Industry associations request U.S. Customs cargo rules amendments
Four U.S. trade associations have joined forces and sent a common petition to the U.S. Bureau of Customs and Border Protection requesting changes to the new rules governing the advance transmission of electronic data for U.S.-bound cargo.
The National Industrial Transportation League, the National Customs Brokers and Forwarders Association of America, the World Shipping Council and the Retail Industry Leaders Association said Monday the final rule, issued Dec. 5, is impractical and could damage the industry.
To identify high-risk shipments and prevent terrorist attacks, the U.S. Department of Homeland Security’s rule requires the electronic submission of information pertaining to cargo before the cargo is either brought into or sent from the United States by sea, air, rail or truck. The rule complements the so-called “24-hour rule” already implemented for inbound ocean container shipments.
In their joint petition, the four U.S. trade associations ask for a change in the definition of “shipper” from that included in the final rule, and request clarifications concerning the requirement for consignee information and the references to master and house bills of lading.
As they stand, some portions of the regulations governing inbound ocean cargo declarations “would have substantial adverse impacts on international commerce,” the trade groups warned. “The final rule must be clarified or amended before Customs and Border Protection begins enforcement,” they added.
The rule became effective in January, after U.S. Customs ruled out previous attempts by industry to eliminate requirements on the submission of multiple-shipper data for NVOCC related shipments.
Of particular concern to the industry associations is Customs’ tighter requirement that the industry transmits data on the identity of what is described in the rule as “the actual shipper (the owner and exporter) of the cargo.”
Because the information will come from bills of lading, carriers must be able to use the same definition of the shipper as that used in the B/L, the industry groups said, noting that the shipper on the B/L may or may not be the cargo owner and exporter. When the ocean carrier’s shipper shown on the B/L is an intermediary, applying the rule would require ocean carriers to obtain information not on its customers, but on the intermediary’s customers, the industry groups said. This could mean replacing the entity shown as “shipper” on the B/L, such as a consolidator, by “multiple entities on multiple B/Ls that have no relationship to the transportation contract.”
“Carriers simply do not routinely receive information about their transportation customers’ suppliers,” the associations stressed.
The petition said the final rule fails to obtain information from the party with direct knowledge and that U.S. Customs should instead turn to importers on entry of the goods.
Furthermore, the industry groups contend that the final rule interferes with the terms of the transportation contracts and the identities of the parties to contracts. For example, under the regulation, the shipper listed on the B/L could differ from the name of the seller in contract of sale or purchase of the goods. “Under those circumstances, the issuing bank will not pay under the letter of credit, and the transaction will be thwarted,” the industry association cautioned.
Warning that the rule as currently written would create “massive confusion and uncertainty in the industry” when enforced, the trade associations urged Customs to remove the reference to the owner and exporter in the future rule.
However, the four trade groups accepted that the industry can submit information to Customs concerning non-U.S. shippers in the case of bills of lading associated with non-NVOCC shipments, and for each house bill of lading for NVOCC shipments.
The four trade groups represent the entire spectrum of companies engaged in international shipping, ranging from shippers and forwarders to non-vessel-operating common carriers and vessel-operating carriers.