary and
any other confidential cargo information that CBP receives under these
regulations, with the exception that certain manifest information is
required to be made available for public disclosure under 19 U.S.C.
1431(c);
[sbull] Balancing the likely impact on the flow of commerce with
the impact on cargo safety and security in determining the timing for
transmittal of required information;
[sbull] Where practicable, avoiding requirements in the regulations
that are redundant with one another or with requirements under other
provisions of law; and
[sbull] The need, where appropriate, for different transition
periods for different classes of affected parties to comply with the
electronic filing requirements in the regulations.
Additionally, the statute requires that a broad range of parties,
including importers, exporters, carriers, customs brokers, and freight
forwarders, among other interested parties, likely to be affected by
the regulations, be consulted and their comments obtained and evaluated
as a prelude to the development and promulgation of the regulations. In
furtherance of this, by a notice published in the Federal Register (67
FR 70706) on November 26, 2002, the United States Customs Service,
which is now merged into CBP, announced a series of public meetings in
accordance with section 343(a) to assist in the formulation of these
proposed regulations. The meetings were also announced on the Customs
Web site.
Separate meetings were scheduled and held to address specific
issues related to the advance electronic presentation of information
prior to the arrival or departure of air cargo (January 14, 2003),
truck cargo (January 16, 2003), rail cargo (January 21, 2003) and sea
cargo (January 23, 2003). ``Strawman'' proposals were offered by
Customs at the meetings and were made available on the Customs Web
site. In the meetings, members of the importing and exporting community
made many significant observations, insights, and suggestions as to
what CBP should consider and how CBP should proceed in composing the
proposed regulations. Also, at the meetings and on the Customs Web
site, suggestions and comments were solicited from the public. The CBP
received numerous submissions via e-mail which similarly provided
valuable insights and recommendations regarding the development of the
proposed rule.
Moreover, an extensive number of meetings were held with workgroups
of the subcommittee on advance cargo information requirements of the
Treasury Advisory Committee on the Commercial Operations of the U.S.
Customs Service (COAC), which greatly assisted CBP in its development
of these proposed regulations. Indeed, much of the input and
recommendations from those members of the trade who participated in the
public meetings, the various workgroups of the COAC subcommittee, as
well as the views expressed in the many e-mail submissions in this
matter, are reflected in these proposed regulations.
In this regard, what follows is a review of, and CBP's response to,
the most salient issues and recommendations that were presented
pursuant to this consultation process, along with an overview of the
proposed programs for advance information filing for cargo destined to,
or departing from, the United States by vessel, air, rail or truck.
Public Comments; General
Costs of Automation; Economic Analysis
Comment
Any implementing regulations compelling the advance presentation to
CBP of electronic information for cargo destined to the United States,
under section 343(a), as amended, would impose substantial automation
costs on the carrier trade. The CBP should conduct an economic impact
analysis to this effect.
CBP Response
As is set forth below, there are electronic data transmission
systems already in place in many of the modes. When coupled with the
fact that much of the trade already uses these systems, it does not
appear that requiring advance electronic cargo information would impose
substantial costs on the trade.
Nevertheless, Customs and Border Protection (CBP) has conducted an
economic analysis to determine whether the proposed rule is an
``economically significant regulatory action'' under Executive Order
12866 and whether the requirements of the Regulatory Flexibility Act
(RFA) (5 U.S.C. 601 et seq.) would apply to this rulemaking. It has
been determined, as a result of the initial analysis conducted, that
this proposed rule would not have a significant economic impact upon a
substantial number of small entities under the RFA. This economic
analysis is attached as an Appendix to this document. For the reasons
set forth in the analysis, the agency does not make a certification at
this time with regard to the regulatory requirements of 5 U.S.C. 603
and 604. Comments are specifically requested as to the impact of the
proposed rule on small entities.
This rule is a ``significant regulatory action'' under Executive
Order (E.O.) 12866 and has been reviewed by the Office of Management
and Budget in accordance with that E.O. However, it is our preliminary
determination that the proposed rule would not result in an
``economically significant regulatory action'' under E.O. 12866, as
regards the impact on the national economy.
Protection of Confidential Information Presented to CBP
Comment
Cargo manifest data collected by CBP under section 343(a), as
amended, should be kept confidential by the agency and not be released
to the public.
CBP Response
Section 343(a)(3)(G), as amended, expressly requires that CBP in
its implementing regulations protect the privacy of any business
proprietary and any other confidential cargo information that is
furnished to CBP in accordance with section 343(a), except for any
manifest information that is collected pursuant to section 431, Tariff
Act of 1930, as amended (19 U.S.C. 1431), and required to be available
for public disclosure pursuant to section 1431(c). It is emphasized in
this connection that the application of section 1431(c) has been
effectively limited only to vessel cargo manifest information (Sec.
103.31, Customs Regulations (19 CFR 103.31)).
As thus mandated by the law, CBP intends to accord full protection
to the privacy of air, rail, or truck cargo information that is
collected under section 343(a), as amended; to this effect, CBP has
included in this document a proposed amendment to part 103, Customs
Regulations (19 CFR part 103) (see proposed Sec. 103.31a)).
Information Technology; Interface With Other Government Agencies
Comment
The regulations should avoid redundancy requirements with those of
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other Federal agencies. There should be one filing procedure for all
Federal agencies (e.g., the Food and Drug Administration (FDA); and the
Animal and Plant Health Inspection Service (APHIS)). All data elements
to be required by Federal agencies, both within and without the
Department of Homeland Security (DHS), for traffic entering the United
States should be coordinated through a single entity, preferably CBP.
Toward this end, the notification requirements of other Federal
agencies should be integrated into the CBP regulations for section
343(a), as amended.
CBP Response
To the extent feasible, CBP will continue to explore ways and
methods to harmonize and synchronize information collection
requirements among the several agencies involved, so that the cargo
information CBP collects under section 343(a), as amended, may be
provided by electronic means to other Federal offices. Indeed, efforts
in this regard are already underway in connection with the development
of the Automated Commercial Environment (ACE) and the International
Trade Data System (ITDS) (a single system that will fully integrate all
requisite information about goods entering and exiting the United
States). These discussions may ultimately lead to a sole portal
(``single window'') for receiving all inward cargo information that may
be required to assist other agencies in administering and enforcing
statutes enacted to further combat threats to the safety and security
of the nation.
However, at present, CBP is of necessity operating under severe
time constraints in endeavoring to comply with the statutory deadline
for promulgating final regulations under section 343(a) as a national
security imperative. Given the limited time available, the construction
of a fully-integrated, comprehensive multi-agency electronic data
interchange system does not, at this moment, appear to be a practicable
or feasible concept, especially in view of the multitude of
technological modifications and substantial reprogramming that would be
needed for existing systems in order to effectuate this; and
withholding the implementation of the final regulations pending the
completion of an undertaking of such magnitude would quite clearly be
inconsistent with the urgency of the legislation.
The CBP notes that other agencies, such as FDA, have different
statutory requirements regarding advance notice of imports. The CBP
further notes that, due to these different statutory requirements,
these agencies may have different information needs to accomplish their
different statutory mandates. For example, some of the information
requirements in section 307 of the Public Health Security and
Bioterrorism Preparedness and Response Act of 2002 to address food
safety and security assessments, are different from those required by
CBP. In some instances, the time needed by other agencies to receive,
review, and respond to this information to accomplish their statutory
mission may be different from the time required by CBP to assess and
respond to information needed to achieve CBP's statutory mission. To
the extent possible, CBP will work with other interested agencies to
share the information collected under section 343(a), as amended, with
other Federal agencies.
Postal Shipments
Comment
The advance cargo information provisions for incoming cargo should
apply to air/vessel shipments through the United States Postal Service
(USPS).
CBP Response
As prescribed in section 343(a)(3)(K), as amended, CBP has the
authority, in consultation with the Postmaster General, to require
advance cargo information for shipments by the USPS. The CBP still has
this issue under consideration. Should a determination be made to
extend the advance electronic cargo information mandate to USPS
shipments, such postal shipments would be the subject of a separate
notice of proposed rulemaking.
Overview; Electronic Filing; Shipper on Master/House Bills
Pursuant to section 343(a)(1), as amended, cargo information for
required inbound and outbound shipments must be transmitted to CBP by
means of a CBP-approved electronic data interchange system. In this
document, CBP is proposing that cargo information be transmitted or
presented through existing CBP-approved data systems. As is further
elucidated infra, for each incoming mode and for all outbound modes,
these existing data systems are as follows:
Outbound, all modes: Automated Export System (AES);
Inbound vessels: Vessel Automated Manifest System (Vessel AMS);
Inbound aircraft: Air Automated Manifest System (Air AMS);
Inbound rail: Rail Automated Manifest System (Rail AMS);
Inbound truck: Free And Secure Trade System (FAST); Pre-Arrival
Processing System (PAPS) (which employs the Automated Broker Interface
(ABI)); Border Release Advanced Screening and Selectivity program
(BRASS, modified as appropriate); and Customs Automated Forms Entry
System (CAFES) or ABI in-bond reporting.
In this latter regard, and to the additional extent that future
approved automated data systems are to be implemented, CBP, either
generally or on a port-by-port basis, as applicable, will give advance
notice of the effective date of implementation of the specific system
at particular port(s) of arrival by publishing a notice to this effect
in the Federal Register.
Master Bills/House Bills
Generally speaking, a master bill of lading refers to the bill of
lading that is generated by the incoming carrier covering a
consolidated shipment. A consolidated shipment would consist of a
number of separate shipments that have been received and consolidated
into one shipment by a party such as a freight forwarder or a Non
Vessel Operating Common Carrier (NVOCC) for delivery as a single
shipment to the incoming carrier. The consolidated shipment, as noted,
would be covered under the incoming carrier's master bill; and this
master bill could reflect the name of the freight forwarder, the NVOCC
or other such party as being the shipper (of the consolidated
shipment). However, each of the shipments thus consolidated would be
covered by what is referred to as a house bill. The house bill for each
individual shipment in the consolidated shipment would reference the
name of the actual shipper (which would be the actual foreign owner and
exporter of the cargo to the United States). As will be seen from the
data elements as proposed in this rulemaking, it is this latter
information as to the identity of the actual shipper from the relevant
house bill that CBP is seeking for targeting purposes.
Public Comments; Vessel Cargo Destined to the United States
Summary of Principal Comments
Most of the comments received concerning the advance information
reporting requirements for incoming vessel cargo evidenced an intent to
revisit the ``24-hour rule'' that was issued and became effective last
year (T.D. 02-62, 67 FR 66318; October 31, 2002).
In brief, it was principally requested that advance cargo
information filing by
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Non Vessel Operating Common Carriers (NVOCCs) be eliminated, due to a
number of operational problems experienced by incoming carriers, that
have resulted from limitations said to be inherent in the Vessel
Automated Manifest System (AMS) when NVOCCs, as opposed to the vessel
carriers, transmit shipment information to CBP; at the same time,
though, it was advocated that importers should be permitted, at their
discretion, to file through AMS certain information that would likely
best be known to them as to the identification and nature of the
incoming cargo. Also, it was asked that definitions be added to the
regulations regarding those data elements pertaining to shipper and
consignee information. In addition, it was asked that Department of
Defense-contracted conveyances be exempted from the 24-hour rule.
CBP Response
In sum, CBP stands by the 24-hour rule for incoming vessel cargo
and does not contemplate any major change to it under this rulemaking,
with one exception: to introduce the mandate that vessel carriers file
their advance cargo manifest information with CBP electronically.
