Importer Security Filing and Additional Carrier Requirements,

[Federal Register: January 2, 2008 (Volume 73, Number 1)]

[Proposed Rules]

[Page 90-113]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr02ja08-22]

DEPARTMENT OF HOMELAND SECURITY

Bureau of Customs and Border Protection

19 CFR Parts 4, 12, 18, 101, 103, 113, 122, 123, 141, 143, 149 and 192

[USCBP-2007-0077]

RIN 1651-AA70

Importer Security Filing and Additional Carrier Requirements

AGENCY: Customs and Border Protection, Department of Homeland Security.

ACTION: Notice of proposed rulemaking.

SUMMARY: To help prevent terrorist weapons from being transported to the United States, vessel carriers bringing cargo to the United States are currently required to transmit certain information to Customs and Border Protection (CBP) about the cargo they are transporting prior to lading that cargo at foreign ports of entry. This document proposes to require both importers and carriers to submit additional information pertaining to cargo before the cargo is brought into the United States by vessel. CBP must receive this information by way of a CBP-approved electronic data interchange system. The information required is reasonably necessary to further improve the ability of CBP to identify high-risk shipments so as to prevent smuggling and ensure cargo safety and security. The proposed regulations are specifically intended to fulfill the requirements of section 203 of the Security and Accountability for Every (SAFE) Port Act of 2006 and section 343(a) of the Trade Act of 2002, as amended by the Maritime Transportation Security Act of 2002.

DATES: Written comments must be submitted on or before March 3, 2008.

ADDRESSES: You may submit comments, identified by docket number, by one of the following methods:

Federal eRulemaking Portal: http://www.regulations.gov.

Follow the instructions for submitting comments via docket number

Dept: [INSERT DOCKET NUMBER].

Mail: Border Security Regulations Branch, Office of Trade, U.S Customs and Border Protection, 1300 Pennsylvania Avenue, NW. (Mint Annex), Washington, DC 20229.

Instructions: All submissions received must include the agency name and document number for this rulemaking. All comments received will be posted without change to http://www.regulations.gov, including any

personal information provided. For detailed instructions on submitting comments and additional information on the rulemaking process, see the ``Public Participation'' heading of the SUPPLEMENTARY INFORMATION section of this document.

Docket: For access to the docket to read background documents or comments received, go to http://www.regulations.gov. Submitted comments

may also be inspected on regular business days between the hours of 9 a.m. and 4:30 p.m. at the Office of International Trade, Customs and Border Protection, 799 9th Street, NW., 5th Floor, Washington, DC. Arrangements to inspect submitted comments should be made in advance by calling Mr. Joseph Clark at (202) 572-8768.

FOR FURTHER INFORMATION CONTACT: Richard Di Nucci, Office of Field Operations, (202) 344-2513.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Public Participation II. Background

1. Current Requirements and CBP Authority for Issuance of Proposed Rule

   (1) 24 Hour Rule

   (2) Trade Act Regulations

   (3) SAFE Port Act

2. Statutory Factors Governing Development of Regulations

3. Carrier and Importer Requirements Presented Separately III. Proposed Carrier Requirements Relating to Vessel Cargo Destined to the United States

1. Overview; Vessel Stow Plan

2. Overview; Container Status Messages

   1. Events Requiring a CSM, Effective Upon Implementation of the Final Rule

   2. Additional Events Requiring a CSM, Effective 90 Days After CBP Publishes a Notice in the Federal Register IV. Proposed Importer Requirement for Vessel Cargo Destined to the United States

1. Overview; Required Elements

   1. Shipments Other Than FROB, IE Shipments, and T&E Shipments

   2. FROB, IE shipments, and T&E shipments

2. Public Comments; Required Elements

3. Overview; Master Bills/House Bills

4. Public Comments; Master Bills/House Bills

5. Overview; CBP-approved Electronic Interchange System

6. Public Comments; CBP-approved Electronic Interchange System

7. Overview; Authorized Agents

8. Public Comments; Authorized Agents

   I. Public Comments; Requested Exemptions/Exclusions From Importer Security Filing Requirements

   1. Bulk and Break Bulk Cargo

   2. Foreign Cargo Remaining on Board, In-bond Shipments, and Instruments of International Traffic

10. Overview; Updating an Importer Security Filing

11. Public Comments; Withdrawing an Importer Security Filing

    L. Overview; Importer Security Filing, Entry, and Application for FTZ Admission

    1. Importer Security Filing and Entry

    2. Importer Security Filing and Application for FTZ Admission

13. Public Comments; Importer Security Filing, Entry, and Application for FTZ Admission V. General Public Comments

1. Economic Analysis; Cost, Benefit, and Feasibility Study

2. Protection of Confidential Information Presented to CBP

3. Test of Concept and Phase-in Enforcement

4. Other General Comments VI. Amendments to Bond Conditions

1. Bond Conditions Related to the Proposed Importer Security Filing, Vessel Stow Plan, and Container Status Message Requirements

2. Bond Conditions Related to the Trade Act Regulations VIII. Regulatory Analyses

1. Executive Order 12866

2. Regulatory Flexibility Act

3. Unfunded Mandated Reform Act

4. Paperwork Reduction Act IX. Signing Authority X. Proposed Regulatory Amendments

   Abbreviations and Terms Used in This Document

   AAEI--American Association of Exporters and Importers AAPA--American Association of Port Authorities ABI--Automated Broker Interface ACE--Automated Commercial Environment AMS--Automated Manifest System ANSI--American National Standards Institute ATDI--Advance Trade Data Initiative ATS--Automated Targeting System CBP--Customs and Border Protection COAC--Departmental Advisory Committee on Commercial Operations of Customs and Border Protection and Related Homeland Security Functions CFR--Code of Federal Regulations CSI--Container Security Initiative CSM--Container status message C-TPAT--Customs-Trade Partnership Against Terrorism DDP--Delivered duty paid DDU--Delivered duty unpaid DHS--U.S. Department of Homeland Security EIN--Employer identification number FAQ--Frequently asked questions

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   FROB--Foreign cargo remaining on board FTZ--Foreign trade zone HTSUS--Harmonized Tariff Schedule of the United States ICPA--International Compliance Professionals Association IE--Immediate exportation IIT--Instruments of international traffic IMO--International Maritime Organization IRS--Internal Revenue Service ITDS--International Trade Data System JIG--Joint Industry Group MID--Manufacturer identification MTSA--Maritime Transportation Security Act of 2002 NAM--National Association of Manufacturers NCBFAA--National Customs Brokers and Forwarders Association of America NVOCC--Non-vessel operating common carrier OMB--Office of Management and Budget Pub. L.--Public Law RFA--Regulatory Flexibility Act of 1980 RILA--Retail Industry Leaders Association SAFE Port Act--Security and Accountability for Every Port Act of 2006 SBREFA--Small Business Regulatory Enforcement Fairness Act of 1996 SSN--Social security number T&E--Transportation and exportation TSN--Trade Support Network UMRA--Unfunded Mandates Reform Act of 1995 UN EDIFACT--United Nations rules for Electronic Data Interchange For Administration, Commerce and Transport U.S.C.--United States Code WCO--World Customs Organization WSC--World Shipping Council

   I. Public Participation

   Interested persons are invited to participate in this rulemaking by submitting written data, views, or arguments on all aspects of the notice of proposed rulemaking. The Department of Homeland Security (DHS) also invites comments that relate to the economic, environmental, or federalism effects that might result from this proposal. Comments that will provide the most assistance to the Department in developing these procedures will reference a specific portion of the proposal, explain the reason for any recommended change, and include data, information, or authority that support such recommended change.

   II. Background

1. Current Requirements and CBP Authority for Issuance of Proposed Rule

   1. 24 Hour Rule

   Section 1431 of title 19, United States Code (19 U.S.C. 1431) requires that every vessel bound for the United States and required to make entry under 19 U.S.C. 1434 have a manifest that meets the requirements that are prescribed by regulation. Pursuant to 19 U.S.C. 1431, Customs and Border Protection (CBP) published a final rule in the Federal Register (67 FR 66318) on October 31, 2002, which amended the regulations in title 19, Code of Federal Regulations (CFR), to require, among other things, the advance and accurate presentation of certain manifest information 24 hours prior to lading of containerized and non- exempt break bulk cargo at a foreign port and to encourage the presentation of this information electronically, commonly known as the 24 Hour Rule. The advance information required pursuant to the October 31, 2002, final rule is required in order to enable CBP to evaluate the potential risk of smuggling weapons of mass destruction through the use of oceangoing cargo containers before goods are loaded on vessels destined to the United States. This advance information ensures compliance with U.S. law and enables CBP to facilitate the prompt release of legitimate cargo following its arrival in the United States. The information assists CBP in increasing the security of the global trading system and, thereby, reducing potential threats to the United States and world economy. 2. Trade Act Regulations

   Pursuant to section 343(a) of the Trade Act of 2002 (19 U.S.C. 2071 note), as amended by section 108 of the Maritime Transportation Security Act of 2002 (Pub. L. 107-295, 116 Stat. 2064), CBP published a final rule in the Federal Register (68 FR 68140) on December 5, 2003, which, among other things, amended the 24 Hour Rule regulations to require the transmission of this information by way of the CBP Vessel Automated Manifest System (AMS). See 19 CFR 4.7 and 4.7a. The advance electronic transmission of cargo information required was determined to be reasonably necessary for CBP to identify high-risk shipments to prevent smuggling and ensure cargo safety and security. 3. SAFE Port Act

   On October 13, 2006, the President signed into law the Security and Accountability for Every Port Act of 2006 (Pub. L. 109-347, 120 Stat 1884) (SAFE Port Act). Pursuant to Section 203 of the SAFE Port Act (6 U.S.C. 943), the Secretary of Homeland Security, acting through the Commissioner of CBP must promulgate regulations to require the electronic transmission of additional data elements for improved high- risk targeting, including appropriate security elements of entry data for cargo destined to the United States by vessel prior to loading of such cargo on vessels at foreign seaports. This NPRM proposes to require the electronic transmission of additional data for improved high-risk targeting.\1\ Some of these data elements would be required from carriers and others would be required from ``importers,'' as that term is defined for purposes of these regulations.

