Changes to U.S. In-Bond Process - Now in Effect

On September, 28, 2017 the U.S. Customs and Border Protection (CBP) published a final rule(1) implementing changes to the In-Bond Process.  The final rule adopts, with changes, proposed amendments originally published on February 22, 2012.  

The in-bond process allows imported merchandise to be entered into the U.S. at one port of entry without payment of duties and then transported by a bonded carrier to another U.S. port of entry.  The merchandise is then either entered or exported.  

The changes to the rule will enhance CBP's ability to track in-bond merchandise and ensure it is properly entered or exported.  The rule became effective on November 27, 2017 but several key changes did not become effective until 2018.  Key changes include:

July 2, 2018

  • All in-bond move requests, by a carrier, must be filed electronically.  The paper 7512 form for truck shipments traveling through the US from Canada is eliminated. 

August 6, 2018

  • Carriers are required to electronically report the arrival and location of the in-bond merchandise within 48 hours of arrival at the port of destination or port of exportation;
  • Carriers are required to electronically report the export of the in-bond merchandise within 48 hours of export; and
  • Carriers are required to electronically request and receive permission from CBP before diverting in-bond merchandise from its intended destination port to another port.

Definitions:

  • Bonded Carrier - a carrier of merchandise whose bond under 113.63 of this title is obligated for the transportation and delivery of merchandise.(1)

References:

US CBP Expands ISF Importer Definition

On April 12, 2018, the U.S. Customs and Border Protection (CBP) published a final rule that expands the definition of an Importer Security Filing (ISF) Importer.  The final rule adopts the proposed rule published in the Federal Register on July 6, 2016 (1).

"The changes are necessary to ensure that the definition of ISF Importer includes parties that have a commercial interest in the cargo and the best access to the required information." (2)  

Background

The ISF Importer is required to submit an ISF to CBP before the cargo is loaded on a vessel that is destined to the United States.  Except for foreign cargo remaining on board (FROB), the ISF must be filed no later than 24 hours before any cargo is laden aboard a vessel.  For FROB cargo the ISF is required any time prior to lading.   

ISF Importers (or their agents) are required to submit to CBP (3):

  • 10 data elements for goods intended to be entered into the U.S. or to be delivered to a foreign trade zone (FTZ)
  • 5 data elements for shipments that consist solely of FROB, immediate exportation (IE), and Transportation and Exportation (T&E) in-bond shipments  

What is Changing?

The existing definition of an ISF Importer is generally defined (4):

  • As the party causing goods to arrive within the limits of a port in the United States by vessel and is generally the goods owner, purchaser, consignee, or agent
    • However, the definition is limited to just certain named parties for FROB, IE and T&E in-bond shipments, and for merchandise being entered into an FTZ
  • To designate the Carrier as the ISF Importer for FROB cargo
  • To designate the party filing the IE, T&E, or FTZ documentation as the ISF Importer for IE and T&E in-bond shipments, and for goods to be delivered to an FTZ

Based on feedback from the trade community, CBP determined that the definition did not always reflect commercial realities.  The updated definition of an ISF Importer now generally (2):

  • Expands the definition for FROB cargo, IE and T&E shipments and for goods to be delivered to an FTZ by:
    • Broadening the definition to include non-vessel operating common carriers (NVOCCs) for FROB shipments
    • Including the goods owner, purchaser, consignee, or agent as a responsible party for IE and T&E in-bond shipments and for goods to be delivered to an FTZ

The vessel operating carrier is the ISF Importer for FROB shipments under the current definition.  In many cases, the carrier does not have access to all the data elements.  As a result, often the NVOCC files the information with CBP (even though legal responsibility remains with the carrier).  In addition, under the current definition, the ISF Importer is the filer of the IE or T&E documentation, but this documentation is often not created until the cargo arrives in the US. 

The expansion of the definition shifts the responsibility to file the ISF, in the instances noted above, to the party that actually has the data.  In many instances this was already occurring so the change is not expected to have a significant impact on the trade community.

What do we need to do?

If your imports into the U.S. require an ISF to be filed:

  • Evaluate if you are currently relying on any carrier's to file your ISF
  • Recognize that in the event you were relying on the carrier to file the ISF, the responsibility to file may now have shifted to your own operation       

The rule becomes effective on May 14, 2018.

Contact the experts at GCSG for more information, assistance with evaluating how the ISF definition change may affect your business, and/or assistance with facilitating the change within your supply chain.    