As explained in the final rule (67 FR at 66319), the 24-hour pre-
lading requirement for incoming vessel cargo, especially containerized
vessel cargo, is tied inextricably to the Container-Security Initiative
(CSI). CSI was developed to secure an indispensable, but vulnerable,
link in the chain of global trade: containerized shipping. Annually,
more than 6 million cargo containers are off loaded at U.S. seaports. A
core element of CSI is to pre-screen such containers at the port of
departure before they are shipped. To enable this pre-screening to be
done fully and effectively, it is essential that the required advance
cargo declaration information be presented to CBP at least 24 hours
prior to lading the cargo aboard the vessel at the foreign port.
With the implementation of CSI and the 24-hour rule, CBP has been
able to identify shipments that have posed potential threats; and
security-related seizures of problematic shipments have occurred. In
short, these programs--CSI coupled with the 24-hour rule--have become a
critical bulwark against threats to the safety and security of United
States seaports, trade, industry, and the country.
Non Vessel Operating Common Carriers (NVOCCs)
In consideration of the competitive relationships that exist in the
international freight forwarding field, those NVOCCs that seek to file
required business proprietary and other confidential cargo information
for their incoming shipments directly with CBP should be allowed to do
so, rather than having to furnish such information to vessel carriers
for electronic presentation to CBP. The CBP is confident that
operational issues that have arisen in relation to the implementation
of the 24-hour rule will over time be satisfactorily addressed; toward
this end, CBP will continue to be available to assist the trade in
resolving such issues.
There is no consensus in the trade community as to whether
importers should provide sea cargo data to CBP. When this split is
coupled with the current design and functionality of the AMS system,
CBP finds that allowing importers, at their discretion, to participate
in advance electronic filing through the system would at this time be
neither advisable nor practicable.
Government Vessels
Government vessels falling within the purview of Sec. 4.5(a),
Customs Regulations (19 CFR 4.5(a)), are exempt from the requirement to
make entry, and, as such, they would already be exempt from having to
comply with advance cargo declaration reporting under the 24-hour rule
(see 19 CFR 4.7(a), (b)(2)). For purposes of enlarging upon those
vessels that would be subject to such exemptions, it is noted that by a
separate, interim rule, CBP will expand the definition of government
vessels.
Data Elements--Shipper, Consignee; Date and Time of Departure
With reference to the identity of the shipper, at the master bill
level, for consolidated shipments, the identity of the Non Vessel
Operating Common Carrier (NVOCC), freight forwarder, container station
or other carrier would be sufficient. For non-consolidated shipments,
and for each house bill in a consolidated shipment, the identity of the
actual shipper (who is both the owner and the exporter) of the cargo
from the foreign country would be needed. To elaborate, the foreign
owner of the goods just before they are delivered for export, and who
initially consigns and ships them from the foreign country, is the
party who ultimately decides that the goods are to be disposed of in
another country, such as the United States. The foreign shipper and
owner of the goods is, therefore, the exporter, because this is the
party initially responsible for causing the export. Section
4.7a(c)(4)(viii), Customs Regulations (19 CFR 4.7a(c)(4)(viii)), would
be revised to include the additional meaning of this data element.
In addition, with reference to the identity of the consignee, for
consolidated shipments, at the master bill level, the identity of the
NVOCC, freight forwarder, container station or other carrier would be
sufficient. However, parties identified as ``consolidators,'' even
though they may also be NVOCCs, may not participate in Vessel AMS.
For non-consolidated shipments, and for each house bill in a
consolidated shipment, the consignee would be the party to whom the
cargo would be delivered in the United States, with the exception of
``FROB'' (Foreign Cargo Remaining On Board). If the name of the
consignee, as described, is available, the carrier must disclose this
information. However, where cargo is shipped ``to the order of [a named
party],'' which is a common business practice, the carrier must report
this named ``to order'' party as the consignee in the advance cargo
information submission; and, if there is any other commercial party
listed in the bill of lading for delivery or contact purposes, the
carrier must also report this other commercial party's identity and
contact information (address/phone number) in the ``Notify Party''
field of the advance electronic data transmission to CBP, to the extent
that the CBP-approved electronic data interchange system is capable of
receiving this data. Section 4.7a(c)(4)(ix) would be revised to include
the added meaning of this data element.
Also, Sec. 4.7a(c)(4) would further be amended to require the date
and time of the departure of the vessel from foreign, as reflected in
the vessel log.
Overview; Vessel Cargo Destined to the United States
Electronic Filing Mandate
Under this proposed rule, in principal part, the 24-hour rule would
be amended to provide that vessel carriers must present their cargo
declarations to CBP by means of a CBP-approved electronic data
interchange system, 24 hours before lading the cargo aboard the vessel
in the foreign port.
Transition/Timetable for Compliance With Electronic Filing Mandate
Within 90 days of the publication of this advance electronic cargo
information requirement as a final rule in the Federal Register, all
ocean carriers, and NVOCCs choosing to participate, must be automated
on the Vessel AMS system at all ports of entry
[[Page 43578]]
in the United States where their cargo will initially arrive.
Comments; Air Cargo Destined to the United States
Time Frame for Presenting Advance Cargo Information to CBP
Comment
The time frames for presenting electronic cargo information to CBP
for air cargo prior to the cargo's arrival in the United States that
were set forth in the ``strawman'' proposal (12 hours in advance of
foreign lading generally, and 8 hours in advance of foreign lading in
the case of express courier shipments) were excessively long. Such
lengthy advance time frames would destroy ``just-in-time'' delivery
systems. Instead, it was chiefly recommended that the time frame be one
hour prior to arrival in the United States; other commenters, however,
thought that the time frame for transmission should be determined on a
country-by-country basis, or, in the alternative, at the time of
``wheels-up'' on the aircraft.
Also, it was asserted that the advance notice time frame should be
consistent within each mode of transport; alternatively, it was
suggested that the advance filing time frame for charter flights should
be shorter than for other flights, and that there should be special
procedures for time-sensitive cargoes (short haul).
CBP Response
The time frames in the ``strawman'' proposal were put forth only
for purposes of stimulating a dialogue with the importing trade
regarding the development of an appropriate time frame for the
electronic submission of information for inbound air cargo. This issue
is central to the implementation of section 343(a) of the Trade Act of
2002, as amended.
Accordingly, after considering the feedback received from the
importing trade in response to the ``strawman,'' CBP is proposing in
this rulemaking that information for inbound air cargo be
electronically presented no later than the time of departure of the
aircraft for the United States (no later than the time that wheels are
up on the aircraft, and it is en route directly to the United States),
in the case of aircraft departing for the United States from any
foreign port or place in North America, which includes locations in
Mexico, Central America, South America (from north of the Equator
only), the Caribbean, and Bermuda. For aircraft departing for the
United States from any other foreign area, information for the inbound
air cargo would be required to be electronically presented to CBP no
later than 4 hours prior to the arrival of the aircraft at the first
port of arrival in the United States.
At present, CBP believes that these time frames (no later than
``wheels-up'' or 4 hours prior to arrival, as applicable) should enable
CBP to properly conduct a risk assessment for incoming air cargo and,
if found advisable, to make preparations to hold the cargo for further
information or for examination, as required to ensure cargo safety and
security under section 343(a), as amended. At the same time, CBP has
determined that these time frames should realistically accommodate the
concerns of the trade, and should not disrupt the flow of commerce.
Indeed, an important reason for the different time frames proposed is
the need to obviate disruptions in the flow of commerce; given this
consideration, the effect on ``just-in-time'' (``JIT'') delivery
systems should be nonexistent.
The time frames proposed for submitting electronic information to
CBP for inbound air cargo would thus be consistent for all air cargo
shipments regardless of the type of operator or the nature of the
cargo; the time frames would differ based only upon the foreign area
from which the incoming air carrier was departing for the United
States.
Parties Required/Eligible To Participate in Advance Cargo Information
Filing
Comment
It was asked whether freight forwarders to the United States would
be required to participate in advance cargo information filing. In the
alternative, it was requested that advance electronic shipment
information be supplied to CBP by the foreign shipper (the exporter to
the United States) or by the U.S. importer. In addition, it was
recommended that freight deconsolidators (Container Freight Stations)
be allowed to transmit in-bond information electronically to CBP at the
house air waybill level. In this overall context, it was further
mentioned that CBP would need to specify what type of bond would be
required for any non-carrier commercial participants in advance
electronic cargo information filing under section 343(a), as amended.
Also, two commenters urged that cargo information be supplied to CBP by
the foreign country (government).
It was also generally stated that some parties in the air
environment would simply be unable to comply with the advance
electronic cargo information requirements. In any case, it was asserted
that any liability for the accuracy of the information that a party
presented to CBP should fall upon the entity that supplied the
information to the presenting party.
CBP Response
Inbound air carriers that are otherwise required to make entry
under Sec. 122.41, Customs Regulations (19 CFR 122.41), would be
required to file advance cargo information electronically with CBP. The
existing automated air cargo manifest system (the Air Automated
Manifest System (Air AMS)) was originally designed and structured to
receive electronic data directly from the incoming air carrier.
Nevertheless, in addition to the incoming air carrier's mandatory
participation in presenting advance electronic air cargo information,
CBP has concluded that one of a number of other parties would be able
to voluntarily present to CBP a part of the electronic information
required for the inbound air cargo. These parties could consist of one
of the following:
(1) An ABI (Automated Broker Interface) filer as identified by its
ABI filer code (this entity could be either the importer of the cargo
or the importer's authorized Customs broker);
(2) A Container Freight Station/deconsolidator as identified by its
FIRMS (Facilities Information and Resources Management System) code;
(3) An Express Consignment Carrier Facility likewise identified by
its FIRMS code; or
(4) Any air carrier as identified by its IATA (International Air
Transport Authority) code, that arranged to have the incoming air
carrier transport cargo to the United States.
Unlike Vessel AMS, as explained above, and Rail AMS, as discussed
below, Air AMS has the existing design capabilities and functionality
to, and in fact already does, accept information from parties other
than the importing carrier for inward cargo shipments. The CBP expects
to make this capability to supply data available to a wider group of
trade members, as appropriate, and to make any systems modifications
necessary to accommodate possible variations in the order in which data
might be received.
Hence, along with the incoming air carrier for whom participation
in Air AMS is compulsory, any one of the foregoing parties could elect
to supply certain data for air cargo to CBP, provided that the party
established the communication protocol required by CBP for properly
presenting electronic data through the system, and provided further
that the party, other than an
[[Page 43579]]
importer or broker, was in possession of a Customs international
carrier bond containing all the necessary provisions of 19 CFR 113.64.
However, in the case of cargo shipments transported under a
consolidated master air waybill, only one party could supply
information for all such cargo so shipped.
It is observed that the importer or its authorized agent would be
the party in the United States most likely to have direct knowledge as
to particular information about the nature and destination of the
cargo. Secondly, a facility, such as a Consolidator or an Express
Consignment Carrier, that handled the shipment and/or arranged for its
delivery to the incoming carrier, would also have access to particular
information about the cargo, more so than the incoming carrier.
Generally speaking, for consolidated shipments, information in the
direct possession of such a facility would consist of data from its
house air waybill(s) that would not be directly known by the incoming
carrier.
Thus, in recognition of possible competitive relationships that a
party such as a container freight station, freight forwarder, or
express consignment or other carrier, might have with the incoming air
carrier, such party would have the opportunity, if it so elected, to
present the required information directly to CBP, as opposed to having
to present this information to the inward air carrier or a service
provider who would, on its behalf, transmit this information for the
cargo to CBP.