   \1\ Information on cargo feeds into CBP's Automated Targeting System (ATS) and is run against the system's protocols to evaluate all cargo shipments headed to the United States. ATS uses algorithms and anomaly analysis to identify high-risk targets. The system screens 100 percent of all cargo shipments. Using risk management principles and strategic intelligence, analysts use the system to identify shipments that pose a potential terrorist threat. One hundred percent of all high-risk shipments are inspected on arrival at ports of entry in the United States or in Container Security Initiative affiliated ports overseas.

   Prior to enactment of the SAFE Port Act, CBP had already undertaken an internal review of its targeting and inspection processes. Consequently, CBP had implemented a comprehensive strategy designed to enhance national security while protecting the economic vitality of the United States. The Container Security Initiative (CSI), the 24 Hour Rule, and the Customs-Trade Partnership Against Terrorism (C-TPAT) are cornerstone approaches implemented to further this goal. Additionally, CBP has developed cargo risk assessment capabilities in its Automated Targeting System (ATS) to screen all maritime containers before they are loaded aboard vessels in foreign ports. Each of these initiatives is dependent upon data supplied by trade entities, including carriers, non-vessel operating common carriers (NVOCCs), brokers, importers or their agents.

   The information that CBP currently analyzes to generate its risk assessment prior to vessel loading contains the same data elements that were originally established by the 24 Hour Rule. For the most part, this is the ocean carrier's or NVOCC's cargo declaration. While this was a sound initial approach to take after the tragic events of September 11th, internal and external government reviews have concluded that more complete advance shipment data would produce even more effective and more vigorous cargo risk assessments.

   In late 2004, the Departmental Advisory Committee on Commercial Operations of Customs and Border Protection and Related Homeland Security Functions (COAC) forwarded to the Department of Homeland Security and CBP one of its subcommittees' recommendations, which provided that: ``For ATS to provide enhanced security screening, the system should acquire additional shipment data to be used in the pre- vessel loading security screening

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   process.'' COAC recommended that CBP undertake a thorough review of the data element recommendations with the Trade Support Network (TSN) to determine what data elements the government required to improve the agency's risk assessment and targeting capabilities.

   Accordingly, CBP undertook further internal review and analysis of its targeting and inspection processes and worked with the TSN on this issue. Based upon its analysis, as well as the requirements under the SAFE Port Act, CBP is proposing to require the electronic transmission of additional data for improved high-risk targeting.

2. Statutory Factors Governing Development of Regulations

   Pursuant to section 203(d) of the SAFE Port Act, DHS is required to adhere to the parameters applicable to the development of regulations under section 343(a) of the Trade Act of 2002, including provisions relating to consultation, technology, analysis, use of information, confidentiality, and timing requirements.

   Under section 343(a) of the Trade Act of 2002, as amended, the requirement to provide information to CBP is generally to be imposed upon the party likely to have direct knowledge of the required information. However, where doing so is not practicable, CBP in the proposed regulations must take into account how the party on whom the requirement is imposed acquires the necessary information under ordinary commercial practices, and whether and how this party is able to verify the information it has acquired. Where the party is not reasonably able to verify the information, the proposed regulations must allow the party to submit the information on the basis of what it reasonably believes to be true.

   Furthermore, in developing the regulations, CBP, as required, has taken into consideration the remaining parameters set forth in the statute, where applicable, including:

   --The existence of competitive relationships among parties upon which the information collection requirements are imposed; --Different commercial practices and operational characteristics, and the technological capacity to collect and transmit information electronically; --The need for interim requirements to reflect the technology that is available at the time of promulgation of the regulations for purposes of the parties transmitting, and CBP receiving and analyzing, electronic information in a timely fashion; --That the use of the additional information collected pursuant to these regulations is to be only for ensuring cargo safety and security and preventing smuggling and not for determining merchandise entry or for any other commercial enforcement purposes; --The protection of the privacy of business proprietary and any other confidential cargo information that CBP receives under these regulations, with the exception that a limited portion of certain manifest information may be required to be made available for public disclosure pursuant to 19 U.S.C. 1431(c); --Balancing the impact on the flow of commerce with the impact on cargo safety and security in determining the timing for transmittal of required information; --Where practicable, avoiding requirements in the regulations that are redundant with one another or with requirements under other provisions of law; and --The need, where appropriate, for different transition periods for different classes of affected parties to comply with the electronic filing requirements in the regulations.

   Additionally, the statute requires that a broad range of parties, including importers, exporters, carriers, customs brokers, and freight forwarders, among other interested parties likely to be affected by the regulations, be consulted and their comments obtained and evaluated as a prelude to the development and promulgation of the regulations. In furtherance of this requirement, CBP met with COAC and other industry groups, including the American Association of Exporters and Importers (AAEI), the American Association of Port Authorities (AAPA), the Joint Industry Group (JIG), the National Association of Manufacturers (NAM), the National Customs Brokers and Forwarders Association of America (NCBFAA), the International Compliance Professionals Association (ICPA), the Retail Industry Leaders Association (RILA), the TSN, the U.S. Chamber of Commerce, and the World Shipping Council (WSC). In meetings and during conference calls, members of the importing and exporting community made many significant observations, insights, and suggestions as to what CBP should consider and how CBP should proceed in composing the proposed regulations. CBP presented to these groups a document entitled ``CBP Proposal for Advance Trade Data Elements'' (the ``10+2 Strawman''). CBP also posted the 10+2 Strawman on the CBP Web site along with a request for comments from the public. The Strawman was known as 10+2 because ten of the elements are to come from importers, as defined in these regulations, describing the cargo, and two of the elements are to come from carriers including information regarding the containers and conveyances in which the cargo is loaded.

   Numerous commenters responded to the 10+2 Strawman. At CBP's request, the COAC Advance Data Subcommittee also prepared and presented recommendations to CBP. Indeed, input and recommendations from those members of the trade who participated in the meetings discussed above, the various workgroups of the COAC subcommittee, as well as the views expressed in the many e-mail submissions on this matter, were considered in the development of these proposed regulations.

   In this document, CBP responds to comments that were received in response to the 10+2 Strawman and the recommendation of the COAC Advance Data Subcommittee. General comments and responses are presented in Section III of this document. Comments relating to specific aspects of the proposal are presented in the section of this document that discusses CBP's proposal relating to that particular aspect.

3. Carrier and Importer Requirements Presented Separately

   Under the proposed regulations, carriers would be generally required to submit a vessel stow plan and container status messages regarding certain events relating to containers loaded on vessels destined to the United States (the ``2'' of ``10+2''). Importers, as defined in these regulations, would be required to submit an Importer Security Filing containing certain data elements (the ``10'' of ``10+2''). For purposes of the proposed regulations, importer means the party causing goods to arrive within the limits of a port in the United States. For foreign cargo remaining on board (FROB), the importer is construed as the carrier. 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 importer is construed as the party filing the IE, T&E, or FTZ documentation with CBP. Because the proposed requirements for carriers and importers are different in scope and timing, they are presented separately below.

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   III. Proposed Carrier Requirements Relating to Vessel Cargo Destined to the United States

1. Overview; Vessel Stow Plan

   Pursuant to the authority granted in section 343(a) of the Trade Act of 2002, as amended by the Maritime Transportation Security Act of 2002 (MTSA), CBP is proposing to require carriers to submit a vessel stow plan for vessels destined to the United States. The vessel stow plan is used to transmit information about the physical location of cargo loaded aboard a vessel, which enhances the security of the maritime environment. Under the proposed regulations, CBP must receive the stow plan for vessels transporting containers and/or break bulk cargo no later than 48 hours after departure from the last foreign port. For voyages less than 48 hours in duration, CBP must receive the stow plan prior to the vessel's arrival at the first port in the United States. Bulk carriers would be exempt from this requirement for vessels exclusively carrying bulk cargo. The vessel stow plan must be submitted via the CBP-approved electronic data interchange system. The current approved electronic data interchange system for the vessel stow plan is vessel AMS. If CBP approves of different or additional electronic data interchange systems, CBP will publish a notice in the Federal Register.

