CBP's Baldwin Addresses Residue Questions, Says Implementation, Not Enforcement, is Immediate Goal for M1 Transition
U.S. Customs and Border Protection official Daniel Baldwin sought to allay persistent concerns from the trade community on the coming transition to eManifest: Rail and Sea (M1), saying the immediate CBP focus will be implementation rather enforcement. Baldwin, CBP's Executive Director of Cargo and Conveyance Security, spoke at the American Association for Exporters and Importers convention June 5. Several industry executives voiced concerns, especially about the treatment of residue within M1.
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Currently, empty containers crossing the Northern Border don't need manifest filings, but that's expected to change with M1, said Amy Magnus, director of customs affairs and compliance at A.N. Deringer. In July 2009, CBP published HQ H026715 in the Customs Bulletin, to require chemical residue imported in reusable containers be classified, entered, and manifested, while the containers themselves continue to be considered IIT. CBP has said the enforcement date for residue requirements would be in December.
The term "enforcement," is a "misnomer," said Baldwin. "I think we want to get away from that term right now," he said. "Implementation" and "administration" are better terms for the time being because "enforcement has punitive connotations," which is "the last thing we want to talk about at this stage in the process," said Baldwin.
CBP is very much interested in answering some of the pressing questions as they come up through the transition, Baldwin said. "Working in the framework of the modified ruling, working in the framework of the business realities that we've seen," CBP is trying to find common ground so by December there's a "clear understanding" of the vast majority of issues. There's time to take these questions up, he said. "I get the sense that there is fear of how CBP would respond" if it were to find residue above the trigger level (3% for trucks, 7% for rail), he said. "I will tell you right now, CBP has really no punitive interest in this approach right now," he said. "Absent a clear overt act of smuggling, I think what we're looking for is to actually get the entry and manifest data correct," said Baldwin.
Also on the "broker watch list" is how in-bond bonds are obligated, said Magnus. Carriers will now have the ability to limit who can use their carrier bond for in-bond movements, potentially preventing sharing the carrier bond, she said. Also of concern is the wider visibility across the government into trade data, something CBP has long been able to access.
CBP is aware there are issues with ACE and the agency has yet to issue a penalty for problems having to do with ACE, said Cindy Allen, CBP executive director of the ACE Business. "We understand there are going to be glitches" and that's why the testing is so important, said Allen. Allen urged active participants in ACE to report any issues they experience to help make CBP aware. As of midnight on Sept. 29, any carrier filings through ACS will be rejected and likely required to submit a paper filing, making more work for all involved, said Allen. Allen also said there's ongoing discussions with Canada to discuss the affects of the M1 change on the Beyond the Border plan.
U.S. Customs and Border Protection has set the deadline to cutover to the Automated Commercial Environment (ACE) e-Manifest: Rail and Sea (M1) for the submission of required advance information for ocean and rail cargo. In its public notice, CBP said it recently completed the testing of ACE M1, and, after a six-month transition period, ACE will be the only CBP-approved EDI for such information as of September 29, 2012.
(See ITT's Online Archives 12032821 for summary of CBP's announced cutoff of ACS. See ITT's Online Archives 09072140 for summary of 2009 CBP Bulletin notice HQ H026715 modifying HQ 113129 to require residue imported in reusable containers to be classified, entered, and manifested. See ITT's Online Archives 12022160 for summary of the residue requirements and effective dates).