Canada - 24 Hour Advance Electronic Cargo Reporting

March 2004

(Revised Version*)

Since the events of September 11, 2001, physical and economic security have become a primary concern for business. For those in the marine industry, the goal is to balance port security and the unimpeded flow of goods. The government of Canada has responded by putting into place the so-called "24-Hour Rule" which requires carriers and freight forwarders to electronically report cargo and vessel data within established timeframes in advance arrival of the cargo and the vessel in Canada to enable the Canada Border Services Agency (CBSA) to identify goods of an unknown or high risk.

The Advance Commercial Information (ACI) initiative will come into force on April 19, 2004, and is therefore of immediate concern to Members. The United States has developed a similar program, the Automated Manifest System (AMS), which was developed in conjunction, and is harmonized, with Canada's ACI program. The U.S initiative comes into force on March 4, 2004.

Who Must Report?

The responsibility for complying with the ACI initiative falls on the "Marine Carrier". The identity of the marine carrier for the purposes of ACI is a function of the type of data that is to be reported. Data pertaining to the cargo aboard the vessel must be transmitted by the carrier that has responsibility for said cargo. This responsibility will therefore fall to the carrier that generates the ocean bill of lading or the contract of carriage. Vessel information, on the other hand, must be transmitted by the entity responsible for operating the vessel, which could include the registered owner or time charterer.

In practice, the vessel agent will likely transmit cargo and vessel data directly to the CSBA on behalf of the carrier.

Carrier Code

Marine Carriers will require a "Carrier Code" in order to transmit data to the CBSA. This code may be obtained by completing Form E370  - Application to Transact Bonded Carrier and Forwarding Operations - in the case of a bonded carrier. The CBSA webpage "Instructions to become a Bonded Marine Carrier" gives instructions on completion of this form and related information.

For non-bonded carrier operations Form E369 is required. 

The completed form should be faxed to CBSA's Carrier & Cargo Policy Section at +1 613 957 9717. A Carrier Code is normally issued within two working days.

Freight forwarders who may not wish to divulge certain information to the carrier or its agent may apply for their own "carrier code" and may electronically transmit this information directly to the CBSA.

Customs Bond

Marine carriers that wish to forward cargo in bond from a Canadian seaport overland to a Canadian destination must post security in the amount of CA $25,000 and complete Form E 370 (see above). Form D120 is the required form for a Customs Bond. Further information is given on CBSA webpage "Instructions to become a Bonded Marine Carrier".

Security can be posted on a single trip or on a general authorization basis. The CBSA recommends that carriers transporting more than five shipments to Canada annually apply for general authorization in order to expedite Canadian customs formalities.

The bond itself may be obtained from a CBSA-approved bonding establishment. The CBSA website provides a list of recognized institutions with which the bond can be posted. 

A carrier need not post a bond if it is not responsible for the inland movement of the cargo.

Further information on Carrier Codes and Customs Bonds may be found on the Carrier And Cargo Policy Section page of the CBSA website and within the following CBSA Memorandums:

D1-7-1 Posting Security for Transacting Bonded Operations 

D3-1-1 Regulations Respecting the Importation, Transportation and Exportation of Goods 

D3-5-2 Marine Cargo - Import Movements 

How Is Information Reported?

The CBSA currently offers five Electronic Data Interchange (EDI) options for carriers to transmit the required information to Canada Customs' host system. Details of these options are available on the Frequently Asked Questions page of the CBSA website. The CBSA permits third party service providers to transmit cargo and vessel data on behalf of carriers. Although the CBSA has not yet sanctioned any third party service provider, several companies have expressed an interest in offering the service. For a list of such companies contact the Electronic Commerce Unit of the CBSA. Their telephone number is 888-957-7224. Carriers must submit a completed application and Memorandum of Understanding between it and the service provider, before the CBSA will allow a third party to submit information on behalf of a carrier. In lieu of this documentation, the CBSA will accept a CBSA approved form that details the carrier's business information including contact and address information, carrier or freight forwarder code, and method of EDI transmission.

Test Environment

The CBSA has provided the guidelines by which carriers and freight forwarders must electronically submit cargo and vessel data, but has left it up to the parties themselves to develop the necessary forms to enable the task. To date, no standard form or manifest has been created by the CBSA.

However, the CBSA has made available a test environment by which forms can be reviewed and evaluated, and where carriers can test the electronic transmission of data under the new ACI initiative. Carriers are encouraged to contact the Electronic Commerce Unit (ECU) at 888-958-7224 for more information regarding testing.

What Must Be Reported?

The vessel data must provide details identifying the vessel, its capacities, scheduling and routing information.

The cargo data must be what the CBSA terms a "detailed commodity description". Descriptions must be in plain language, and detailed enough to allow CBSA officials to identify the size, shape, and characteristics of the commodity to be shipped. Therefore, general descriptions such as "apparel", "electronics", and "equipment" are not acceptable, and should be replaced with more specific terms such as "clothing", "personal/household electronics" and "Automotive Equipment", for example. The following non-exhaustive list, approved by the CBSA, is a guide to acceptable and unacceptable descriptions.

 

 

Not Acceptable

Acceptable 

Apparel 

Wearing Apparel 

Ladies' Apparel 

Men's Apparel 

Clothing

 Shoes

 Footwear

 Jewelry (may include watches)

Appliances

Kitchen Appliances

Industrial Appliances

Heat Pump

Autoparts

Parts

New Autoparts

Used Autoparts

Caps

Baseball Caps

Blasting Caps

Bottle Caps

Hub caps

Chemicals,

Hazardous Chemicals,

Non-Hazardous

 

Actual chemical name (not brand name)

or UN HAZMAT Code Identifier #

Electronic Goods

Electronics

Computers

Consumer Electronics

Telephones

Electronic Toys (can include Gameboys, Game Cubes, Dancing Elmo Doll etc.)