   Under the proposed regulations, the vessel stow plan must include standard information relating to the vessel and each container and unit of break bulk cargo laden on the vessel. The vessel stow plan must include the following standard information: With regard to the vessel,

   (1) Vessel name (including international maritime organization (IMO) number);

   (2) Vessel operator; and

   (3) Voyage number.

   With regard to each container or unit of break bulk cargo,

   (1) Container operator, if containerized;

   (2) Equipment number, if containerized;

   (3) Equipment size and type, if containerized;

   (4) Stow position;

   (5) Hazmat-UN code;

   (6) Port of lading; and

   (7) Port of discharge.

2. Overview; Container Status Messages

   Pursuant to section 343(a) of the Trade Act of 2002, CBP is proposing to require carriers to submit container status messages (CSMs) daily for certain events relating to all containers laden with cargo destined to arrive within the limits of a port in the United States by vessel. Container status messages serve to facilitate the intermodal handling of containers by streamlining the information exchange between trading partners involved in administration, commerce, and transport of containerized shipments.

   Container status messages will provide CBP with additional transparency into the custodial environment through which inter-modal containers are handled and transported before arrival in the United States. This enhanced view (in corroboration with other advance data messages) into the international supply chain will contribute to the security of the United States and in the international supply chain through which containers and import cargos reach ports in the United States.

   The messages are used to report terminal container movements (e.g., loading and discharging the vessel) and to report the change in status of containers (e.g., empty or full). There are two basic standards governing the formation of CSMs. These are the American National Standards Institute (ANSI) X.12 standard and the United Nations rules for Electronic Data Interchange For Administration, Commerce and Transport (UN EDIFACT) standard. Under the proposed regulations, CSMs created under either standard will be acceptable.

   Under the proposed regulations, carriers must submit a CSM when any of the required events occurs if the carrier creates or collects a CSM in its equipment tracking system reporting that event. The proposed regulations would not require a carrier create or collect any CSM data other than that which the carrier already creates or collects on its own and maintains in its electronic equipment tracking system. CSMs must be submitted no later than 24 hours after the message is entered into the carrier's equipment tracking system.

   The events for which CSMs would be required are:

   (1) When the booking relating to a container which is destined to arrive within the limits of a port in the United States by vessel is confirmed;

   (2) When a container which is destined to arrive within the limits of a port in the United States by vessel undergoes a terminal gate inspection;

   (3) When a container, which is destined to arrive within the limits of a port in the United States by vessel, arrives or departs a facility (These events take place when a container enters or exits a port, container yard, or other facility. Generally, these CSMs are referred to as ``gate-in'' and ``gate-out'' messages.);

   (4) When a container, which is destined to arrive within the limits of a port in the United States by vessel, is loaded on or unloaded from a conveyance (This includes vessel, feeder vessel, barge, rail and truck movements. Generally, these CSMs are referred to as ``loaded on'' and ``unloaded from'' messages);

   (5) When a vessel transporting a container, which is destined to arrive within the limits of a port in the United States by vessel, departs from or arrives at a port (These events are commonly referred to as ``vessel departure'' and ``vessel arrival'' notices);

   (6) When a container which is destined to arrive within the limits of a port in the United States by vessel undergoes an intra-terminal movement;

   (7) When a container which is destined to arrive within the limits of a port in the United States by vessel is ordered stuffed or stripped;

   (8) When a container which is destined to arrive within the limits of a port in the United States by vessel is confirmed stuffed or stripped; and

   (9) When a container which is destined to arrive within the limits of a port in the United States by vessel is shopped for heavy repair.

   CBP is aware that it may be cost beneficial for some carriers to transmit all CSMs, rather than filter out CSMs relating to containers destined to the United States or relating only to the required events. Accordingly, CBP is proposing to allow carriers to transmit their ``global'' CSM messages, including CSMs relating to containers that do not contain cargo destined for importation into the United States and CSMs relating to events other than the required events. By transmitting CSMs in addition to those required by the proposed regulations, a carrier authorizes CBP to access and use that data.

   For each CSM submitted, the following information must be included:

   (1) Event code being reported, as defined in the ANSI X.12 or UN EDIFACT standards;

   (2) Container number;

   (3) Date and time of the event being reported;

   (4) Status of the container (empty or full);

   (5) Location where the event took place; and

   (6) Vessel identification associated with the message.

   Carriers would be exempt from the CSM requirement for bulk and break

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   bulk cargo. Under the proposed regulations, CSMs must be submitted via the CBP-approved electronic data interchange system. The current approved electronic data interchange system for CSMs is vessel AMS. CBP is continuing to consider additional electronic interchange systems. If CBP approves of a different or additional electronic data interchange system, CBP will publish notice in the Federal Register.

   IV. Proposed Importer Requirements for Vessel Cargo Destined to the United States

1. Overview; Required Elements

   Pursuant to the authority of section 343(a) of the Trade Act of 2002 and section 203 of the SAFE Port Act, in order to enhance the security of the maritime environment, CBP is proposing to require importers, as defined in these regulations, or their agents, to transmit an Importer Security Filing to CBP, for cargo other than foreign cargo remaining on board (FROB), no later than 24 hours before cargo is laden aboard a vessel destined to the United States. Because FROB is frequently laden based on a last-minute decision by the carrier, the Importer Security Filing for FROB would not be required 24 hours prior to lading. Rather, the Importer Security Filing for FROB would be required any time prior to lading.\2\

   \2\ CBP is not proposing to amend the timing requirements in 19 CFR part 4 requiring submission of advance manifest information 24 hours prior to lading.

   Under the proposed regulations, 10 elements are required for shipments consisting of goods intended to be entered into the United States and goods intended to be delivered to a foreign trade zone (FTZ). For goods to be delivered to an FTZ, the importer is construed as the party filing the FTZ documentation with CBP. These 10 elements must be transmitted by the importer, as defined in these regulations, or its agent. Five elements are required for shipments consisting entirely of FROB and shipments consisting entirely of goods intended to be ``transported'' as immediate exportation (IE) or transportation and exportation (T&E) in-bond shipments.

   For FROB, the importer is construed as the international carrier of the vessel arriving in the United States. For IE and T&E in-bond shipments, the importer is construed as the party filing the IE or T&E documentation with CBP. 1. Shipments Other Than FROB, IE Shipments, and T&E Shipments

   Under the proposed regulations, for the Importer Security Filing for shipments other than those consisting entirely of FROB and goods intended to be ``transported'' in-bond as an IE or T&E, 10 elements must be provided, unless specifically exempted. The manufacturer (or supplier) name and address, country of origin, and commodity HTSUS number must be linked to one another at the line item level.

   The ten required elements are:

   (1) Manufacturer (or supplier) name and address. Name and address of the entity that last manufactures, assembles, produces, or grows the commodity or name and address of the supplier of the finished goods in the country from which the goods are leaving. In the alternative, the name and address of the manufacturer (or supplier) that is currently required by the import laws, rules and regulations of the United States (i.e., entry procedures) may be provided (this is the information that is used to create the existing manufacturer identification (MID) number for entry purposes).

   (2) Seller name and address. Name and address of the last known entity by whom the goods are sold or agreed to be sold. If the goods are to be imported otherwise than in pursuance of a purchase, the name and address of the owner of the goods must be provided.\3\

   \3\ The party required for this element is consistent with the information required on the invoice of imported merchandise. See 19 CFR 141.86(a)(2).

   (3) Buyer name and address. Name and address of the last known entity to whom the goods are sold or agreed to be sold. If the goods are to be imported otherwise than in pursuance of a purchase, the name and address of the owner of the goods must be provided.\4\

   \4\ The party required for this element is consistent with the information required on the invoice of imported merchandise. See 19 CFR 141.86(a)(2).

   (4) Ship to name and address. Name and address of the first deliver-to party scheduled to physically receive the goods after the goods have been released from customs custody.

   (5) Container stuffing location. Name and address(es) of the physical location(s) where the goods were stuffed into the container. For break bulk shipments, the name and address(es) of the physical location(s) where the goods were made ``ship ready'' must be provided.

   (6) Consolidator (stuffer) name and address. Name and address of the party who stuffed the container or arranged for the stuffing of the container. For break bulk shipments, the name and address of the party who made the goods ``ship ready'' or the party who arranged for the goods to be made ``ship ready'' must be provided.

   (7) Importer of record number / FTZ applicant identification number. Internal Revenue Service (IRS) number, Employer Identification Number (EIN), Social Security Number (SSN), or CBP assigned number of the entity liable for payment of all duties and responsible for meeting all statutory and regulatory requirements incurred as a result of importation. For goods intended to be delivered to an FTZ, the IRS number, EIN, SSN, or CBP assigned number of the party filing the FTZ documentation with CBP must be provided. The importer of record number for Importer Security Filing purposes is the same as ``importer number'' on CBP Form 3461.

   (8) Consignee number(s). Internal Revenue Service (IRS) number, Employer Identification Number (EIN), Social Security Number (SSN), or CBP assigned number of the individual(s) or firm(s) in the United States on whose account the merchandise is shipped. This element is the same as the ``consignee number'' on CBP Form 3461.

