Question: What is the purpose of this new Customs requirement?

Answer: Quite simply, US Customs wants to examine any cargo that it considers to be 'high-risk' before it is loaded onto a ship for the United States. Any cargo that is examined at a foreign port would not be re-examined in the United States barring unusual circumstance. Cargo that is not examined at a foreign port prior to loading would still be eligible to be examined once discharged in the United States per normal Customs practices.

Question: What does compliance entail?

Answer: Carriers must submit electronically a complete manifest to US Customs for each port of load at least 24 hours prior to cargo loading. To be clear, the 24-hour rule applies to the vessel calling US direct. The 24 hours is measured against EST. This means shipping instructions will have to have been received at the front office/input at the back office/transmitted to NAM branch/and then transmitted to Customs

Question: What about dummy bills?

Answer: Dummy bills or information or generic cargo references (FAK, etc) will no longer be permitted. It is not clear how this impacts supplemental bills/to order of shipper/to order/to order of banks/or amended bills.

Question: Is this just for Imports to the USA?

Answer: No, The requirement also extends to transshipments/FROB (Freight Remaining on Board)/and empty containers. In essence, any cargo discharging, discharging for further transshipment or merely transiting a United States port must be manifested and transmitted to US Customs 24 hours prior to being loaded to a vessel. Export cargo is subject to the same regulations, and will be managed through the current AES system will little to no process changes anticipated.

Question: How will this change cargo and documentation receiving standards at foreign ports of load?

Answer: While specific changes are yet to be determined, clearly this new requirement will have a very significant impact on current standards. Receipt of documentation will likely have to occur several days prior to loading. While cargo-receiving cutoffs may be affected (it is only the manifest information that is required early), please note that the time frame lines referenced against will be the "loading” date.

Question: How do carriers plan to comply?

Answer: All lines will need to amend their systems to comply. All lines realize the importance of developing Consistent rules for cargo receiving in order not to make this competitive situations.

Question: Does this affect cargo discharging in Canada?

Answer: Not directly, though US Customs has made it clear that they will work hand in hand with their Canadian counterparts and any cargo that appears to be routed over Canada to avoid the new requirements will likely be held at the port of discharge or the border crossing and considered high-risk cargo until examined.

Question: What happens to cargo loaded without manifest information being supplied to Customs?

Answer: Customs will reserve the right to have the carrier remove the container if they feel the container warrants inspection. Penalties for loading without proper and timely information could be levied against the carrier. .

Question: Are there penalties for non-compliance?

Answer: The penalties for non-compliances are potentially significant. They range from carriers being fined to carriers not receiving permission to discharge all or a portion of their cargo on a particular ship.

Question: Are any cargoes exempt (e.g. military)?

Answer: Only certain bulk cargoes are exempt and this is only after application to US Customs has been made for an exemption.

Question: How will Customs notify P&ONl. which cargoes are to be examined prior to loading?

Answer: Customs will generate a Hold message through their electronic automated Manifest System. It will be up to each carrier to determine how best to manage the information received from Customs in order to prevent the incorrect loading of containers.

Question: Where can I go for additional information on this topic ?

Answer: World Shipping Council which is the liner shipping industries US representative organization. (www.worldshipping.org)

Question: Does this new rule apply to Export cargo?

Answer: Not yet. Presently, the 24 hr Rule only applies to cargo imported into the U.S. However, the Trade Act of 2002 requires more information to be collected by Customs by the summer of 2003, so expect this to be expanded by next year.

Question: Can general descriptions such as "FAK" be used?

Answer: No. All general descriptions such as "FAK", "Cargo, NOS", "STC" or "Said to Contain", "Mixed Shipments", "General Cargo", "Foodstuffs" and "Chemicals", are prohibited. Customs will require a specific description which matches a Harmonized Code.

Question: Do I have to file a Cargo Declaration for cargo destined to another country?

Answer: Yes, if the vessel calls a U.S. Port. All "FROB" (freight remaining onboard) cargo must be filed if the vessel transits a U.S. Port.
For example, if the vessel loads in Rotterdam, destined to Hong Kong, but makes a call at a U.S. Port, regardless if the B/L is issued from Rotterdam to HK, it would still have to be filed with U.S. Customs. The main "trigger" is whether the vessel your goods are sailing on is calling a U.S. port during the voyage.

