NCBFAA, AAEI, WCO, Others Submit Comments on 10+2
Comments on certain aspects1 of U.S. Customs and Border Protection's interim final rule that amended 19 CFR to require Security Filing (SF) information from importers and additional information from carriers (10+2) for vessel cargo before it is brought into the U.S. were due by June 1, 2009.
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Over 400 documents were posted under the docket number for the proposed and interim final 10+2 rulemakings.
The following are highlights of the shared concerns of certain groups regarding the interim final rule:
NCBFAA, AAEI Want to Keep Interpretation and/or Timing Flexibility
Many groups, including the American Association of Exporters and Importers (AAEI) and the National Customs Brokers and Forwarders Association of America (NCBFAA) commented on the "flexible" data elements permitted under the interim final rule.
(The requirements regarding the timing of transmission for two of the 10 Importer SF (ISF) elements and the interpretation for four of the 10 elements were adopted as an interim final rule and are considered "flexible."2 According to the interim final rule, the Department of Homeland Security will perform an analysis of the flexible data elements during a structured review and after reviewing public comments. DHS will then determine whether to eliminate, modify, or leave unchanged the flexible requirements.)
Interpretation flexibility. AAEI states that the "flexible" data elements permitted under the interim final rule should be made a permanent feature of the ISF.
AAEI adds that the interim final rule allows for importers to provide a "range" of HTS numbers along with other "flexible" data elements. However, it also requires the importer to amend the ISF prior to shipment arrival. AAEI requests that the final rule allow the importer to provide CBP with the HTS number for the imported product that the importer "reasonably believes to be true," without being required to amend the ISF or risk ISF penalty exposure if the HTS number applied at entry differs.
Alternatively, the final rule should provide the importer with the flexibility to provide CBP with a range or listing of the probable HTS numbers, based upon the importer exercising reasonable care, and without any obligation to amend the ISF with the HTS number used at entry.
Timing flexibility. NCBFAA states that the continued flexibility of the data elements is necessary for the trade. NCBFAA believes that the timing flexibility for the two data elements is critical in ensuring that accurate data is transmitted for targeting purposes.
AAEI, AAFA, NAM, CEA Say Costs are Significant
AAEI, the American Apparel and Footwear Association (AAFA), the National Association of Manufacturers (NAM), the Consumer Electronics Association (CEA), and others commented on the cost of the ISFs.
CEA states that, as currently drafted, the 10+2 reporting requirements will dramatically impact business costs. AAEI states that the trade community has yet to identify a final and total cost for the implementation of the ISF program. However, it is certain that the costs will be significant for program development and will easily exceed the original cost estimates generated by CBP during the initial exploration phase of this program.
NAM states that the 10+2 requirements have imposed both one-time and ongoing operational costs on firms. AAFA adds that in addition to the operational costs of filing ISFs, 10+2 adds a delay to the importing process. (AAFA estimates this delay to be, on average, 2.8 days.)
AAFA recommended that CBP develop a free web-based application or portal for importers to file ISFs on their shipments (similar to AESDirect functionality for export reporting) after the 10+2 rule has been finalized.
Chamber of Commerce, JIG Say Compliance Date Should be Pushed Back
Among others, the Chamber of Commerce and the Joint Industry Group (JIG) commented on the January 26, 2010 compliance date of the interim final rule.3
(The interim final rule states that CBP may, at its sole discretion, delay the January 26, 2010 general compliance date in the event that any necessary modifications to the approved electronic data interchange system are not yet in place or for any other reason. Notice of any such delay will be provided in the FederalRegister.)
The Chamber of Commerce states that out of 800,000 total importers, it has found that only about 45,000 have filed ISFs. In light of these figures, the Chamber recommends that CBP extend the "informed compliance" period for at least an additional six months.
JIG states that the compliance date may need to be pushed back to allow more impacted parties to achieve full compliance. Not only are people having problems with software and systems, importers are facing challenges in explaining the U.S. requirements to and obtaining the data feeds necessary from their oversees partners.
EC, WCO Concerned about Unilateral Implementation, Disregard of SAFE Framework
Both the European Commission and the World Customs Organization have expressed concern over the unilateral implementation of 10+2 and the EC has suggested that the U.S. not move forward with the rulemaking when a more effective global approach is possible - WCO Framework of Standards to Secure and Facilitate Global Trade (SAFE Framework).
The EC calls for the U.S. to consider delaying compliance for the 10+2 data requirements until such time as the SAFE Framework review has fully considered these data elements and incorporated those data elements which add risk analysis value for the entire supply chain.
1CBP's interim final rule only invited comments on the six flexible data elements and the revised Regulatory Assessment and Final Regulatory Flexibility Analysis, including compliance costs for various industry segments. However, one group commented on the ISF report cards, other groups commented on penalties, etc.
2The data elements for which there is flexibility are: manufacturer (or supplier), ship to party, country of origin, commodity HTS number, container stuffing location, and consolidator (stuffer).
3The interim final rule establishes the date of January 26, 2010 for full compliance. However, as of January 26, 2009, CBP expected importers to make a good faith effort to comply with the interim final rule to the extent of their ability.
(See ITT's Online Archives or 05/07/09 news, 09050710, for BP summary of CBP officials giving a 10+2 update at the May 6, 2009 COAC meeting.
See ITT's Online Archives or 12/23/08 news, 08122310, for the final part of BP's summary on the details of CBP's 10+2 interim final rule, with links to previous parts.
See ITT's Online Archives or 03/10/09 news, 09031015, for the final part of BP's summary on CBP's 10+2 FAQ, with links to previous parts.)
Comments (available by searching under USCBP-2007-0077) available at http://www.regulations.gov/search/index.jsp