   (9) Country of origin. Country of manufacture, production, or growth of the article, based upon the import laws, rules and regulations of the United States. This element is the same as the ``country of origin'' on CBP Form 3461.

   (10) Commodity HTSUS number. Duty/statistical reporting number under which the article is classified in the Harmonized Tariff Schedule of the United States (HTSUS). The HTSUS number is required to be provided to the 6 digit level. The HTSUS number may be provided up to the 10 digit level. This element is the same as the ``H.S. number'' on CBP Form 3461 and can only be used for entry purposes, if it is provided at the 10 digit level or greater. 2. FROB, IE Shipments, and T&E Shipments

   Under the proposed regulations, for the Importer Security Filing for shipments consisting entirely of FROB and shipments consisting entirely of goods intended to be ``transported'' in-bond as an IE or T&E, five elements must be provided in order to enhance the security of the maritime environment.

   The five required elements are:

   (1) Booking party name and address. Name and address of the party who is paying for the transportation of the goods.

   (2) Foreign port of unlading. Port code for the foreign port of unlading at the intended final destination.

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   (3) Place of delivery. City code for the place of delivery.

   (4) Ship to name and address. Name and address of the first deliver-to party scheduled to physically receive the goods after the goods have been released from customs custody.

   (5) Commodity HTSUS number. Duty/statistical reporting number under which the article is classified in the Harmonized Tariff Schedule of the United States (HTSUS). The HTSUS number must be provided to the 6 digit level. The HTSUS number is required to be provided up to the 10 digit level.

2. Public Comments; Required Elements

   Comment

   The Importer Security Filing should be based on the best information available at the time of filing. CBP, in consultation with the trade, should develop a process to amend a filing prior to arrival. An entry (CBP Form 3461, 7501 or 214) filed prior to arrival should be accepted as the amendment, except to change the name and address of the consolidator and/or place of container stuffing. CBP should issue frequently asked questions (FAQs) clarifying when an amendment is required or recommended. CBP Response

   Pursuant to existing 19 CFR 4.7(b)(3)(iii) and proposed 19 CFR 149.2(c), CBP will take into consideration how, in accordance with ordinary commercial practices, the presenting party acquired Importer Security Filing information and whether and how the presenting party is able to verify this information. Where the presenting party is not reasonably able to verify such information, CBP will permit the party to electronically present the information on the basis of what the party reasonably believes to be true.

   Under the proposed regulations the party who filed the Importer Security Filing is required to update the Importer Security Filing if, after the filing and before the goods enter the limits of a port in the United States, there are changes to the information filed.

   Permission to divert T&E and IE shipments would be required. Such permission would only be granted upon receipt by CBP of a complete Importer Security Filing.

   Finally, in order to maintain the integrity of the differences between the Importer Security Filing and commercial documents and to facilitate compliance with the Trade Act requirement not to use security information for trade compliance purposes, CBP will not accept CBP Forms 3461, 7501, or 214 in lieu of an amendment to an Importer Security Filing. Comment

   CBP needs to provide instruction to the trade as to how to handle those situations where despite due diligence, all of the necessary data elements are simply not available 24 hours prior to loading. For example, importers may not know the container stuffing location, consolidator name and address, country of origin, and 6 digit HTSUS number 24 hours prior to lading. CBP Response

   CBP understands that, in some cases, business practices may have to be altered to obtain the required information in a timely fashion. CBP, however, will provide guidance in the form of FAQs, postings on the CBP website, and other outreach to the trade.

   If an importer, as defined in these regulations, does not know an element that is required pursuant to the proposed regulations, the importer must take steps necessary to obtain the information. For example, the 6 digit HTSUS number is sometimes provided by members of the trade community on T&E and IE in-bond movements. Under the proposed rulemaking, CBP would allow importers to submit the HTSUS number at the 6 digit level. CBP recognizes that, for most importers, this information is known well before the placement of the order for their goods because of the need to determine duty cost and admissibility status prior to finalizing the purchase contract or shipment contract. Comment

   Tier 3 C-TPAT members should be exempt from the Importer Security Filing requirement or, in the alternative, should be required to submit fewer than all of the required Importer Security Filing elements. Tier 3 C-TPAT supply chains have already been vetted by CBP. Why does CBP intend to repeat its risk assessment on each individual shipment? CBP Response

   CBP will use the Importer Security Filing to assess the risk of individual shipments. For purposes of this rulemaking, all cargo arriving to the United States by vessel, regardless of the parties involved, would be subject to the Importer Security Filing requirements. CBP is not proposing to allow exemption from, or alteration of, the requirement that C-TPAT partners submit Importer Security Filing information in advance of arrival. CBP believes that compliance with these regulations complements supply chain security and efficiency procedures being implemented by C-TPAT partners. Furthermore, it is emphasized that C-TPAT membership will continue to be viewed in a positive light for targeting purposes. It is more likely that shipments made by C-TPAT members will be readily and expeditiously cleared, and not be delayed for greater CBP scrutiny. Other related perquisites of C-TPAT partnership may include essential security benefits for suppliers, employees, and customers, such as a reduction in the number and extent of border inspections and eligibility for account-based processes. Comment

   The Importer Security Filing should be done by a single party; however that party should be permitted to rely on information from more than one source for the purpose of preparing the filing. CBP and the trade should remain open to proposals for any viable means by which a single Importer Security Filing could be done by more than one party. CBP Response

   Under the proposed regulations, the importer, as defined in these regulations, is ultimately responsible for the timely, accurate, and complete submission of the Importer Security Filing. CBP is proposing to require that one party aggregate and submit all required elements. In response to requests from the trade, CBP is proposing to allow importers to designate an agent to submit the filing on behalf of the importer. While CBP understands that some business practices may need to be altered to obtain the required information at an earlier point, CBP does not anticipate that these changes will be unduly burdensome. Comment

   CBP's current layered targeting approach, along with the additional Importer Security Filing data elements, such as container stuffing and consolidator data, provide CBP with the needed information with which to determine the last country of manufacture, production, assembly or shipping. Therefore, the current regulatory definition of country of origin as articulated by existing CBP regulations and free trade agreements should remain an option for satisfying the Importer Security Filing definition of country of origin.

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   CBP Response

   CBP agrees. Under the proposed regulations, the country of origin is required to be provided for all goods that have been listed at least at the 6 digit HTSUS level. The proposed definition for this element is consistent with the country of origin as required on CBP Form 3461. Comment

   The security filing should require an HTSUS number at only the 6 digit level; however the system used for filing should be capable of accepting up to a 10 digit HTSUS number. CBP Response

   CBP agrees. Under the proposed regulations, the importer, as defined in these regulations, is required to provide the HTSUS number 24 hours prior to lading at the HTSUS number at the 6 digit level. However, importers may submit the HTSUS number up to the 10 digit level (they must use the 10 digit level if they plan to use the Importer Security Filing as part of an entry filing). Comment

   There should be no mandatory linking of the HTSUS number to the country of origin and manufacturer (or supplier) name and address data elements. If this linking is proposed by CBP in its NPRM, the agency must first ensure this specific topic is addressed in a separate cost/ benefit analysis, with the participation of the trade, and the results separately reported, because the linking would potentially impose a significant cost burden on the trade both from a programming perspective and a service provider fee perspective. The data in question is also generally not provided at the line item level to foreign entities such as freight forwarders. CBP Response

   CBP disagrees. Under the proposed regulations, the manufacturer (or supplier) name and address, country of origin, and commodity HTSUS number elements must be linked to one another at the line item level. CBP has considered the economic impacts of this proposed rule in its cost, benefit, and feasibility study. A summary of this analysis is presented below, and the complete analysis can be found on the CBP website and the public docket for this rulemaking (see http://www.regulations.gov). Regarding the potential burden, the data is

   already provided to CBP at the line item level for entry and entry summary purposes. If an importer, as defined in these regulations, chooses to use a foreign freight forwarder as an agent for Importer Security Filing purposes, the importer will need to provide this data to that party at the line item level. Comment

   The CBP proposal and data elements must include a bill of lading number. CBP Response

   The bill of lading number is necessary to link the carrier's submissions with the Importer Security Filing submission. Under the 24 Hour Rule, the carrier is required to provide the bill of lading number 24 hours prior to lading. Therefore, the importer, as defined in these regulations, or its authorized agent would be required to submit the bill of lading number when the importer elements are submitted. Comment

   The Importer Security Filing data elements and definitions should align with those of the World Customs Organization (WCO) SAFE Framework. CBP Response

   CBP agrees. CBP is working with the WCO to develop an amendment process that will enable the WCO Framework of Standards to adapt to changes in the international security environment. In addition, CBP will seek to make data elements consistent with (or have data elements included in) the WCO Data Model. CBP is concerned with ensuring that, to the maximum extent possible, the data elements and definitions required under the proposed Importer Security Filing regulations are consistent with the data elements and their meaning as currently required of importers under the commercial entry procedures. Comment