Question: My shipment is "To ORDER". Who do I show as the "Consignee"?

Answer: If the Consignee is not available, then the Cargo Owner (title holder) or Owner's Representative must be listed instead.

Question: Implementation Date: Explain how the implementation process for the rule will work. Will all manifests need to be filed starting after the 30-day implementation period on December 2? Will Customs refuse certificates to unlade cargo if manifest information is incomplete or not filed during the 60-day non-enforcement period? How will Customs conduct its enforcement activities during the early stages of the rule's implementation when it has no overseas personnel at most ports?

Answer: The effective date of implementation is December 2,2002. Carriers and/or automated NVOCC's will be required to submit a cargo declaration 24 hours before cargo is laden aboard the vessel at a foreign port for any vessel beginning the voyage on or after December 2, 2002. Any vessel that is beginning the entire voyage on or after December 2, 2002 must comply with the 24 hour manifest rule. Those vessels that are in between foreign ports of call on December 2 are not required to comply with the 24 hour manifest rule.
Customs will not initiate enforcement actions nor will unlading be denied during the 60-day period following December 2, 2002 for any non-fraudulent violations discovered.
Customs will coordinate with other foreign governments to perform examinations of shipments deemed to be of high-risk. Within the 60-day non-enforcement period there will be new CSI ports scheduled to begin operations.

Question: Enforcement Date: The enforcement date for the new regulations is February 1, 2003. Please confirm that this means the enforcement actions apply to vessels loading on or after that date and not to vessels that have loaded before that date but not yet arrived in the U.S.

Answer: Carriers and/or automated NVOCC's will be subject to enforcement actions for any vessel beginning the voyage on or after February 1, 2003. Any vessel that is beginning the entire voyage, on or after, is subject to full obligation of the 24 hour manifest rule. Those vessels that are in between foreign ports of call on February 1,2003 will not be considered for penalty action for violation of the 24 hour manifest rule.

Question: Requirement of Carriers on December 2, 2002: What will be required of carriers on December 2, 2002?

Answer: Automated carriers should begin to transmit cargo declaration information beginning with the first appropriate vessels that have begun their voyage. Carriers should begin to transmit all the cargo declaration information that they are capable of transmitting. Carriers should continue to show progress and increase the total number of bills of lading on each vessel for each transmission of the cargo declaration. Carriers should fully and completely comply with the 24 hour manifest rule as soon as possible but no later than February l' 2003. Carriers will be required to inform Customs as to when they will be capable of complete transmission within the 60 day non-enforcement period.

Question: Requirement of NVOCCs on December 2, 2002: What will be required of NVOCCs on December 2, 2002?

Answer: Those NVOCCs that are capable of transmitting electronically to Customs are required to do so on December 2, 2002 for those shipments that are eligible under the guidelines listed in the Implementation Date. Those NVOCCs that are working towards automation but have been unable to test will be authorized to submit paper cargo declarations directly to Customs 24 hours prior to lading at the foreign port. These NVOCCs must provide Customs with a date as to when they will be able to electronically transmit their cargo declarations to Customs. Additionally, those NVOCCs who are authorized to submit a paper cargo declaration to Customs must provide a copy of their traditional shipping documents to the vessel carrier in order to allow the carrier to abide by the regulations to maintain a copy of the vessel manifest on board the vessel.
Those NVOCCs who have not begun the process to automate or cannot prove to Customs that they have begun the automation process will be required to submit their cargo declarations directly to the vessel carrier for input into the vessel AMS program 24 hours prior to lading at the foreign port.

Question: Implementation at CSI and Non-CSI Ports: How does the application of this rule differ between CSI and non-CSI ports? How will holds on cargo from non-CSI ports be handled? Besides electronic messages through AMS, how will Customs notify origin ports of cargo to be held or examined?

Answer: Requirements for implementation of the 24-hour rule at CSI and non-CSI ports will be the same for vessel AMS participants. For non-automated carriers at CSI ports, paper manifests will be presented to U.S. Customs personnel at a designated location in these ports.

