Bureau of Customs and Border Protection CBP Decisions 19 CFR PARTS 4, 103, 113, 122, 123, 178 AND 192 (CBP Dec. 03–32) RIN 1651–AA49 REQUIRED ADVANCE ELECTRONIC PRESENTATION OF CARGO INFORMATION AGENCY: Customs and Border Protection, Homeland Security. ACTION: Final rule. SUMMARY: This document amends the Customs Regulations to provide that the Bureau of Customs and Border Protection (CBP) must receive, by way of a CBP-approved electronic data interchange system, information pertaining to cargo before the cargo is either brought into or sent from the United States by any mode of commer- cial transportation (sea, air, rail or truck). The cargo information re- quired is that which is reasonably necessary to enable high-risk shipments to be identified for purposes of ensuring cargo safety and security and preventing smuggling pursuant to the laws enforced and administered by CBP. These regulations are specifically in- tended to effectuate the provisions of section 343(a) of the Trade Act of 2002, as amended by the Maritime Transportation Security Act of 2002. DATES: This rule is effective January 5, 2004. The compliance dates for these regulations are set forth, as appli- cable, in §§ 4.7(b)(5), 122.48a(e), 123.91(e), 123.92(e), and 192.14(e). FOR FURTHER INFORMATION CONTACT: Legal matters: Glen E. Vereb, Office of Regulations and Rulings, 202–572–8724; Trade compliance issues: Inbound vessel cargo: Kimberly Nott, Field Operations, 202–927– 0042; 1 2 CUSTOMS BULLETIN AND DECISIONS, VOL. 37, NO. 52, DECEMBER 24, 2003 Inbound air cargo: David M. King, Field Operations, 202–927– 1133; Inbound truck cargo: Enrique Tamayo, Field Operations, 202– 927–3112; Inbound rail cargo: Juan Cancio-Bello, Field Operations, 202–927– 3459; Outbound cargo, all modes: Robert Rawls, Field Operations, 202– 927–5301. SUPPLEMENTARY INFORMATION: BACKGROUND Section 343(a) of the Trade Act of 2002 (Public Law 107–210, 116 Stat. 933, enacted on August 6, 2002), as amended by section 108 of the Maritime Transportation Security Act of 2002 (Public Law 107– 295, 116 Stat. 2064, enacted on November 25, 2002), required that the Secretary endeavor to promulgate final regulations not later than October 1, 2003, providing for the mandatory collection of elec- tronic cargo information by the Customs Service (now the Bureau of Customs and Border Protection (CBP)), either prior to the arrival of the cargo in the United States or its departure from the United States by any mode of commercial transportation (sea, air, rail or truck). Under section 343(a), as amended (codified at 19 U.S.C. 2071 note), the information required must consist of that information about the cargo which is determined to be reasonably necessary to enable CBP to identify high-risk shipments so as to ensure cargo safety and security and prevent smuggling pursuant to the laws that are enforced and administered by CBP. Proposed Rulemaking Consequently, in accordance with the parameters set forth in sec- tion 343(a), as amended, a document was published in the Federal Register (68 FR 43574) on July 23, 2003, proposing to amend the Customs Regulations in order to require the advance electronic transmission of information pertaining to cargo prior to its being brought into, or sent from, the United States by sea, air, rail or truck. In part, section 343(a), as amended, required that a broad range of parties likely to be affected by the regulations be consulted and their comments be taken into consideration in developing these regula- tions. For this reason, separate public meetings were held in Janu- ary 2003 to address specific issues, and to obtain public input, re- lated to the advance electronic presentation of information, respectively, for sea, air, rail or truck cargo. The CBP also received numerous public comments via e-mail. In addition, extensive meet- ings were held with workgroups of the subcommittee on advance cargo information requirements of the Treasury Advisory Committee BUREAU OF CUSTOMS AND BORDER PROTECTION 3 on the Commercial Operations of the U.S. Customs Service (COAC). For a detailed discussion of the development of the proposed rule, and the evaluation of the comments received as the result of the con- sultation process, see 68 FR 43574–43592. Discussion of Comments A total of 128 commenters responded in timely manner to the July 23, 2003, notice of proposed rulemaking. What follows is a review of, and CBP’s response to, the issues and questions that were presented by these commenters concerning the proposed regulations. The CBP also received comments pertaining to the preliminary regulatory im- pact analysis which was published as an appendix to the proposed rule. Those comments, and the corresponding CBP response, have been addressed separately immediately following this section under the heading, ‘‘Comments on Economic Analysis’’. In addition, a sum- mary of the findings contained in the regulatory