   The Importer Security Filing data elements and definitions should align with the ISO UNTEDE 2005 7372:2005 definitions and the Automated Commercial Environment (ACE)/International Trade Data System (ITDS) definitions. CBP Response

   CBP has considered, and will continue to consider, ISO definitions and the ITDS requirements during the development of the Security Filing initiative. As discussed in response to a comment above, CBP is preliminarily concerned with ensuring that, to the maximum extent possible, the data elements and definitions required under the proposed Importer Security Filing regulations are consistent with the data elements and their meaning as currently required of importers under the commercial entry procedures. Comment

   Where possible the name and address of the actual manufacturer should be required. Where this is not known or the shipment consists of commingled articles, filers should indicate the name and address of the supplier in their security filing. CBP Response

   CBP agrees. Based on input from the trade, CBP is proposing to require the importer, as defined in these regulations, or his authorized agent, to provide the name and address of either the manufacturer or supplier of the finished goods in the country from which the goods are leaving. Comment

   The manufacturer identification (MID) number, as defined in CBP directives, should be accepted in lieu of the manufacturer (or supplier) name and address. CBP Response

   CBP disagrees. In general, the MID does not include the complete address of the manufacturer. CBP believes that the complete manufacturer's name and address (sometimes supplier in the country from which the goods are leaving in lieu of manufacturer) is a critical piece of information to effectively target high risk cargo. CBP believes that this information is readily available to importers because this is the underlying information necessary for creating the MID which is required for filing entry. The trade already has access to software that electronically converts the manufacturer's full name and address into the MID. Comment

   CBP should more clearly define the term ``shipper'' as used in the data definitions. CBP Response

   ``Shipper'' is not one of the data elements required under the proposed regulations, nor is it used in the definitions for the required elements.

3. Overview; Master Bills/House Bills

   Under the proposed regulations, an Importer Security Filing is required for each shipment, at the lowest bill of lading level (i.e., at the house bill of lading level, if applicable). Generally speaking, a master bill of lading refers to the bill of lading that is generated by the incoming carrier covering a consolidated shipment. A consolidated

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   shipment would consist of a number of separate shipments that have been received and consolidated into one shipment by a party, such as a freight forwarder or a NVOCC for delivery as a single shipment to the incoming carrier. The consolidated shipment would be covered under the incoming carrier's master bill. However, each of the shipments thus consolidated would be covered by what is referred to as a house bill. It is information from the relevant house bill that CBP is seeking for targeting purposes.

4. Public Comments; Master Bills/House Bills

   Comment

   When one shipment to one importer of record includes multiple bills of lading, only one security filing should be required. The multiple bills of lading should not be required to be identified at the line item level. CBP Response

   CBP agrees. Under the proposed rule, one Importer Security Filing can satisfy multiple bills of lading. However, the manufacturer (or supplier) name and address, country of origin, and commodity HTSUS number elements must be linked to one another at the line item level. Comment

   There should be capability for the Importer Security Filing to be done at the house bill of lading level with no reference to the master bill of lading. CBP Response

   CBP disagrees with this comment. It is necessary for the filer to reference the master bill of lading number in the Importer Security Filing in order for the house bill and master bill to be linked at a later date. Comment

   In the case of transshipped goods, the system programming should allow reporting at the house bill of lading level based upon the feeder vessel at time of loading, which can then be married to the arriving/ mother vessel through AMS filing by that arriving/mother vessel. CBP Response

   CBP disagrees. Under the proposed rule, CBP is requiring that the Importer Security Filing be submitted at the lowest bill level, down to the house bill, and is requiring that the bill be the one under which the cargo is brought to the United States. Comment

   CBP should establish account profiles for importers of repetitive shipments. These accounts could be based on the ACE account example or the BRASS (line release) example at the U.S.-Canada and U.S.-Mexico borders. A repetitive low-security risk importer would then give its account information, together with anything unique/different about the specific shipment, in lieu of the full security filing. CBP Response

   CBP disagrees. CBP will use the Importer Security Filing to assess the risk of individual shipments. For purposes of this rulemaking, each and every shipment arriving to the United States by vessel would be subject to the Importer Security Filing requirements. As CBP continues to develop ACE, the agency will continue to make enhanced flexibility for the trade a top priority.

5. Overview; CBP-approved Electronic Interchange System

   Under the proposed regulations, importers, as defined in these regulations, or their agents, would be required to transmit the Importer Security Filing via a CBP-approved electronic data interchange system. The current approved electronic data interchange systems for the Importer Security Filing are the Automated Broker Interface (ABI) and the Vessel Automated Manifest System (AMS). If CBP approves a different or additional electronic data interchange system, CBP will publish notice in the Federal Register.

6. Public Comments; CBP-approved Electronic Interchange System

   Comment

   CBP should delay the implementation of the regulations until they can be implemented through ACE. CBP Response

   CBP disagrees. Pursuant to Section 203 of the SAFE Port Act, the Secretary of Homeland Security is required to promulgate regulations requiring additional data elements for improved high-risk targeting. After careful consideration, DHS has determined that immediate action is necessary to increase the security of containers entering the United States by vessel by improving CBP's risk assessment capabilities. CBP will take into account systems changes made by the trade to comply with this proposed rulemaking as ACE is developed. Comment

   Current access requirements to CBP systems need to be changed. CBP must eliminate the requirement that ABI filers have custom house broker licenses or be self-filers. CBP Response

   Pursuant to 19 CFR 143.1, importers, brokers, and ABI service bureaus are permitted to participate in ABI. In addition, other parties currently access ABI to transmit protests, forms relating to in-bond movements (CBP Form 7512), and applications for FTZ admission (CBP Form 214). CBP is proposing to amend 19 CFR 143.1 to clarify that importers, brokers, and, if they do not participate in ``customs business,'' ABI service bureaus are permitted to participate in ABI for entry purposes. In addition, upon approval by CBP, any party may gain access to ABI for other purposes, including transmission of protests, forms relating to in-bond movements (CBP Form 7512), and applications for FTZ admission (CBP Form 214). In addition, CBP is proposing to amend 19 CFR 143.1 to permit any Importer Security Filing filer to gain access to ABI for the purpose of transmitting the Importer Security Filing if that party obtains a bond. Comment

   Flexibility of who may send the Importer Security Filing should be enhanced by allowing other formats and interfaces in addition to ABI and AMS. CBP Response

   CBP disagrees. As stated above, filing of the data elements through ABI and AMS is not limited to licensed customs brokers or importers filing their own submissions (ABI) or bonded carriers (AMS). CBP will continue to make enhanced flexibility for the trade a top priority as ACE is developed and is continuing to look at additional electronic interchange systems for transmission of CSMs. Comment

   CBP should transmit a confirmation or acceptance message confirming that the Importer Security Filing has been successfully filed. The acceptance message is not expected to validate the data transmitted, simply to confirm that it has been received in the required format.

   In addition, query functionality should be designed into the system to provide the importer of record or its authorized agent visibility as to whether an Importer Security Filing has been made for a specific shipment. At the

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   same time, the system should be designed so that importers have full visibility, meaning they are able to read the actual data elements as filed and also who made the filing. CBP Response

   CBP agrees in part. CBP will provide, to the filer, electronic acknowledgement that the filer's submission has been received according to ABI and AMS standards. However, ABI and AMS filers will not have the ability to query whether an Importer Security Filing is complete, the actual data elements, or the identity of the party who filed the elements. CBP believes that communication between importers, as defined in these regulations, and their designated agents will be sufficient to inform the importer regarding the completeness and contents of a filing.

7. Overview; Authorized Agents

   CBP is proposing to allow an importer, as defined in these regulations, as a business decision, to designate an authorized agent to file the Importer Security Filing on the importer's behalf. Under the proposed regulations, a party can act as an authorized agent for purposes of filing the Importer Security Filing if that party obtains access to ABI or AMS and obtains a bond.

8. Public Comments; Authorized Agents

   Comment

   It is unfair to hold the importer liable for data filed by a foreign party, such as a foreign freight forwarder. The foreign filing party may make typographic errors for which the importer may be liable. The importer may not have any method of even checking the advance trade data that has been filed. CBP Response

   In response to requests from the trade, CBP is proposing to allow an importer, as defined in these regulations, to use an agent of the importer's choosing to submit the Importer Security Filing. CBP is not requiring the use of an agent. The importer is ultimately responsible for the timely, accurate, and complete submission of the Importer Security Filing. Comment

   Foreign freight forwarders need to be allowed to file the Importer Security Filing. The final rule needs to state that filing the Importer Security Filing does not constitute ``customs business.'' CBP Response

   The Importer Security Filing would be a filing for security purposes, not for any of the purposes identified under 19 U.S.C. 1641 or 19 CFR part 111. As such, the transmission of the Importer Security Filing alone would not constitute ``customs business.'' As discussed below, if an importer chooses to have applicable elements of the Importer Security Filing used for entry purposes, the Importer Security Filing must be self-filed by the importer or filed by a licensed customs broker.

