OTTAWA, Ont. – Transborder carriers won’t have to pay non-compliance fees for U.S. Trade Act violations if they can prove they have correctly and successfully submitted the required shipment information to their U.S. Customs brokers, U.S. Customs and Border Protection announced last month.

The decision was the result of an ongoing lobby by the Canadian Trucking Alliance (CTA) and the American Trucking Associations (ATA) to get U.S. Customs to alter its policies for issuing monetary penalties for failure to submit electronic cargo information prior to arrival.

Recent enforcement of the new prenotification rules resulted in monetary penalties for loads for which appropriate cargo information was not submitted within the required time frame prior to arrival at the border (one hour for non-FAST, a half-hour for FAST loads). The fines ranged from US$5,000 to US$10,000 (for repeat offenders).

But even though a number of parties are responsible for making sure the information gets to U.S. Customs on time, including U.S. Customs brokers, carriers were the ones paying the fines up front.

Carriers were then obliged to contest them after the fact if they were not at fault, a serious flaw in fair enforcement, which the CTA and ATA were quick to point out to U.S. Customs officials.

“It was unfair of CBP to issue fines exclusively to carriers for failure to meet Trade Act requirements when carriers were submitting cargo information well in advance to their U.S. brokers – carriers cannot control the information processes of customhouse brokers and today’s announcement by CBP recognizes this lack of control,” said David Bradley, CEO of CTA, in April. “With this announcement, carriers who can now prove to CBP that they have successfully submitted the required shipment information to their U.S. Customhouse brokers will not be issued penalties for non-compliance.”

According to CBP, no less than 1,467 fines (at US$5,000 to $10,000 each) were issued to carriers in a two-month period by mid-February of this year).

To understand where problems were occurring, the CTA conducted a national survey of its membership.

The association found that about 50 per cent of the fines were issued to the correct parties, to carriers who were confused about a number of the Trade Act requirements from all three sectors of the supply chain. In a number of cases carriers were not fully compliant and have now started an internal educational phase to resolve areas where non-compliance exists.

But that’s too late for some company drivers and O/Os, who were left holding the bag when the companies they were working for refused to pay their fines.

“Tom,” who makes CAN$18 per hour driving for an agency, was one such driver. When the new enforcement rules for PAPS carriers kicked in Dec. 14, 2004, he was not informed of the change by the carrier he was hauling for. He arrived at the border with a load Dec. 16, without having faxed in the required load information in advance and without his barcode stickers and was immediately dinged with a US$5,000 fine. According to his wife “Jenna,” the carrier he was working for said he’d have to pay the fine himself.

“(Tom) told the Customs officer who he was working for and the officer told him the carrier would be held responsible. But when Tom went back to the carrier, the carrier said he’d have to pay because his name was on the fine.”

Tom and Jenna subsequently got the fine reduced to $500.00 and sent their cheque. But they’re still feeling burned.

“This was right before Christmas, and we had a US$5,000 fine hanging over our heads,” said Jenna.

She said the carrier, which doesn’t haul over the border very often, subsequently made sure its drivers knew they would have to fax in their information prior to arrival at U.S. Customs.

To be fair, the CTA survey also showed a number of instances where fines had been issued to the carriers who were not at fault as well. CTA, along with the American Trucking Associations, had been advocating to CBP that fines should not be issued to carriers that can prove they have complied with the law.

“CTA was pleased that CBP officials listened to CTA recommendations and revised their policies accordingly,” said Bradley.

The new policies are as follows:

In-Bond: All Groups

For any truck arriving with in-bond shipments (QP/WP and CAFES) that have not been transmitted electronically to CBP, the following guidelines have been implemented:

A penalty under 19 USC 1436 will be issued to the driver (in care of the carrier) who fails to provide CBP with electronic cargo information prior to arrival and does not have a QP barcode (or in-bond number).

For carriers that can provide proof that the information was provided in timely fashion to the Automated Broker Interface (ABI) filer prior to arrival, an information letter will be issued to the ABI filer and carrier.

No penalty will be issued to the carrier.

A penalty under 19 USC 1436 will be assessed to the driver (in care of the carrier) who does not have a valid CAFES barcode that transmits the required electronic cargo information.

PAPS: All Groups

For any truck arriving with a PAPS entry that was not electronically received by CBP, the following guidelines will be implemented:

A penalty under 19 USC 1436 will be issued to the driver (in care of the carrier) who fails to provide CBP with electronic cargo information prior to arrival and does not have a PAPS barcode (or entry number).

For carriers that can provide proof that the information was provided in a timely fashion to the ABI filer prior to arrival, an information letter will be issued to the ABI filer and carrier.

No penalty will be issued to the carrier.

Drivers of BRASS loads should also remember they must have FAST (Free and Secure Trade) cards by May 1, or they risk being turned back at the border

U.S. Customs had already postponed the deadline for BRASS drivers by three months to allow government agencies more time to process a huge backlog in driver security screening applications.

The problem, according to Bradley, was relatively simple: “Not enough drivers with FAST cards to move the volume of trade moving by BRASS.

“We want to comply, but there is still a lot of work to do by everyone.”

Three months ago, CTA estimated that around 70,000 of the 87,000 or so drivers involved in cross-border trucking had already applied for FAST registration, but less than 30,000 of those drivers had completed the process, leaving more than 40,000 drivers at various stages of processing.

CBP admitted there were backlogs and offered to provide assistance to eliminate the backlog and process the applications within 90 days.

It still remains to be seen whether the May 1 deadline will have provided enough time for the backlog of FAST applications to be processed.

Elsewhere in border news, CBP announced last month its plan to require passport identification from all foreign nationals and U.S. citizens crossing into the U.S.

CTA moved to reassure truckers that the passport requirement will not be enforced at land borders until December 2007, and that even then, CBP may continue to accept FAST cards from truckers in lieu of passports.