Advance trade data rule on tap for early 2007
U.S. Customs and Border Protection plans to propose rules for collecting commercial shipping data from importers or their agents by spring 2007 to improve its knowledge about the content, origin and destination of international containers, and identify potential terrorist threats prior to departure from a foreign port, according to a top agency official.
CBP officials have worked for nearly three years to narrow down the type of data elements that could enhance the Automated Targeting System that sorts containers for inspection based on risk. The effort has intensified in recent months culminating with a 'strawman' proposal issued 13 days ago to the Commercial Operations Advisory Committee (COAC) for industry input on formulating a regulation.
According to a tentative timetable laid out by Assistant Commissioner Jayson Ahern at the Nov. 9 COAC meeting in New York, CBP expects COAC to quickly select a broad range of industry experts for subgroups that would use the rest of the month to tear down the strawman proposal and provide detailed advice and counsel for the rulemaking. CBP would continue the dialogue with the trade community at the Trade Support Network meeting scheduled for Dec. 11-13 and the Customs Trade Symposium Dec. 14-15 in Washington.
The TSN comprises more than 150 industry experts who provide advice on Customs modernization issues. But in recent years the group has become a forum for discussing all sorts of Customs policy because information technology touches all aspects of the department.
CBP would spend January fine-tuning the proposal based on the feedback it receives and present the final language to the COAC at its February meeting before issuing a notice of proposed rulemaking with its requisite public comment period, Ahern said.
To improve targeting of high-risk shipments, Congress included language in the new SAFE Port Act requiring the Department of Homeland Security to issue regulations within one year for collecting advance electronic shipping data prior to vessel loading. The law formalized and set deadlines for the process that was already underway. Under the system currently in place, CBP officers analyze data from the ocean carriers' container manifest, as well as customs entry documents, 24 hours prior to loading at the foreign port. But all involved in homeland security acknowledge that the information lacks the necessary detail, accuracy or timeliness necessary for a system based on selective rather than comprehensive container inspections. Building a more robust targeting system is designed to thwart legislative calls for inspecting 100 percent of containers, which most agree would gum up the flow of trade and cause economic harm.
Partner customs agencies working through the Container Security Initiative image a portion of the suspicious containers on behalf of CBP prior to export.
In the strawman proposal, a copy of which was obtained by Shippers' NewsWire, CBP proposes collecting the additional data elements 24 hours prior to vessel loading, as it does with the ocean cargo declaration.
Still unclear is whether any new data filing requirements for importers would be mandatory or part of a voluntary program with industry, such as the Customs-Trade Partnership Against Terrorism, in which shippers gain expedited clearance by demonstrating strong controls over their shipping processes and suppliers.
As previously reported, CBP last summer honed in on 10 additional data elements to help Customs officers understand who is initiating the shipment and stuffing the container at its origin, the specific cargo being shipped, and the actual receiver of goods in the United States.
The 10 data elements CBP wants from cargo interests are:
* Manufacturer name and address.
* Seller name and address.
* Container stuffing location.
* Consolidator name and address.
* Buyer name and address.
* Ship to name and address.
* Importer of record number.
* Consignee number.
* Country of origin.
* Commodity’s six-digit Harmonized Tariff Schedule number.
The use of the six-digit tariff code rather than the more detailed 10-digit code suggests that CBP might open up a window in Automated Broker Interface for others besides licensed brokers to transmit the security filing.
The agency is also interested in two separate data elements — the electronic container stowage plan and status messages — supplied by the vessel operator. Under the draft proposal, ocean carriers would be required to transmit the stow plan (and nine data elements identifying the vessel and the container) no later than 48 hours after departure from the last foreign port. For voyages less than 48 hours in duration, the plan must be transmitted prior to arrival at the first U.S. port.
'If we don’t have these elements for targeting it diminishes our ability to secure the homeland,' Ahern told COAC.
The job of COAC and CBP now is to better define the data elements, and find the best way for the importer or customs broker to submit the information to CBP. It proposed that importer information be submitted via the Automated Broker Interface used by brokers to file their entries, and that carriers submit their information through the existing Automated Manifest System.
The agency has revised the way it presents trial proposals, or strawmen, to the import-export industry. In 2003, it floated the first draft of Trade Act proposals for multimode advance manifest rules to the public at large and was inundated with caustic comments. Now agency officials are following the approach used in issuing revamped minimum security criteria for C-TPAT by releasing early drafts of proposed program changes to select industry groups in a controlled fashion, and making revisions without the glare of public attention.
