CBP Officials Outline Upcoming Pilot on Entry for Container Residues
CBP hopes to begin its pilot program for entry of residues in instruments of international traffic (IIT) by the end of the fiscal year, said officials at an April 9 webinar hosted by Integration Point. Through the test, CBP will roll out its new “residue entry” type, and allow carriers and importers an alternative to filing consumption entries for residue in containers, they said. Given the fees and brokerage costs associated with consumption entries, CBP expects high levels of participation, the officials said. The agency will not restrict participation in the pilot, nor even require formal registration, they said.
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CBP originally said it would begin enforcement of the 2009 ruling that required entry for residues in IIT in July 2011 (see 11022519), but pulled back after it became clear that regular entry/release procedures for residue would be impossible to follow. Since then, CBP has been working on a new entry procedure, “residue entry,” that would allow for easy entry of IIT containing residue while still allowing CBP to know what is inside a container, said Jeremy Baskin, senior advisor to the Executive Director of Regulations and Rulings at CBP.
Carrier as Import of Record, Automatic Zero Value, Simple Country of Origin
For residue entry, the importer of record will be the carrier, unless otherwise indicated, Baskin said. The shipment will be valued at $0, as long the importer makes a declaration that the container is either going to be cleaned or refilled. And the country of origin will be the country of origin will be the country from which the IIT came, he said. “We’re just taking all of these default kind of positions so as to make it easy to fulfill the requirement of entry,” Baskin said.
Cargo will be released under the Section 321 informal entry duty exemption, said Amy Hatfield, Cargo Conveyance and Security branch chief at the Office of Field Operations. The entry type will be available for IIT carrying residue in amounts limited to 7 percent of total capacity or less for rail mode, 5 percent of or less for air mode, and 3 percent or less for truck and ocean modes, Hatfield said. The thresholds are based on industry standards for minimum residues in containers for the purposes of freight charges, she said.
Whether the percentage of capacity is measured by weight or volume will depend on the type of commodity, said Baskin. For example, the percentage will apply by volume for gases, because weight wouldn’t be measurable. The system will rely on some trust from CBP towards carriers, because the agency doesn’t have a reasonably priced technology available to measure what’s remaining inside a container, said Hatfield. But CBP found in an independent study using x-ray imaging that containers carrying residue were under the weight/volume thresholds in every case it surveyed.
According to Hatfield, no additional bonding will be required for residue entries. Importers or carriers will not have to raise their bond amounts in order to carry residue. Following standard procedure for other entry documentation, CBP will ask that the manifest record be maintained by the filer for a period of five years, she said.
Nonparticipants Could Face Freight Delays
CBP will begin the pilot after it publishes a Federal Register notice, and hopes to do so by the end of the fiscal year, Hatfield said. The agency recently issued a draft version of the notice for review (here). Once the pilot begins, the agency will begin an informed compliance phase, where it will explain to carriers that it is requiring entry for residue in containers.
After the informed compliance phase, CBP will begin enforcing the requirement for entry of residues, she said. At that point, carriers who are not participating in the residue entry program will have to file consumption entries for residue in containers.
“It really benefits all companies to be a participant in the pilot,” said Baskin. Registration for the program will not be required, she said. “We’re going to assume that everyone is going to be participating in the pilot, because it’s in the best interest financially for everybody that is involved to not have to file a consumption entry or informal consumption entry, as the case may be.”
The pilot is open to everyone, and “if carriers don’t want to participate in the pilot, then the original manifest and entry requirements that were discussed in the ruling will apply,” said Jim Swanson, ACE Liaison at the CBP Office of Field Operations. Those who don’t participate could face freight delays, he said. With CBP officers looking more carefully at empty containers, requests for additional information from nonparticipants could cause slowdowns, Swanson explained, particularly as CBP moves out of the informed compliance phase. “We need to make sure everyone understands, the ruling is the ruling,” he said. “And we’re going to enforce the ruling.”
We run the pilot with the anticipation that one day this is going to be a regulation, concurred Baskin. “And this residue entry will exist in the regulations.”