Additional Information Regarding New Electronic In-bond Requirements

As an update to our Blog article of October 24th, on last Thursday’s ACE Technical Call it was announced that CBP has been receiving many questions regarding the new automated in-bond requirements which are scheduled to go into effect on November.

CBP confirmed on the call that currently they are not planning on requiring any additional information on electronic In-Bonds beyond what they receive today.  For instance, the 6-digit HTS number will not be required initially.  Rather, CBP’s Office of Field Operations will be issuing guidance soon on how they intend to role this out with ‘delayed enforcement.’

Stay tuned for more details!

 

Adjustments to MPF and HMF in 2018!

Money Dollar bills on digital stock market financial exchange information and Trading graph
On November 1 st, 2017, CBP published a General Notice in the Federal Register titled ‘COBRA Fees To Be
Adjusted for Inflation in the fiscal year 2018 CBP Dec. 17–17’.  This announces a change to current import entry fees, which importers need to be aware of.

By way of background, CBP explains that “On December 4, 2015, the Fixing America’s Surface
Transportation Act (FAST Act, Pub. L. 114–94) was signed into law. Section 32201 of the FAST Act
amended section 13031 of the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 (19
U.S.C. 58c) by requiring certain customs COBRA user fees and corresponding limitations to be adjusted
by the Secretary of the Treasury (Secretary) to reflect certain increases in inflation ”.

The long-and-short of it for the majority of importers, is that the Harbor Maintenance Fee (HMF) will be
adjusted to a minimum of $25.67. The Merchandise Processing Fee (MPF) cap will be adjusted to $497.99.

This change will go into effect on January 1, 2018.

Modifications to PSC and PMS Processes

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Customs and Border Patrol Changes Timing

 

 

The Post Summary Correction has been modified. Out with the old requirements of 270 days from the date of entry and 20 days prior to scheduled liquidation date, and in with the new:300 days from the date of entry and 15 days from the scheduled date of liquidation (whichever is earlier).

Read the Modification and Clarification of the National Customs Automation Program Tests Regarding Post Summary Corrections Here

 

Advance Screening for Air Freight to Continue

On July 24th, U.S. Customs & Border Protection (CBP) published a Federal Register notice announcing an extension of the Air Cargo Advance Screening (ACAS) pilot program which was due to expire on July 26, 2017. The program has been extended for another year.

In brief, the ACAS pilot revises the time frame for pilot participants to transmit a subset of mandatory advance electronic information for air cargo of no later than the time of departure of the aircraft for the United States (from specified locations) or four hours prior to arrival in the United States for all other locations.

The ACAS pilot is a voluntary test in which participants agree to submit a subset of the required 19 CFR 122.48a data elements (ACAS data) at the earliest point practicable prior to loading of the cargo onto the aircraft destined to or transiting through the United States. The ACAS data is used to target high-risk air cargo.

To address air cargo security vulnerabilities, CBP intends to amend the CBP regulations to incorporate ACAS as an ongoing regulatory program. The regulation will take into account the results of the pilot and the concerns of industry. CBP would like the pilot to continue during the rulemaking process to provide continuity in the flow of advance air cargo security information and serve as a partial stop-gap security measure. CBP would also like to continue to provide pilot participants with the additional opportunity to adjust and test business procedures and operations in preparation for the forthcoming rule.

Changes ahead for 2018: Reconciliation Entries and ACE Transitioning

With the processing of reconciliation entries transitioning to ACE on February 24, 2018, we wanted to let our readers understand the practical results.  For instance:

  • ACE will be the sole mechanism to file Reconciliation entries (even if the underlying entries were filed in ACS)
  • Importers may choose the port in which to file
  • CBP will no longer blanket flag an importer’s entries for Reconciliation.  Self-filing importers, as well as those entries processed by a 3rd party broker, will need to be flagged individually.
  • You cannot file a PSC to adjust an entry to be flagged for Recon.  The only recourse is to request that CBP flag your entry retroactively.  This request must be made within 60 days of liquidation.
  • Importers indicate whether any of the underlying entries in a Reconciliation entry were subject to a prior disclosure
  • No-change Reconciliations will only need to identify the underlying entry numbers and original entered values, duties, and fees not being reported for aggregate or entry-by-entry Reconciliations.

CBP will also no longer provide the MasterFile Extract and Liquidation Extract Reports to importers that provided detail on entries flagged for Reconciliation. Importers may utilize ACE reports to identify those entry numbers going forward. For an unknown limited amount of time, ITRAC reports will also still be available; though it is likely they will be discontinued as well.

While we look forward to certain aspects of CBP’s transition of Reconciliation entries to ACE, such as the elimination of reporting of original values, duties, and fees, there are some aspects of which we are wary. In particular, because CBP can no longer blanket flag entries and will only grant retroactive requests to flag at its discretion and for a limited amount of time, it is very important to both trust and monitors your customs brokers’ entry flagging.

