[Federal Register Volume 73, Number 228 (Tuesday, November 25, 2008)]
[Rules and Regulations]
[Pages 71729-71785]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-27048]



[[Page 71729]]

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Part II





Department of Homeland Security





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U.S. Customs and Border Protection



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19 CFR Parts 4, 12, 18, et al.



Importer Security Filing and Additional Carrier Requirements; Final 
Rule

Federal Register / Vol. 73, No. 228 / Tuesday, November 25, 2008 / 
Rules and Regulations

[[Page 71730]]


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DEPARTMENT OF HOMELAND SECURITY

Bureau of Customs and Border Protection

19 CFR Parts 4, 12, 18, 101, 103, 113, 122, 123, 141, 143, 149, 
178, and 192

[Docket Number USCBP-2007-0077; CBP Dec. 08-46]
RIN 1651-AA70


Importer Security Filing and Additional Carrier Requirements

AGENCY: Customs and Border Protection, Department of Homeland Security.

ACTION: Interim final rule, solicitation of comments.

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SUMMARY: To help prevent terrorist weapons from being transported to 
the United States, vessel carriers bringing cargo to the United States 
are required to transmit certain information to Customs and Border 
Protection (CBP) about the cargo they are transporting prior to lading 
that cargo at foreign ports of entry. This interim final rule requires 
both importers and carriers to submit additional information pertaining 
to cargo to CBP before the cargo is brought into the United States by 
vessel. This information must be submitted to CBP by way of a CBP-
approved electronic data interchange system. The required information 
is reasonably necessary to improve CBP's ability to identify high-risk 
shipments so as to prevent smuggling and ensure cargo safety and 
security. These regulations specifically fulfill the requirements of 
section 203 of the Security and Accountability for Every (SAFE) Port 
Act of 2006 and section 343(a) of the Trade Act of 2002, as amended by 
the Maritime Transportation Security Act of 2002.

DATES: Effective Date: This rule is effective on January 26, 2009.
    Compliance Dates: The compliance dates for these regulations are 
set forth in Sec.  4.7c(d), 4.7d(f), and 149.2(g).
    Comment Date: As provided in the ``Public Participation'' section 
of this document, comments are requested on certain aspects of the 
rule. Comments must be received on or before June 1, 2009.

ADDRESSES: You may submit comments, identified by docket number, by one 
of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments via docket number 
USCBP-2007-0077.
     Mail: Border Security Regulations Branch, Office of 
International Trade, U.S. Customs and Border Protection, 799 9th 
Street, NW., Washington, DC 20001.
    Instructions: All submissions received must include the agency name 
and document number for this rulemaking. All comments received will be 
posted without change to http://www.regulations.gov, including any 
personal information provided. For detailed instructions on submitting 
comments and additional information on the rulemaking process, see the 
``Public Participation'' heading of the SUPPLEMENTARY INFORMATION 
section of this document.
    Docket: For access to the docket to read background documents or 
comments received, go to http://www.regulations.gov. Submitted comments 
may also be inspected on regular business days between the hours of 9 
a.m. and 4:30 p.m. at the Office of International Trade, Customs and 
Border Protection, 799 9th Street, NW., 5th Floor, Washington, DC. 
Arrangements to inspect submitted comments should be made in advance by 
calling Mr. Joseph Clark at (202) 325-0118.

