Customs gets it right

Customs gets it right

Customs and Border Protection got it right with its changes to the Importer Security Filing, or 10+2, program. After objections by virtually everyone, it seems Customs finally listened to the trade.

Although not final, the rule that will take effect on Jan. 25 requires the U.S. importer to file 10 pieces of information on the companies involved in an import shipment. If not filed, Customs could issue a "no load" order. The additional two pieces of information require the carrier to file the vessel stow plan and container status message (information related to container arrival at port, location, stuffed or empty, etc.). These two elements are easily available and controllable by the carrier.

Importers have never really criticized or challenged the information in the two additional elements because carriers could easily accommodate that data. They have, however, always objected to the 10 elements of the rule that would be their responsibility. The interim rule takes care of that by allowing the ISF to be accomplished by importers "or their agents." This is crucial for the small importer who often has no clue as to the actual origin of the product it is importing -- and consequently could not have obtained the 10 elements.

The final 10 elements are easily knowable and acquired. They are: name of seller, name of buyer, importer of record, consignee, manufacturer or supplier, "ship-to" party, country of origin, Harmonized Tariff Schedule number, container stuffing location, and consolidator.

For a large importer who imports directly from the foreign manufacturer or distributor in full containerloads, filing these elements should not be a problem. The requirement for use of the lowest bill of lading or house bill of lading can be met easily.

For instance, depending on national practices or law, the shipper can produce an original, or house, bill of lading. When the motor carrier arrives to pick up the load at the shipper's location, it is provided to the carrier for signature, at which time it becomes the contract for carriage to another location such as a seaport, where another maritime bill of lading is given by the vessel carrier. If not made by the shipper, the motor carrier makes the original bill of lading.

Regardless, the information about the contents of the shipments is easily reportable.

On a less-than-containerload shipment, all the data elements are known at the time the authorized consolidator stuffs the container. All is transferable to Customs sooner than 24 hours prior to lading into the vessel as required by the rule.

For in-bond shipments (those transiting the U.S. and not for entry into U.S. commerce), there are now five data elements required: booking party, foreign port of lading, place of delivery, "ship-to" party and HTS number.

Four of the 10 ISF elements already are submitted on Customs Form-3461 and -7501. Regarding submission, the rule says Customs is flexible with time. Consider the following options:

-- Submission "as early as possible ? no later than 24 hours prior to arrival in a U.S. port.

-- ISF importer "could identify the manufacturer as being one of three typically used manufacturers, with more precision to be provided in subsequent ISF updates.

-- Customs allows importers "to provide a range of acceptable responses based on facts available to the importer at the time."

-- Importers are allowed to "update their filings ? as soon as more precise or more accurate information is available, in no event less than 24 hours prior to arrival at a U.S. port."

This is a reasonable approach in accommodating the private sector while adding information to its layered approach.

What seems to be lost in all of this is the use and value of the smart container. The smart container not only can provide this information, but it can also do it faster. It can also show that the integrity of the container has been maintained from stuffing at origin to opening at destination. Smart boxes are able to verify movement and traceability of goods from stuffing to opening.

In other words, the interim 10+2 rule should be just the beginning application of a chain-of-custody approach to container and port security. It can be the rational scaffolding or framework for complying with not just U.S. mandates, but also the World Customs Organization's SAFE Framework.

Finally, the 10+2 program, while apparently vessel-focused, can be easily implemented for cross-border movements through U.S. land ports.