E  info@globalcompliancesg.com   

References and Definitions:

  • (1) 83 FR 43961-43965 - "Definition of Importer Security Filing Importer"
  • (2) 83 FR 15736-15740 - "CBP Decision No. 18-04; Definition of Importer Security Filing Importer"
  • (3) 19 CFR 149.3 - "Data Elements"
  • (4) 19 CFR 149.1 - "Definitions"
  • ISF Importer (Current) - "means the party causing the goods to arrive within the limits of a port in the United States by vessel.  For shipments other than foreign cargo remaining on board (FROB), immediate exportation (IE) and transportation and exportation (T&E) in-bond shipments, and goods to be delivered to a foreign trade zone (FTZ), the ISF Importer will be the goods' owner, purchaser, consignee, or agent such as a licenses customs broker.  For FROB cargo, the ISF importer will be the carrier.  For IE and T&E in-bond shipments, and goods to be delivered to an FTZ, the ISF Importer will be the party filing the IE, T&E, or FTZ documentation." (4)
  • ISF Importer (New) - "means the party causing goods to arrive within the limits of a port in the United States by vessel. For shipments other than foreign cargo remaining on board (FROB), the ISF Importer will be the goods' owner, purchaser, consignee, or agent such as a licensed customs broker. For immediate exportation (IE) and transportation and exportation (T&E) in-bond shipments, and goods to be delivered to a Foreign Trade Zone (FTZ), the ISF Importer may also be the party filing the IE, T&E, or FTZ documentation. For FROB cargo, the ISF Importer will be the carrier or the non-vessel operating common carrier." (2)
  • U.S. Customs and Border Protection

DEA and CBP Announce Joint Trade Webinar for June 20

The U.S. Drug Enforcement Administration (DEA) will host a webinar on June 20, 2017.  The webinar will cover the updated Import and Export regulations for Controlled Substances and Listed Chemicals.  The U.S. Customs and Border Protection (CBP) will also be in attendance.   

Click here to register for the webinar.  Click here for the webinar announcement.

CBP delays effective date for TSCA Import Certification Process Revisions

The U.S. Customs and Border Protection (CBP) published a final rule (81 FR 8590), on January 27, 2017, delaying the effective date of the final rule published on December 27, 2016 (81 FR 94980-94986) which finalized revisions to the Toxic Substances Control Act (TSCA) certification process when importing bulk chemicals or when importing as part of mixtures and articles containing a chemical or mixture.

This final rule is effective January 25, 2017 and the effective date of the December final rule is now March 21, 2017.  The delay is in response to the January 20, 2017 Memorandum for the Heads of Executive Departments and Agencies from Reince Priebus, Assistant to the President and Chief of Staff.  Click here to see the memorandum. 

For more information on the specific changes finalized in the December rule, click here to read an earlier post by GCSG related to the August 29, 2016 proposed rule (81 FR 59157-59162).     

TTB Streamlines Import requirements

The Alcohol and Tobacco Tax and Trade Bureau (TTB) published a final rule (81 FR 94186-94210), on December 22, 2016, that amends the import requirements for Distilled Spirits, Wine, Beer, Malt Beverages, Tobacco Products, Processed Tobacco, and Cigarette Papers and Tubes and facilitates the use of the International Trade Data System (ITDS). 

The amendments "clarify and streamline import procedures, and support the implementation of the International Trade Data System and the filing of import information electronically" and include "providing the option for importers to file import-related data electronically when filing entry or entry summary data electronically with U.S. Customs and Border Protection (CBP), as an alternative to current TTB requirements that importers submit paper documents to CBP upon importation."  

Some of the changes finalized with this rule include, but are not limited to, the following:

