Details on CBP's Interim Final Rule on 10+ 2 for Maritime Cargo (Part VI - Carrier Requirements, Carrier/NVOCC Penalties)

This is Part VI of a multi-part series of summaries of the details of the interim final rule and highlights the carrier requirements, as well as amendments to the regulations on penalties/liquidated damages for the failure of vessel masters and non-vessel operating common carriers (NVOCCs) to provide manifest information. See future issues of ITT for additional summaries.

(Note that CBP stated in response to a question on the proposed rule that vessel operating carriers, rather than NVOCCs, are responsible for filing the vessel stow plan and container status messages (CSMs). However, CBP states that it will allow carriers to designate a third-party agent to transmit stow plans and CSMs.)

Vessel Stow Plan Requirements

In addition to the existing carrier requirements pursuant to the 24 Hour Rule, the interim final rule requires carriers to submit a stow plan for vessels destined to the U.S. Carriers must transmit the stow plan for vessels transporting containers so that CBP receives the stow plan no later than 48 hours after the carrier's 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 U.S.

(Vessels that exclusively carry bulk or break bulk cargo - are exempt from the stow plan requirement.)

EDI submission system. Carriers must submit the vessel stow plan via the CBP-approved electronic data interchange (EDI) system, which currently includes the Automated Manifest System (AMS), secure file transfer protocol (sFTP), or e-mail. If CBP approves of different or additional EDI systems, CBP will publish a notice in the Federal Register.

EDI standard. In response to a comment on the proposed rule, CBP states that it will accept vessel stow plans in the United Nations rules for Electronic Data Interchange For Administration, Commerce and Transport (UN EDIFACT) Bayplan/stowage plan occupied and empty locations message (BAPLIE) SMDG format, which is the industry-wide standard for carriers who currently use electronic stow plans. CBP will also work with carriers to accept the American National Standards Institute (ANSI) X.12 ''324'' format on a case-by-case basis. CBP states that other formats, such as the Adobe.pdf format, are not specifically designed for stow plans and, therefore, would be difficult for CBP systems to interpret. Therefore, it cannot justify the costs associated with supporting these additional formats at this time.

Required information. The vessel stow plan must include standard information relating to the vessel and each container laden on the vessel, including the following standard information:

Regarding the vessel

• Vessel name (including International Maritime Organization (IMO) number);
• Vessel operator; and
• Voyage number.

Regarding each container

• Container operator;
• Equipment number;
• Equipment size and type;
• Stow position;
• Hazmat code (if applicable);
• Port of lading; and
• Port of discharge.

Container Status Message Requirements

In addition to the existing carrier requirements pursuant to the 24 Hour Rule, the interim final rule also requires carriers to submit CSMs to CBP daily for certain events relating to all containers laden with cargo destined to arrive within the limits of a port in the U.S. by vessel.

According to CBP, CSMs are required for empty containers.

EDI submission system. Carriers must submit CSMs via the CBP-approved EDI system. The current EDI system for CSMs approved by CBP is sFTP. If CBP approves of a different or additional electronic data interchange system, CBP will publish a notice in the Federal Register.

EDI standard. CSMs created under either the ANSI X.12 standard or the UN EDIFACT standard are acceptable.

Timing. 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.

Carriers are not required to create or collect any CSM data other than those which the carrier already creates or collects on its own and maintains in its electronic equipment tracking system. Carriers must submit CSMs no later than 24 hours after the message is entered into the carrier's equipment tracking system.

Events requiring CSMs. The events for which CSMs are required are:

When the booking relating to a container which is destined to arrive within the limits of a port in the U.S. by vessel is confirmed;

When a container destined to arrive within the limits of a port in the U.S. by vessel undergoes a terminal gate inspection;

When a container, which is destined to arrive within the limits of a port in the U.S. 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.);

When a container, which is destined to arrive within the limits of a port in the U.S. 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.);

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

When a container which is destined to arrive within the limits of a port in the U.S. by vessel undergoes an intra-terminal movement;

When a container which is destined to arrive within the limits of a port in the U.S. by vessel is ordered stuffed or stripped;

When a container which is destined to arrive within the limits of a port in the U.S. by vessel is confirmed stuffed or stripped; and

When a container which is destined to arrive within the limits of a port in the U.S. by vessel is shopped for heavy repair.

As CBP is aware that it might be cost beneficial for some carriers to transmit all CSMs, rather than filter out CSMs relating to containers destined to the U.S. or relating only to the required events, carriers may transmit their ''global'' CSM messages, including CSMs relating to containers that do not contain cargo destined for importation into the U.S. and CSMs relating to events other than the required events. By transmitting CSMs

in addition to those required by this interim final rule, a carrier authorizes CBP to access and use those data.

Required information. For each CSM submitted to CBP by the carrier, the following information must be included:

• is associated with a specific vessel.
• Event code being reported, as defined in the ANSI X.12 or UN EDIFACT standards;
• Container number;
• Date and time of the event being reported;
• Status of the container (empty or full);
• Location where the event took place; and
• Vessel identification associated with the message if the container

Carriers are exempt from the CSM requirement for bulk and break bulk cargo.

