Details on CBP's Interim Final Rule on 10+ 2 for Maritime Cargo (Part VIII - Bonding/Carrier Comments)

This is Part VIII of a multi-part series of summaries of the details of the interim final rule and highlights CBP's response to comments on bonding issues and carrier requirements it received on its 10+2 proposed rule. (See future issue of ITT for BP summary on the interim final rule's compliance issues.)

Bonding Issues

The following are highlights of CBP's responses to comments it received on bonding issues:

Interim final rule includes new ISF bond. In response to a comment that when an agent submits an Importer Security Filing (ISF) on behalf of an importer, both parties should not be required to obtain bonds, CBP agreed and stated that the interim final rule reflects a change to remove the requirement that the filer have a separate bond. The interim final rule includes a new ISF bond and will allow the ISF Importer to use a basic custodial bond or new ISF bond in addition to the bond types included in the proposed rule. If the ISF Importer does not have one of these bonds, the party must obtain a bond or designate a bonded agent to file under the agent's bond if the agent agrees in writing. CBP states that the ISF Importer is ultimately liable for the timely, accurate, and complete submission of the ISF.

Requests to file STBs will be evaluated on case-by-case basis. In response to a question as to whether a continuous or single transaction bond (STB) will be required, CBP states that generally, continuous bonds will be accepted for the ISF. Continuous bonds are verifiable electronically and will give CBP more transparency into the party and bond's existence. CBP states that requests to file STBs for ISFs will be evaluated by CBP on a case-by-case basis consistent with current practices.

CBP is not increasing bond amounts in interim final rule. In response to a question on whether CBP will change the required bond amounts, CBP states that it is not increasing bond amounts through the interim final rule, and if it does increase bond amounts in the future, it will do so through established procedures.

Demands for liquidated damages will be subject to mitigation on case-by-case basis. In response to a comment regarding the lack of risk assessment associated with CBP's proposed liquidated damages amounts, CBP states that any demand for liquidated damages will be subject to mitigation on a case-by-case basis. However, CBP states that mitigation will be the exception and not the rule.

CBP officials recently noted that mitigation guidelines are being prepared and will be made available to the public.

Carrier Requirements

The following are highlights of CBP's responses to comments it received on carrier requirements:

Vessel operating carriers are required to submit stow plan, CSMs. In response to comments regarding whether non-vessel operating common carriers (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. In addition, all vessel operating carriers who create or collect CSMs for cargo that are 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" (DNL) 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.

Submission of CSMs by carriers. 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 carrier is not required to submit CSMs to CBP. If a carrier does create or collect CSMs, the carrier's obligation to transmit CSMs ends upon discharge of the cargo in the U.S. However, a carrier may transmit other CSMs in addition to those required by the interim final rule. By transmitting additional CSMs, the carrier authorizes CBP to access and use those data.

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, 12/10/08, 12/17/08, and 12/19/08 news, 08112505, 08112605, 08120305, 08120905, 08121010, 08121710, and 08121905, for Parts I-VII of 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 Di Nucci (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.