In any event, it would not be realistic or feasible to seek to
obligate a foreign country (government) to transmit advance cargo
information for commercial cargo sent from that country to the United
States; and it is submitted in this connection that section
343(a)(3)(B), as amended, clearly envisages the electronic filing of
cargo information by appropriate commercial or business entities,
rather than foreign governments.
Since the party from whom electronic air cargo information would be
required might not necessarily, in all situations, be the party with
direct knowledge of that information, CBP would take into consideration
how, in accordance with ordinary commercial practices, the electronic
filer acquired such information, and whether and how the filer was able
to verify this information. Where the party electronically presenting
the cargo information to CBP was not reasonably able to verify such
information, CBP would permit the party to electronically present the
information on the basis of what the party reasonably believed to be
true.
Comment
There should be an exemption from the advance cargo filing
requirements for aircraft that are owned or leased by the Department of
Defense.
CBP Response
Aircraft, including public aircraft as defined in 19 CFR 122.1(i),
that are exempt from entry under 19 CFR 122.41 would be exempt from
advance cargo information filing under this proposed rule. It is noted
that by a separate, interim rule, CBP will expand upon those aircraft
that are subject to such an exemption from entry.
Comment
Participants in the Customs-Trade Partnership Against Terrorism (C-
TPAT), and related parties, should be excluded from the advance cargo
information requirement or should be subject to a reduced time frame
within which the advance cargo information must be transmitted.
CBP Response
The CBP disagrees with this suggestion. However, participation in
C-TPAT would be considered as one factor in targeting whether cargo
needed to be held upon arrival pending the receipt of further
information or for examination. Such additional information, if
required, would have to be made available at the port of arrival.
Required Cargo Information; Availability/Correction of Data Transmitted
Comment
For freight forwarders that might participate in the advance
electronic filing of cargo information, it was asked what information
they would specifically be required to transmit to CBP.
CBP Response
The specific data elements that would be required from a
participating party are enumerated below under the heading ``Overview;
Air Cargo Destined to the United States'' (see ``Additional Data
Elements from Incoming Carriers; Other Participants''); and these data
elements are also set forth in proposed Sec. 122.48a(d). A freight
forwarder could be included among those parties that could participate
voluntarily in electronic cargo information filing, provided that the
freight forwarder was either an ABI filer, a Container Freight Station/
deconsolidator or an Express Consignment Carrier Facility; that it had
posted a Customs international carrier bond containing all necessary
provisions of 19 CFR 113.64; and that it had established the
communication protocol required by CBP for properly presenting
electronic data through the system.
Comment
The CBP should clearly define the meaning of those data elements
which must be presented for inbound air cargo.
CBP Response
The CBP believes that the proposed data elements to be required in
advance for incoming air cargo are fairly well known; however, a number
of the data elements set out in the proposed regulations are
accompanied by detailed explanations as to their meaning. Should it be
called for, CBP will include additional definitions for those elements
about which the importing air community might prefer greater
elucidation.
Therefore, CBP requests comments in response to this proposed rule
especially concerning those data elements contained in proposed Sec.
122.48a(d) for which the importing air community seeks additional
guidance.
Comment
Most of the necessary data for incoming cargo would not necessarily
be available prior to its lading aboard the aircraft. Moreover, the
line-item Harmonized Tariff Schedule (HTS) number for air cargo would
not be available prior to the departure of the aircraft. The air
carrier would not always have information for cargo at the house air
waybill level; and CBP should allow in-transit consolidations to be
reported at the master air waybill level. Also, CBP should permit an
air carrier to submit electronic cargo data for shipments brought in by
truck.
CBP Response
Because CBP proposes to require advance cargo information for
incoming aircraft either no later than the time of ``wheels-up'' or no
later than 4 hours prior to arrival in the United States, as applicable
(and not prior to the foreign lading of the cargo aboard the aircraft),
the commenters' concerns as to the availability of the necessary data
for the cargo prior to foreign lading are addressed.
Nevertheless, concerning the possible unavailability of the 6-digit
HTS number for the cargo prior to foreign departure, it is emphasized
that either a precise description of the cargo or its HTS 6-digit
tariff subheading would be sufficient. In any case, under the
[[Page 43580]]
proposal, as already explained, the line-item HTS number for the cargo
would essentially not be required prior to the departure of the
aircraft for the United States.
As to the carrier not always having cargo information from the
house air waybill, should another party, such as an ABI filer, elect to
participate in advance automated cargo information filing, the carrier
would only be responsible for transmitting information from the master
air waybill. However, if another electronic filer did not participate
in transmitting needed cargo information to CBP, the incoming carrier
would need to obtain the house air waybill information from the
relevant party for presentation to CBP.
In-transit consolidations of inbound cargo typically present the
same issues of cargo safety and security as other inbound shipments.
Thus, the complete house air waybill information would be required from
the carrier or the other party electing to participate in advance cargo
information filing. Also, should an air carrier choose to ship freight
by truck, advance cargo information would be required to be presented
to CBP through the truck processing system (see proposed Sec. 123.92);
electronic air documents would not be accepted in lieu of advance
electronic truck cargo information.
Comment
If cargo were bumped from one flight to a later flight, there
should be no need to re-transmit related cargo information that was
previously transmitted to CBP.
CBP Response
Given the time frames proposed, since cargo information would
essentially not be required prior to the departure of the aircraft for
the United States, this issue should not present a significant concern.
Comment
The CBP should allow changes and additions to electronically
transmitted manifest information in accordance with current manifest
discrepancy reporting policies.
CBP Response
Complete and accurate information would need to be presented to CBP
for cargo aboard the aircraft no later than the time period specified
for the particular foreign area from which the aircraft departs for the
United States. As for any changes in the cargo information already
transmitted for a flight, the procedures for discrepancy reporting will
be the subject of a separate rulemaking.
Pre-Departure Screening of Cargo; Cargo Inspections in the United
States
Comment
Air cargo security is already highly regulated by the
Transportation Security Administration (TSA), the Federal Aviation
Administration (FAA), and other agencies and foreign governments. As
such, there should be no pre-departure screening process required for
incoming air cargo. In the alternative, it was advocated that CBP
should consider a CSI (Container Security Initiative)-type program for
air cargo. In the event that pre-departure/lading information is
necessary for pre-screening purposes, CBP should provide a positive
load/no-load message to the electronic filer. Also, for cargo that may
be identified as high risk, CBP should not compel inspections of such
cargo at locations in the United States that are merely technical
stops.
CBP Response
There will be no pre-departure-screening-and-hold process applied
to air cargo under this proposal. While CBP may consider the
possibility of developing a CSI-type initiative for air cargo based on
a number of factors, including the terrorist threat, the success of
industry security programs, and the success of this rulemaking and
related CBP security efforts, such a proposal falls outside the scope
of this rulemaking.
In addition, inspections of cargo in the United States conducted
for the purpose of ensuring cargo safety and security and for the
prevention of smuggling would only be conducted if the cargo had been
identified as potentially posing a safety, security or smuggling risk;
and CBP would work with the carrier and other affected Government
agencies to determine an appropriate location to examine such
potentially high-risk cargo. In appropriate cases, however, landing
rights could be denied to an incoming carrier if advance cargo
information was not timely, accurately, and completely presented to CBP
(see proposed Sec. 122.14).
Comment
The possible need for a carrier to retain cargo in a staging/
storage area at a foreign location in order to comply with a pre-
departure advance information requirement for inbound cargo would
create a security risk for the cargo that would not otherwise exist.
CBP Response
As indicated, the time frames proposed for the advance reporting of
air cargo information have been designed so as to preclude any need to
retain cargo in a foreign area in order to comply with the pre-arrival
reporting mandate.
Requested Exemptions/Exclusions From Electronic Filing Requirements
Comment
Advance electronic information should not be required for inbound
air cargo in diplomatic pouches. Merchandise brought in by the air
carrier for its own use should be exempt as well from the advance
electronic information provisions. Also, letters and documents should
be exempted from the detailed advance electronic cargo information
submission. It was further asked whether the advance filing
requirements would apply to hand-carried merchandise or merchandise
checked in passenger baggage.
CBP Response
For purposes of this rulemaking, all air cargo shipped under an air
waybill, regardless of its nature, would be subject to the advance
electronic reporting provisions. This would include diplomatic pouches
and letters and documents. Also, merchandise brought in by an air
carrier for its own use would be subject to the same advance cargo
information filing requirements that would apply to other incoming
cargo. However, hand-carried merchandise and merchandise contained in
passenger baggage would not be subject to the advance cargo information
requirements in this rulemaking; such merchandise would be included in
the passenger baggage declaration.
Required Information Technology; Trade Support; Transition Periods
Comment
It was asked whether CBP would provide staffing for data/targeting
analysis and related trade support on an around-the-clock basis; and
two commenters were insistent that CBP conduct extensive training in
Air AMS filing procedures at all ports. Various concerns were also
expressed as to the ability of CBP to effectively analyze advance cargo
information.
CBP Response
An automated targeting system for performing a risk assessment for
incoming air cargo will be fully in place upon the effective date of
the final regulations. Automated data/targeting analysis for risk
assessment will be available at all times. Related trade support will
be available during regular
[[Page 43581]]
port hours; and CBP will conduct any training that CBP personnel might
need in Air AMS procedures.
Comment
To effectuate the filing of electronic cargo information under
section 343(a), as amended, CBP should consider integrating advanced
information technology (IT) products into its current automated
manifest filing system. Additionally, the Automated Commercial
Environment (ACE) system should be compatible with the implementing
regulations. Also, there should be a grace period given under the
implementing regulations in order to afford trade participants the
chance to make suitable changes to their computer programming; and
there should likewise be a grace period allowed during which such trade
participants could bring the detail and accuracy of their advance
information filing up to the level that CBP would require.
CBP Response
While disposed to explore any advances in IT products, CBP will
largely rely, at least initially, upon the Air AMS, with appropriate
future modifications, as the principal vehicle to achieve the goal of
advance air cargo information presentation under section 343(a), as
amended. However, any new system developed within the framework of ACE
will be compatible with the implementing regulations. For this reason,
therefore, the implementing regulations will refer generally to a CBP-
approved electronic data interchange system (rather than to Air AMS,
specifically).
The CBP contemplates that, pursuant to section 343(a)(3)(J), as
amended, the effective date that would be set for the final
implementing regulations following their promulgation should afford
sufficient time for Air AMS participants to make suitable changes to
their programming for the advance transmission of cargo data; and the
effective date would similarly incorporate a reasonable grace period
within which Air AMS participants should be able to bring their advance
data filing up to the level of detail and accuracy that CBP seeks.
Specifically, the proposed effective date, and the provisions for
delaying the effective date, for compliance with the advance
presentation of electronic air cargo information to CBP under section
343(a), as amended, are contained in proposed Sec. 122.48a(e).
Overview; Air Cargo Destined to the United States
Electronic Systems To Be Used
Air carriers, and certain other parties authorized for voluntary
participation in the program, must transmit through a CBP-approved
electronic data interchange system advance cargo air waybill
information, in accordance with the ``Transition and Implementation
Timeline'' discussed below. The current CBP system for transmitting air
cargo information is the Air Automated Manifest System (Air AMS). Also,
certain express consignment carriers have proprietary electronic data
systems which CBP personnel can access. The CBP will permit the use of
these electronic proprietary systems, provided that the participants
are capable of providing the data in a suitable electronic format to
CBP for the purposes of ensuring cargo safety and security and
preventing smuggling, unless CBP determines that it is necessary to
migrate those participants to Air AMS. In addition, these express
consignment carriers will be required to provide CBP with an electronic
record of the data in a CBP-approved storage medium. All other express
consignment carriers, including those that currently submit information
to CBP using paper documents, will be required to participate in Air
AMS.