FOR FURTHER INFORMATION CONTACT: Richard Di Nucci, Office of Field 
Operations, (202) 344-2513.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Public Participation
II. Background
III. Carrier and Importer Requirements
    A. Existing Requirements
    B. New Carrier Requirements Under This Interim Final Rule
    1. Vessel Stow Plans
    2. Container Status Messages
    C. New Importer Requirements Under This Interim Final Rule
    D. Structured Review and Flexible Enforcement Period
    E. Summary of Changes From NPRM
IV. Discussion of Comments Regarding This Rulemaking Generally
V. Discussion of Comments Regarding Proposed Carrier Requirements 
Relating to Vessel Cargo Destined to the United States
    A. Overview; Vessel Stow Plan
    B. Public Comments; Vessel Stow Plan
    C. Overview; Container Status Messages
    D. Public Comments; Container Status Messages
    E. Public Comments; Carrier Requirements Generally
VI. Discussion of Comments Regarding Proposed Importer Requirements 
for Vessel Cargo Destined to the United States
    A. Overview; Proposed Importer Requirements
    1. Shipments Other Than FROB, IE Shipments, and T&E Shipments
    2. FROB, IE Shipments, and T&E Shipments
    B. Public Comments; Responsible Party
    C. Public Comments; Agents
    D. Public Comments; Customs Business
    E. Public Comments; Bills of Lading
    F. Public Comments; Required Elements
    G. Public Comments; Technical Issues
    H. Public Comments; Update and Withdrawal of Importer Security 
Filing
    I. Public Comments; In-Bond Shipments
    J. Public Comments; Importer Security Filing, Entry, and 
Application for FTZ Admission
    K. Public Comments; Requests for Special Treatment
    L. Public Comments; Importer Security Filing, Other Comments
VII. Discussion of Comments Regarding Proposed Amendments to Bond 
Requirements and Enforcement
    A. Overview; Bond Conditions and Enforcement Related to the 
Proposed Importer Security Filing, Vessel Stow Plan, and Container 
Status Message Requirements
    B. Public Comments; Bond Conditions and Enforcement Related to 
the Proposed Importer Security Filing, Vessel Stow Plan, and 
Container Status Message Requirements
    C. Overview; Bond Conditions Related to the Trade Act 
Regulations
    D. Public Comments; Bond Conditions Related to the Trade Act 
Regulations
VIII. Discussion of Comments Regarding the Cost, Benefit, and 
Feasibility Study
IX. Adoption of Proposal
X. Regulatory Analyses
    A. Executive Order 12866
    B. Regulatory Flexibility Act
    C. Unfunded Mandates Reform Act
    D. Paperwork Reduction Act
XI. Signing Authority
XII. Coordination of Interim Final Rule With Congress
XIII. Regulatory Amendments

Abbreviations and Terms Used in This Document

AAEI--American Association of Exporters and Importers
AAPA--American Association of Port Authorities
ABI--Automated Broker Interface
ACE--Automated Commercial Environment
AES--Automated Export System
AMS--Automated Manifest System
ANSI--American National Standards Institute
ATDI--Advance Trade Data Initiative
ATS--Automated Targeting System
BAPLIE--Bayplan/stowage plan occupied and empty locations message
CAMIR--Customs Automated Manifest Interface Requirements
CATAIR--Customs and Trade Automated Interface Requirements
CBP--Customs and Border Protection
CFR--Code of Federal Regulations
COAC--Departmental Advisory Committee on Commercial Operations of 
Customs and Border Protection and Related Homeland Security 
Functions
CSI--Container Security Initiative
CSM--Container status message
C-TPAT--Customs-Trade Partnership Against Terrorism
DDP--Delivered duty paid

[[Page 71731]]