Importers can work with their customs brokers to enact a blanket flag, just as CBP had been doing, or if they had been entry-by-entry flagging, work with their customs brokers to mimic the conditions for which they had been previously flagging their entries. Additionally, given the glitches, we have seen when other programs have transitioned to ACE, and the fact that many Reconciliation entries are due in October, importers, and CBP should allow ample time to sort things out before the first Reconciliation due date arrives.  Read more here.

Need help with your direct filing? Customs Now offers industry-leading that leads you through every step of the process. Get in touch now and we’ll have you up and running quickly, saving you time and money. 

Advanced Screening for Air Freight to Continue

air-cargo-service

On July 24th, U.S. Customs & Border Protection (CBP) published a Federal Register notice announcing an extension of the Air Cargo Advance Screening (ACAS) pilot program which was due to expire on July 26, 2017. The program has been extended for another year.

 
In brief, the ACAS pilot revises the time frame for pilot participants to transmit a subset of mandatory advance electronic information for air cargo of no later than the time of departure of the aircraft for the United States (from specified locations) or four hours prior to arrival in the United States for all other locations.

 

The ACAS pilot is a voluntary test in which participants agree to submit a subset of the required 19 CFR 122.48a data elements (ACAS data) at the earliest point practicable prior to loading of the cargo onto the aircraft destined to or transiting through the United States. The ACAS data is used to target high-risk air cargo.

 
To address air cargo security vulnerabilities, CBP intends to amend the CBP regulations to incorporate ACAS as an ongoing regulatory program. The regulation will take into account the results of the pilot and the concerns of industry. CBP would like the pilot to continue during the rulemaking process to provide continuity in the flow of advance air cargo security information and serve as a partial stop-gap security measure. CBP would also like to continue to provide pilot participants with the additional opportunity to adjust and test business procedures and operations in preparation for the forthcoming rule.

2017 CBP East Coast Trade Symposium Registration Open Now

2017ECTSLogo

CBP East Coast Symposium has been announced.  CBP announced this year’s east coast symposium will be in Atlanta, GA, December 5th & 6th 2017.

What’s on the agenda?

Section 321, also known as the De Minimis shipments is the hot topic. Because of the explosion of e-commerce and low-value shipments coming into the US with the corresponding De Minimus amount raised to $800 we expect to hear more about this at the top of the agenda.

Hopes are that CBP is planning on allowing the Trade to declare these shipments via ABI soon which will allow for better screening and easier declarations for the Trade.

Read the CSMS message here

Register for the symposium here

 

Updates to ACE Export Manifest Implementation Guides Now Available

Customs Now CPB Updates

The US Customs and Border Protection has announced changes and updates on Implementation Guides. This X12 Transaction Set contains the format and establishes the data contents of the Customs Manifest Transaction Set (309) for use within the context of an Electronic Data Interchange (EDI) environment. The transaction set can be used by carriers, terminal operators, port authorities, or service centers to provide Customs with manifest data on cargo arriving in or departing from oceangoing vessels, railroad trains, or other types of conveyances.

To view this change:

 Rail Manifest X12 – 309 Customs Manifest Implementation Guide

To view all changes announced in October of 2017

Ace Export Manifest Implementation Guide

 

W Coast Trade Symposium recap: E-commerce is THE hot topic

2017 w coast trade symp

 

CustomsNow attended CBP’s West Coast Trade Symposium last week in Phoenix.  The theme was “Looking Ahead Together: What’s Next for Trade?”  Generally, CBP stated that they would continue to focus on the Priority Trade Issues, as well as the Executive Orders issued by the Trump Administration in 2017.

CBP also intends to build on the foundation of ACE to perform smarter targeting of inbound cargo and will be working to reduce the amount of regulations as required (for every new regulation two must be eliminated.)

Finally, CBP is struggling to stay on top of the explosive growth in the number of small packages shipments driven by e-commerce.

E-commerce is clearly a pressing issue for CBP and here is why:

  • E-commerce sales were valued at $3.4B on Black Friday and are expected to exceed $500B annually by 2020
  • 52M small packages are shipped annually via express carriers
  • 130M small packages ship via air cargo
  • 275M small packages ship via the mail.  This compares to 100M in 2010, up 20% year over year
  • In a recent 5-day operation at JFK airport, CBP checked 3000 mail packages and seized over 1500 due to Intellectual Property Right (IPR), Agriculture, and illegal drugs reasons.  The operation was halted in just 3 days due to the sheer number of seizures.

CBP is just not staffed to handle and examine this volume of packages and they are trying to overcome this shortfall.  For instance, CBP will be piloting a program in Dallas whereby any small package shipments that need to be examined will have to be delivered to a Centralized Examination Station (CES) as opposed to CBP inspectors driving to the various air carrier facilities.