Data Submission Timelines
Air carriers and other parties electing to participate in the
program would transmit the required information to CBP no later than
the time of departure (``wheels-up'') for aircraft that are departing
for the United States from any foreign port or place in North America,
including locations in Mexico, Central America, South America (from
north of the Equator only), the Caribbean, and Bermuda. For aircraft
departing for the United States from any other foreign area, such
carriers and other parties would transmit the required information to
CBP no later than 4 hours prior to the arrival of the aircraft at the
first port of arrival in the United States. This amount of time should
enable CBP to conduct an adequate analysis of the data and to select
individual shipments for further document review or physical
examination, while not disrupting the flow of commerce and ``just-in-
time'' delivery systems.
Parties Required/Eligible To Present Advance Electronic Cargo
Information
All carriers required to enter under Sec. 122.41, Customs
Regulations (19 CFR 122.41), would be required to participate in the
electronic data interchange system and present the necessary cargo
information to CBP.
The carrier will only need to be automated at each port where
entrance and clearance of the aircraft is required. Incoming air
carriers and other authorized parties who choose to do so may
participate in Air AMS until CBP migrates to a different processing
system. For this reason, the implementing regulations will refer only
to a ``CBP-approved electronic data interchange system'' in order to
accommodate the future migration to any superseding data processing
systems.
In addition to an incoming air carrier for whom participation will
be mandatory, one of the following parties may elect to transmit
particular data to CBP for incoming cargo: an ABI filer (importer or
its Customs broker); a Container Freight Station/deconsolidator as
identified by its FIRMS code; an Express Consignment Carrier Facility
likewise identified by its FIRMS code; or an air carrier as identified
by its IATA code, that arranged to have the incoming air carrier
transport the cargo to the United States. To be qualified to file cargo
information electronically, the party would need to establish the
communication protocol required by CBP for properly presenting
electronic information through the data interchange system; and, except
for an importer or broker, the party would have to possess a Customs
international carrier bond containing all the necessary provisions of
19 CFR 113.64.
Consequently, the carrier will either have to obtain all the needed
cargo shipment information for presentation to CBP, or the carrier will
need to obtain the unique identifier of the party that will separately
transmit to CBP a portion of the required data for the cargo; the other
party's unique identifier code would have to accompany the carrier's
data transmission to CBP, so that CBP could associate the subject cargo
shipment with both electronic transmissions related to the cargo.
Permission to unlade all or part of the cargo could be denied or
delayed, and penalties and/or liquidated damages could be assessed,
where the air carrier or other electronic filer transmitted inaccurate,
incomplete or untimely information to CBP.
Information Required From Air Carriers
An incoming air carrier would need to transmit all of the necessary
information for non-consolidated air waybills. For consolidated
shipments: the carrier would have to present to CBP all the required
information from the master air
[[Page 43582]]
waybill record; and the carrier would supply all the information for
associated house air waybill records where another authorized party did
not electronically transmit information for the associated house air
waybills directly to CBP. If another approved party did transmit the
information, the carrier would not be required to electronically supply
such information.
The carrier would still be required under 19 U.S.C. 1431 to have a
manifest for all cargo aboard the aircraft, whether that cargo was
manifested under a non-consolidated air waybill or a house air waybill
that was part of a consolidation.
These proposed regulations apply to air cargo that would be entered
into the United States, as well as to in-transit air cargo including
any cargo which remained aboard the aircraft on the same through
flight.
Specific Data Elements; Air Carriers
In the following listing of data elements for air carriers, an
``M'' next to any element indicates that the data element would be
mandatory in all cases; a ``C'' next to the data element indicates that
the data element was conditional and would be transmitted to CBP if the
condition were present for that particular air waybill.
(1) Air waybill number (M) (The air waybill number is the
International Air Transport Association (IATA) standard 11-digit
number);
(2) Trip/flight number (M);
(3) Carrier/ICAO (International Civil Aviation Organization) code
(M) (The approved electronic data interchange system supports both 3-
and 2-character ICAO codes, provided that the final digit of the 2-
character code is not a numeric value);
(4) Airport of arrival (M) (The 3-alpha character ICAO code
corresponding to the first airport of arrival in the Customs territory
of the United States (for example, Chicago O'Hare = ORD; Los Angeles
International Airport = LAX));
(5) Airport of origin (M) (The 3-alpha character ICAO code
corresponding to the airport from which a shipment began its
transportation by air to the United States (for example, if a shipment
began its transportation from Hong Kong (HKG), and it transits through
Narita, Japan (NRT), en route to the United States, the airport of
origin is HKG, not NRT));
(6) Scheduled date of arrival (M);
(7) Total quantity based on the smallest external packing unit (M)
(for example, 2 pallets containing 50 pieces each would be considered
as 100, not 2);
(8) Total weight (M) (may be expressed in either pounds or
kilograms);
(9) Cargo description (M) (for consolidated shipments, the word
``Consolidation'' is a sufficient description for the master air
waybill record; for non-consolidated shipments, a precise cargo
description or the 6-digit Harmonized Tariff Schedule (HTS) number must
be provided);
(10) Shipper name and address (M) (for consolidated shipments, this
may be the name and address of the consolidator, express consignment or
other carrier, for the master air waybill record; for non-consolidated
shipments, this must be the name and address of the actual shipper (the
owner and exporter) of the merchandise from the foreign country);
(11) Consignee name and address (M) (for consolidated shipments,
this may be the name and address of the container freight station,
express consignment or other carrier, for the master air waybill
record; for non-consolidated shipments, this must be the name and
address of the party to whom the cargo will be delivered, with the
exception of ``FROB'' (Foreign Cargo Remaining On Board));
(12) Consolidation identifier (C);
(13) Split shipment indicator (C) (this data element includes
information indicating the particular portion of the split shipment
that will arrive; the boarded quantity of that portion of the split
shipment (based on the smallest external packing unit); and the boarded
weight of that portion of the split shipment (expressed in either
pounds or kilograms));
(14) Permit to proceed information (C) (this element includes the
permit-to-proceed destination airport (the 3-alpha character ICAO code
corresponding to the permit-to-proceed destination airport); and the
scheduled date of arrival at the permit-to-proceed destination
airport);
(15) Identifier of other party which is to submit additional air
waybill information (C);
(16) In-bond information (C) (this data element includes the
destination airport; the international/domestic identifier (the in-bond
type indicator); the in-bond control number, if there is one (C); and
the onward carrier identifier, if applicable (C)); and
(17) Local transfer facility (C).
Additional Data Elements From Incoming Carriers; Other Participants
In addition to the data elements listed in items ``1'' through
``17'' above, the incoming air carrier, or another eligible electronic
filer electing to do so, must transmit the following information to CBP
for the inward cargo:
(1) The master air waybill number and the associated house air
waybill number (M) (the house air waybill number may be up to 12
alphanumeric characters (each alphanumeric character that is indicated
on the paper house air waybill document must be included in the
electronic transmission; alpha characters may not be eliminated));
(2) Foreign airport of origin (M) (The 3-alpha character ICAO code
corresponding to the airport from which a shipment began its
transportation by air to the United States (for example, if a shipment
began its transportation from Hong Kong (HKG), and it transits through
Narita, Japan (NRT), en route to the United States, the airport of
origin is HKG, not NRT));
(3) Cargo description (M) (a precise description of the cargo or
the 6-digit Harmonized Tariff Schedule (HTS) number must be provided.
Generic descriptions, specifically those such as ``FAK'' (``freight of
all kinds''), ``general cargo'', and ``STC'' (``said to contain'') are
not acceptable);
(4) Total quantity based on the smallest external packing unit (M)
(for example, 2 pallets containing 50 pieces each would be considered
as 100, not 2);
(5) Total weight of cargo (M) (may be expressed in either pounds or
kilograms);
(6) Shipper name and address (M) (the name and address of the
actual shipper (the owner and exporter) of the cargo from the foreign
country);
(7) Consignee name and address (M) (the name and address of the
party to whom the cargo will be delivered in the United States, with
the exception of ``FROB''); and
(8) In-bond information (C) (this data element includes the
destination airport; the international/domestic identifier (the in-bond
type indicator); the in-bond control number, if there is one (C); and
the onward carrier identifier, if applicable (C)).
Advance Electronic Information for Letters and Documents
For purposes of compliance with the advance cargo information
filing requirements under section 343(a), as amended, letters and
documents would be subject to the same procedures as all other types of
cargo. Such ``letters and documents'' comprise the data (for example,
business records and diagrams) described in General Note 19(c),
Harmonized Tariff Schedule of the United States (HTSUS); personal
correspondence, whether on paper, cards, photographs, tapes, or other
media; and securities and similar evidence of value described in
subheading 4907, HTSUS, but not
[[Page 43583]]
including monetary instruments covered under 31 U.S.C. 5301-5322.
Electronic Freight Status Notifications
If the facility (carrier, deconsolidator, or other party) currently
holding the goods was automated, that party would have to honor all
freight status notifications transmitted by CBP. Cargo could not be
transferred to another facility, moved under the provisions of the in-
bond regulations or released to the consignee except upon electronic
status notifications from CBP. Should the cargo be transferred to a
non-automated facility (e.g., a Container Freight Station, a carrier
facility in another port, or the like), that facility would be required
to accept only paper documents for the disposition of the cargo.
Transition and Implementation Timeline
All air carriers, and those authorized parties that choose to
participate in presenting advance cargo information electronically to
CBP through the approved automated system, would be expected to comply
with the provisions of these regulations on and after 90 days from the
date that the final rule in this matter is published in the Federal
Register. However, CBP could delay the implementation of the final
regulations at a given port until the necessary training had been
provided to CBP personnel at that port. Also, CBP could delay the
effective date of the final regulations in the event that any essential
programming changes to the applicable CBP-approved electronic data
interchange system were not in place. Finally, CBP could delay the
effective date of the regulations if further time were required to
complete certification testing of new participants. Any such delay
would be the subject of a notice provided through the Federal Register
Electronic System Failure; Downtime
Should the approved electronic data interchange system go down, the
incoming air carrier and, if applicable, any other electronic filer
would have to submit a hard copy equivalent of all required electronic
cargo information to CBP either no later than ``wheels-up'' or no later
than 4 hours prior to the arrival of the aircraft in the United States,
depending upon the foreign area from which the incoming aircraft
departs for the United States.
Comments; Rail Cargo Destined to the United States
Time Frame for Transmitting Information; Impact on Commerce
Comment
Various suggestions were made regarding the time in which advance
rail cargo data would need to be electronically presented to CBP.
Specifically, the following time frames were put forth: 4 hours prior
to departure for the United States; 4 hours prior to arrival in the
United States; 2 hours prior to arrival; and under 2 hours prior to
arrival. By contrast, it was stated that the time frame set forth in
the ``strawman'' proposal (24 hours prior to lading in the foreign
country) was unworkable/unrealistic. It was also stated that any time
frame that CBP proposed should not adversely impact ``just-in-time''
shipping practices.
CBP Response
The time frame in the ``strawman'' was put forth only as a
perfunctory proposal, merely for the purpose of eliciting feedback from
the trade in order to assist CBP in developing an appropriate time
frame for inclusion in the proposed regulations. After considering the
various recommendations from the rail trade, CBP agrees with those
commenters who recommended that electronic cargo data for incoming rail
cargo be presented no later than 2 hours prior to the arrival of the
cargo at a United States port of entry.
