NCBFAA, Shippers Want More Clarity on In-Transit Provision, Relay Vessels

"While we appreciate the guidance provided by U.S. Customs and Border Protection (“CBP”) thus far, we believe that there are outstanding questions regarding how relay vessels are addressed which continue to create confusion and disruption to supply chains," said the letter, signed by the National Customs Brokers & Forwarders Association of America and dozens of trade groups representing shippers and brokers.

Much of the confusion stems from conflicting information given by CBP; but past precedent is also hampering the ability to correctly interpret the language, according to the letter.

CBP had indicated in May via an update to the IEEPA tariff FAQs that goods loaded onto feeder vessels before reciprocal tariffs took effect, but transferred to another vessel after, aren’t eligible for an exemption from the tariffs for in-transit goods (see 2505150066).

For starters, one change from precedent is the way that CBP defines when goods in transit are eligible for duty collection, according to the letter. CBP historically held that transaction value requires a sale for exportation to the U.S., the letter said.

"We have witnessed differing and sometimes contradictory responses to trade questions and engagement, as well as lack of clarity during the initial rollout, and this has created confusion and harm to U.S. companies. ... We urge the Administration to conform to trade norms that loading is loading on any vessel for the purpose of duty assessment. The transference of cargo from a relay vessel to a larger ocean-faring vessel has neither historically been nor should it currently be a dutiable event," the letter said.

The letter explained that CBP's Informed Compliance Publication Bona Fide Sales and Sale for Exportation, "which is underlined by scores of rulings, likewise supports the notion that in-transit eligibility should be based on the initial country of loading and export."

In past situations, importers knew that CBP wanted a paper trail demonstrating that the destination for the imported merchandise was the U.S., according to the letter. Numerous CBP rulings clarify that CBP relies on documentary evidence, such as invoices, purchase orders, and/or bills of lading, when confirming that the ultimate destination for goods always was the United States and there was never a contingency of diversion, the letter said.

This information helps importers and CBP understand when goods are eligible for duty treatment. "The sale for exportation standard is consistent with and supports the finding that relay vessels originating in the initial country of export should meet the in-transit exception and eligibility should be based on the initial country of loading and export," the letter said.

The letter also asked for "consistent notices through traditional channels of communication," such as CSMS messages, as soon as new information is posted in the IEEPA FAQs to ensure maximum compliance.

"With the proliferation of communication channels, it is vital for the trade community to have one consistent and reliable repository of information regarding updates and changes to trade practices, policies, and procedures," the letter said. Furthermore, having a tracked changes version of the guidance highlighting updates and changes also would help parties see and digest the new information, the letter continued.

The letter also asked to remove CBP and DHS non-uniform personnel from the DOGE government reduction plan, given their role in executing tariff changes and enforcement.