Penalties/Liquidated Damages Provisions for Vessel Masters and NVOCCs

The interim final rule will also amend 19 CFR 4.7 and 4.7a regarding penalties/liquidated damages for failure to provide manifest information to read as follows (added text is bold and denoted by and deleted text is struck):

4.7(e) Failure to provide manifest information; penalties/liquidated damages. Any master [of the vessel] who fails to provide manifest information as required by 19 CFR 4.7, or who presents or transmits electronically any document required by 19 CFR 4.7 that is forged, altered or false, or who fails to present or transmit the information required by 19 CFR 4.7 in a timely manner, may be liable for civil penalties as provided under 19 USC 1436, in addition to damages under the international carrier bond of $5,000 for each violation discovered in addition to penalties applicable under other provisions of law. In addition, if any NVOCC as defined in 19 CFR 4.7(b)(3)(ii) elects to transmit cargo manifest information to Customs electronically and fails to do so in the manner and in the time period required by 19 CFR 4.7(b)(3)(i), or electronically transmits any false, forged or altered document, paper, manifest or data to Customs, such NVOCC may be liable for the payment of liquidated damages as provided in 19 CFR 113.64(c) (which the interim final rule redesignates as (d)), of $5,000 for each violation discoveredin addition to any other penalties applicable under other provisions of law.

4.7a(f) Failure to provide manifest information; penalties/liquidated damages. Any master [of the vessel] who fails to provide manifest information as required by 19 CFR 4.7a, or who presents or transmits electronically any document required by 19 CFR 4.7a that is forged, altered or false, may be liable for civil penalties as provided under 19 USC 1436, in addition to the damages under the international carrier bond of $5,000 for each violation discoveredin addition to penalties applicable under other provisions of law. In addition, if any NVOCC as defined in 19 CFR 4.7(b)(3)(ii) elects to transmit cargo manifest information to Customs electronically, and fails to do so as required by 19 CFR 4.7a, or transmits electronically any document required by 19 CFR 4.7a that is forged, altered or false, such NVOCC may be liable for liquidated damages as provided in 19 CFR 113.64(c) (which the interim final rule redesignates as (d)) of $5,000 for each violation discoveredin addition to other penalties applicable under other provisions of law.

CBP's Responses to Comments Regarding Carrier Requirements

The following are highlights of CBP's remarks in response to comments it received from the publication of its 10+2 proposed rule regarding the carrier requirements (see interim final rule for additional responses to comments on carrier requirements, etc.):

Vessel operating carriers are required to submit stow plan, CSMs. In response to comments regarding whether NVOCCs and terminal operators should be required to submit vessel stow plans and CSMs, CBP states that the vessel operating carrier (i.e., vessel operator) is required to submit the stow plan and CSMs.

CBP states that the vessel operator is responsible for the submission of the vessel stow plan because it is the party operating the vessel and transporting the cargo to the U.S. and all vessel operating carriers who create or collect CSMs for cargo that is destined to enter the limits of a port in the U.S., including slot and other vessel sharing partners, are responsible for the submission of CSMs.

Carriers may designate third party agent to submit stow plans, CSMs. CBP further states that in response to requests from the trade, CBP will allow the responsible carrier to designate a third party agent to transmit stow plans and CSMs. However, the obligation and liability for those requirements remains with the carrier.

Issuance of "Do Not Load" messages. In response to questions regarding whether "Do Not Load" messages would be issued, whether an importer's cargo would be subject to increased scrutiny if the carrier fails to submit a vessel stow plan or CSM, whether the ISF Filer will be notified if a DNL is issued in this instance, and whether the importer is liable for vessel stow plan and CSM related errors, CBP stated that:

(a) if a carrier fails to submit a vessel stow plan or CSM, when a carrier is required to do so, CBP may take appropriate enforcement actions, including but not limited to, issuance of a DNL, a prelude to a denial of a permit to unlade the container(s) upon arrival in the U.S.;

(b) CBP will not notify the party who filed the ISF regarding DNL messages not related to their ISF. If parties wish to share these data, they will need to do so privately; and

(c) the importer is not responsible for submitting stow plans and CSMs to CBP and is therefore not liable for inaccuracies or errors.

Additional hazmat codes accepted. In response to a suggestion that CBP accept U.S. hazardous materials (hazmat) codes or Hazmat class in addition to the Hazmat-UN code that CBP proposed, CBP states that it will accept any widely recognized commercially acceptable hazmat identification numbers and classifications that the carrier uses in the normal course of business, such as those listed on the U.S. Department of Transportation Hazardous Materials Table.

New accurate stow plan must be submitted upon discovery of inaccuracies. In response to a question about whether carriers need to amend stow plans, CBP states that a carrier must submit a new accurate stow plan immediately upon discovery of any inaccuracies. However, the carrier will still be liable for enforcement actions resulting from the inaccurate vessel stow plan.

CSMs required only from carriers with electronic equipment tracking systems. In response to a question regarding carriers that do not have an electronic equipment tracking system, CBP notes that if a carrier currently does not create or collect CSMs in an equipment tracking system, the carriers is not required to submit CSMs to CBP.

¹The interim final rule is 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.

See ITT's Online Archives or 11/25/08, 11/26/08, 12/03/08, 12/09/08, and 12/10/08 news, 08112505, 08112605, 08120305, 08120905, and 08121010, for Parts I-V of BP's series of summaries on the details of CBP's 10+2 interim final rule.

See ITT's Online Archives or 11/24/08 news, 08112400, for BP summary announcing the publication of CBP's 10+2 interim final rule, with links to other recent BP summaries on 10+2.).

CBP contact - Richard DiNucci (202) 344-2513

Interim final rule (D/N USCBP-2007-0077, CBP Dec. 08-46, FR Pub 11/25/08) available at http://edocket.access.gpo.gov/2008/pdf/E8-27048.pdf.