The CBP is of the opinion that this minimum 2-hour period for
presenting rail cargo information electronically in advance of arrival
is a reasonable and practical time frame for the submission of the
necessary cargo data, and one that should not disrupt the flow of rail
commerce into the country. This view is based in large part on the
understanding that rail carriers will transmit cargo data on many types
of shipments (e.g., intermodal sea traffic) as it becomes available,
thereby limiting the amount of data that is transmitted 2 hours prior
to arrival.
At present, CBP finds that this is the minimum time period needed
to perform the requisite risk analysis in relation to the transmitted
data, and, if necessary, to request further information about the
cargo, or to arrange for its examination in those instances, which are
anticipated to be rare, where an examination should be found warranted.
Rail carriers need to be advised, however, that while CBP is
confident that the targeting can be accomplished within the 2-hour
period, it may result in more trains spending time at the border
uncoupling cars in order for them to be examined. Nevertheless, CBP is
confident that this proposed time frame should not have any notable
impact upon rail business practices, including ``just-in-time'' (JIT'')
inventory shipments. In this latter respect, CBP is aware that commerce
has increasingly relied on ``JIT'' shipping as a more cost effective
way of conducting business.
Party Required To Present Data to CBP
Comment
One commenter asked that the shipper (the exporter from the foreign
country) and the United States importer be required to transmit the
required cargo data to CBP. Another commenter said that the shipper
should supply the data. Three commenters asserted that data should be
accepted utilizing current systems and that the trade not be forced to
incur extraordinary expenses for system upgrades which might only have
to be quickly replaced due to the establishment of the Automated
Commercial Environment (ACE).
CBP Response
While it is recognized that the shipper and/or the United States
importer could be the parties most likely to possess direct knowledge
of particular information about the incoming rail cargo, CBP has
initially concluded that it should be incumbent upon the rail carrier
to submit the required information for the cargo. Simply stated, the
current CBP-approved electronic data interchange system (the Rail
Automated Manifest System (Rail AMS)) is essentially structured and
programmed only to receive such data directly from the carrier.
Accepting advance cargo information from the shipper and/or the United
States importer would not be practicable in the present automated rail
environment.
The CBP will employ the prevailing system to electronically
transmit and receive cargo information pending the advent of the
Automated Commercial Environment (ACE). When ACE is established and in
place, it may have the capability to receive data from the foreign
exporter and/or the U.S. importer.
Requested Exemptions From the Advance Electronic Filing Requirements
Comment
Vessel-to-rail containers and bulk/break-bulk shipments should be
exempted from the filing requirements.
[[Page 43584]]
Members of C-TPAT (the Customs-Trade Partnership Against Terrorism) and
participants in the FAST (Free And Secure Trade) system should be
exempted from having to present advance electronic cargo data for their
shipments; and the Department of Defense (DoD) should have exemptions
based on the nature of their shipments (descriptions for sensitive
military cargo should be general).
CBP Response
Generally speaking, it is the view of CBP that a straightforward
and streamlined regulation, unencumbered with multiple special
exemptions, would present the most workable system especially with
respect to the rail environment. Given the abbreviated time frame
proposed (no later than 2 hours prior to arrival at a U.S. port of
entry), CBP believes that the rail community in particular should be
able to comply with the advance transmission of needed cargo data, with
no measurable disruption in the flow of cross-border commerce; this
should render moot most of the special requests for exemptions from the
proposed advance filing requirements.
Nevertheless, CBP is proposing to exempt one category of cargo from
the advance automated notification rule: Domestic cargo that would
arrive by train at one port from another in the United States after
transiting a foreign country would not be subject to the advance
electronic information filing requirement for incoming cargo; but
advance information for such domestic cargo may be electronically
presented to CBP, if desired.
Required Data Elements
Comment
Required data elements to be transmitted to CBP should be clearly
set forth; and CBP should give clear instructions as to what level of
data would be sought.
CBP Response
The proposed data elements for incoming rail cargo are contained in
proposed Sec. 123.91(d). A number of the data elements contained in
this proposed regulation are accompanied by explanations. The CBP will
include additional definitions for those elements about which the
importing rail community may desire greater elucidation. To assist in
making this determination, CBP requests comments especially concerning
those data elements for which the importing rail community seeks
further guidance.
Information Technology; High Risk Cargo
Comment
The CBP would need to automate any ports that were not already
automated in order to enable the port to transmit or receive electronic
data as part of the advance information filing program.
CBP Response
The CBP will automate any remaining port that is not now
operational on the existing CBP-approved electronic data interchange
system (Rail AMS).
Comment
Mandatory automation under section 343(a), as amended, would place
additional pressure on trade participants. The CBP should take steps to
ensure that its offices would be fully staffed around-the-clock at all
rail crossings in order to handle any eventualities resulting from the
implementation of the final advance cargo information filing
regulations.
CBP Response
The CBP will make every effort to ensure that there will be
sufficient staff to assist the trade in effectively complying with the
regulations. The CBP is aware that effectively administering the
advance cargo information program will undoubtedly place upon it
additional burdens, especially on some of the smaller ports along the
border.
Comment
Railroads rely extensively on Automated Line Release. The CBP
should retain the C-4 Line Release Program (19 CFR part 142, subpart D)
for the rail industry; eliminating Line Release would negatively affect
carriers participating in Rail AMS as it would delay the time required
for rail release.
CBP Response
For the present, CBP intends to keep some type of Line Release,
which might necessitate only some slight changes in names and terms.
Comment
The CBP should establish procedures to be followed if Rail AMS were
not functioning properly when a carrier attempted to file information
through the system. Specific backup systems should be designated in the
event of unplanned outages of either CBP's system or the rail carriers'
systems.
CBP Response
The CBP contemplates that the existing procedures of presenting a
paper copy of the electronic data elements would still be used, with
some adjustments as appropriate.
Comment
Should an examination of any cargo aboard the incoming train be
found warranted, the train should be allowed to proceed to the first
inland port where the examination would be conducted.
CBP Response
Absent special circumstances, all security-related examinations
under section 343(a), as amended, would occur at or near the border.
Transition Period for Complying with Advance Cargo Information Filing
Comment
A number of commenters advocated that they be afforded a transition
period for complying with the regulations, without specifying what the
period should be. One commenter asked for a period of 180 days; another
suggested that different periods be allowed for different types of
affected parties; and another requested that there be a period similar
to the 90-day transition period granted for incoming vessel cargo under
the ``24-hour rule'' (T.D. 02-62, 67 FR 66318; October 31, 2002).
CBP Response
The CBP, as noted, seeks uniformity and simplicity in its advance
cargo reporting rule for rail traffic, and agrees with the
recommendation that a 90-day transition period would be adequate under
the circumstances, particularly given that the rail industry is highly
automated. Hence, a rail carrier would need to begin the electronic
transmission to CBP of the required cargo information 90 days from the
date that the port of arrival becomes automated.
Overview; Rail Cargo Destined to the United States
Rail Carrier Transmittal of Required Information for Incoming Cargo
For any train requiring a train sheet under 19 CFR 123.6, that
would have commercial cargo aboard, the rail carrier would be required
to electronically present to CBP certain information concerning the
incoming cargo no later than 2 hours prior to arrival at a United
States port of entry. Specifically, based upon the transition/timetable
as discussed below under ``Transition Period,'' to effect the advance
electronic transmission of the required rail cargo information to CBP,
the rail carrier would have to use a CBP-approved electronic data
interchange system.
[[Page 43585]]
Currently, the CBP-approved automated system for this purpose is the
Rail Automated Manifest System (Rail AMS).
As indicated, the current CBP-approved automated system (Rail AMS)
for electronically collecting cargo information for incoming rail cargo
is programmed and structured to receive cargo data only from the inward
rail carrier. Additionally, it is highly practicable and
administratively expeditious for CBP to obtain the necessary cargo data
from rail carriers as these carriers would already have the most direct
contact with CBP, as opposed to the foreign shipper (exporter), a
foreign freight forwarder, or the U.S. importer, who could,
nevertheless, be more likely to have direct knowledge of particular
information involving the incoming cargo. For this latter reason, and
as a pre-requisite to accepting the cargo, the carrier would need to
receive any necessary cargo information from the foreign shipper and
owner of the cargo or from a freight forwarder, as applicable.
Foreign Cargo Transiting the United States
Any foreign cargo arriving by train for transportation in transit
across the United States would be subject to the advance electronic
information filing requirement for incoming cargo. This includes
foreign cargo being transported from one foreign country into another,
and cargo arriving by train for transportation through the United
States from one point to another in the same foreign country. Further,
cargo that was to be unladen from the arriving train and entered, in
bond, for exportation, or for transportation and exportation, in
another vehicle or conveyance would also be subject to this advance
electronic information filing requirement.
Exemption From Filing Mandate; Domestic Cargo Transiting Foreign
Country
With respect to incoming rail cargo, CBP believes that, as a
general proposition, exemptions from the advance electronic filing
requirements would unduly complicate the administration of the program.
In consideration of the fairly abbreviated time frame for transmitting
the electronic cargo information, CBP finds that a basic, uniformly-
imposed advance filing requirement would occasion only minimal
disruption to cross-border commerce in the rail environment.
Nevertheless, domestic cargo that would arrive by train at one port
from another in the United States after transiting a foreign country
would not be subject to the advance electronic information filing
requirement for incoming cargo; however, advance information for such
domestic cargo could be electronically presented to CBP, if desired.
Specific Information Required From the Carrier
The rail carrier must electronically present to CBP the following
cargo shipment information for all incoming cargo, as outlined above,
that would arrive in the United States by train:
(1) The rail carrier identification SCAC code (the unique Standard
Carrier Alpha Code assigned for each carrier by the National Motor
Freight Traffic Association; see 19 CFR 4.7a(c)(2)(iii));
(2) The carrier-assigned conveyance name, equipment number and trip
number;
(3) The scheduled date and time of arrival of the train at the
first port of entry in the United States;
(4) The numbers and quantities of the cargo laden aboard the train
as contained in the carrier's bill of lading, either master or house,
as applicable (this means the quantity of the lowest external packaging
unit; containers and pallets do not constitute acceptable information;
for example, a container holding 10 pallets with 200 cartons should be
described as 200 cartons);
(5) A precise description (or the Harmonized Tariff Schedule (HTS)
numbers to the 6-digit level under which the cargo is classified if
that information is received from the shipper) and weight of the cargo;
or, for a sealed container, the shipper's declared description and
weight of the cargo (generic descriptions, specifically those such as
``FAK'' (``freight of all kinds''), ``general cargo,'' and ``STC''
(``said to contain'') are not acceptable);
(6) The shipper's complete name and address, or identification
number, from the bill(s) of lading (this means the actual owner
(exporter) of the cargo from the foreign country; listing a freight
forwarder or broker under this category is not acceptable; the
identification number will be a unique number to be assigned by CBP
upon the implementation of the Automated Commercial Environment);
(7) The complete name and address of the consignee, or
identification number, from the bill(s) of lading (The consignee is the
party to whom the cargo will be delivered in the United States.