For non-automated carriers at non-CSI ports, paper cargo declaration must be presented to each port of unlading in the U.S. 24-hours prior to lading in the foreign port. Facsimiles and non-AMS electronic messages sent directly to Customs are not authorized. Non-automated vessel carriers may enlist the automated services of a Vessel Agent, Service Provider, local Port Authority, or a business partner in the U.S. The domestic party in receipt would deliver the cargo declaration information directly to Customs. When a non-automated vessel carrier has elected to submit a paper cargo declaration directly to Customs in the United States, the non-automated carrier is responsible for ensuring that complete cargo declaration information for each port of call in the United States is submitted to each Customs location for review 24 hours prior to lading at the foreign port.

For non-automated carriers that submit a paper a manifest, the party designated to present the cargo declaration to Customs will be the one to receive notifications from Customs of any cargo holds. Hold notices must also be provided to the vessel carrier from the non-automated NVOCCs.

NVOCCs who are in the process of automating will be authorized to present their paper cargo declaration directly to Customs, 24 hours prior to lading at CSI ports or to the local U.S. ports of call, as applicable.

Question: Trade Act of 2002: Does Customs contemplate new rulemaking under the 2002 Trade Act? If yes: Would Customs entertain modifications to the current rule under that process? Does Customs also expect to modify the rule as ACE comes on line to provide alternative means of information collection? What sort of transition would Customs contemplate?

Answer: Customs does not anticipate new rule making under the Trade Act of 2002 that would limit or restrict the requirements of the 24-hour rule.
As the various releases of ACE are completed and the ability to collect data and information is enhanced, Customs will re-evaluate the rule. Questions pertaining to the transition will be addressed once Customs and its trade partners involved with the development of ACE have identified the specific elements within ACE pertaining to this issue.

Question: Confidentiality: It appears that the only protection of business confidentiality would be by Customs delaying the release of the information. How does that prevent information from getting into the hands of a company's competitors or criminals?

Answer: The fact that information is provided directly to Customs addresses the concern of NVOCCs wishing to safeguard their clients' information from competitors. Customs has also provided the opportunity for non-automated NVOCCs who are in the process of becoming automated to continue presenting their paper cargo declarations to U.S. Customs, 24 hours prior to lading at the foreign port, at CSI ports or to local U.S. ports of call for non-CSI ports. Customs will also be issuing a separate Notice of Proposed Rulemaking to expand the list of parties who may file a biennial certification that would allow those parties to file on behalf of the importer or consignee. This separate Notice of Proposed Rulemaking is necessary because comments received on this issue were outside the scope of the original Notice of Proposed Rulemaking dated August 8, 2002.
Customs is regulated by statute (19 USC 1431(c)) regarding disclosure of manifest data. Congress must enact any changes to the statute.

Question: Non-AMS Carriers: How does the rule accommodate those who do not presently have access to the Automated Manifest System?

Answer: Carriers that are not automated will be required to submit a paper cargo declaration 24 hours prior to lading at the foreign port. NVOCC's that are not automated but are showing continued progress at becoming automated will be authorized to submit their paper cargo declaration to Customs 24 hours prior to lading at the foreign port for CSI ports and to the local U.S. ports of call, as applicable. Those NVOCCs that have not shown progress or the desire to become automated will be required to submit their cargo declarations to the carrier for input into AMS, 24 hours prior to lading at the foreign port. Customs will accept paper cargo declarations from non-automated NVOCC's during the 60 day non-enforcement period for non-fraudulent violations as long as the NVOCC is diligently working towards becoming automated and can prove that diligence to the local ports upon request.

Question: How will it be advantageous to be a C- TPA T participant under this rule?

Answer: Customs expects that its partners in C- TPA T will provide the required information under this rule as a regular part of their security-related procedures. Accurate and timely cargo declarations are critical to the delivery of the cargo release benefits that are part of C- TPA T participation. While C- TPA T participants will not be excluded from the advance reporting requirements, their participation in the program will be taken into account during the targeting process.

Question: COAC: How will the consultation process envisioned in the rule and the 2002 Trade Act involve the COAC and non-COAC members? Does Customs foresee this process evolving in a manner comparable to the C- TPAT process?

Answer: Customs expects that its partners in C- TPA T will provide the required information under this rule as a regular part of their security-related procedures. Accurate and timely cargo declarations are critical to the delivery of the cargo release benefits that are part of C- TPA T participation. While C- TPA T participants will not be excluded from the advance reporting requirements, their participation in the program will be taken into account during the targeting process.