   I. Public Comments; Requested Exemptions/Exclusions From Importer Security Filing Requirements

   Comment

   The security filing process should be created in such a way as to allow the capability to designate that the security filing for a specific type of shipment involves a transaction for which all the required information cannot be provided at time of filing. Examples include, but are not limited to: carnets, direct duty paid (DDP)/direct duty unpaid (DDU) shipments, consigned goods, returned goods, and samples. CBP Response

   CBP generally agrees. However, the examples provided by the commenter will not be automatically exempt from submitting the required importer elements. The proposed regulations require the importer, as defined in these regulations, or its authorized agent, to submit the importer elements of the Importer Security Filing. If an importer does not know an element that is required pursuant to the proposed regulations and CBP guidance, the importer must take steps necessary to obtain the information. If an importer believes that a required Importer Security Filing data element does not exist for a non-exempt transaction type, the importer should request a ruling from CBP prior to the time required for the Importer Security Filing. If the filing is for a shipment type that CBP has specifically designated exempt from an element or elements, CBP will allow the filer to designate the filing as one of several ``exemption'' types, including FROB and IE and T&E in-bond shipments. These ``exemptions'' are discussed more in-depth below. CBP will publish technical requirements regarding the input of data in ABI and AMS on the CBP Web site.

   1. Bulk and Break Bulk Cargo

      Comment

      How should bulk and break bulk shipments be handled? CBP Response

      Under the proposed regulations, importers of bulk cargo are exempt from the proposed importer and carrier requirements for bulk goods when the goods are exempt from the requirement that the carrier file the cargo declaration 24 hours prior to loading.

      For Importer Security Filing purposes, CBP is proposing to model the treatment of approved break bulk cargo as per the Trade Act regulations in 19 CFR 4.7(b)(4). CBP is proposing to require an Importer Security Filing for break bulk shipments, when the goods are exempt from the requirement that the carrier file the cargo declaration 24 hours prior to loading, 24 hours prior to arrival in the United States. For break bulk shipments, the name and address(es) of the physical location(s) where the goods were made ``ship ready'' must be provided for the container stuffing location element and the name and address of the party who arranged for the goods to be made ``ship ready'' must be provided for the consolidator (stuffer) name and address element.

   2. Foreign Cargo Remaining on Board, IE and T&E In-bond Shipments, and Instruments of International Traffic

      Comment

      Foreign cargo remaining on board (FROB), Immediate Exportation (IE) and Transportation and Exportation (T&E) in-bond shipments, and instruments of international traffic (IIT) (e.g., containers, racks, pallets) should be exempt from the Importer Security Filing requirement in the near term. The final regulations should define additional transactions exempt from the Importer Security Filing including types of transactions identified by CBP in consultation with the trade. CBP Response

      CBP is not proposing to require an Importer Security Filing for IIT. However, CBP is proposing to require an Importer Security Filing for all other shipments arriving in the United States by vessel, including FROB and in-bond shipments, unless specifically exempted under the regulations. Under the proposed regulations, an Importer Security Filing is required for FROB, but because FROB is not destined to be received in the United States, the carrier would be required to submit the following data elements: booking party name and address, foreign port of unlading, place of delivery, ship to name and address, and commodity 6 digit HTSUS number.

      Under the proposed regulations, an Importer Security Filing is required for

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      IE and T&E in-bond shipments. Because IE and T&E shipments are not destined to remain in the United States, CBP is proposing to require the party taking delivery in the United States to submit the following data elements: booking party name and address, foreign port of unlading, place of delivery, ship to name and address, and commodity 6 digit HTSUS number.

      CBP is proposing to amend the regulations to require that, if at the time of submission of the Importer Security Filing, the goods are intended to be moved in-bond as an IE or T&E shipment, but later a decision is made to divert the goods, permission to divert the in-bond movement to a port other than the listed port of destination or export or to change the in-bond entry into a consumption entry must be obtained from the port director of the port in which the original in- bond documents were filed. Such permission would only be granted upon receipt by CBP of a complete Importer Security Filing.

10. Overview; Updating an Importer Security Filing

    As discussed above, under the proposed regulations, the party who filed the Importer Security Filing is required to update the Importer Security Filing if, after the filing and before the goods arrive within the limits of a port in the United States, there are changes to the information filed or more accurate information becomes available.

11. Public Comments; Withdrawing an Importer Security Filing

    Comment

    CBP should establish a procedure for cancellation of an Importer Security Filing for goods not shipped, changes in itineraries, etc. CBP Response

    CBP agrees. The proposed regulations allow for the withdrawal of an Importer Security Filing when a shipment is no longer intended to arrive within the limits of a port in the United States.

    L. Overview; Importer Security Filing, Entry, and Application for FTZ Admission

    1. Importer Security Filing and Entry

    Four of the Importer Security Filing elements are identical to elements submitted for entry (CBP Form 3461) and entry summary (CBP Form 7501) purposes. These elements are the importer of record number, consignee number, country of origin, and commodity HTSUS number when provided at the 10 digit level. In an effort to minimize the redundancy of data transmitted to CBP, after further consideration and in response to public comments, CBP is proposing to allow an importer to submit these elements once to be used for both Importer Security Filing and entry/entry summary purposes. If an importer chooses to have these elements used for entry/entry summary purposes, the Importer Security Filing and entry/entry summary must be self-filed by the importer or filed by a licensed customs broker in a single transmission to CBP. In addition, the HTSUS number must be provided at the 10 digit level. Choosing this option does not relieve the requirement to submit all remaining Importer Security Filing elements (including the manufacturer (supplier) name and address) and entry and/or entry summary elements (including the manufacturer identification (MID) number).

    Under the proposed rule, an importer can choose to do the following: (1) Submit the Importer Security Filing and entry and/or entry summary data with no connection between them; or (2) Submit the entry and/or entry summary data via the same electronic transmission as the Importer Security Filing. If the importer chooses this option, the importer would only be required to submit the 4 elements listed above once to be applied to the Importer Security Filing as well as the entry and/or entry summary. CBP will publish technical information regarding the transmission of entry and Importer Security Filing data in the appropriate guidance documents and on the CBP Web site. 2. Importer Security Filing and Application for FTZ Admission

    Two of the Importer Security Filing elements are identical to elements submitted for application to admit goods to an FTZ (CBP Form 214). These elements are the country of origin and commodity HTSUS number when provided at the 10 digit level. In an effort to minimize the redundancy of data transmitted to CBP, the proposed regulations allow a filer to submit the Importer Security Filing and CBP Form 214 in the same electronic transmission to CBP and to submit the country of origin and commodity HTSUS number once to be used for both Importer Security Filing and FTZ admission purposes. If the party submitting the Importer Security Filing chooses to have this element used for FTZ admission purposes, the HTSUS number must be provided at the 10 digit level.

13. Public Comments; Importer Security Filing, Entry, and Application for FTZ Admission

    Comment

    CBP should allow for entry to be made when the Importer Security Filing is submitted. CBP Response

    CBP agrees. Under the proposed rule, an importer would be able to submit the entry and/or entry summary data via the same electronic transmission as the Importer Security Filing. If an importer chooses to do so, the consolidated submission of both the Importer Security Filing and entry must be filed by the party entitled to make entry pursuant to 19 U.S.C. 1484 on its own behalf or a licensed customs broker. Comment

    The regulations should allow an importer to submit, in lieu of an Importer Security Filing, CBP Forms 3461, 7501, or 214. In the alternative, the regulations should allow an importer to submit, in lieu of an Importer Security Filing, CBP Forms 3461, 7501, or 214 along with the consolidator (stuffer) name and address and container stuffing location. CBP Response

    CBP appreciates the suggestions in this comment but disagrees. Importers, as defined in these regulations, or their authorized agents, are responsible for providing the complete Importer Security Filing 24 hours prior to lading. The other options suggested do not satisfy the proposed Importer Security Filing requirements. CBP Forms 3461, 7501, and 214, alone or in combination with the consolidator (stuffer) name and address and container stuffing location, do not contain the required elements. However, as discussed above, CBP is proposing to allow an importer to submit the entry and/or entry summary data via the same electronic transmission as the Importer Security Filing. In addition, CBP is proposing to allow applicants for FTZ admission to submit the country of origin and HTSUS number (when provided at the 10 digit level) once for both Importer Security Filing and FTZ admission purposes. Comment

    The advance trade data required represents a redundancy of information. CBP Response

    As discussed above, in an effort to reduce the redundancy of information presented to CBP, CBP is proposing to allow an importer to submit certain

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    elements once to be used for both Importer Security Filing and entry purposes and to allow applicants for FTZ admission to submit the country of origin and HTSUS number once to be used for both Importer Security Filing and FTZ admission purposes. To the extent feasible, CBP will continue to explore ways and methods to harmonize and synchronize information collection requirements. Comment

    CBP should extend the five-day minimum entry and selectivity time frame for entry release and FTZ admission purposes to after confirmed departure of the vessel from its last foreign port to the United States. CBP Response

    CBP disagrees. CBP does not propose to amend, at this time, the regulations generally governing entry release and FTZ admission of imported goods.