However, in the case of cargo shipped ``to the order of [a named
party],'' the carrier must identify this named ``to order'' party as
the consignee; and, if there is any other commercial party listed in
the bill of lading for delivery or contact purposes, the carrier must
also report this other commercial party's identity and contact
information (address/phone number) in the ``Notify Party'' field of the
advance electronic data transmission to CBP, to the extent that the
CBP-approved electronic data interchange system is capable of receiving
this data. The identification number will be a unique number assigned
by CBP upon implementation of the Automated Commercial Environment);
(8) The place where the rail carrier takes possession of the cargo
shipment;
(9) Internationally recognized hazardous material code when such
materials are being shipped by rail;
(10) Container numbers (for containerized shipments) or the rail
car numbers; and
(11) The seal numbers for all seals affixed to containers and/or
rail cars, to the extent that the electronic system can accept this
information (currently, Rail AMS only has the capability to accept two
seal numbers per container; the electronic presentation of up to two
seal numbers for each container would be considered as constituting
full compliance with this data element).
Electronic Freight Status Notifications
If the party holding the goods was automated, that party would have
to honor all freight status notifications transmitted by CBP. Cargo
could not be transferred to a facility, moved under the provisions of
the in-bond regulations or released to the consignee except upon
electronic status notifications from CBP.
Transition Period
The CBP will be automating any existing port that currently is not
able to receive or transmit electronic information through the CBP-
approved electronic data interchange system. There are currently up to
12 ports, most of them Permit Ports, that would require automation and
training for CBP staff who are unfamiliar with the electronic data
interchange system. Rail carriers would have to commence the advance
electronic transmission to CBP of the required cargo information on and
after 90 days from the date that CBP publishes a notice in the Federal
Register informing affected carriers that Rail AMS is in place and
operational at the port of entry where the train would initially arrive
in the United States.
Electronic System Failure; Downtime
Should the automated system fail, after going online, existing
procedures, with some adjustments, if necessary,
[[Page 43586]]
would be used for presenting a hard copy equivalent of the electronic
documentation to CBP.
Public Comments; Truck Cargo Destined to the United States
Summary of Principal Comments
The following comments were received regarding the procedures for
advance reporting of inbound cargo information for trucks:
1. Any provision for pre-reporting information for inbound truck
cargo should be pre-arrival, rather than pre-lading; and it was
variously recommended that such notification be required no earlier
than either 15 minutes or 30 minutes prior to reaching the port of
arrival in the United States. These time frames are necessary to
account for the ``just-in-time'' delivery systems that have been
developed around land border operations.
2. To accomplish the electronic transmission of the requisite data
to CBP, on an interim basis, pending the establishment of the
electronic truck multi-modal manifest system in the Automated
Commercial Environment (ACE), the trade should be able to satisfy the
pre-notification requirements of the statute by using existing systems/
programs, such as PAPS (the Pre-Arrival Processing System), BRASS (the
Border Release Advanced Screening and Selectivity program, and FAST
(the Free and Secure Trade program). In particular, CBP should take
into consideration the importance of the role of the BRASS system in
expediting the flow of traffic at the land borders.
No new information-submission systems should be initiated or
imposed during the interim period. The proposed pre-reporting
provisions should be uniform for all ports on the U.S./Canada as well
as the U.S./Mexico borders. Filers should not be held liable for
incorrect/incomplete information supplied by others.
3. There should be transition periods for implementing advance
cargo information transmissions for the trucking industry that would
take into account the fact that the industry has, at present, multiple
sectors with varying, limited degrees of automation; indeed, much of
the trucking trade on the U.S./Mexico border is currently not
automated. Further, a contingency plan for handling shipments arriving
without any pre-notification should be created and publicized.
4. CBP should expand its hours of operation to 24 hours a day,
seven days a week and have sufficient staffing to perform any
inspections during those hours.
5. Participation in special programs such as the Customs-Trade
Partnership Against Terrorism (C-TPAT) should be taken into account by
CBP and CBP should work with the Canadian government under the Shared
Border Accords to arrive at common procedures and requirements to ease
the burden on the trade.
CBP Response
Taking into account the flexibility provided by the Trade Act
(e.g., developing interim measures based on existing technology to
enable CBP to identify high-risk shipments), CBP agrees that, on an
interim basis, existing systems, especially the Free and Secure Trade
(FAST) system, will be employed, being enhanced and adapted as
appropriate, to effect the advance presentation of the necessary
commodity and carrier information for inbound truck cargo, as a prelude
to the creation and activation of the Truck Manifest module in ACE.
(The Truck Manifest module in ACE will be the subject of a separate
notice in the Federal Register.) However, regardless of what actual
program(s)/procedure(s) may be employed at any given time or place to
comply with the pre-arrival information filing requirements of section
343(a), as amended, the regulations, for uniformity and continuity,
will simply reflect that the required data elements must be presented
through a CBP-approved electronic data interchange system.
Interim Measures
As indicated, until the development of the Truck Manifest Module in
ACE, CBP will employ existing systems on both the Northern and Southern
borders to receive and evaluate information for incoming truck
shipments. These systems are FAST, PAPS (which uses the Automated
Broker Interface (ABI)), BRASS (which would be modified as necessary),
and CAFES (the Customs Automated Forms Entry System) or ABI in-bond
reporting.
The Pre-Arrival Processing System (PAPS) is a method of speeding
the release of Border Cargo Selectivity or regular Cargo Selectivity
entries on the land border. The shipment data required to submit an
entry through the Automated Broker Interface (ABI) must be provided to
the entry filer by the shipper or the carrier or other trade partner in
advance of the conveyance arrival. Also included in that ABI data is
the Pro-Bill or Bill of Lading assigned to the shipment by the carrier
and the Standard Carrier Alpha Code (SCAC) assigned to the carrier.
That code and number is submitted through ABI to CBP by the entry
filer. The carrier provides the driver with a bar-coded representation
of that information to accompany the paper inward manifest (CF 7533)
and invoices. The CBP inspector uses that bar code to retrieve the
electronic record and targeting results in the automated system. The
carrier can then be processed without the necessity of stopping at the
entry filer's office and be released from either the primary truck
inspection booth or from the cargo examination facility.
The advance transmission, via fax or other means, of the SCAC/Pro-
bill number from the carrier or shipper to the filer eliminates the
requirement of any return communication from the filer to the carrier.
The submission of the ABI data in advance of arrival eliminates the
need for carriers to park in an import lot and spend additional time at
an entry filer's office; traffic congestion decreases and efficiencies
in the release process increase.
The electronic filer would have to present commodity and
transportation information to CBP for the subject cargo no later than
either 30 minutes or 1 hour prior to the carrier's arrival at a United
States port of entry, depending upon the specific CBP-approved system
employed in transmitting the required data, with the exception of CAFES
and BRASS, as described below. This 30-minute or 1-hour period would be
measured by the time that CBP receives the information, as opposed to
the time that the electronic filer transmits the information for the
cargo. The CBP believes that this time period, in relation to the
particular automated system used, would be the minimum period needed to
perform a targeting analysis for cargo selectivity, and, if found
warranted, to arrange for an inspection or examination of the cargo
following its arrival. This advance cargo information reporting
requirement would thus be the same at all ports, depending on the
approved system used to present the cargo information to CBP.
Specifically, in this latter respect, under the Free and Secure
Trade (FAST) system, the electronic filer would have to present
commodity and transportation information to CBP for the subject cargo
no later than 30 minutes prior to the carrier's arrival at a United
States port of entry. The CBP believes that FAST shipments can be
screened and targeted, as appropriate, with less advance notification
than would otherwise be necessary, because of the prior screening
incurred by the parties to the FAST transaction, including the driver.
However, under PAPS or ABI in-bond reporting, the required cargo data
would need to be
[[Page 43587]]
presented no later than 1 hour prior to arrival at the U.S. port of
entry. By contrast, for CAFES and BRASS (as modified), given the
limitations of these systems, the necessary information would be
submitted upon arrival at the first port of entry.
The only system currently in effect that allows carrier
transmission of data electronically to CBP is FAST, with respect to
those transactions that have data submitted totally through an
electronic interface with CBP. Other participants in FAST have the
electronic shipment data transmitted via the entry filer in the
Automated Broker Interface (ABI) system of the Automated Commercial
System (ACS), while the carrier/driver presents a paper manifest for
the goods on the conveyance. In either case, the driver must be a
registered driver in the FAST Driver Registration Program. Under the
FAST system, the electronic filer would need to present cargo data to
CBP no later that 30 minutes prior to the carrier's arrival at a U.S.
port of entry.
Additionally, CBP acknowledges the role that BRASS (formerly Line
Release (19 CFR part 142, subpart D)) plays in the expeditious movement
of cargo on the land border. However, the current methodology utilized
in BRASS for trucks does not allow for an advance electronic notice
prior to arrival. The BRASS system is, and remains, heavily based upon
the presentation of paper manifests, invoices and C-4 bar code labels
(19 CFR 142.43(b)). It is observed, though, that CBP has already
instituted an electronic form of BRASS in the Rail Automated Manifest
System, and intends to do the same with the introduction of a Truck
Automated Manifest System in ACE. In the interim, CBP intends to allow
the continuation of BRASS for trucks, but may institute some additional
requirements or otherwise modify BRASS in order to increase the
security of BRASS transactions.
The CBP proposes a gradual transition from the reliance on the
paper based BRASS release system. With the incorporation of a fully
electronic version of BRASS planned in the new automated truck manifest
scheduled for delivery under the Automated Commercial Environment
(ACE), CBP does not propose making any changes to the method in which
the current paper based BRASS operates. A gradual reduction in the
parties eligible to utilize the existing paper based BRASS system is
planned, with limitations in participation based on concerns of other
government agencies, the level of compliance within past BRASS
shipments and the volume of usage over the course of the preceding
year. Additionally, CBP will take measures considered necessary to
ensure the security of the BRASS program by incorporating voluntary
program requirements such as FAST Driver registration and participation
in the Customs-Trade Partnership Against Terrorism.
Moreover, for in-bond shipments transiting the United States that
arrive by truck, as an interim procedure, CBP will also make use of
those systems that are currently available, since the necessity for
screening advance data for in-bond truck shipments must be addressed
while awaiting future automated systems in the truck environment. In
particular, the Customs Automated Forms Entry System (CAFES) will be
utilized to prepare the Customs Form (CF) 7512 in-bond document at all
land border crossings where no other automation is available for in-
bond shipments. While this capability does not include advance notice
of the details of a shipment, it does include automated screening when
the shipment arrives and is processed by CBP. As an alternative,
carriers or their agents may use the Automated Broker Interface (ABI)
to transmit in-bond information for shipments arriving by truck.
Interim Transition Periods
Furthermore, CBP recognizes the merit, and necessity, of affording
suitable transition periods for implementing the regulations for inward
truck cargo. To this effect, CBP proposes that cargo information be
filed electronically for truck cargo that would arrive at a United
States port of entry on and after 90 days from the date that CBP has
published a notice in the Federal Register informing affected carriers
that:
(1) The approved data interchange is in place and fully operational
at that port; and
(2) The carrier must commence the presentation of the required
advance cargo information through the approved system.
During these interim periods, however, if CBP suspected that goods
were being routed in an attempt to evade advance scrutiny at an
automated United States port of arrival, those goods would very likely
be treated as high risk upon their arrival at a non-automated port.
Mandatory Filing by Truck Carrier; Voluntary Importer Participation
Under the proposed pre-notification program, the incoming truck
carrier would be obliged to submit all essential information to CBP
within the designated time period. However, the United States importer,
or its Customs broker, if electing to do so, could instead timely file
with CBP any required commodity and other data that it possessed in
relation to the cargo. Such information would likely be directly known
by the importer or its broker. If the importer or broker did elect to
file the commodity data with CBP, the carrier would have to present the
required data pertaining to the transportation of the cargo. Such
information would, of course, be best known by the carrier.
