CBP Final Rule on Changes to In-Bond Regulations Includes Several Revisions to 2012 Proposal
CBP's final rule on changes to the agency's in-bond regulations (see 1709270017) include some major deviations from the rules the agency proposed in 2012. The agency decided against requiring several new data elements for in-bond applications and won't reduce the arrival reporting requirements to 24 hours, it said. The final rule follows several years of consideration of the proposed rules, which were issued in 2012 (see 12022131). CBP said it plans to provide additional guidance on the ACE requirements.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
The final rule takes effect on Nov. 27, though CBP will allow for "flexible enforcement" 90 days after that date, it said. "In order to provide the trade with sufficient time to adjust to the new requirements and in consideration of the business process changes that may be necessary to achieve full compliance, CBP in implementing and enforcing the rule, will take into account challenges that carriers may face in complying with the rule, so long as carriers are making satisfactory progress toward compliance and are making a good faith effort to comply with the rule to the extent of their ability," it said. The agency will also give guidance and do outreach to "facilitate a smooth transition to the new requirements."
CBP eliminated or changed "several proposed required data elements on the in-bond application," it said. CBP won't require that the in-bond application filer provide information about which government agency oversees enforcement of the product or identify prohibited or restricted merchandise, it said. Instead, CBP will require the filer to give the six-digit HTS number, it said. "This is necessary to ensure that CBP knows what merchandise is being transported in-bond in light of the above changes to the required information."
CBP disagreed with commenters that said the agency should require the use of a licensed customs broker for in-bond applications. Despite the new requirements, "this information is generally available to the carrier and does not require the expertise of a customs broker and does not require making admissibility determinations," CBP said. Also, "the filing of an in-bond application does not constitute customs business requiring a licensed broker and CBP does not believe that CBP needs to mandate the use of customs brokers in order to safeguard sensitive commercial information," it said.
CBP also decided not to shorten the arrival reporting requirement to within 24 hours of arrival at the port of destination or exportation, it said. The current time limit for reporting will remain two days, it said. The agency also changed its treatment of barge transportation because of the "various factors that can delay barge shipments." Following comments that said it's "not feasible for all in-bond shipments transported by barge to be completed within 30 days," the final rule allows for 60 days in-transit time for barges, while keeping the 30-day limit on other modes, it said.
The agency also clarified that it will require information on “the quantity of the smallest external packing unit” within the application. CBP added a definition for the "bonded carrier" in response to questions about liability for failing to comply with in-bond requirements. The party that will be ultimately liable is the party whose bond is obligated in the in-bond record for the in-bond movement," the agency said. However, "when issuing claims and considering their mitigation, CBP will consider whether a party reasonably relied on information submitted to it from a third party," it said.
CBP also decided "the requirement to notify CBP when in-bond merchandise is transferred from one conveyance to another is not necessary." The agency will now require a report of arrival from the original bonded carrier and a new in-bond application from the new carrier "when in-bond merchandise is taken over by a subsequent bonded carrier which assumes liability for the merchandise."
The final rule also dealt with transportation of bonded merchandise with non-bonded merchandise differently. Whereas the proposal called for sealed containers for bonded merchandise, CBP agreed with commenters that "the limitations on transporting in-bond merchandise with non-bonded merchandise would unnecessarily hamper the transportation of in-bond merchandise." Such goods will be allowed to be transported together "in a container or compartment that is not sealed, if the in-bond merchandise is corded and sealed, or labeled as in-bond merchandise," CBP said.
The final rule continues to treat air carriers differently. Even though the ability to file electronic air in-bond applications was added in ACE since the rule was proposed, "changes to the regulations pertaining to in-bond movements by air will be handled under a separate rulemaking," it said. "Until such time, the 7512 paper form may still be used in the air environment."
(Federal Register 09/28/17)