Ahern, who heads the Office of Field Operations, assured the trade community that the agency would use the consultations as it has in the past to make sure the new advance data rules do not cause a 'negative hit on the flow of trade.'
Furthermore, he insisted under questioning, the information would be treated with the same degree of confidentiality as the entry information is today.
The data elements themselves should not be cause for concern because many of them, such as seller's name and address, are already included on the customs entry, 'so it’s just a question of moving up the timeline for some of that data,' said Michael Mullen, assistant commissioner for international affairs and trade relations. Other pieces of information are found on the commercial document used by business partners in the sale and purchase of international goods.
Requiring transaction-level data in advance should come with a caveat that protects the importer if shipping information is incomplete or not known until a later date, said COAC member Kevin Smith, director of customs for General Motors.
It is 'critical' that the importer have the ability to submit the most accurate information it has at the time without being subject to fines and penalties, Smith said. For example, in many instances the buyer is not known or changes, because cargo is traded while it is at sea — after the advance data has been filed to CBP by electronic means.
Smith argued for a mechanism whereby importers could notify the agency when information being submitted is sketchy so that CBP can factor that into its targeting for a particular shipment.
The Coast Guard should be represented in the sub-groups working on the draft rulemaking because CBP's sister agency has the ultimate say on which ships are allowed into port and if it lacks confidence in the cargo onboard the vessels it could pose a problem for industry in terms of delayed shipments, recommended Christopher Koch, president of the World Shipping Council.
Commissioner Ralph Basham said CBP will go forward with the data collection project despite potential inconsistencies with the global framework of supply chain security standards passed two years ago by the World Customs Organization. The WCO's policy commission will meet in December to discuss the types of data elements customs administrations should collect and share for security and trade facilitation, but that nothing precluded countries from defining their own targeting requirements, he said.
'We're going to press this forward energetically at the WCO and elsewhere,' Mullen added, because CBP's goal is 'to achieve more commonality between customs agencies on a range of areas, including information requirements.'
The United States will advocate at regional forums such as the European Union and the Asia-Pacific Economic Cooperation group, or through bilateral negotiations, that the trade data elements it uses for screening cargo be adopted by other countries, he said.
Meanwhile, the WCO's high-level steering committee is in agreement that the security framework guiding customs-to-customs and customs-to-business interactions is ready to be amended. Mullen said the framework's two-year anniversary in June serves as a good time to update the document.
CBP will not wait for the WCO to amend its document before issuing rules for advance data submission, Basham insisted.
Officials scaled back the strawman proposal to focus discussions on defining the necessary data elements and prevent them from deteriorating into a debate about process, Ahern said. However, due to the serious implementation issues involved, such as what systems will be used to transmit the data and who is responsible for delivering the data, he agreed to a request that CBP share its ideas for executing the policy with the working groups sooner rather than later.
Mullen said COAC's work would be merged with feedback from the Trade Support Network 'to get more input and then nail down specifics going forward.'
Norm Schenk, with UPS Supply Chain Solutions, said he supported CBP's security initiative, but raised concern that the government was creating a second process for entering goods into the country that would increase the cost of international trade.
Schenk suggested that since so much data will be provided in advance of departure to help make a decision about the admissibility of the goods from a security perspective, that CBP should use the data transmission to provide a provisional release of the goods upon arrival at U.S. ports.
'It seems we're creating an entirely second-step process where we're going to clear the goods twice,' once overseas and separately at home for commercial enforcement purposes, he said.
'I'm in favor of whatever it takes to secure the border. But if essentially what it takes to do that is creating a duplicate process, can we look at doing it once? If it needs to be done as an export, then fine, let's do it that way. But let's not do it as an export process and then duplicate the same thing” on the import side,' Schenk said, adding that new steps will likely result in additional fees from customs brokers and forwarders.
CBP will consider adjusting the entry process in light of the advance data rule, Ahern promised.
'Because of the similarity of the 10 data elements of the Security Filing and entry data, importers may be interested in fulfilling both Security Filing and entry obligations at the same time by filing 24 hours before vessel loading,' the draft proposal said.
Advance trade data rule on tap for early 2007