In any event, should the electronic filer of the cargo information
receive any of this information from another party, the law mandates
that where the electronic filer is not reasonably able to verify the
information received, the regulations must allow the filer to transmit
the information based on what it reasonably believes to be true. The
CBP has expressly included this mandate in the proposed regulations.
The CBP will make every effort to ensure that there will be
sufficient staff to assist the trade in effectively complying with the
regulations. The CBP is aware that effectively administering the
advance cargo information program will undoubtedly place additional
burdens upon it, especially on some of the smaller ports along the
border.
Finally, CBP will not propose a contingency plan for handling cargo
that is not pre-reported in accordance with the regulations; once
implemented at a port, the advance reporting provisions would be
mandatory for all required cargo. For any inward cargo for which
advance electronic commodity and transportation information was not
presented to CBP, as otherwise required in the regulations, the
transporting carrier could be refused admission to the United States,
or be denied a permit to unlade such cargo.
Overview; Truck Cargo Destined to the United States
Transmittal of Required Information for Incoming Cargo
For any truck required to report its arrival under 19 CFR 123.1(b),
that will have commercial cargo aboard, CBP must electronically receive
from the inbound truck carrier, and from the United States importer, or
its Customs broker, if they choose to do so, certain information
concerning the incoming cargo. Except as provided for BRASS and CAFES
under the previous section concerning ``Interim Measures,'' CBP must
receive such cargo information by means of a CBP-approved electronic
[[Page 43588]]
data interchange system no later than either 30 minutes (for FAST) or 1
hour (for PAPS and ABI in-bond reporting) prior to the carrier's
arrival at a United States port of entry.
Foreign Cargo Transiting the United States
For foreign cargo transiting the United States in-bond, as an
interim measure, CBP intends to employ CAFES or ABI in-bond reporting
when either of these systems is available at the given port of arrival.
In addition, any foreign cargo arriving by truck for transportation in
transit across the United States would be subject to the advance
electronic information filing requirement for incoming cargo when the
Truck Manifest module in the Automated Commercial Environment (ACE) is
implemented and made mandatory at the port of arrival. This reporting
requirement for in-transit cargo would include foreign cargo being
transported by truck from one foreign country to another (19 CFR
123.31(a)), and cargo being transported from point to point in the same
foreign country (19 CFR 123.31(b); and 19 CFR 123.42). Further, cargo
that is to be unladen from the arriving truck and entered, in bond, for
exportation, or for transportation and exportation, in another vehicle
or conveyance would also be subject to this advance electronic
information filing requirement, either under CAFES or ABI in-bond
reporting, or under ACE when it is implemented and made mandatory at
the port of arrival. However, as previously observed, the
implementation of ACE will be the subject of a future Federal Register
notice.
Exemptions; Domestic Cargo Transiting Foreign Country; Certain Informal
Entries
By contrast, domestic cargo transported by truck to one port from
another in the United States by way of a foreign country (19 CFR
123.21; and 19 CFR 123.41) is not subject to the advance electronic
filing requirement for incoming cargo. However, such information may be
electronically transmitted in advance to CBP, if desired, when the
electronic cargo information system is made available at the port of
arrival.
Similarly, the following merchandise would be exempt from the
advance cargo information reporting requirements under this proposed
rule, to the extent that such merchandise qualifies for informal entry
pursuant to part 143, subpart C, Customs Regulations (19 CFR part 143,
subpart C): (1) Merchandise which may be informally entered on Customs
Form (CF) 368 or 368A (cash collection or receipt); (2) Goods,
unconditionally or conditionally free, not exceeding $2,000 in value,
that are eligible for entry under CF 7523; and (3) Products of the
United States being returned, for which entry is prescribed on CF 3311.
In these instances, the paper entry document alone would serve as both
the manifest and entry.
Affected Parties
The incoming truck carrier must present the required commodity and
transportation information in advance to CBP electronically via the
CBP-approved electronic data interchange, currently through FAST, PAPS,
BRASS (modified as necessary), CAFES or ABI in-bond reporting, and,
when available, through ACE. However, the United States importer, or
its Customs broker, if choosing to do so, may instead electronically
submit to CBP, within the designated time period, that portion of the
required information that it possesses in relation to the cargo. Where
the importer, or broker, elects to file a portion of the cargo
information, the carrier would be responsible for timely presenting to
CBP the remainder of the required data.
Specific Information Required
The cargo data elements that would need to be presented
electronically to CBP, on an interim basis, are those data elements
that are currently required under FAST. The anticipated data elements
for electronic submission under ACE have not been completely finalized
yet. The data elements that would be required under ACE will be
identified at a future date pursuant to a future Federal Register
notice.
Accordingly, the following commodity and transportation
information, as applicable, would have to be electronically transmitted
to and received by CBP for all required incoming cargo arriving in the
United States by truck, to the extent that the particular CBP-approved
electronic data interchange system employed can accept this
information:
(1) Conveyance number, and (if applicable) equipment number (the
number of the conveyance is its Vehicle Identification Number (VIN) or
its license plate number and state of issuance; the equipment number,
if applicable, refers to the identification number of any trailing
equipment or container attached to the power unit);
(2) Carrier identification (this is the truck carrier
identification SCAC code (the unique Standard Carrier Alpha Code)
assigned for each carrier by the National Motor Freight Traffic
Association; see 19 CFR 4.7a(c)(2)(iii));
(3) Trip number and, if applicable, the transportation reference
number for each shipment (the transportation reference number is the
freight bill number, or Pro Number, if such a number has been generated
by the carrier);
(4) Container number(s) (for any containerized shipment) (if
different from the equipment number), and the seal numbers for all
seals affixed to the equipment or container(s);
(5) The foreign location where the truck carrier takes possession
of the cargo destined for the United States;
(6) The scheduled date and time of arrival of the truck at the
first port of entry in the United States;
(7) The numbers and quantities for the cargo laden aboard the truck
as contained in the bill(s) of lading (this means the quantity of the
lowest external packaging unit; containers and pallets do not
constitute acceptable information; for example, a container holding 10
pallets with 200 cartons should be described as 200 cartons);
(8) The weight of the cargo, or, for a sealed container, the
shipper's declared weight of the cargo;
(9) A precise description of the cargo or the Harmonized Tariff
Schedule (HTS) numbers to the 6-digit level under which the cargo will
be classified (Generic descriptions, specifically those such as FAK
(``freight of all kinds''), ``general cargo,'' and ``STC'' (``said to
contain'') are not acceptable);
(10) Internationally recognized hazardous material code when such
cargo is being shipped by truck;
(11) The shipper's complete name and address, or identification
number, from the bill(s) of lading (this is the actual shipper (the
owner and exporter) of the cargo from the foreign country; the
identification number will be a unique number to be assigned by CBP
upon the implementation of the Automated Commercial Environment); and
(12) The complete name and address of the consignee, or
identification number, from the bill(s) of lading (this is the party to
whom the cargo will be delivered in the United States, with the
exception of ``FROB'' (Foreign Cargo Remaining On Board); the
identification number will be a unique number assigned by CBP upon
implementation of the Automated Commercial Environment).
Transition/Timetable for Compliance
The incoming truck carrier and, if electing to do so, the United
States importer, or its Customs broker, must present the advance
electronic cargo
[[Page 43589]]
data to CBP, as discussed above, at the particular port of entry where
the truck will arrive in the United States on and after 90 days from
the date that CBP has published a notice in the Federal Register
informing affected carriers that:
(1) The approved data interchange is in place and fully operational
at that port; and
(2) The carrier must commence the presentation of the required
advance cargo information through the approved system.
Comments; Cargo Departing From the United States; All Modes
The following comments were received regarding the electronic
submission of cargo data for outbound shipments.
Setting Transmittal Times for Electronically Presenting Information
Comment
The time frames proposed by Customs were too long, would
significantly impede or eliminate Just-in-Time (``JIT'') business
practices, and impede or eliminate express shipping services.
CBP Response
The pre-departure filing time frames set forth in this proposed
rule for export cargo information reporting are far shorter than the
24-hour period prior to lading that was included in the ``strawman''
proposals. As previously indicated, the time frames set forth in the
``strawman'' proposals were only intended to stimulate feedback from
the trade, for consideration by CBP in formulating time frames for
presenting the required cargo data under this proposed rule. The time
frames proposed in this rule, discussed in further detail below, range
from 24 hours prior to departure for vessels to not later than 1 hour
prior to departure for trucks.
In determining the time frames for the advance reporting of
information for outbound cargo in this proposed rule, CBP considered
existing commercial practices. The CBP also took into account the
minimum amount of time necessary to perform automated targeting and
analysis and to request further information about the cargo or to
schedule its examination, in the event that a shipment were identified
as being potentially high-risk. The CBP also considered the different
threats to the United States and others posed by outbound shipments. It
is anticipated that these time frames are sufficiently abbreviated that
there will be no palpable impact on ``JIT'' business/inventory
practices.
Comment
The reporting time frames should be based on when the electronic
filer transmits the information, as opposed to when the Government-
administered automated system verifies the receipt of the transmitted
information.
CBP Response
There is no mechanism in the approved electronic data interchange
system (currently, the Automated Export System (AES)) for capturing the
date and time of submission by the filer. The time of receipt is
quantified by the time that an Internal Transaction Number (ITN) is
generated, and the system records this date and time.
The AES has an Office of Management and Budget (OMB) performance
measure for 2003 which sets the goal of monitoring and tuning trade
processing to maintain the average monthly percent of filer
transmissions with a turnaround time below one minute at 95%. The AES
consistently meets this new performance measure. The CBP cannot monitor
compliance and/or perform enforcement based on the date and time of
submission by the filer.
Load/No Load Messages
Comment
The trade expressed the need for both a ``No Load'' message, and an
``OK to Load'' message for both imports and exports.
CBP Response
The CBP sees ``No Load'' situations for exports as an extremely
infrequent occurrence. Therefore, a constant stream of ``OK to Load''
messages would not be useful to the export process.
The AES Commodity module, which will be used to meet the Trade Act
mandate, currently does not have the capability to provide an automated
``No Load'' or ``Hold'' message to the carrier. The AES Commodity
module does provide feedback to the United States Principal Party in
Interest (USPPI) or its authorized filing agent in the form of warning
messages for data inconsistencies as well as for data errors in cases
where the system cannot accept the data as transmitted. (The CBP will
use the term ``USPPI,'' as defined in 15 CFR part 30; the term
``Exporter'' will not be used again in this document.) A ``No Load''
message transmitted to the USPPI or its filing agent is not the most
efficient notification path for denying lading to a specific shipment.
A ``No Load'' message will be feasible when export manifest modules for
all modes are in place in AES.
At the time of promulgation of a final rule in this matter,
automated manifest options will not be available for air, truck, and
rail modes in AES. For the purposes of this rulemaking, pursuant to the
Trade Act of 2002, CBP has determined that the option of waiting for
the availability of automated export manifest systems in AES does not
meet the intent of the Trade Act to improve cargo safety and security
in the near term. Accordingly, should export manifest modules not be
available upon the effective date of a final rule in this matter, CBP
proposes to collect the following 6 transportation data elements for
outbound cargo, which should otherwise be readily known to the USPPI or
its authorized agent, as further discussed, infra: Mode of
transportation; Carrier identification; Conveyance name; Country of
ultimate destination; Estimated date of exportation; and Port of
exportation.
Exemptions; Retention of Post-Departure Filing
Comment
The trade strongly supported retaining the Option 4 Post-Departure
filing privilege.