  • Removes the requirement that importers of alcohol beverages file a copy of their FAA Act basic permit with CBP at the port of entry when importing these products into the U.S. from the U.S. Virgin Islands (27 CFR 26.202)
  • Removes the requirements for distinctive liquor bottles to provide a photograph of the bottle to CBP upon entry (27 CFR 26.314 and 27.204)
  • Removes the requirement for certain Gin Statements of Process (27 CFR 5.51(d))
  • Adds a definition of natural wine that is applicable to all of parts 26 and 27
  • Amends 27 CFR 27.48 and 26.200 requiring importers file with CBP and/or retain certain information identifying distilled spirits, wine, and beer imported or brought into the US from the US Virgin Islands subject to tax, as well as information identifying the importer and ultimate consignee of the products
  • Removed the requirement that the importer of distilled spirits submit the certificate of effective tax rate or the standard effective tax rate approval applicable at entry or entry summary, and instead requires that the importer have the certificate in its possession at the time of filing the entry summary and make it available upon request
  • Generally provided for the transfer of tax liability for bulk imports of natural wine from the Virgin islands, to the proprietor of the bonded wine cellar or bonded brewery receiving such bulk wine or beer
  • Allows for electronic filing of the consignee permit number and other information for tax-free industrial alcohol shipments to the US from the US Virgin Islands
  • Allows for electronic filing of the permit number of government agencies importing distilled spirits for non-beverage purposes free of tax, and for other information associated with such imports
  • Removes the requirement to file a certificate with CBP at the time of entry summary for Distilled Spirits, Wine, or Beer brought into the US from the US Virgin Islands, and instead provides that a copy must be maintained as a record
  • Removes the requirement for CBP to gauge or inspect shipments of alcohol before they are released
  • Clarifies that the three year record retention requirements in parts 26 and 27 are measured from the time of release from customs custody, and require that such records be made available to TTB or CBP upon request

The rule became effective on December 31, 2016.

ACE will be sole CBP-authorized EDI system effective July 23, 2016

On May 23, 2016, the U.S. Customs and Border Protection (CBP) published a Federal Register notice (81 FR 32339-32340) announcing, effective July 23, 2016, that the Automated Commercial Environment (ACE) will be the sole CBP-authorized EDI system for electronic entry and entry summary filings (for all filers).

On the effective date the electronic filings listed immediately below must be formatted for submission in ACE, and will no longer be accepted in the Automated Commercial System (ACS). 

 01--Consumption--Free and Dutiable
 02--Consumption--Quota/Visa
 03--Consumption--Antidumping/Countervailing Duty
 06--Consumption--Foreign Trade Zone (FTZ)
 07--Consumption--Antidumping/Countervailing Duty and Quota/
Visa Combination
 11--Informal--Free and Dutiable
 12--Informal--Quota/Visa (other than textiles)
 21--Warehouse
 22--Re-Warehouse
 23--Temporary Importation Bond (TIB)
 31--Warehouse Withdrawal--Consumption
 32--Warehouse Withdrawal--Quota
 34--Warehouse Withdrawal--Antidumping/Countervailing Duty
 38--Warehouse Withdrawal--Antidumping/Countervailing Duty & 
Quota/Visa Combination
 51--Defense Contract Administration Service Region (DCASR)
 52--Government--Dutiable
 61--Immediate Transportation
 62--Transportation and Exportation
 63--Immediate Exportation
 69--Transit (Rail only)
 70--Multi-Transit (Rail only)

Until CBP publishes a future Federal Register notice, with a transition date, the 
following entry types must continue to be filed only in ACS. 

 08--NAFTA Duty Deferral
 09--Reconciliation Summary
 41--Direct Identification Manufacturing Drawback
 42--Direct Identification Unused Merchandise Drawback
 43--Rejected Merchandise Drawback
 44--Substitution Manufacturer Drawback
 45--Substitution Unused Merchandise Drawback
 46--Other Drawback

Filings for the below entry types will not be automated in ACS or ACE.

 04--Appraisement
 05--Vessel--Repair
 24--Trade Fair
 25--Permanent Exhibition
 26--Warehouse--Foreign Trade Zone (FTZ) (Admission)
 33--Aircraft and Vessel Supply (For Immediate Exportation)
 64--Barge Movement
 65--Permit to Proceed
 66--Baggage

CBP Announces In-Transit Manifest Pilot Program (U.S. - Canada)

On April 27, 2016 the U.S. Customs and Border Protection (CBP) published (81 FR 24837-24839) a General Notice announcing their intentions to "conduct a National Customs Automation Program (NCAP) test relating to truck shipments of commercial goods that transit from a point of origination in Canada through the United States to a point of destination in Canada."  These shipments are domestic Canadian shipments that transit through the U.S. 

Instead of presenting the required paper manifest form (Customs Form 7512–B Canada 81⁄2), test participants will submit an in-transit manifest electronically.  In addition, the value data element requirement will be relaxed and they will not be required to provide the Harmonized Tariff Schedule (HTS) number.