CBP will split the ACE deployment planned for Dec. 9 into two separate deployments, said Monica Crockett, CBP director-entry summary, accounts and revenue during a Dec. 4 conference call. The agency will push its deployment of statements to Jan. 6, while still deploying e214 foreign-trade zones admissions in ACE and manufacturer ID creation on Dec. 9, she said.

CBP will also make available on Dec. 9 in the production environment the "new ACE statement reports to allow" the trade "to also test with us as we continue in our parallel mode processing," said Crockett. CBP decided further parallel testing is needed "because we did not have an opportunity to process monthly statements while in parallel mode," she said. CBP is also "closely monitoring the potential of a government funding lapse on Dec. 8 and will provide further communication regarding any impact to deployment as early as possible should that happen," she said.

The National Customs Brokers & Forwarders Association of America filed a petition for reconsideration with the Federal Communications Commission over recent agency rule changes involving radiofrequency device imports.

The FCC's rule removed Form 740 filing requirements for RF device imports, but retained compliance requirements and said customs brokers can be a "responsible party" for import compliance. "We urge the FCC to reconsider the rule to ensure that the responsible party is a person positioned to know important details about the product and its supply chain," the NCBFAA said.

The NCBFAA previously noted its objections within the rulemaking process, but the FCC went forward with the regulations, including language seen by the association as onerous. "To the extent customs brokers are included in this rule, the responsibilities assigned to brokers should be reasonably proportionate to their function in the supply chain," the NCBFAA said.

CBP issued a long awaited final rule to make various changes to the in-bond regulations. "The changes in this rule, including the automation of the in-bond process, will enhance CBP’s ability to regulate and track in-bond merchandise and ensure that in-bond merchandise is properly entered or exported," it said. The final rule includes several changes from the proposal, which CBP issued in 2012.

Among other changes, "CBP is eliminating or changing 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 also decided not to shorten the arrival reporting requirement to 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. CBP will allow for "flexible enforcement" for 90 days after the Nov. 27 effective date, it said.

CBP will postpone until Dec. 9 the mandatory use date for e214 foreign-trade zones admissions in ACE, Acting CBP Commissioner Kevin McAleenan said at the National Customs Brokers & Forwarders Association of America Government Affairs Conference on Sept. 11 in Washington. The delay of the deadline, previously set for Sept. 16, comes in response to concerns from industry, McAleenan said. CBP will make a formal announcement on Sept. 11, he said.

“Even though programming is completed and tested,” the delay is meant to “ensure FTZ industry readiness,” McAleenan said. The National Association of Foreign-Trade Zones asked CBP for the delay, in a letter to CBP officials dated Sept. 7. A “lift-and-shift” of the e214 from the legacy Automated Commercial System to ACE has not gone as smoothly as planned, with testing of the e214 capability in ACE revealing a “disturbing number of systemic problems and new issues that need to be addressed before the roll-out,” the letter said.

As of the time the letter was written, an “end-to-end test” of standard zone admissions processes and direct delivery processes had not yet been successfully completed, NAFTZ said in the letter. In light of the testing issues and disruptions to CBP and FTZ operators, particularly petroleum refiners, caused by Hurricanes Harvey and Irma, the trade group had asked for a delay of four to six weeks.

The trade community should plan for the Port of Houston and other ports affected by Hurricane Harvey to be closed for the “foreseeable future,” and start sending cargo to other ports until damage from the storm can be fully assessed, said Gary Schreffler, acting chief of CBP’s Cargo Control & Release Branch, during a call held Aug. 29. Recent guidance issued by CBP requesting diversion of cargo to other ports applies only for the short term, affecting shipments already on the water. Shipments leaving ports now should find other destinations, as affected ports could be closed for a month or more, he said.

In its guidance, CBP said only changes to manifests are necessary, and no changes required for entries that have already been filed for diverted shipments. Changes to Importer Security Filings aren’t necessary, and CBP will not issue liquidated damages for ISF filings that list Houston and other affected ports as the port of arrival, Schreffler said. The Food and Drug Administration has agreed that changes to prior notices are also not necessary.

CBP’s top priority now is facilitating movement of cargo, but the agency will soon issue guidance on how it will handle statements and reconciliation entries affected by the port closures, Schreffler said. The agency will also likely relax permitting procedures to allow brokers permitted only in Houston to file at other ports. “One off” scenarios are expected, and CBP will continue to work with the trade community to address them, he said. In the meantime, CBP continues to monitor Harvey as it moves along the Gulf Coast for potential impacts on other ports, including the Port of New Orleans, he said.

