Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



More Advance Data Elements Required - 10 + 2 Formally Proposed

Carrying out the mandate of Congress in the SAFE Port Act to obtain more data elements prior to the arrival of shipments, Customs published its Notice of Proposed Rule Making (NPRM) regarding 10 + 2 in the Federal Register on January 2, 2008.  The link to the actual notice is found at a257.g.akamaitech.net/7/257/2422/01jan20081800/edocket.access.gpo.gov/2008/pdf/E7-25306.pdf.   The deadline to file comments is March 3, 2008.  10 + 2 will drastically change how importers conduct business if for no other reason than it mandates these data elements must be filed 24 hours prior to loading.  

 

There are two data elements required from carriers: vessel stow plans and container status messages. Each carries with it a different advance filing time frame. This is data carriers routinely maintain in the ordinary course of business. The same cannot be said for the ten (10) data elements required from importers. They are:

 

1) Manufacturer (or supplier) name and address – the name and address to report are of the entity that last manufactures, assembles, produces, or grows the commodity; if that is not known and cannot be determined through due diligence, or may not apply, then report the name and address of the supplier of the finished goods in the country from which the goods are leaving.

 

 

2)  Seller name and address – of the last known entity by whom the goods are sold or agreed to be sold; if no sale, then the name and address of the owner is to be reported.

 

 

3) Buyer name and address – the last known entity to whom the goods are sold or agreed to be sold: again if there is no sale, report the owner of the goods.

 

 

4) Ship to name and address – report the first deliver-to party scheduled to physically receive the goods after release from Customs’ custody.

 

 

5) Container stuffing location – name and address of the physical location(s) where the goods were stuffed; for break bulk goods it is the physical location(s) where the goods were made shipment ready.

 

 

6) Consolidator (stuffer) name and address – of the party who stuffed the container or arranged for its stuffing; for break bulk goods, it is again the shipment ready party.

 

 

7) Importer IRS number  –  including the Foreign Trade Zone applicant ID number;

 

 

8) Consignee IRS number ; 

 

 

9) Country of origin  -  to include the country of manufacture, production, or growth, based upon the import laws, rules and regulations of the U.S.; and

 

 

10) Commodity HTS number – required to the 6 digit level, but allowed to be reported to the 10 digit level.

 

 

The drastic change for importers is that all of these data elements must be filed no later than 24 hours prior to loading. Can it be done? What changes will be required to your day-to-day operations? While you are thinking about that, keep in mind the most controversial of the requirements. Customs has mandated importers link the country of origin, manufacturer and tariff number (HTS). The potential programming costs to the importing community are astronomical. Despite this fact, Customs continues to ignore the practical suggestion to write an algorithm that would cause its Automated Targeting System to make all the possible matches and determine whether any combination created a risk. If so, that shipment would be subject to inspection. Instead, Customs insists on putting the burden on the trade to link at the line item level when filing. What will it cost?

 

 

The other noteworthy topic was the portion of the NPRM which deals with penalties. If the vessel stow plan is not filed, the liquidated damages will be $50,000 for each vessel arrival.  Liquidated damages for the failure to provide CSMs is set at $5,000 per violation, $100,000 per vessel arrival. If you are the importer and fail to met the ISF requirements, your fine will be the value of the imported merchandise.

 

 

Share your thoughts with Customs through filing comments.  Customs wants to hear particularly about the financial consequences of this proposal since it has insufficient data to figure out the cost.

 

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