CBP Response
The CBP supports a structured system of exemptions and/or pre-
approval programs that recognize the varying degrees of risk associated
with export shipments and the different threats posed to the United
States and others by such shipments. Given the differences in in-bond
and export shipments, a limited post-departure filing option may be
appropriate for certain types of export shipments. The CBP will work
with the Bureau of Census and the trade in designing these programs,
building upon current initiatives such as AES Option 4, the Customs-
Trade Partnership Against Terrorism (C-TPAT), and the Transportation
Security Administration's (TSA's) ``Known Shipper'' Program. The C-TPAT
is a joint government-business initiative designed to enhance security
procedures over the entire supply chain of incoming cargo while
improving the flow of trade. In return for tightening the security of
their supply chains, C-TPAT participants can get their cargo processed
through CBP faster.
At the present time, while not exempting any USPPI from the advance
pre-departure cargo information reporting requirements, this rulemaking
supports post-departure reporting by highly compliant exporters. The
CBP and Census will develop and implement
[[Page 43590]]
changes to post-departure reporting jointly, and as appropriate.
Comment
The trade indicated a need for priority/exemption for a range of
commodities and transaction types. Examples of commodities proposed for
exemption were bulk cargo, perishables, and human organs/perishable
medical products. Related or ``twin plant'' shipments were also
suggested as candidates for exemption.
CBP Response
The CBP is not planning to eliminate exemptions or pre-approval
programs in regulations promulgated pursuant to the Trade Act. The CBP
agrees with the exemption of select export shipments such as human
organs, perishable medical supplies, and emergency humanitarian aid. As
such, the scope of future exemptions and the requirements for
participation in low-risk exporter programs for reporting export
commodity data will be determined jointly by CBP and Census.
Internal Transaction Number; External Transaction Number
Comment
The External Transaction Number (XTN) was preferred by most of
those who commented. The XTN is generated by the USPPI or its
authorized agent who transmits the electronic data. At the same time,
some support in the trade community was expressed for the Internal
Transaction Number (ITN), and there was near unanimity that CBP should
not require reporting of both numbers. The ITN is the AES system-
generated number that indicates that the transmission of required
export cargo information has been received and accepted through the
system.
CBP Response
The preference for the XTN is understandable, but because an XTN
can be generated and annotated on export documents without transmitting
shipment data to AES, the XTN is susceptible to abuse. This assertion
is supported by a 60-day AES exemption statement survey conducted by
CBP during the summer of 2002. Then Customs (now CBP) field locations
nationwide audited over 13,000 AES exemption statements and found 25%
to be invalid at the time of export. Therefore, CBP's position will be
to require that the ITN number be annotated on the appropriate export
documents for shipments which require full pre-departure reporting.
However, CBP wishes to especially emphasize in this regard that the
annotation of the ITN number on any export documentation will not be
required or enforced until the implementation of the redesign of the
AES commodity module, which is anticipated to be completed in mid 2004.
The ITN provides a link to a create date and time for the record in
AES from which to verify compliance with pre-departure filing
requirements. The ITN is also consistent in format, starting with an
``X'', followed by an 8-position date (century, year, month, day) and a
6-position sequential number that is assigned by the AES system. In
addition, the AES mainframe typically returns the ITN in less than one
minute.
By contrast, External Transaction Numbers (XTNs) consist of the 9-
digit electronic filer identification and a Shipment Reference Number
(SRN) that are separated by a hyphen. The SRN may contain up to 17
letters, numbers and symbols, allowing for a longer format with more
variability than the ITN.
The CBP notes that ITNs will not be required for shipments
authorized for post-departure (currently AES Option 4) reporting of
export cargo information. The post-departure filing citation annotated
on export documentation will continue to conform to approved formats
contained in the Bureau of Census Foreign Trade Statistics Regulations
(FTSR) (15 CFR part 30).
The CBP recognizes conditions under which ITNs will not be
available due to a failure of an automated system. Procedures for
dealing with system downtime--where the Government's electronic system
and/or the USPPI's system for receiving and processing export cargo
data fails--will be detailed in the Automated Export System Trade
Interface Requirements handbook (AESTIR), and any successor
publication. The AESTIR is available on the CBP Web site (http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.cbp.gov
).
Overview; Cargo Departing From the United States; All Modes
Outward Cargo Information Reporting; System To Be Used
To ensure the safety and security of cargo that would be sent from
the United States, as mandated by section 343(a), as amended, CBP would
use the existing approved electronic data interchange system for
receiving export commodity data from the United States Principal Party
in Interest (USPPI). The current system being used for this purpose is
called the Automated Export System (AES).
The CBP has elected, in consultation and cooperation with the
Bureau of Census, to utilize the commodity module of the AES (the
automated Shipper's Export Declaration), to meet the mandate of the
Trade Act. At such time as automated manifest modules are available for
all modes, these enhanced capabilities will be reviewed to determine
additional compliance with the Trade Act of 2002.
This is a considered decision recognizing that at the time of
promulgation of the final rule under section 343(a), as amended, the
filing of export data via the AES will not be mandatory. In short, it
is intended that the final rule in this matter for the advance filing
of cargo information for all reportable outbound shipments not be
implemented until Bureau of Census regulations under the Security
Assistance Act (Pub. L. 107-228) are implemented.
Since the inception of AES, the elimination of the paper Shipper's
Export Declaration (SED) has been the ultimate goal, and with the
passage of the Security Assistance Act, the Bureau of Census has the
authority to mandate the electronic filing of all reportable export
shipments, with promulgation of regulations planned for mid 2004. Prior
to mandatory electronic filing for all reportable export shipments, the
Department of Commerce, Bureau of Census, will publish a rule requiring
mandatory electronic reporting for commodities on the Commerce Control
List (CCL), and U.S. Munitions List (USML), planned for the summer of
2003.
The CBP, however, does intend to accomplish several things with
this rulemaking:
(1) Articulate a commitment to strengthening export reporting
processes in concert with external agency partners such as the
Department of Commerce (the Bureau of Census and the Bureau of Industry
and Security), the Department of State (the Directorate of Defense
Trade Controls), the Department of Treasury (Office of Foreign Assets
Control), the Department of Transportation, the Drug Enforcement
Administration, and the Environmental Protection Agency;
(2) Establish time frames for automated reporting that will support
targeting for high risk exports and allow CBP or other Government
agencies to respond prior to export; and
(3) Establish the system generated Internal Transaction Number as
the accepted proof of automated filing, for all reportable exports not
eligible for exemption.
Utilizing the automated SED within the AES combined with mandatory
filing under Census complies with the intent of the Trade Act to
collect
[[Page 43591]]
advance cargo information electronically from the party with the best
knowledge of that information. Under current automated practices, the
USPPI or its authorized agent has the capability to transmit export
information electronically, and with limited exceptions, has knowledge
of the data transmitted.
Time Frames for Presenting Information
A USPPI, or its authorized agent, participating in advance cargo
information filing would have to present export cargo information
through the AES commodity module for outbound shipments, as follows:
(1) For vessel cargo, the participating USPPI or its authorized
agent must transmit and verify system acceptance of export vessel cargo
information no later than 24 hours prior to the departure of the
vessel;
(2) For air cargo, including cargo being transported by Air Express
Couriers, the participating USPPI or its authorized agent must transmit
and verify system acceptance of export air cargo information no later
than 2 hours prior to the scheduled departure time of the aircraft;
(3) For truck cargo, including cargo departing by Express
Consignment Courier, the participating USPPI or its authorized agent
must present and verify system acceptance of export truck cargo
information no later than 1 hour prior to the arrival of the truck at
the border; and
(4) For rail cargo, the participating USPPI or its authorized agent
must transmit and verify system acceptance of export rail cargo
information no later than 4 hours prior to the time at which the engine
is attached to the train to go foreign.
The preceding time frames are provided by CBP as minimum
guidelines. All parties involved in export transactions should be
advised that filing electronic cargo information as far in advance as
practicable reduces the need for CBP to delay export of that cargo to
complete any screening or examinations deemed to be necessary.
The foregoing time frames for reporting information about outbound
vessel, air, truck and rail cargo only apply to shipments without an
export license, that require full pre-departure reporting of shipment
data, in order to comply with the advance cargo information filing
requirements under section 343(a), as amended. The USPPI or its
authorized agent may refer to proposed Sec. 192.14(e) for specific
guidance concerning the effective date for the time frames detailed
herein. Requirements placed on exports controlled by other Government
agencies will remain in force unless changed by the agency having the
regulatory authority to do so. The CBP will also continue to require a
72-hour advance notice for vehicle exports pursuant to 19 CFR
192.2(c)(1) and (c)(2)(i). The USPPI or its authorized agent should
refer to the relevant titles in the Code of Federal Regulations for the
pre-filing requirements of other Government agencies.
Electronic Filer of Export Cargo Information; Proposed Requirements
The USPPI, or its authorized agent, who participates in reporting
export data electronically via the commodity module (the automated
Shipper's Export Declaration) of the AES, would continue to transmit
and verify that such data had been accepted through the system, but
would have to do so no later than the time, in advance of departure,
prescribed for each mode of transportation under this proposed rule.
The USPPI or its authorized agent may refer to proposed Sec. 192.14(e)
for specific information concerning effective dates for procedures
outlined herein.
Since the AES Commodity Module already captures the requisite
export data, and to avoid redundancy with existing export reporting
requirements, no new commodity or transportation data elements would
need to be required under section 343(a), as amended. Specifically, the
export cargo information collected from USPPIs or their authorized
agents is contained in the Bureau of Census electronic Shipper's Export
Declaration (SED) that is presented to CBP through the AES. Those
export commodity data elements that are required to be reported
electronically through AES are also found in Sec. 30.63 of the Bureau
of Census Regulations (15 CFR 30.63). The required transportation data
elements are defined below in accordance with 15 CFR 30.63.
1. Mode of transportation. The mode of transportation is defined as
that by which the goods are exported or shipped (vessel, air, rail, or
truck).
2. Carrier identification. The USPPI or its authorized agent should
reasonably be expected to know the identification of the carrier that
would actually be transporting the merchandise out of the United
States. For vessel, rail and truck shipments, the unique carrier
identifier would be its 4-character Standard Carrier Alpha Code (SCAC);
for aircraft, this identifier would be the 2- or 3-character
International Air Transport Association (IATA) code.
3. Conveyance name. The conveyance name would be the name of the
carrier (for sea carriers, the name of the vessel; for others, the
carrier name).
4. Country of ultimate destination. This is the country as known to
the USPPI or its authorized agent at the time of exportation, where the
cargo is to be consumed or further processed or manufactured. This
country would be identified by the 2-character International Standards
Organization (ISO) code for the country of ultimate destination.
5. Estimated date of exportation. The participating USPPI or its
authorized agent must report the date the cargo is scheduled to leave
the United States for all modes of transportation. If the actual date
is not known, the participating USPPI or authorized agent must report
the best estimate as to the time of departure.
6. Port of exportation. The port of exportation would be designated
by its unique code, as set forth in Annex C, Harmonized Tariff Schedule
of the United States (HTSUS).
Identifying High-Risk Shipments
The CBP finds that the data elements that the USPPI would have to
timely present through AES covering both the commodity and
transportation information for outbound cargo should prove to be
sufficient for identifying and targeting potentially high-risk
shipments. For outbound cargo that CBP has identified as high-risk, the
carrier, after being duly notified by CBP, would be responsible for
delivering the cargo for inspection/examination; if the cargo
identified as high-risk had already departed, CBP would exercise its
authority to demand that the carg