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Home » rebellion brewing against Customs' proposed "10+2" rule
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rebellion brewing against Customs' proposed "10+2" rule

February 1, 2008
DC Velocity Staff
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When U.S. Customs and Border Protection (CBP) finally issued a Notice of Proposed Rulemaking for the so-called "10+2" rule on Jan. 2, U.S. importers were disappointed—but not surprised—by the contents of that proposal. As they had feared, the proposed rule failed to include most of the recommendations they had presented over the past year.

Formally known as the "Importer Security Filing and Additional Carrier Requirements," the proposed rule places new legal burdens on importers and ocean carriers to submit data they currently do not provide to the agency. Ocean carriers will have to provide two new pieces of information: container-status messages and stowage plans showing the location of cargo on board vessels bound for the United States. Shipping lines already submit two dozen other data elements to CBP.

Importers or their agents, who already provide detailed shipment information on their entry summaries, will be required to submit 10 additional data elements:

  • Manufacturer (or supplier) name and address
  • Seller (or owner) name and address
  • Buyer (or owner) name and address
  • Ship-to name and address
  • Container stuffing location
  • Consolidator (stuffer) name and address
  • Importer of Record number/foreign trade zone (FTZ) applicant identification number
  • Consignee number(s)
  • Country of origin
  • Commodity Harmonized Tariff Schedule number

The data must be electronically submitted at least 24 hours prior to vessel load- ing at the foreign port of origin.

Importers, customs brokers, and other international traders have expressed concerns about the rule, which was mandated by the SAFE Port Act of 2006. Among other things, they've questioned whether the security filing falls under the definition of "customs business" and therefore must be transacted by a licensed customs broker (it does not, but many people think it should); whether filings could be amended for goods that are sold in transit (they can); and whether CBP might use information obtained in security filings for commercial enforcement purposes (the agency says it will not). That's just a tiny sampling of the issues that have been raised; CBP's Commercial Operations Advisory Committee alone recommended more than three dozen changes. Only about one-third of them made it into the proposed rule.

Now a rebellion against 10+2 appears to be brewing. According to a trade compliance expert who's active in several industry groups, a movement to ask Congress or President Bush to intervene is picking up momentum.

Among the complaints: Some importers believe the rule goes beyond the legislation's intent by placing legal liability on the importer to obtain complete, accurate information from overseas sources, even though it may be impossible to obtain or verify that information by the pre-sailing deadline. Furthermore, compliance will be costly: The federal Office of Management and Budget has estimated that the 10+2 rule could cost industry between $350 million and $600 million annually. Critics say that estimate is too low, in part because it doesn't take into account the cost of the inevitable delays and longer cycle times.

The proposal is open for public comment until March 3, 2008, but CBP is under no obligation to adopt the recommendations it receives. Based on their experiences so far, the compliance expert notes, few people expect the results of the next round of rulemaking to be much different from the first.

Transportation Regulation/Government Global Logistics Safety & Security
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