Question: Canada/Mexico Shipments: Please clarify whether the final rule applies to cargo shipped from a foreign port to Canada or Mexico and then trucked or railed across the border to a final U.S. destination. How will Customs address the concern that cargo may be diverted from ocean carriers to truck or rail carriers as a means of circumventing the rule?

The final rule does not apply to cargo that is shipped to Canada or Mexico and into the U.S. by truck or rail. Customs has targeting personnel stationed at seaports in Canada and cooperation with Canadian authorities has been excellent. If either Customs administration suspected that goods were being routed in an attempt to evade scrutiny, those goods would likely be treated as high risk. For vessels that are departing Canada or Mexico with cargo destined for the United States, the 24 hour rule does apply.

Question: Containers at Dock: In response to concerns from the trade that containers will have to be delivered to a carrier several days before lading, Customs has said that it wants the information on cargo delivered earlier, not the container. Will Customs mandate that carriers enter information about a container on a manifest before the carrier has actually received the container?

Answer: Customs is not mandating that carriers submit cargo declaration information to Customs prior to receiving the container. That is a business decision for the carrier to determine. Many comments received stated that the container had to be physically located at the foreign port (dock) in order for the carrier to transmit the cargo declaration to Customs. Customs was clarifying that, for Customs purposes, the container did not have to be physically located at the dock for the carrier to transmit the cargo declaration to Customs.

Question: Liability: If a container is examined by Customs, either in the United States or at a foreign port, and the manifest description of the contents is, in Customs opinion, inaccurate, will the carrier be held liable for penalties or liquidated damages? What does Customs recommend carriers do to protect themselves from misleading descriptions on bills of lading?

Answer: Yes, in the stated circumstances, carriers can be held liable for penalties and NVOCC's can be held liable for liquidated damages. Carriers should establish business relationships with shippers to ensure accurate information is provided.

Question: Bonds: What are the mitigation guidelines for an NVOCC bond? What is the proposed penalty and potential mitigation if the information is not supplied, if it is supplied but untimely, if it is supplied but Customs finds it to be too general and potential liabilities if the information is inaccurate? Who is responsible the carrier or NVOCC if it relied on the information supplied by the shipper (product description and/or HTS number, quantity, etc)? Assuming that the carrier had no actual knowledge that the goods in the container were other than as described or that any of the other information might be inaccurate, who is liable? It is assumed that surety companies will only be held liable for claims under these new provisions for bonds issued on or after the effective date of the new regulations. Is that assumption correct? If so, can the field receive appropriate notification to avoid unnecessary claims?

Answer: Currently, Customs is formulating policy with regard to the assessment of penalties and claims for liquidated damages. Once the assessment policy has been approved, Customs will establish mitigation guidelines. The final rule indicates that in addition to penalties applicable under other provisions of law, carriers may be liable for civil penalties under 19 USC 1436 and NVOCC's may be liable for liquidated damages under 19 CFR 113.64(c).

Question: The party that provides the cargo declaration information to Customs is responsible for ensuring that the information is accurate. Customs will initially use informed compliance with the carriers, but if repeated violations occur Customs may assess penalties or claims for liquidated damages.

Answer: The assumption is not correct that sureties will only be held liable under bonds issued on or after the effective date. Current bonds guarantee payment of penalties and will be used and claims will be filed against these active bonds.

Question: Who is required to obtain an international carriers bond?

Answer: NVOCCs that are transmitting their cargo declarations electronically to Customs must obtain an international carriers bond. This electronic transmission includes direct interface with Customs, hiring a service provider or airport authority. The minimum amount for the NVOCC International Carriers Bond is $50,000. However the port director has the discretion of increasing the bond. Once a bond is on file with U.S. Customs it is good for all ports of entry.

Question: Public Lists: Will Customs make public a list of those NVOCCs who are approved for AMS manifesting and have obtained an International Carrier Bond?

Answer: Customs presently does not publicly post a list of AMS carriers, we do however maintain a list internally. Customs has never made a practice out of publishing a list of AMS participants. If the trade community makes this request, Customs could review the procedures for possible distribution to the public. NVOCCs will not be authorized to transmit in AMS without an International Carriers Bond.