    V. General Public Comments

1. Economic Analysis; Cost, Benefit, and Feasibility Study

   Comment

   Regulations compelling the advance submission of Importer Security Filing elements would impose substantial reprogramming and process redesign costs on importers. Furthermore, the compliance costs for an importer importing multiple products per container would be substantial. CBP should complete a cost/benefit and feasibility study and report, as recommended by the SAFE Port Act, before the final rule is published. CBP Response

   CBP has conducted a cost, benefit, and feasibility analysis as required under the SAFE Port Act. This analysis meets the requirements of Executive Order 12866 and Office of Management and Budget (OMB) Circular A-4 and has been reviewed by OMB. A summary of this analysis is presented below, and the complete analysis can be found on the CBP Web site and the public docket for this rulemaking (see http://www.regulations.gov). CBP is seeking comments on this analysis.

   Comment

   CBP has not had sufficient discussions with the trade community, particularly in view of the enormous impact that the proposal will have on the United States economy. CBP Response

   CBP disagrees. CBP has engaged and will continue to engage the trade through the rulemaking process and through consultation as required by Section 203 of the SAFE Port Act (incorporating the requirements of Section 343(a) of the Trade Act of 2002). CBP has met with groups representing the trade while developing the proposal, including: the COAC, the American Association of Exporters and Importers (AAEI), the American Association of Port Authorities (AAPA), the Joint Industry Group (JIG), the National Association of Manufacturers (NAM), the National Customs Brokers and Forwarders Association of America (NCBFAA), the International Compliance Professionals Association (ICPA), the Retail Industry Leaders Association (RILA), the TSN, the U.S. Chamber of Commerce, and the World Shipping Council (WSC). CBP also posted a ``strawman'' proposal on the CBP Web site along with a request for comments from the trade. Comment

   CBP has not provided any indication that it is in compliance with the requirements of section 343 of the Trade Act of 2002, including the requirement that the agency: ``[account] for the extent to which the technology necessary for parties to transmit, and for CBP to receive and analyze, data in a timely fashion, is available.'' CBP Response

   CBP is modifying existing systems to accommodate the proposed requirements. CBP has included the impacts to the trade to modify its processes as part of the cost, benefit, and feasibility study.

2. Protection of Confidential Information Presented to CBP

   Comment

   CBP should keep all the security filing data confidential from disclosure. The data should be held as not eligible for disclosure under 5 U.S.C. 552 et seq. or any other statute or regulation. For example, many U.S. firms do not want their federal tax identification number made available to others. The importer may not want the seller to know who the ultimate ``deliver to'' party is. The importer may fear back solicitation by the seller/exporter. In addition, the seller may not want the buyer to know the name and address of the actual manufacturer.

   In lieu of the importer of record and/or consignee number, the filer should be able to indicate the name and address of the importer of record and ultimate consignee. American companies remain concerned about the misuse of the importer of record number by parties to whom such information is generally not provided for business confidential and other similar reasons. CBP Response

   CBP agrees that we should keep Importer Security Filing, vessel stow plan, and container status message information confidential, except to the extent required by law. Pursuant to the authority under both section 343(a) of the Trade Act (19 U.S.C. 2071 note) and section 203(d) of the SAFE Port Act (6 U.S.C. 943(d)), CBP is proposing to amend 19 CFR 103.31a to include the Importer Security Filing elements (including the importer of record number), vessel stow plan information, and container status message information to the list of information that is per se exempt from disclosure under 19 CFR 103.12(d), unless CBP receives a specific request for such records pursuant to 19 CFR 103.5, and the owner of the information expressly agrees in writing to its release.

   While the importer, as defined in these regulations, is proposed to be responsible for providing the Importer Security Filing 24 hours prior to lading, CBP is proposing to allow the importer to use a licensed customs broker, in addition to other parties, to submit the Importer Security Filing. CBP recognizes the concerns of parties in these instances about sharing their confidential business information. If an importer with confidential business interests chooses to use an agent to file, the importer may choose to execute confidentiality agreements to protect those interests. Pursuant to 19 CFR 111.24, customs brokers are required to keep information pertaining to the business of clients serviced by the broker confidential.

3. Test of Concept and Phase-in Enforcement

   Comment

   There should be a test of the concept and the mechanics of the advance data elements filing with a volunteer group before the concept moves to the phase-in period. The test should involve the proposed data set and should include the approved interfaces (such as ABI and AMS) for initial programming. In order for the test results to have the greatest validity, CBP should seek participation from parties in the supply chain who ship from varying parts of the world and include small, medium and large companies as well as those who ship using forwarders and those who do not. An invitation to participate in the testing should be published in the

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   Federal Register and on the CBP Web site. CBP Response

   As part of CBP's pre-existing Advance Trade Data Initiative (ATDI), CBP is working with a wide variety of volunteers from the world trade community to test the trade's ability to provide data, including some elements of the Importer Security Filing, to CBP. The ATDI test results will assist CBP in understanding the various formats that are being used in the international trade community to share supply chain information. Under the foregoing circumstances, we do not believe that a new or separate test is needed to evaluate the practical requirements of this rule. Comment

   Once the final regulations are effective, CBP should adopt a phase- in period, during which CBP should publish FAQs addressing issues associated with the regulations and specific guidelines on how the phase-in will work and what rules will apply. CBP should include outreach to other countries. CBP Response

   CBP agrees. Regardless of when the regulations on this subject go into effect, CBP will adopt a phase-in enforcement process similar to that which was utilized when the 24-Hour Rule and Trade Act regulations were implemented. Depending on the circumstances, CBP may take an ``informed compliance'' approach following the effective date of this rule. Through the phase-in enforcement process, CBP will work with the trade to ensure informed compliance. CBP will continue to update the trade on issues associated with the proposed regulations in the form of FAQs, postings on the CBP website, other outreach to the trade, and consultation with foreign countries. Comment

   During any test period or phase-in period, CBP should consider requiring fewer than all of the Importer Security Filing elements and carrier elements. CBP Response

   CBP disagrees. Through discussions with the trade and through the development of ATDI, CBP has found that the elements required under the proposed regulations are generally available. Moreover, CBP does not agree that a phase-in period requiring fewer than all of the required Importer Security Filing elements and carrier elements would fulfill the goal of enhancing the government's risk assessment capabilities.

4. Other General Comments

   Comment

   Some importers may not be aware of the Importer Security Filing requirement, especially those traveling overseas who happen to buy something to ship. CBP Response

   Under the proposed regulations, the importer, as defined in these regulations, is ultimately responsible for the timely, accurate, and complete submission of the Importer Security Filing. CBP will conduct outreach to the public and the trade, including postings to the CBP website to promote widespread knowledge of this requirement during the phase-in enforcement period following the final rule. Comment

   Shipments may be diverted to Canada or Mexico to avoid the proposed requirements. CBP Response

   CBP disagrees. This proposal is focused on ocean cargo primarily pursuant to the requirements under the SAFE Port Act. As such, this proposal is an incremental step toward meeting the goal of securing shipments to the United States. CBP does not expect shipments to be diverted to Canada or Mexico to avoid the proposed requirements. CBP will continue to evaluate the effectiveness of this rule and will consider additional steps, including expanding the advance data requirements for other transportation modes. Comment

   If containers cannot be laden aboard the vessel, based on existing service contracts, companies quite possibly will face delays while they await another vessel for the specified contract service. These types of delays would create additional security risks. CBP Response

   With regard to the concern that the proposed rule may adversely affect the efficiency of international shipping operations, CBP recognizes this legitimate concern and has taken steps to address it in the development of this rulemaking. First, it is important to note that under the proposed regulations, it is the information about the contents of a shipping container, not the container itself, that must be presented to CBP 24 hours prior to lading at a foreign seaport. Under this proposed rule, so long as the Importer Security Filing is provided to CBP 24 hours in advance of lading, the container itself may be brought to the seaport at a later time. Second, the development of this proposal has been designed to take advantage of the existing shipping cycle. In most foreign seaports, containers destined to the United States are often stored at terminals for several hours or several days before lading. This provides ample opportunity for CBP and its foreign CSI partners to identify and screen potentially high-risk containers within the normal shipping cycle and without causing any unnecessary delays. Third, by screening potentially high-risk containers at foreign seaports during the normal shipping cycle, CBP will use the additional advance information to further expedite low risk shipments. This should not only reduce delays associated with targeting and screening containers for security purposes upon arrival in the United States; it should also add greater predictability to the movement of containers through domestic seaports.

   CBP recognizes that some changes to business practices may be required in order to transmit the data required under this proposed rule. For example, although much, if not all, of the data required by CBP is available prior to lading, CBP recognizes that businesses currently may not be configured to collect and transmit such information in compliance with the rule. This is one of the reasons that CBP is proposing to phase in enforcement of the rule--to strike an appropriate balance between the needs of business and the need of the government to address the immediate threat that international terrorist organizations pose to the United States and the global economy. Comment

   CBP should ensure that the information collected pursuant to the proposed regulations will be used exclusively for ensuring transportation safety and security, and not for any other commercial enforcement purposes. CBP Response

   CBP agrees. If the proposed regulations are adopted as final, pursuant to section 343(a)(3)(F) of the Trade Act of 2002, as amended by the MTSA, CBP will use the data required by this rule ``exclusively for ensuring cargo safety and security and preventing smuggling'' and will not use the data for ``determining merchandise entry or for

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   any other commercial enforcement purposes.''

