CBP Opens New Comment Period on Regulatory Analysis of In-Bond Process Changes

No Delay Expected, Says CBP

The notice "will not delay CBP’s preparation of the final rule," said a CBP spokesman. "CBP is still in the process of reviewing and analyzing the detailed comments that have been submitted in response to the NPRM in order to determine what changes, if any, are necessary. We expect that process to take several months."

Due to an expected significant impact to small businesses, CBP performed and published an Initial Regulatory Flexibility Analysis (IRFA) to look at the impact, as required under the Small Business Regulatory Enforcement Fairness Act. CBP summarized the IRFA, which concluded a big effect was likely as a result of the proposal, in the original notice. CBP also said the full version would be posted to regulations.gov and requested comments on the IRFA. The full IRFA, which is dated September 2011, wasn't posted until July 11, according to regulations.gov.

CBP will now seek comments on the full IRFA, which is (here). CBP said it will not accept comments on any other topic. The IRFA identified three alternatives to the current in-bond process, the first of which served as the basis for the proposal.

No Regulatory Alternatives

CBP said in the IRFA it hadn't found "any significant regulatory alternatives to the [proposed] rule that specifically address small entities while also meeting the rule’s objective, which is to improve CBP’s ability to regulate, track, and control in-bond cargo and to ensure that the in-bond merchandise is properly entered and duties are paid or is exported."

According to the IRFA, under the proposal (Alternative #1), "entities filing in-bond forms and/or reporting in-bond arrivals by paper only (582 non-air carriers plus an unknown number of air carriers and other filers) would have to obtain electronic access to CBP or retain a third party agent or service provider." All filers (5,081 non-air carriers plus an unknown number of air carriers and other filers) would have to obtain and provide additional in-bond shipment data to CBP by reprogramming their existing business and information systems and processes, using a third-party service provider, or relying on their trade partners, it said.. "Those entities reporting arrivals (4,388 non-air carriers plus an unknown number of air carriers and other filers) would have to reprogram their existing business and information systems and processes or use a third party service provider to electronically report arrivals and arrival locations within 24 hours." IRFA notes the analysis is imperfect due to a lack of cost data and information.

Other alternatives considered in the IRFA cost less because they include fewer features, said CBP. For instance, Alternative #2 didn't include the requirement for the additional in-bond shipment data and information. and Alternative #3 would only affect a small number of entities that currently file in-bond forms by paper only.

(Under CBP regulations, imported merchandise may be transported in-bond. This process allows imported merchandise to be entered at one U.S. port of entry without appraisement or payment of duties and transported by a bonded carrier to another U.S. port of entry provided all statutory and regulatory conditions are met. At the destination port, the merchandise is officially entered into the commerce of the United States and duties paid, or, the merchandise is exported.)

Proposed Changes Would Eliminate Paper Form, Require Add'l Info, Etc.

Among other things, CBP states the proposed changes would:

• eliminate the paper in-bond application (CBP Form 7512) and require carriers or their agents to electronically file the in-bond application;
• require additional information on the in-bond application including the six-digit Harmonized Tariff Schedule number, if available, and information relevant to the safety and security of the in-bond merchandise;
• establish a 30-day maximum time to transport in-bond merchandise between U.S. ports, for all modes of transportation except pipeline;
• require carriers to electronically request permission from CBP before diverting the in-bond merchandise from its intended destination port to another port; and
• require carriers to report the arrival and location of the in-bond merchandise within 24 hours of arrival at the port of destination or port of export.

CBP also proposes various other changes, including the restructuring of the in-bond regulations, so they're more logical and better track the in-bond process. However, at this time, CBP is not proposing to change the in-bond procedures found in the air commerce regulations, except to change certain times periods to conform to the proposed changes in this document.

(See ITT's Online Archives 12022218 for Part I of a series of summaries of the proposal. Part I provides an overview of the major amendments proposed to the in-bond regulations. See ITT's Online Archives 12022317 for Part II of this series, which covers proposed revisions to the general requirements of the in-bond regulations in 19 CFR Part 18 Subpart A. See ITT's Online Archives Ref:12022418] for Part III of this series, which covers proposed revisions to 19 CFR Part 18 Subparts B through H on Immediate Transportation, Transportation and Exportation, pipelines, etc. See ITT's Online Archives 12022721 for Part IV of this series, which covers changes for withdrawals, shipments to other ports, etc. See See ITT's Online Archives 12022131 for initial summary announcing the availability of this proposed rule.)