Question: Will Customs publicize what third party service providers are available to perform NVOCC electronic manifest filing in AMS, as vessel carriers may have difficulty performing this function.

Answer: Customs will provide a copy of the list of third party service providers, however this document is constantly changing and should not be relied upon as the only source of providers

Question: Earlier Security Screening for Transshipments: Some ocean carriers have expressed an interest in how they could have security prescreening done by Customs before the first leg of a voyage of a container that will be transshipped. For example, Carrier agrees to transport a container from Karachi to LA. The first leg of the voyage is on Vessel A from Karachi to Singapore. It is then loaded in Singapore onto Vessel B that sails for LA. Under this regulation, the security screening is done before Vessel B loads in Singapore. If there is a problem with the container, it is now stuck in Singapore. Is there a way for a carrier to have the option to have the security screening done at the first port of loading, so that if there is a problem, the container will not begin the voyage until the problem is addressed?

Answer: Customs would eventually like to receive this information, but current limitations in the AMS system does not allow for this type of transaction. With the development of ACE, Customs will be looking to accept this type of electronic information.

Question: Clearing "Held" Cargo: When the targeting identifies a container that warrants inspection in a non-CSI port, what procedures will be used to inspect and subsequently clear the container for loading aboard the vessel?

Answer: Customs will coordinate with foreign customs authorities in each CSI and non-CSI port regarding how it will clear cargo that has been placed on hold. Foreign governments will perform inspections at CSI and non-CSI ports. Immediately after the foreign government notifies Customs that the shipment is cleared, Customs will remove the hold in AMS. For non-automated carriers, the party that submitted the cargo declaration to Customs will be notified. Customs will coordinate with foreign customs authorities in each CSI and non-CSI port regarding how it will clear cargo that has been placed on hold.

Question: How will Customs clear cargo that has been put on hold in CSI and non-CSI ports?

Answer: Customs will coordinate with foreign customs authorities in each CSI and non-CSI port regarding how it will clear cargo that has been placed on hold. Foreign governments will perform inspections at CSI and non-CSI port. Immediately after the foreign government notifies Customs that the shipment is cleared, Customs will remove the hold in AMS. For non-automated carriers, the party that submitted the cargo declaration to Customs will be notified.

Question: Diversion to a Foreign Port: If cargo has been cleared to sail to the U.S. from a foreign port and the vessel carrier decides to divert by dropping cargo in Freeport, Bahamas to load aboard another vessel for subsequent entry to the U.S., would the vessel carrier be required to file another 24 hours advance manifest for that cargo?

Answer: This cargo would have to once again comply with the 24-hour rule. What would happen if a carrier drops a Canadian first port of call, and comes directly to the U.S. with Canadian destination cargo aboard that has not been subjected to the 24 hour advance manifest filing obligation (ex. operational decision to bypass Halifax due to North Atlantic storm).

Carriers must notify U.S. Customs at the designated first port of arrival as soon as they realize they are not going to make the foreign port of call. The carrier should then transmit the manifest with corrections indicating the missed foreign port of call. Upon arrival in the U.S. port the cargo declaration will be placed on hold until Customs has had the opportunity to review the documentation, any examinations will be conducted and appropriate penalties may be issued. If U.S. Customs determines that this has become a common occurrence for vessels this could eventually lead to denying the permit to unlade. Additionally, U.S. Customs will notify the Coast Guard of the vessel with unmanifested cargo that is scheduled to arrive.

Question: A shipper may change cargo destination after vessel loading; an amendment to the manifest will be required. How will this be handled?

Answer: Amendments will be done under the current procedures. The Notice of Proposed Rule Making has not been published. However, be aware that any change to the original information may affect our risk assessment of the cargo and could result in an examination.

Question: FROB: If a shipper changes the cargo destination from FROB to a U.S. port after the vessel has sailed, can that be handled through a manifest correction?

Answer: Yes, manifest corrections will be handled as a manifest discrepancy. Since the cargo was FROB and falls under the 24 hour requirement, information would have already been received 24 hours before lading. However, the shipment is subject to screening and examination due to the change in the information.

Question: Paper Manifest Onboard: Please clarify which carriers participating in Custom's AMS advance cargo manifest filing will have to have a paper copy of the manifest on board the vessel (in contrast to be able to provide one upon request).

