January 23, 2007

(Expeditors’ Newsflash)

The Bureau of Customs and Border Protection (Customs, CBP) has posted a notice to its web site to provide carriers and other interested trade partners with specific information regarding enforcement actions they should expect Customs to take beginning January 25, 2007 related to the mandatory use of Automated Customs Environment (ACE) electronic Manifest (e-Manifest) at certain U.S. land border ports.

On October 27, 2006, Customs published a Federal Register notice establishing the mandatory use of ACE e-Manifest at all land border ports in the states of Washington and Arizona, as well as the ports of Pembina, Neche, Walhalla, Maida, Hannah, Sarles and Hansboro. The notice established January 25, 2007 as the effective date for the implementation of ACE e-Manifest as the approved data interchange for transmission of advance electronic cargo information to Customs.

“These enforcement actions are based on the implementing regulations of the Trade Act of 2002 for truck carriers found in the Code of Federal Regulations, Title 19, Part 123.92 (19 CFR 123.92),” Customs stated in the notice. “This regulation requires that advanced electronic cargo information, in the form of an e-Manifest, be provided to CBP one hour (thirty minutes for the Free and Secure Trade program - FAST) prior to the arrival of the conveyance in the first U.S. port of arrival. This rule includes goods moving under bond between U.S. ports of entry as well as goods moving in transit through the U.S.”

Customs announced that enforcement discretion will take place in the following phases:

“Phase 1 - Beginning January 25, 2007, CBP will begin to exercise enforcement discretion in the form of an informed compliance period of at least 60 days. This period may be extended based on system performance issues and operational readiness. During this period CBP Officers working in primary lanes will provide an informed compliance notice to the driver of any conveyance that fails to meet the requirement.”

“Phase 2 - Beginning no earlier than March 26, 2007, CBP will deny a permit to proceed into the U.S. to any carrier, required to submit an e-Manifest, which arrives without submitting or attempting an e-Manifest. CBP Officers may accept the ACE e-Manifest cover sheet as initial proof of this attempt. Prior to the beginning of this phase, CBP Officers will also be provided with a process they can use to check for transmission attempts by carriers. Validation of e-Manifest participation should ideally take place in a secondary inspection environment.”

“Phase 3 - Beginning no earlier than April 26, 2007 and continuing as ongoing Trade Act enforcement, CBP will deny a permit to proceed into the U.S. for any truck, required to submit an e-Manifest, that arrives at one of the ports covered under this memorandum without first successfully transmitting an e-Manifest for that trip. For egregious violations, a monetary penalty ($5000 for the first offense and $10,000 for subsequent offenses) may be issued to the driver in care of the carrier under 19 USC 1436. Egregious violators are defined as those carriers that make no attempt to comply with the requirements.”

“Additional Phases - Once CBP achieves substantial compliance with the requirements to file manifests, additional phases will be announced for enforcement of other Trade Act elements including timeliness of submission, accuracy of data and completeness of manifests.”

The required cargo information enables high-risk shipments to be identified for purposes of ensuring cargo safety and security under to the laws enforced and administered by Customs.

Filing e-manifests can be completed either by Electronic Data Interchange (EDI) or via the Internet by using the ACE Secure Data Portal.

Existing entry/release processes supported by ACE include: the Pre-Arrival Processing System (PAPS), Border Release Advanced Selectivity System (BRASS), In-bond processing, and Section 321 processing, as well as the Free and Secure Trade (FAST) program. However, Customs has stated that these systems alone do not meet the Advanced Cargo Rule requirements filing requirements in ports where e-Manifest filing is required.

Customs' e-Manifest enforcement notice and detailed information on ACE and e-Manifest can be accessed on-line at: http://www.cbp.gov/xp/cgov/toolbox/about/modernization/carrier_info/electronic_truck_manifest_info/