Capitol Comments

Customer Proposes Advance Filing Requirements for Ocean Vessels

By Peter Mayberry and Jessica Franken | October 8, 2009

measure would create new advance filing requirement for importers to the U.S.

On January 2, 2008, the U.S. Customs and Border Protection (CBP) agency published notice in the Federal Register outlining its long-awaited Advance Trade Data Elements proposal, which would create new advance filing requirements for maritime importers and carriers bringing cargo to the U.S.The purpose of the proposal, according to CBP, is to help the agency better address the threat of terrorists smuggling contraband into the U.S. via shipping containers.

To achieve this goal, the draft rule seeks to expand upon the agency's so-called "24-Hour Rule", which currently requires carriers to submit cargo manifest information 24 hours before containers are loaded onto a U.S.-bound ocean vessel. It is also being called the "10+2" proposed rule because it would require importers to submit to the agency 10 additional data elements and would require ocean carriers to file two additional data sets before bringing shipments to the U.S.

According to CBP Commissioner W. Ralph Basham, the proposed regulations "will improve CBP's ability to target high risk cargo by identifying actual cargo movements and improving the accuracy of cargo descriptions...[and] improve our ability to facilitate lawful international trade by identifying low-risk shipments much earlier in the supply chain."

Many in the shipping community, however, fear otherwise. Critics of the proposal in general, in fact, worry that the proposed requirements will be overly burdensome and add an extra layer of bureaucracy to an already complex system. But even though the "10+2" is officially still just a proposal and the agency is currently accepting public comments, most knowledgeable observers expect that it—or something similar–will move forward in the coming months. Furthermore, CBP has made it clear that it intends to expand the regulation to all modes of transportation at a later date. With this in mind, this article will review the key features of the proposed regulation.


As many in the international trade community already know, the "10+2" proposed rule is one of several initiatives launched in the last several years to improve CBP's targeting, inspection and risk assessment processes for shipping containers. In addition to the 24-Hour Rule, the agency has implemented the Container Security Initiative (CSI), the Customs Trade Partnership Against Terrorism (C-TPAT), developed an Automated Targeting System (ATS), all of which rely on data supplied by the trade community.

Until now, however, CBP has relied upon carrier cargo declarations collected under the 24-Hour Rule to generate risk assessments for pre-loaded vessels. This solution worked well as a quick fix in the days after the September 11 attacks, the agency notes, but in the following years after various internal and external government reviews, CBP has concluded that "more complete advance shipment data would produce even more effective and more rigorous cargo risk assessments." With this in mind, the agency began in late-2004 to look at specific data elements that could be used to make the risk assessment system more effective. After conducting internal reviews, consulting with industry stakeholders and other advisory committees, the agency issued a "strawman" proposal that included many of the same elements found in the current draft.

Shortly thereafter, the Security and Accountability for Every Port Act of 2006 (P.L. 109-347, also known as the "SAFE Act") was enacted which, among other things, mandated the "electronic transmissionof additional data elements for improved high-risk targeting, including appropriate security elements of entry data as advanced information with respect to cargo destined for importation into the United States prior to loading of such cargo on vessels at foreign seaports."
With this new statutory mandate in place, CBP released the proposal currently under consideration.


Under the proposed rule, importers would be required to transmit to Customs an "Importer Security Filing" describing the cargo no later than 24 hours before it is laden onto a vessel. The Importer Security Filing would have to contain 10 data elements, including: manufacturer (or supplier) name and address; seller name and address; buyer name and address; ship to name and address; shipment recipient; container stuffing location; consolidator (stuffer) name and address; importer of record number/FTZ applicant identification number; consignee number; country of origin; and the commodity Harmonized Tariff Schedule (HTS) number.

Customs notes that the security filings for Foreign Remaining on Board (FROB), Immediate Exportation (IE) and Transportation and Exportation (T&E) in-bond shipments would only need to identify five data elements including: booking party name and address; foreign port of unloading; place of delivery; ship to name and address; and commodity HTS number. Furthermore, recognizing that FROB is often laden based on last-minute carrier decisions, FROB security filings would only need to be transmitted at some point before loading.

Ocean carriers, meanwhile, would be required to transmit to CBP a "vessel stow plan" describing the physical location of cargo on the vessel no more than 48 hours after the vessel has departed from the last foreign port, or in the case of ships traveling less than 48 hours, at some point before it arrives at its first U.S. port. The stow plan would include: the vessel name; operator; voyage number; container operator; equipment number; equipment size and type; stow position; hazmat-UN code; port of loading; and port of discharge.

Carriers would also be required to submit to CBP container status messages (CSMs) reporting terminal container movements (e.g., loading and discharging the vessel) and changes in status of containers (e.g., empty or full), but they would not have to collect any data beyond what they already gather and maintain in their electronic equipment tracking systems. Both the stow plan and CSM would have to be submitted via the CBP-approved electronic data interchange system.

Finally, the draft regulation would amend regulations covering certain bond conditions to include agreements to pay liquidated damages for violations of the proposed regulations. CBP has said it will adopt a phase-in enforcement process for the new requirements similar to that which was utilized when the 24-Hour Rule was implemented.

CBP estimates the proposed regulation will cost industry $3.3-5.2 billion over 10 years. But based on expected volume of shipments over the coming decade—nearly 140 million containers are expected to reach U.S. ports during that time—the agency expects the regulation will only add an extra $20 to $38 to the cost of each shipment, a tiny fraction of the $37,000 median value of these shipments and nothing compared to the cost of a catastrophic terrorist attack.

For its part, INDA, Association of the Nonwoven Fabrics Industry, has asked its International Trade Advisory Board to review the CBP proposal to determine if our industry should file comment on the issue. CBP will accept comments until March 3, 2008, and more information can be found at the agency's website,
Peter Mayberry's column appears monthly in Nonwovens Industry.