Customs Update:  Details on Advance Manifest Rules
(Published in the Journal of Commerce on Jul 22, 2003)

The long-awaited advance manifest rules are scheduled to be published in the July 23 Federal Register. These new rules address each mode of transportation (vessel, air, truck and rail) separately stating individual time frames within which shipment notification must be given to Customs and Border Protection (Customs) prior to arrival or departure.

Regardless of the mode of transportation, the manifest information must be sent to Customs in an approved electronic format for targeting and analysis. However, in a worthwhile concession, the agency will transition the rules taking effect at different times for different modes of transportation. Additionally, quite wisely, Customs built into the process an acknowledgment of the differing states of automation between vessel, air, rail and truck movements. The new regulations will not take effect for 90 days, or until Oct. 22, 2003. Comments in response to the latest proposals are due no later than August 22, 2003.

In explaining the new regulations, one of the first points Customs makes is that business proprietary information will remain confidential, except those portions of the vessel manifest which are already required to be publicly disclosed. In other words, air, rail and truck manifest data will not be available to the general public in any form, but mail shipments remain exempt from these new rules.

Intending to build the manifest reporting system relying on existing technology, Customs is banking on the Automated Export System for all outbound shipments. The Automated Manifest System already operating for vessel, rail and air will be relied upon for imports, while for truck shipments there is currently no automated system. Therefore, the Free And Secure Trade System (FAST), Pre-Arrival Processing System (PAPS), Border Release Advanced Screening and Selectivity (BRASS) and Customs Automated Forms Entry System (CAFES) and ABI In-Bond reporting will be called upon, at least until the Automated Commercial Environment (ACE) system is up and running.

For ocean shipments, the applicable time frame remains 24 hours prior to lading, but there was one notable change - the requirement that vessel operators file their manifests electronically. While some in the trade argued in favor of eliminating the filing requirement for NVOCCs, Customs held fast arguing that it needed details at the shipment level in order to make proper targeting determinations, especially since the advance manifest rule is an integral part of the success of the Container Security Initiative. While many of the concerns of the trade were incorporated into these final rules, Customs rejected the idea that importers or their brokers should provide shipment details in support of manifest targeting, finding instead that such an approach was "neither advisable nor practicable" at this juncture. Further, regardless of the mode, Customs reinforced that cargo remaining on board the carrier had to be manifested and reported within the same time frames as cargo being off-loaded.

These regulations become mandatory for ocean shipments within 90 days of publication, by Oct. 22, 2003, and apply to all vessel operators and only those NVOCCs choosing to participate.

Things have changed dramatically for air shipments. Customs' original proposal was 12 hours prior to lading but only eight hours for express courier shipments. From the outset, it was obvious to the trade these time frames were unrealistic. Customs has agreed and so will require advance notification only four hours prior to arrival from all origins except North America where a wheels-up approach is approved. North America includes Mexico, Canada, Central America, South America (north of the equator only) plus the Caribbean and Bermuda.

These rules are mandatory on all air carriers but allow a number of other parties to provide some of the data including ABI filers, CFS and consolidators, and express consignment carrier facilities; freight forwarders may also participate provided they qualify in one of these capacities and post the appropriate international carrier bond. In the event any of these parties provide the data, an appropriate identifier must be transmitted by the air carrier. This difference between air and ocean shipments is due to the advanced capabilities of Air AMS.

These rules become mandatory for air shipments on or after 90 days from July 23, 2003 but there could be delays in implementation generated by the need for training of Customs personnel, programming changes to Air AMS and/or time needed to complete certification testing of new participants.

For rail, the original proposal was 24 hours prior to lading. There was never any question, this time frame, too, was unrealistic. Customs will now require advance manifest information from rail carriers no later than two hours prior to arrival of the cargo. Customs settled on this time frame with the expectation that rail carriers will transmit information about many shipments well in advance of the two-hour time limit. Otherwise, Customs posited, it is likely there will be many more rail cars uncoupled for examination at the border!

Rail AMS is on par with Vessel AMS and so data will only be accepted from carriers. However, all forms of manifesting will be revisited when ACE is operational.

In responding to Customs' original proposal, many parties sought exemptions for one or another type of transaction or commodity. The rail context is the only one where one was granted - to cargo transiting through Canada or Mexico on its journey between two points within the U.S.

Here again, the transition period is 90 days from the date a given port becomes operational. Customs will publish information when those ports currently incapable do become operational. As in the ocean and air environment, all cargo remaining in the railcar must be manifested, even if it is transiting the U.S.

Needing to put something in place before Truck AMS is operational, Customs proposes a unique framework for truck shipments. Customs will allow 30 minutes advance notification if the trucker and importer are part of FAST, due to the pre-qualification required to be a member of this program. Under PAPS or ABI In-Bond, the minimum time frame is one hour. However, CAFES and BRASS will remain paper programs as neither, in the opinion of the agency, lends itself to automation. Eventually both will be phased out. For now, Customs is looking at modifying BRASS so that the parties eligible will be gradually reduced. CAFES will be allowed only at land border crossings where no other automation is available for in-bond shipments.

The transition period for truck shipments is much longer than any other mode, because, quite simply, currently there is no automation. As a result, the effective date of these truck rules will be 90 days from publication when Customs informs the public that an approved data interchange is in place and operational and states that carriers must commence using it to present documentation. Given the proposed interim system, either the carrier, the importer or broker will be allowed to submit advance manifest data.

One other notable exemption is cargo which qualifies for informal entry on a C.F. 368 or 368A, goods not valued in excess of $2,000 which are free of duty and entered on a C.F. 7523, and American products entered on a C.F. 3311. In those instances, the entry serves as both the entry and the manifest.

The Trade Act of 2002 also requires advance manifest data be submitted for export cargo. As there is no approved electronic data interchange system for exports, Customs has agreed to rely on the Automated Export System. AES is going to be upgraded by Census, but if there is no export manifest module in place when the new rules take effect, Customs will accept the following data elements through AES: mode of transportation, carrier identification, conveyance name, country of ultimate destination, estimated date of exportation and port of exportation.

Option 4 post-departure filing will be continued. Although not stated in the new proposal, Customs has announced publicly that it will continue to work with Census on AES but may well require all current participants to reapply so as to be sure it has sufficient data with which to screen these shipments after the fact. Customs has also said it will work with TSA's Known Shipper program. Clearly stated in the proposal is language explaining that Customs expects mandatory AES filing to be in place before mandatory AES manifest filing is enacted.

On the export side, the time frames are: vessel: no later than 24 hours prior to departure; for air: no later than two hours prior to scheduled departure; for truck, including express consignment couriers: no later than one hour prior to arrival at the border, and for rail: no later than four hours prior to the locomotive being coupled to a border-bound train.

Customs reiterated that requirements placed on exports by other agencies will remain in place. Similarly, requirements placed on imports by other agencies will remain in place, such as the FDA bioterrorism prior notice rules. Further, Customs' 72 hour advance notice requirement for vehicle exports remains unchanged.

One other area of contention with the trade was whether advance manifest notification would be mandated where no Census Shippers Export Declaration was required. Customs has answered that question with a resounding no by stating Census' exemptions apply in the manifest context as well.

While there remain many problems with the already existing vessel advance manifest rules in terms of Customs holding NVOCCs liable for acts which are controlled by the vessel operator, the fact remains Customs took the myriad of complaints it received to the original proposals, conducted many outreach efforts and seems to have come up with a framework which should allow the agency to screen and target shipments without untoward delays. We just have to hope that the implementation process is not as painful as what happened in the ocean environment!