Details of CBP’s In-Bond Test for Canadian Goods Moving thru U.S.

(See ITT’s Online Archives or 06/10/11 news, 11061009, for initial BP summary of CBP’s notice on this test.)

Test Could Expand to U.S. Goods Moving thru Canada and Become Permanent

This NCAP pilot test will be part of a joint CBP and Canada Border Services Agency (CBSA) Highway In-Transit Project, and could similarly be implemented (at a later time) on a pilot basis for shipments transiting through Canada (from one point in the U.S. to another point in the U.S.), or on a permanent basis for one or both types of transit movements.

(A March 2011 Memorandum of Understanding² on the In Transit Project specifies the criteria that highway carriers must meet in order to participate in the pilot and provides for the transmission of pre-arrival cargo (manifest) and conveyance information using mutually identified electronic data interchange (EDI) highway cargo (manifest) and conveyance transaction sets.

The MOU further allows for the confidential electronic sharing between the CBSA and CBP of certain manifest information to be used for the purposes of risk assessment and tracking of in-transit highway movement of commercial goods between Canada and the U.S.)

New Filing Code for Truck Carriers & New Data Element Needed for Pilot

In order to facilitate implementation of the pilot, CBP is designating a new filing code in the ACE Truck Manifest System for truck carrier participants to indicate that their shipments are being shipped as part of the In-Transit Project.

Additionally, carriers will file an additional data element, the Canadian Cargo Control Number (CCN), consisting of a CBSA-issued carrier code and a unique reference number assigned by the carrier. The CCN will allow the CBSA and CBP to track in-bond shipments being transported under the NCAP test and will facilitate the closing out of these Transportation and Exportation (T&E) entries. Carriers will only be required to report their arrival to CBP at the U.S. port of export and the CBSA will notify CBP when the shipment enters into Canada. At that point, the T&E will be updated in the system as exported.

Pilot Requires e-Manifest for T&E Entries, Eliminates Reporting Requirement

Highway movements of commercial goods that are transported through the U.S. from one point in Canada to another point in Canada must be transported in-bond and processed as T&E. The procedures for these in-bond shipments are addressed in 19 CFR 123.42 (available here). Among other things, this regulation requires the filing of a manifest and various reports to CBP and the CBSA regarding the movement of the goods.

The NCAP test will also require participants to file their T&E entries using an e-Manifest in the ACE Truck Manifest System and eliminates one of the reporting requirements.

No Diversions of In-Bond Shipments Will be Permitted

Carriers transporting a shipment through the U.S. as part of this NCAP test will be required to complete the T&E entry by exporting their shipment to Canada. Carriers will not be allowed to divert these shipments to a port that is not a land crossing port between the U.S. and Canada.

Participants Must Meet Certain Requirements, CBP Will Accept Only Nine

To participate in this NCAP test, a truck carrier must be a bonded carrier with CBP and the CBSA, be accepted by the CBSA to participate in the In-Transit Project, and must be able to transmit an e-Manifest using the American National Standards Institute (ANSI) X12 format to CBP. Additional information on how to participate in the In-Transit Project is available on CBSA’s website.

Carriers that wish to participate in this NCAP test should send a letter or email to CBP stating that they meet the eligibility requirements and that they wish to participate. The letter or email must include (1) the carrier’s name, (2) Internal Revenue Service number (IRS number), and (3) proof of acceptance by the CBSA to participate in the In-Transit Project. CBP will accept the first nine eligible carriers that apply and will notify the carriers that they have been accepted to participate in the NCAP test.

(Note that if a test participant fails to abide by the rules, procedures, or term and conditions of this and all other applicable Federal Register notices, fails to exercise reasonable care in the execution of participant obligations, or otherwise fails to comply with all applicable laws and regulations, then the participant may be suspended from participation in this test and/or subjected to penalties, liquidated damages, and/or other administrative or judicial sanction. Additionally, CBP has the right to suspend a test participant based on a determination that an unacceptable compliance risk exists.)

Future Expansion of the Test Will be Announced in Federal Register

Any future expansion in ACE to include a new in-bond filing code for in-transit movements through Canada and back to the U.S. (U.S-Canada-U.S) or expansion of this test to include other transmission methods, i.e., UN/EDIFACT or ACE Secure Data Portal, will be announced via a separate Federal Register notice.

¹The NCAP established in the Customs Modernization, in the North American Free Trade Agreement Implementation Act (Customs Modernization Act). The Customs Modernization Act provides the Commissioner of CBP with authority to conduct limited test programs or procedures designed to evaluate planned components of the NCAP.

²MOU is titled “Arrangement Between the Canada Border Services Agency and the Department of Homeland Security, United States Customs and Border Protection Regarding the Highway In-Transit Project”.