CBP seeks makeover for ultimate consignee, manufacturer terms

CBP seeks makeover for ultimate consignee, manufacturer terms U.S. Customs and Border Protection wants to replace the 'ultimate consignee' and 'manufacturer's ID number' data fields used on customs entry documents with terms that more clearly define the parties involved in buying and selling goods from overseas, according to a draft CBP proposal circulated to the trade community.
   The agency is proposing to eliminate ultimate consignee and substitute it with two data fields, the buyer (or 'sold to party') and the 'deliver to' party that physically receives the good.
   It also says it wants to split the manufacturer ID number into two fields, one for the manufacturer/producer/grower and another for the exporter/shipper/seller.
   CBP e-mailed the proposal last Thursday to members of the Trade Support Network, the 150-strong industry panel that provides advice on Customs modernization issues, and asked them to provide feedback in consultation with trade associations when the TSN convenes for its three-day meeting beginning today in Arlington, Va., according to TSN members.
   Confusion has persisted within the import/export community about CBP's exact definition of the ultimate consignee under various situations. Customs defines the consignee at the time of entry or release as the party to whom the foreign shipper sold the imported merchandise, but the legal importer of record may not be the ultimate recipient. Furthermore, the ultimate consignee has different meanings when listed on the manifest, customs entry or final entry summary.
   The ultimate consignee is a gray area in the customs process because ownership of the goods being shipped is not always easy to determine. Business transactions that make it difficult to definitely list the ultimate consignee include exported goods that are sold or re-sold while the ship is at sea, inter-company transfers from a foreign subsidiary to a domestic subsidiary that aren’t necessarily considered sales, or lease transactions in which the item that enters the country doesn't change owners and will be returned. The situation is complicated by the fact that freight forwarders — the transportation middlemen — often list themselves as the consignee if they don’t know the ultimate buyer.
   Similar problems arise from pigeonholing many types of parties by using a single manufacturer ID number (MID).
   Now CBP wants to replace these terms with something that is more identifiable. In both cases, customs brokers and importers use the social security number or corporate IRS number to identify the ultimate consignee and manufacturer.
   Under the CBP proposal different numbers would be used for the buyer and the receiver listed on the invoice, although the number could be the same number if the party is the same for both transactions. In cases of goods where there is not a transaction, such as shipments of household goods or equipment leases, the consolidator or agent may provide the numbers in lieu of an actual buyer, according to a copy of the draft proposal.
   The new tool would give CBP a couple of different numbers to identify parties to a cross-border transaction rather than relying on one number that can identify two or three parties.
   CBP is also floating the idea of using a universal number such as an identification number generated by the Automated Commercial Environment system or a Dunn & Bradstreet number as a substitute for the social security or tax numbers.
   The new approach could be particularly useful for determining the manufacturer. The MID is created by the customs broker by plugging the name and address on the invoice into its computer system. The number is an algorithm based on the name, city, country code associated with the facility, but many times there are duplicate numbers for unrelated companies in the same city with similar street names.
   The importance of clarifying the terms has taken on additional importance as the agency looks to get a better picture of the origin and destination of international shipping containers so it can better target suspicious shipments for security inspections. CBP is in the process of finalizing a preliminary rulemaking that would require importers to provide 10 additional commercial data elements prior to vessel departure, plus two pieces of data from carriers.
   ACE has given the agency the opportunity to better define and use information to improve targeting and reporting of imports.