The addition of seats to a cargo van and their removal immediately after importation constitutes “legitimate tariff engineering” to obtain a lower duty rate applicable to passenger vehicles, said the Court of International Trade in an Aug. 9 decision that was released the evening of Aug. 16. Tariff classification is determined based on an article’s condition at the time of importation, and the steps Ford took to manufacture its Ford Transit Connect vans after importation are irrelevant to the classification analysis, CIT said.

A manufacturer has the right to make its goods as it chooses, even if a process lacks a
"manufacturing or commercial purpose” and is meant only to achieve a lower duty rate, said CIT, citing a 19th century Supreme Court ruling. Tariff engineering is legitimate as long as not by means of “disguise or artifice,” the trade court said.

At the time of importation, Ford’s Transit Connect vans with a modified, cost-reduced rear seat added before shipment from Turkey are principally designed for the transport of persons, CIT said. Even though the rear seats are removed and the vehicles are converted into cargo vans at the port after customs clearance, they still qualify for the 2.5 percent duty rate applicable to passenger vehicles from Europe, not the 25 percent duty rate for trucks in place when the vans were imported, it said.

CBP released a revised schedule for deploying post-release capabilities in ACE in a July 27 CSMS message. The agency will separate out the collections functionalities and "deploy the other post release capabilities of ACE core using a phased approach," said CBP.

CBP plans to deploy "Non-ABI Entry Summary/Lineless (for CBP only), Duty Deferral, e214 (electronic Foreign Trade Zone admission) and Manufacturer ID Creation" on Sept. 16, it said. Statements will be deployed on Dec. 16 and "Reconciliation, ACE Core Drawback and Trade Facilitation and Trade Enforcement Act (TFTEA) Drawback, Liquidation and Automated Surety Interface (ASI)" are scheduled for deployment on Feb. 24.

The U.S. Trade Representative is authorizing duty free treatment for certain travel goods of heading 4202 under the Generalized System of Preferences, it said in a list of the results of its 2016-2017 GSP Review (here). The list also includes USTR’s decisions to add other products to GSP, including certain rolled grains and essential oils of lemon, as well as USTR’s decisions on competitive need limitation and de minimis waivers. The changes take effect July 1.

“According to the information provided in the course of USTR’s review, making travel goods GSP-eligible for all GSP beneficiaries is expected to be neutral with respect to overall U.S. import levels, and therefore also to the U.S. trade balance, though this action may shift some of the overseas production of these products from non-GSP countries to GSP countries,” USTR said in a statement. The Obama administration deferred decisions on whether to add travel goods to GSP last June (here).

CBP again postponed its last major ACE deployment for post-release capabilities that was scheduled for July 8, it said in a June 27 CSMS message (here). "We have been conducting ongoing, rigorous testing to ensure these capabilities will operate successfully," said CBP. "Our latest efforts have revealed areas specific to collections that are in need of further testing before these capabilities can be deployed. Consequently, we are postponing the July 8, 2017 deployment, and are in the process of replanning. We will communicate further information as soon as possible."

CBP said earlier this month it would require ACE filing beginning July 8 for drawback, reconciliation and duty deferral entries and entry summaries following a previous delay (here). The agency will again provide 30-days' notice before deploying the capabilities, it said.

The World Customs Organization on June 14 released its latest tariff classification rulings, as well as changes to the Harmonized System Explanatory Notes and amendments to the WCO Compendium of Classification Opinions, from the 59th session of the Harmonized System Committee in March (here). Importers and exporters should verify implementation of these decisions in the relevant country before relying upon them, the WCO said.

International Trade Today will provide further details on all the changes in our issue later today.

First-time importers and importers delinquent on antidumping and countervailing duties may be subject to enhanced bonding and “other legal measures,” under an executive order signed by President Donald Trump on March 31 (here).

The executive order, meant to address the issue of unpaid AD/CV duties, requires that the Departments of Homeland Security and Commerce and the U.S. Trade Representative develop a plan by June 29 “that would require covered importers that, based on a risk assessment conducted by CBP, pose a risk to the revenue of the United States, to provide security for antidumping and countervailing duty liability through bonds and other legal measures, and also would identify other appropriate enforcement measures.”

The executive order defines “covered importers” as importers of record for which CBP has no record of any imports, or has a record that the importer has failed to fully pay or not paid AD/CV duties. The executive order references 19 USC 4321, a provision created by Section 115 of the Trade Facilitation and Trade Enforcement Act of 2015 that required CBP to develop a program to adjust bond amounts for importers based on risk assessments. Customs-Trade Partnership Against Terrorism Tier 2 and 3 participants are exempt under the statute.