U.S. Customs - Advance Electronic Submission Of Cargo Information

January 2004

Recent legislation* states that regulations shall be promulgated providing for the transmission of cargo information to U.S. Customs and Border Protection (CPB) through an electronic data interchange system. The final rule, published in the Federal Register on 5 December 2003, contains CPB's implementing regulations. This rule provides that CPB shall receive, by way of an approved electronic data interchange system, such cargo information which may be reasonably necessary to enable high-risk shipments to be identified for purposes of ensuring cargo safety and security and to prevent smuggling. 

The cargo information must be electronically received 24 hours before the cargo is laden aboard the vessel at the foreign port. 

The rule comes into effect on 5 January 2004 and enforcement with regard to inbound shipments via vessels will commence on 4 March 2004. As with the 24 hour rule, CPB intends to continue to work with carriers to achieve compliance with the new regulations during the above implementation period. 

The final rule does not change the existing requirement that cargo information be filed 24 hours before loading; it simply mandates that the filing be electronic, by way of CPB's Automated Manifest Systems (AMS). AMS is a multi-modular cargo inventory control and release notification system for sea, air and rail carriers. AMS is intended to speed the flow of cargo and entry processing and to provide participants with electronic authorization to move cargo prior to arrival. The CBP webpage on AMS provides further information. 

The following points on the CBP's final rule are worthy of note: 

1. The rule will inconvenience those foreign carriers that move cargo into U.S. ports that do no use AMS. These carriers will be required to use the services of brokers or contract with vendors. CBP estimates that vendor service costs would amount to $8,000 per carrier. CBP did not provide a basis for this figure. 

2. The 24 hour rule will change a carrier's practice of sometimes adding last minute loads to vessels. 

3. Carriers presenting information to CBP must ensure that the information is accurate or be subject to a penalty/liquidated damages claim. CPB intends to issue mitigation guidelines in this matter. In the circumstances carriers should consider imposing indemnity obligations against those shippers/NVOCCs providing inaccurate cargo information. (If further guidance is required on this issue Members should contact the Managers' London Representatives.) 

4. CBP advises that it intends to notify the United States Coast Guard of any vessel with un-manifested cargo that is scheduled to arrive. These vessels will be subject to enhanced boardings and will undoubtedly experience potentially significant delays. 

5. CBP has given bulk, and some break bulk shipments exemptions from the requirements of filing 24-hours prior to loading, but these entities will still be required to file their cargo declarations electronically. CBP has also issued an exemption to certain U.S. Department of Defense chartered vessels.

With thanks to Daniel J. Fitzgerald of Healy & Baillie for supplying this information.

*Section 343 of the Trade Act of 2002, as amended by section 108 of the Maritime Transportation Security Act