Answer: All parties must submit a hard copy of the cargo declaration to the carrier to comply with the requirement to maintain a copy of the cargo declaration onboard the vessel. The only exception would be for bills of lading filed by a Paperless Manifest participant.

Question: Coast Guard Rulemaking: The final rule makes clear that "by requiring the submission of cargo declaration information 24 hours prior to lading, Customs is eliminating the requirement for vessel carriers to submit an additional cargo declaration upon arrival in the United States." The Coast Guard has before it a proposed rulemaking that would require cargo manifests to be filed with Customs 96 hours before vessel arrival. Now that Customs has finalized its rule, the Coast Guard rule has been overtaken by events. Will Customs please inform the Coast Guard that its proposed 96 hour rule should not apply to any carrier that is filing in AMS and complying with the new Customs advance manifest filing requirements?

Answer: Customs will require only one electronic manifest to be submitted by the carrier and will work with the Coast Guard to coordinate this transmission. The presentation of the paper manifest will have to be available to both agencies

AMS/Batch Filing:

Question: Currently each manifest has one CF 1302 filing. Please explain how AMS will handle multiple CF 1302 filings for the same vessel.

Answer: The current AMS system does handle multiple cargo declaration filing as amendments from each port, if the vessel and voyage number are the same. If the vessel or voyage number changes the cargo declarations must be deleted and re-added with the new vessel and voyage number.

Question: The Comments state that: "The vessel AMS program was not designed to allow for the transmission of individual bills of lading, and such transmissions must be sent by batch." For the advance filing obligation under these rules, does batch filing require a single batch containing all containers to be loaded at a loading port, or can a carrier file more than one batch for a single loading port? (Example: file one batch 48 hours before loading and one additional batch 24 hours before loading.)

Answer: The example provided is correct. The carrier can file more than one batch for the same port on the same vessel and voyage.

Question: Perishables: Many perishable commodities (e.g., bananas, pineapples) are harvested and loaded within the 24-hour time window before vessel loading. Information (such as final seal number, precise quantity, and container number) will be preliminary 24 hours before vessel loading. How should this be handled?

Answer: The majority of the data elements should be known, the only unknown data elements would be the exact piece count and weight. This may require some prior planning of selecting a container to be loaded from a pool and a seal number from a batch. For these shipments approximate piece count and weights should be given and can be amended once the actual amounts are identified. Customs believes the shippers should be fairly close in their estimated piece counts and weights due to the redundancy of the shipment. Customs recognizes the uniqueness of the perishable industry and is working with carriers to develop strategies to facilitate the industry and at the same time provide Customs with the cargo declaration information 24 hours prior to loading at a foreign port.

Question: Equipment Change: If a refrigerated container's cooling system fails after the CF 1302 has been filed, but prior to loading, can the carrier reload the perishables into anew reefer container, affix a new seal, load the container aboard the vessel, and correct the manifest information?

Answer: Customs will allow for changing of equipment due to failure. Carrier mI:Jst file a Manifest Discrepancy Report to correct the container/seal #. Once Customs has been notified by the carrier, the exact procedures will be determined on a case by case basis.

Question: AMS Acknowledgement of Manifest Receipt: After the carrier submits the manifest, Customs currently returns an acceptance message that confirms receipt of the manifest data, quantity of BLs accepted, and quantity of BLs rejected. Can vessel carriers expect to receive this same message for manifest information submitted under the 24-hour regulation?

Answer: Yes, procedures will be the same. The carriers will receive these same messages.

Question: How will manifest receipt message relate to NVOCC cargo, and what information will the vessel carrier receive regarding the NVOCC's filing?

Answer: The information that the vessel carrier receives today for automated slot charters will be the same information that the vessel operating carrier will receive. Please refer to previous answer.

Question: Manifest Discrepancy: Does Customs have any forecasted time when the new rules will be proposed for manifest discrepancy reports?

Answer: Within 30-days of publication of the final rule (October 31, 2002) the proposal for manifest discrepancy will be out of the Customs office to the Department of the Treasury.

Question: Between now and then, is there any informal guidance Customs would offer to vessel carriers regarding how to deal with these issues?

Answer: Current procedures apply and can be found within 19 CFR 4.12.