Personal/Household Electronics (i.e. PDA's, VCR's, TV's)

Equipment

Industrial Equipment

Oil Well Equipment

Automotive Equipment

Poultry Equipment

etc

Flooring

Wood Flooring

Plastic Flooring

Carpet

Ceramic Tile

Marble Flooring

Foodstuffs

Oranges

Fish

Packaged Rice

Packaged Grain

Bulk Grain

Iron

Iron Pipes

Steel Pipes

Steel

Iron Building Material

Steel Building Material

Leather Articles

Saddles

Leather Handbags

Leather Jackets

Shoes

Machinery

Metal Working Machinery

Cigarette Making Machinery

Machines

Sewing Machines

Printing Machines

Pipes

Plastic Pipes

PVC Pipes

Steel Pipe

Copper Pipes

Plastic Goods

Plastic Kitchenware

Plastic Houseware

Industrial Plastic

Toys

New/Used Auto Parts

Polyurethane

Polyurethane Threads

Polyurethane Medical Gloves

Personal Effects

Household Goods

Rubber Articles

Rubber Hoses

Tires

Toys

Rubber Conveyor Belts

Rods

Welding Rods

Rebar

Aluminum Rods

Reactor Rods

Scrap

Plastic Scrap

Aluminum Scrap

Iron Scrap

STC (Said to Contain)

General Cargo

FAK (Freight of All Kinds)

"No Description"

               

Tiles

Ceramic Tiles

Marble Tiles

Tools

Hand Tools

Power Tools

Industrial Tools

Wires

Electronic Wires

Auto Harness

Coiled Wire (Industrial)

 

 

Members should note that familiar notations used by carriers to limit their liability such as "freight of all kinds", "said to contain", and "shippers load stow and count", are unacceptable descriptions for the purposes of the ACI reporting requirement. This does not prevent a carrier from describing the goods in this way on the bill of lading, and a more specific EDI cargo description should not foreclose a carrier from relying upon a notation in a bill of lading that gives it a defence to a cargo claim.

Timeframes

Under ACI, carriers and freight forwarders must report cargo and vessel data electronically within established timeframes in advance of the arrival of the cargo and of the vessel to Canada. U.S. loaded cargo is not subject to advance electronic reporting timeframes. Advance reporting requirements for marine cargo loaded in the U.S. will be implemented in a future phase of ACI.

Cargo Reporting

Advance cargo reporting requirements are a function of the type of cargo being shipped.

Container cargo

The data pertaining to goods shipped to Canada in containers must be transmitted electronically 24 hours prior to loading the goods aboard the vessel that transports the goods to Canada. A carrier will be permitted to load a container if the CBSA has not issued a "HOLD" notice within 24 hours of successful data transmission of the cargo report.

Bulk cargo

The data pertaining to goods shipped to Canada in bulk must be transmitted electronically 24 hours prior to arrival in Canada. The ACI's definition of bulk goods, being "goods that are loose or in mass, such that they are confined only by the permanent structures of a large container or a transport unit, without intermediate containment or intermediate packaging", is a definition that has been harmonized with the meaning of bulk goods sanctioned by the United States Customs and Border Protection.

Other

For other cargo not shipped in containers or in bulk, reporting is a two step process: First, the cargo data must be transmitted 24 hours prior to loading the goods on board the vessel that transports the goods to Canada. If authorization to load is granted, the cargo data must once again be electronically transmitted 24 hours prior to arrival in Canada.

Mixed Cargo

In the case of mixed cargo, the containerized cargo must be reported 24 hours prior to loading at the foreign port, and the bulk cargo must be reported at least 24 hours prior to arrival in Canada.

Empty Containers

Data pertaining to empty containers carried onboard a vessel heading to Canada must be electronically transmitted 96 hours prior to arrival in Canada.

Transshipments

If after a cargo report has been electronically transmitted, cargo is removed from a vessel prior to arrival in Canada, and then laden on board another vessel for transport to Canada, the cargo data must be re-transmitted at least 24 hours prior to transshipment.

Freight Remaining on Board

All goods laden in a country other than the U.S. that will be Freight Remaining on Board (FROB) in Canada while in-transit to a third country must comply with the above timeframes, as a function of whether the cargo is moved in containers, bulk, or otherwise.

Changes to Cargo

All changes to cargo prior to loading will re-start the clock for reporting purposes.

Vessel Reporting

The vessel data must include details identifying the vessel, its capacities, and scheduling and routing information. Vessel data must be reported within the following time frames:

Conveyances for containerized cargo 96 hours prior to arrival Conveyances for bulk cargo 24 hours prior to arrival Empty containers 96 hours prior to arrival  Conveyances for non-authorized break-bulk cargo 96 hours prior to arrival  Conveyances for authorized break-bulk cargo 24 hours prior to arrival

In the case of voyages less than 96 hours, the report is required at the time of departure.

Penalties For Non-Compliance

No monetary penalties have been created in the ACI's initial implementation for parties who do not comply with the reporting requirements. However, parties who fail to provide accurate data electronically within the stipulated timeframes will be subject to loading delays in the foreign port, and increased rates of examination. In some circumstances, vessels may be refused entry to a Canadian port, or containers could be refused authorization for unloading in a Canadian Port. The CBSA is currently in the process of reviewing the regulations that will detail any eventual penalty scheme.

Further details on the implementation of ACI are available on the CBSA "ACI" webpage. 

 

 

With thanks to Gassim Bangoura of Borden Ladner Gervais LLP for preparing this article. 

*This article represents a consolidation of the article published earlier this month and the update which was subsequently published