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CBP issues proposed rule on “10+2” security filing
U.S. Customs and Border Protection’s (CBP) importer security filing and additional carrier requirements, otherwise known as the 10+2 rule, were published in the Federal Register on Jan. 2, 2008.
The SAFE Port Act of 2006 requires CBP to report data elements to identify high-risk imports for inspection. The 10+2 rule attempts to obtain the information by requiring importers and steamship lines to submit 12 data elements to CBP 24 hours prior to a vessel loading in a foreign port.
The 10 data sets an importer must provide through the Automated Broker Interface (ABI) include:
- Manufacturer (or supplier) name and address
- Seller name and address
- Buyer 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 ID number
- Consignee number(s)
- Country of origin
- Harmonized Tariff Schedule number
The ocean carrier must supply the following information via the Automated Manifest System (AMS):
- Vessel stow plan
- Container status messages
For foreign goods remaining on board the vessel (FROB), immediate exportation (IE), and transportation and exportation (T&E) in-bond shipments, Customs will require the following five data elements:
- Booking party name and address
- Foreign port of unlading
- Place of delivery
- Ship to name and address
- Harmonized Tariff Schedule number
The bill of lading connects the importer security filing information to the carrier’s submissions. Both the house bill of lading number (if applicable) and the master bill of lading number must be presented with the importer security filing. If one shipment to one importer of record utilizes multiple bills of lading, only one importer security filing is required.
Currently, only containerized and break bulk ocean cargo is subject to the 10+2 requirements. CBP may eventually expand the advance data requirements to other modes of transit.
The Office of Management and Budget (OMB) determined the 10+2 rule will cost the trade industry from $390 to $690 million per year. The costs will come from security filing transaction costs and fees charged to importers by cargo and broker agents, along with supply chain delays and the costs for transmitting the additional data to CBP.
The 10+2 Federal Register notice also outlined the fees CBP could impose for refusing to comply with the regulation. According to the Federal Register notice, Section 113.62 outlines the fees imposed for import bonds, “If the principal defaults with regard to any obligation, the principal and surety agree to pay liquidated damages equal to the value of the merchandise involved in the default.” The same fees would also apply on Section 113.72 for FTZ Operator bonds.
For international carrier bonds, Section 113.64, liquidated damages are set at $5,000 for each violation, to a maximum of $100,000 per conveyance arrival. If the principal defaults in regard to the obligation of submitting a vessel stow plan in a timely manner, liquidated damages are set at $50,000 for each vessel arrival. If the principal does not submit container status messages in a timely manner, liquidated damages will be incurred at $5,000 for each violation, to a maximum of $100,000 per conveyance arrival.
Comments must be submitted on or before March 3, 2008. Detailed instructions and addresses are listed in the
Federal Register notice.
CBP later added a one-page
amendment.
Avalon remains committed to providing the highest level of local service and will keep you aware of any governmental changes impacting your business. Avalon is a market leader with a 35 percent share of the Customs bond market. Avalon’s Customs surety program is underwritten by our sister company, Lincoln General Insurance Company. Avalon and Lincoln are both wholly-owned subsidiaries of Kingsway Financial Services, publicly traded on the NYSE under ticker symbol KFS, so you can be assured of our financial stability and dedication to your industry.
For further information, contact Andriana Davis, Product Manager at Avalon’s corporate headquarters. Andriana Davis can be reached at (847) 700-8087 or at
adavis@avalonrisk.com. Please do not hesitate to contact one of our nine regional offices throughout the United States.
To view a directory of Avalon’s office locations, please
visit our Web site at
www.avalonrisk.com.
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