CBP's Proposed Rule on 10 2 for Maritime Cargo (Part VIII - Bond Conditions)

CBP states that this additional information, which would be submitted by way of a CBP-approved electronic data interchange system¹, will further improve the ability of CBP to identify high-risk shipments in order to prevent the smuggling of terrorist weapons into the U.S. and ensure cargo safety and security.

Written comments on this proposed rule are due by March 3, 2008 (See BP Note).

This is Part VIII of a multipart series of summaries of this proposed rule, and highlights the proposed amendments to Customs bond conditions. See future issues of ITT for additional summaries on this proposed rule.

CBP Proposes to Amend Regulations on Customs Bond Conditions

CBP states that in order to provide a clear enforcement mechanism, it is proposing to amend the regulations on Customs bonds conditions to include agreements to pay liquidated damages for violations of the proposed regulations.

CBP is also proposing to amend these regulations for violations of the advance cargo information requirements under the Trade Act of 2002 (24-hour rule) in order to make the liquidated damages amounts for those violations consistent with the liquidated damages amounts for violations of the proposed requirements.

New Condition Would be Added to Basic Importation/Entry Bond

According to CBP, the proposed rule would add a new condition to those provisions in 19 CFR 113.62 required to be included in a basic importation and entry bond (either single entry or continuous).

Specifically, CBP is proposing to amend 19 CFR 113.62 to include a condition whereby the principal agrees to comply with the proposed importer SF requirements. If the principal fails to comply with any obligation of the importer SF, the principal and surety (jointly and severally) would pay liquidated damages equal to the value of the merchandise involved in the default.

CBP Proposes to Add 3 New Conditions for International Carrier Bonds

The proposed regulations would also amend the conditions in 19 CFR 113.64 for international carrier bonds. Specifically, CBP is proposing to amend 19 CFR 113.64 to include three new conditions:

Importer SF requirements. First, a new condition would be added whereby the principal agrees to comply with the proposed importer SF requirements if the principal elects to provide the importer SF on behalf of an importer, as defined in the proposed regulations. If the principal fails to comply with any obligation of the proposed importer SF requirements, the principal and surety (jointly and severally) would agree to pay liquidated damages equal to the value of the merchandise involved in the default.

Vessel stow plan requirements. Second, a new condition would be added whereby the principal agrees to comply with the proposed vessel stow plan requirements. If the principal fails to comply with the proposed vessel stow plan requirements, the principal and surety (jointly and severally) would agree to pay liquidated damages of $50,000 for each vessel arrival.

CSM requirements. Third, a new condition would be added whereby the principal agrees to comply with the proposed container status message (CSM) requirements. If the principal fails to timely provide CSMs for all events that occur relating to a container, for which the carrier creates or collects CSMs in its equipment tracking system, the principal and surety (jointly and severally) would pay liquidated damages of $5,000 for each violation, to a maximum of $100,000 per vessel arrival.

CBP Proposes to Add Condition to FTZ Operation Bond Conditions

CBP states that the proposed rule would amend those provisions in 19 CFR 113.73 required to be included in a foreign trade zone (FTZ) operator bond. Specifically, CBP is proposing to amend 19 CFR 113.73 to include a condition whereby the principal agrees to comply with the importer SF requirements. If the principal fails to comply with any obligation of the proposed importer SF, the principal and surety (jointly and severally) would pay liquidated damages equal to the value of the merchandise involved in the default.

CBP Proposes New Liquidated Damage Amounts for Violations of Advance Cargo Information Requirements

CBP states that the proposed rule would also amend the liquidated damages amounts for violations of the advance cargo information (24-hour rule) requirements under 19 CFR 4.7 and 4.7a in order to make those amounts consistent with the liquidated damages amounts for violations of the proposed container status message requirements ($5,000 for each violation discovered) and more in line with the liquidated damages for violations of the proposed importer SF requirements.

Accordingly, CBP is proposing to amend 19 CFR 4.7, 4.7a, and 113.64 to include liquidated damages amounts of $5,000 for each violation of the advance cargo information requirements, to a maximum of $100,000 per vessel arrival.

¹The current approved electronic data interchange systems for the importer SF are the Automated Broker Interface (ABI) and the Vessel Automated Manifest System (AMS). CBP states that if it approves a different or additional electronic data interchange system, CBP will publish notice in the Federal Register.

• Written comments on the proposed rule are due by March 3, 2008 (see BP Note)

(See ITT's Online Archives or 01/11/08 news, 08011105, for Part VII of BP's summary on this proposed rule, with a link to Parts I - VI.)

CBP contact - Richard Di Nucci (202) 344-2513

CBP proposed rule (FR Pub 01/02/08) available at http://a257.g.akamaitech.net/7/257/2422/01jan20081800/edocket.access.gpo.gov/2008/pdf/E7-25306.pdf

BP Note

On January 8, 2007, CBP corrected two errors in its proposed rule pertaining to the address and docket number for comments. (CBP correction notice, FR Pub 01/08/08, http://a257.g.akamaitech.net/7/257/2422/01jan20081800/edocket.access.gpo.gov/2008/pdf/E8-50.pdf)