10+2 should be a 'go'

10+2 should be a 'go'

". . . CBP needs to withdraw this proposal . . ."

- Hallock Northcott, president and CEO, American Association of Exporters and Importers

Not everyone offered this response to Customs and Border Protection's proposed plan to require importers to submit detailed data on each container shipment before it's loaded at the foreign port.

Northcott's call for the rule to be withdrawn represents a minority view among the dozens of comments Customs received about the 10+2 rule before the comment period closed in March. Most said they were uncomfortable with the rule as written and suggested changes. But the outright opposition of a group such as the AAEI has drawn attention.

Chris Koch of the World Shipping Council, warned Congress earlier this month to be on guard for efforts to derail the rule-making. The WSC has been the leading proponent of 10+2, which would augment existing pre-loading data derived from vessel manifests with data supplied directly by importers. Koch noted that comments on 10+2 included some from "those who go beyond seeking specific answers or adjustments to the proposal to address specific concerns and make it work better, and seek instead to stop it from proceeding."

In his testimony, Koch appears to take seriously the potential for meaningful opposition to the rule. He suggested that the real issue boils down to a go/no-go decision on 10+2: "The most significant questions (about 10+2) will not be questions about the format of specific data fields, or the definitions of specific terms, or the length of the phase-in implementation period, but the strategic question of whether and how the agency intends to improve its advance cargo risk-assessment capabilities."

Many believe that when looked at from that stark perspective, it's a go. That view is based on the specific mandate in the 2006 SAFE Port Act that Customs "require the electronic transmission to the department of additional data elements for improved high-risk targeting . . . prior to loading of such cargo on vessels at foreign ports." It is also based on an assessment of the mindset on Capitol Hill that 10+2 is not a subject of debate.

"My view is that 10+2 is destined to become a final rule," said Jon Kent, Washington representative of the National Customs Brokers and Forwarders Association of America. "I think that looking into a crystal ball, Customs is likely to find solutions to some of the more macro-criticisms of the rule, such as that it is devoid of benefits, that it does not recognize the low-risk shipper, and that some adjustments need to be made to reduce cost. I think Customs has to go there."

Customs needs to be walk a fine line between enhancing security and forcing far-reaching changes in business practices. The latter will spark a nasty backlash from a business community believing its competitiveness is being undermined.

For example, for many types of shipments, especially agricultural goods such as meat and coffee, not all of the required data elements are typically available by the time of loading. And often they change while the shipment is en route. Merchandise is often sold while in transit or diverted en route to a different destination for a commercial reason, changing the required "ship to" data element.

"We do not believe that CBP should require prior to shipment any data elements which may routinely change during the course of transit and which may inhibit the ability of American companies to conduct business," wrote Donald Pisano, vice president of the American Coffee Corp.

An issue raised repeatedly concerns penalties. The rule makes no distinction between trusted importers as validated by the C-TPAT program and others who have not undergone that process of government scrutiny.

"As a C-TPAT Tier-3 importer, we feel this section of the (proposed rule) does not recognize the hard work of importers like ourselves and is therefore inequitable in its treatment," wrote Aasha Wanless, global import compliance manager for Best Buy Co.

The irony of the opposition to 10+2 is that, in the end, importers face greater liability if the rule doesn't take effect than if it does. The DP World case should not be forgotten. Ignorance and unjustified fear about trade in the U.S. runs so deep that even today, no opportunity to build confidence in the security of the trade system can afford to be lost. That is the real issue at stake, and that's why 10+2 should move forward.