It was explained that most air and express carriers do a good job of prescreening their shipments to the US to ensure they are compliant with US laws and regulations.  Therefore, the criminals are turning to shipping via the mail since there is no prescreening performed at present.

The United States Postal Service is not required to provided CBP with advanced data that would allow CBP to target suspect shipments as they do with all other modes of transportation.  The STOP Act, which is working its way through congress, will address this deficiency.  The Global Direct Entry program is also helping the postal service to identify Trusted Traders for certain wholesalers so that CBP can concentrate on those shippers which are not in this program.

Another concern is that many of these packages fall under the $800 de minimis amount, also known as a Section 321 entry, and, therefore, do not have to be entered with CBP.  The intent of the de minimis rule is that a formal entry must still be made if “additional information, bonding or protection is required.”  Many shippers ignore this requirement and are therefore not declaring their drug shipments to the appropriate Partner Government Agency (PGA), specifically the FDA.

CBP is very concerned with the increase in small packages moving via the mail that contain Fentanyl, a very dangerous synthetic opioid and they shared this story.  Recently an Inspector brushed the lapel of his uniform to remove a substance.  He later overdosed on Fentanyl but, thankfully, survived. CBP is looking at utilizing spectrometers to examine small packages.  This would allow them to screen for illegal drugs without having to open the packages.

Incidentally, the only way, presently, to declare a Sec. 321 shipment to CBP is via the manifest.  E-commerce providers want the ability to declare them via ABI and CBP is investigating this option.  CustomsNow learned that the Trade Leadership Council is considering the creation of a new entry type code of ‘86’ for Sec. 321 shipments.  This way the appropriate PGAs can be declared and there will be no duties or fees due to CBP (in 2010 Congress estimated that if the de minimis amount was raised to $1,000 that would result in only $42M in lost revenue compared to the total amount of duties paid annually which was $37B in FY 2015.)

In addition to illicit drugs, CBP is focused on IPR infractions (“If you can make it, the criminals will fake it.”) It is estimated that companies involved with IPR employ 42M Americans and constitute 40% of our GDP.  Unfortunately, there were 32K IPR seizures last year with an estimated value of $461B.  86% of these shipments came from China and that number climbs to 88% when you add in Hong Kong.  Many of these shipments move as small parcel.

 

Importer’s lament: “Why isn’t my release visible to my carrier?”

 

Nic Adams
Nic Adams

Nic Adams, CustomsNow’s Vice President, Client Services, offers guidance for importers who are frustrated that their carriers don’t seem to have visibility to shipment releases even when there is a CBP release on the cargo:

I have a Customs release, and a 1USG, but my carrier says my shipment isn’t clear.  I know I referenced the correct I.T. and Bill of Lading numbers on my entry (I didn’t receive any responses from CBP indicating a No Bill Match.)  Why isn’t my release visible to my carrier?

We often receive this question from our clients.  Invariably, it involves a shipment that is moving In-Bond via truck or rail.

After receiving the Arrival Notice with the I.T. information, the client enters the appropriate information into our ABI system and transmit the entry to CBP.  Normally the cargo responses come back in this order:

  • SE DATA ACCEPTED  (SE=Simplified Entry)
  • RELEASED (along with a Release Date which is the expected ETA at the inland port)
  • DATA UNDER PGA REVIEW (for shipments subject to a PGA such as FDA)
  • MAY PROCEED (along with a ONE USG meaning the shipment has cleared CBP and any/all relevant PGA’s)

At this point, most our clients will then query the bill of lading in the Automated Manifest System to ensure the release has posted to the bill of lading and that, therefore, the carrier has visibility to the release (a release is posted against a bill of lading in AMS with a code of ‘1C’).

But, no release has been posted.  Why is that?  The reason is that CBP posts releases to the carrier’s manifests based on different factors.  These rules can be found on page 17 of US Customs’ ACE Cargo Release Business Process document:

CBP sends a notification of release to the filer, carrier, and the terminal facility/custodian as appropriate… That information is sent at different times for different modes of transportation.

  • Land Border (Truck and Rail) – at time of arrival (may be sent earlier in rail depending on location)
  • Ocean – as early as 5 days prior to the estimated date of arrival
  • Air – as early as 4 hours prior to the estimated date of arrival

The key for truck and rail shipments is that the shipment must be arrived… not just physically arrived but deemed “arrived” in AMS.  This means that the In-Bond status must be updated from ER (en route) to AR (arrived.)  Then, and only then, will the 1C be posted to the bill of lading.  It is not uncommon that carriers do not ‘arrive’ their In-Bonds timely and, in this case, we advise our clients to contact the carrier and request that they arrive the In-Bond so the customs release can post.

Please contact Nic if you would like to discuss this topic in more depth.