   VI. Amendments to Bond Conditions

   In order to provide a clear enforcement mechanism for the proposed requirements, CBP is proposing to amend regulations covering certain bond conditions to include agreements to pay liquidated damages for violations of the new proposed regulations. CBP is also proposing to amend the bond conditions for violations of the advance cargo information requirements under the Trade Act regulations in order to make the liquidated damages amounts for those violations consistent with the liquidated damages amounts for violations of the proposed requirements. As discussed above, upon implementation of the final rule, CBP will adopt a phase-in enforcement process for the new requirements similar to that which was utilized when the 24-Hour Rule and Trade Act regulations were implemented.

1. Bond Conditions Related to the Proposed Importer Security Filing, Vessel Stow Plan, and Container Status Message Requirements

   The proposed regulations would add a new condition to those provisions in 19 CFR 113.62 required to be included in a basic importation and entry bond. Specifically, CBP is proposing to amend 19 CFR 113.62 to include a condition whereby the principal agrees to comply with the proposed Importer Security Filing requirements. If the principal fails to comply with the proposed Importer Security Filing requirements, the principal and surety (jointly and severally) would pay liquidated damages equal to the value of the merchandise involved in the default.

   The proposed regulations would also amend those provisions in 19 CFR 113.64 required to be included in an international carrier bond. Specifically, CBP is proposing to amend 19 CFR 113.64 to include three new conditions. First, a new condition would be added whereby the principal agrees to comply with the proposed Importer Security Filing requirements if the principal elects to provide the Importer Security Filing on behalf of an importer, as defined in these regulations. If the principal fails to comply with the proposed Importer Security Filing requirements, the principal and surety (jointly and severally) would agree to pay liquidated damages equal to the value of the merchandise involved in the default. Second, a new condition would be added whereby the principal agrees to comply with the proposed vessel stow plan requirements. If the principal fails to comply with the proposed vessel stow plan requirements, the principal and surety (jointly and severally) would agree to pay liquidated damages of $50,000 for each vessel arrival. Third, a new condition would be added whereby the principal agrees to comply with the proposed container status message requirements. If the principal fails to timely provide CSMs for all events that occur relating to a container, for which the carrier creates or collects CSMs in its equipment tracking system, the principal and surety (jointly and severally) would pay liquidated damages of $5,000 for each violation, to a maximum of $100,000 per vessel arrival.

   Lastly, the proposed regulations would amend those provisions in 19 CFR 113.73 required to be included in a foreign trade zone operator bond. Specifically, CBP is proposing to amend 19 CFR 113.73 to include a condition whereby the principal agrees to comply with the Importer Security Filing requirements. If the principal fails to comply with the proposed Importer Security Filing requirements, the principal and surety (jointly and severally) would pay liquidated damages equal to the value of the merchandise involved in the default.

2. Bond Conditions Related to the Trade Act Regulations

   The proposed regulations would also amend the liquidated damages amounts for violations of the advance cargo information requirements under 19 CFR 4.7 and 4.7a in order to make those amounts consistent with the liquidated damages amounts for violations of the proposed container status message requirements ($5,000 for each violation) and more in line with the liquidated damages for violations of the proposed Importer Security Filing requirements. Accordingly, CBP is proposing to amend 19 CFR 4.7, 4.7a, and 113.64 to include liquidated damages amounts of $5,000 for each violation of the advance cargo information requirements, to a maximum of $100,000 per conveyance arrival.

   VIII. Regulatory Analyses

1. Executive Order 12866

   This rule is considered to be an economically significant regulatory action under Executive Order 12866 because it may result in the expenditure of over $100 million in any one year. Accordingly, this proposed rule has been reviewed by the Office of Management and Budget (OMB). The following summary presents the costs and benefits of the proposed rule plus a range of alternatives considered. (The ``Regulatory Assessment'' can be found in the docket for this rulemaking: http://www.regulations.gov; see also http://www.cbp.gov).

   In this analysis, we first estimate current and future baseline conditions in the absence of the proposed rule using 2005 shipping data. In this baseline analysis, we characterize and estimate the number of unique shipments, carriers, and vessel-trips potentially affected by the proposed rule. We then identify the incremental measures that importers and carriers will take to meet the requirements of the proposed rule and estimate the costs of these activities, as well as the cost to CBP of implementing the rule. Next, relying on published literature, we identify hypothetical scenarios describing representative terrorist attacks potentially prevented by this regulation and estimate the economic costs (i.e., the consequences) of these events. We compare these consequences to the costs of the proposed regulation and estimate the reduction in the probability of a successful terrorist attack resulting from the proposed regulation that would be required for the benefits of the regulation to equal the costs of the regulation. Finally, we consider the distribution of costs to sensitive subgroups such as small entities and the energy sector.

   As of the projected effective date of the regulation, we estimate that approximately 11 million import shipments conveyed by 1,200 different carrier companies operating 50,000 unique voyages or vessel- trips to the United States will be subject to the proposed rule. Table 1 summarizes the results of the regulatory analysis. We consider and evaluate the following four alternatives:

   Alternative 1 (the chosen alternative): Importer Security Filings and Additional Carrier Requirements are required. Bulk cargo is exempt from the Importer Security Filing requirements;

   Alternative 2: Importer Security Filings and Additional Carrier Requirements are required. Bulk cargo is not exempt from the Importer Security Filing requirements;

   Alternative 3: Only Importer Security Filings are required. Bulk cargo is exempt from the Importer Security Filing requirements; and,

   Alternative 4: Only the Additional Carrier Requirements are required.

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   Table 1.--Summary of Findings

   Percent reduction in baseline risk Number of these events Discount rate

   Annualized costs Terrorist attack scenario that must be that must be avoided for

   Comment (2008-2017, $2007)

   achieved for benefits to equal costs benefits to equal costs

   Alternative 1 (chosen alternative): Importer Security Filings and Additional Carrier Requirements, bulk cargo exempt

   3%............................... $390 million to $620 Actual West Coast Port

   25.6 to 41.0 One event in 2 to 4 Preferred Alternative: million.

   Shutdown (12-days).

   years.

   Most favorable combination of cost and stringency. Hypothetical Nuclear

   0.1 to 0.2 One event in 700 to Attack.

   1,100 years. Hypothetical Biological

   0.9 to 1.4 One event in 70 to 100 Attack.

   years. 7%............................... $390 million to $630 Actual West Coast Port

   26.1 to 42.0 One event in 2 to 4 million.

   Shutdown (12-days).

   years. Hypothetical Nuclear

   0.1 to 0.2 One event in 600 to Attack.

   1,000 years. Hypothetical Biological

   0.9 to 1.4 One event in 70 to 100 Attack.

   years.

   Alternative 2: Importer Security Filings and Additional Carrier Requirements, bulk cargo not exempt

   3%............................... $390 million to $620 Actual West Coast Port

   25.7 to 41.3 One event in 2 to 4 More stringent than million.

   Shutdown (12-days).

   years.

   Alternative 1, but limited expected additional benefit for increased cost. Hypothetical Nuclear

   0.1 to 0.2 One event in 700 to Attack.

   1,100 years. Hypothetical Biological

   0.9 to 1.4 One event in 70 to 100 Attack.

   years. 7%............................... $400 million to $640 Actual West Coast Port

   26.3 to 42.3 One event in 2 to 4 million.

   Shutdown (12-days).

   years. Hypothetical Nuclear

   0.1 to 0.2 One event in 600 to Attack.

   1,000 years. Hypothetical Biological

   0.9 to 1.5 One event in 70 to 100 Attack.

   years.

   Alternative 3: Importer Security Filings only, bulk cargo exempt

   3%............................... $380 million to $610 Actual West Coast Port

   25.5 to 40.3 One event in 3 to 4 Similar cost to million.

   Shutdown (12-days).

   years.

   Alternative 1 with decreased effectiveness. Importer Security Filings and Additional Carrier Requirements are not working in tandem. Hypothetical Nuclear

   0.1 One event in 700 to Attack.

   1,100 years. Hypothetical Biological

   0.9 to 1.4 One event in 70 to 100 Attack.

   years. 7%............................... $390 million to $620 Actual West Coast Port

   26.1 to 41.2 One event in 2 to 4 million.

   Shutdown (12-days).

   years. Hypothetical Nuclear

   0.1 to 0.2 One event in 700 to Attack.

   1,000 years. Hypothetical Biological

   0.9 to 1.4 One event in 70 to 100 Attack.

   years.

   Alternative 4: Additional Carrier Requirements only

   3%............................... $3 million to $12 Actual West Coast Port

   0.2 to 0.8 One event in 100 to 600 Least cost, but also million.

   Shutdown (12-days).

   years.

   least effective alternative. Does not meet the statutory requirements of Section 203 of the SAFE Port Act nor provide data on shipment history. Importer Security Filings and Additional Carrier Requirements are not working in tandem. Hypothetical Nuclear