impact analysis for this rule can be found in the ‘‘REGULATORY ANALYSES’’ section of this document. For more detailed information, the complete regula- tory impact analysis is available on the following Web site, http:// www.cbp.gov General; Issues Affecting Multiple Modes Issuance of Separate House Bills of Lading COMMENT: The requirement that a separate house bill of lading be issued for each shipper/consignee relationship imposed significant costs upon commerce. Carriers would now have to issue multiple bills of lading for each container of consolidated cargo, and they would charge a fee for each additional bill of lading, where the consolidated goods were tendered for shipment by a single freight forwarder and were des- tined to a single consignee in the United States. It was stated that CBP should modify AMS (the Automated Manifest System) so that it could receive vendor information for consolidated shipments without requiring the entry of entirely separate bills of lading. CBP RESPONSE: The CBP reasonably needs detailed shipper information on the house bill of lading because this information is critical for targeting purposes under section 343(a)(2) of the Trade Act of 2002, as amended (19 U.S.C. 2071 note, section (a)(2)). Thus, where a freight forwarder or other consolidator receives goods from several foreign vendors (shippers) for consolidation and shipment to a single con- signee in the United States, listing the freight forwarder or other consolidator, instead of the foreign vendor, as the shipper on the house bill of lading would be at odds with the intent of section 4 CUSTOMS BULLETIN AND DECISIONS, VOL. 37, NO. 52, DECEMBER 24, 2003 343(a). It is, of course, a business decision as to whether a forwarder or consolidator would choose to charge for any additional bill(s) of lading issued. However, at the present time, the AMS system generally lacks the capability to process data for multiple shippers/consignees from a single house bill of lading. The AMS systems were built with a one- to-one relationship—one shipper to one consignee. To alter this would require a complete redesign of the system for all modes of transportation. In addition, it would also force the entire bill of lad- ing to be placed on hold rather than one specific shipment. This is not a programming process that CBP can undertake at this time and, more specifically, detailed communication with the trade com- munity would be required. Confidentiality COMMENT: Proposed § 103.31a should be revised to indicate that advance cargo information which contained classified or sensitive unclassi- fied information would be released only in accordance with appli- cable regulations, statutes, and orders. Also, it was believed that the vessel cargo declaration information required to be reported in ad- vance could be different from the manifest information envisioned in 19 U.S.C. 1431. CBP RESPONSE: Section 103.31a, as proposed pursuant to section 343(a)(3)(G), as amended (19 U.S.C. 2071 note, section (a)(3)(G)), exempts from dis- closure advance cargo data for all inbound and outbound air, rail, or truck cargo unless the owner of the information expressly agrees in writing to its release. In addition, as far as vessel cargo data col- lected under 19 U.S.C. 1431 is concerned, section 1431 already ad- equately addresses the conditions under which such information may not be disclosed, including where the information is authorized to be kept secret in the interest of national defense, as provided in 5 U.S.C. 552(b)(1); or where disclosure of the information would pose a threat of personal injury or property damage (see 19 U.S.C. 1431(c)(2)(A) & (B)). COMMENT: One commenter discussed the matter of public disclosure of out- bound cargo information which would be required to be submitted to CBP electronically. It was stated that since cargo information on out- bound ocean shipments would rely upon Automated Export System (AES) submissions and not upon vessel cargo manifests, such infor- mation should not be subject to the public disclosure provisions of 19 U.S.C. 1431. Another commenter, however, fully supported the re- BUREAU OF CUSTOMS AND BORDER PROTECTION 5 lease of cargo data from outward vessel cargo manifests pursuant to the disclosure provisions of section 1431. CBP RESPONSE: The underlying cargo manifest statute in question, 19 U.S.C. 1431, applies to both inbound and outbound cargoes. Although mani- fests are actually comprised of numerous documents, including the Shipper’s Export Declaration (SED), the SED document itself is ex- empt from public disclosure pursuant to 13 U.S.C. 301(g) unless the Secretary of Commerce determines that such exemption would be contrary to the national interest. Also appearing in existing Customs Regulations (19 CFR 103.31) is a provision making available for copying and publication certain information and data appearing on outward manifests.