DHS--U.S. Department of Homeland Security
DNL--Do not load
DUNS--Data Universal Numbering System
EIN--Employer identification number
FAQ--Frequently asked questions
FDA--U.S. Food and Drug Administration
FIRMS--Facilities Information and Resources Management System
FROB--Foreign cargo remaining on board
FTZ--Foreign trade zone
FR--Federal Register
GLN--Global Location Number
HTSUS--Harmonized Tariff Schedule of the United States
ICPA--International Compliance Professionals Association
IE--Immediate exportation
IIT--Instrument of international trade
IMO--International Maritime Organization
IRS--Internal Revenue Service
IT--Immediate transportation
ISF--Importer Security Filing
JIG--Joint Industry Group
LCL--Less than Container Load
MID--Manufacturer identification
MTSA--Maritime Transportation Security Act of 2002
NAM--National Association of Manufacturers
NCBFAA--National Customs Brokers and Forwarders Association of 
America
NII--Non-Intrusive Inspection
NPRM--Notice of Proposed Rule Making
NVOCC--Non-vessel operating common carrier
OCS--Outer Continental Shelf
OPA--Outward Processing Arrangement
OMB--Office of Management and Budget
PDF--Portable Document Format
PGA--Participating Government Agency
Pub. L.--Public Law
RILA--Retail Industry Leaders Association
RFA--Regulatory Flexibility Act of 1980
SAFE Port Act--Security and Accountability for Every Port Act of 
2006
SBREFA--Small Business Regulatory Enforcement Fairness Act of 1996
sFTP--Secure File Transfer Protocol
SSN--Social Security Number
T&E--Transportation and exportation
TIB--Temporary Importation Bond
TSC--Technology Support Center
TSN--Trade Support Network
UMRA--Unfunded Mandates Reform Act of 1995
UN EDIFACT--United Nations rules for Electronic Data Interchange For 
Administration, Commerce and Transport
U.S.C.--United States Code
VIN--Vehicle Identification Number
VOCC--Vessel Operating Common Carrier
WHTI--Western Hemisphere Travel Initiative
WSC--World Shipping Council

I. Public Participation

    Interested persons are invited to submit written comments on only 
the six data elements for which CBP is providing some type of 
flexibility (container stuffing location, consolidator (stuffer), 
manufacturer (or supplier), ship to party, country of origin, and 
commodity HTSUS number) and the requirements related to those elements 
discussed in section 149.2(b) and (f). CBP also invites comments on the 
revised Regulatory Assessment and Final Regulatory Flexibility 
Analysis, including compliance costs for various industry segments, the 
impact of the flexibilities provided in this rule, and the barriers to 
submitting Importer Security Filing data 24 hours prior to lading. We 
urge commenters to reference a specific portion of the rule, explain 
the reason for any recommended change, and include data, information, 
or authorities that support such recommended change.

II. Background

    Section 203 of the Security and Accountability for Every Port Act 
of 2006 (Pub. L. 109-347, 120 Stat. 1884 (SAFE Port Act)) provides that 
the Secretary of Homeland Security (Secretary), acting through the 
Commissioner of CBP, shall promulgate regulations to ``require the 
electronic transmission to the Department [of Homeland Security] of 
additional data elements for improved high-risk targeting, including 
appropriate security elements of entry data, as determined by the 
Secretary, to be provided as advanced information with respect to cargo 
destined for importation into the United States prior to loading of 
such cargo on vessels at foreign seaports.'' Pursuant to this Act, and 
section 343(a) of the Trade Act of 2002 (19 U.S.C. 2071 note), CBP 
published a Notice of Proposed Rule Making (NPRM) in the Federal 
Register (73 FR 90) on January 2, 2008, proposing to require importers 
and carriers to submit additional information pertaining to cargo 
before the cargo is brought into the United States by vessel.
    CBP has provided an overview of existing advance cargo information 
requirements and entry requirements below. For a detailed discussion of 
the advance cargo information requirements prior to this interim final 
rule, the statutory and regulatory histories, and the statutory factors 
governing development of these regulations, please see the NPRM 
published at 73 FR 90.
    The proposed rule was known to the trade as both the ``Importer 
Security Filing proposal'' and the ``10 + 2 proposal.'' The name ``10 + 
2'' is shorthand for the number of advance data elements CBP was 
proposing to collect. Carriers would be generally required to submit 
two additional data elements--a vessel stow plan and container status 
messages regarding certain events relating to containers loaded on 
vessels destined to the United States--to the elements they are already 
required to electronically transmit in advance (the ``2'' of ``10+2''); 
and importers,\1\ as defined in the proposed regulations, would be 
required to submit 10 data elements--an Importer Security Filing 
containing 10 data elements (the ``10'' of ``10+2'').
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    \1\ For purposes of the proposed regulations, importer means the 
party causing goods to arrive within the limits of a port in the 
United States. For foreign cargo remaining on board (FROB), the 
importer was proposed to be construed as the carrier. For immediate 
exportation (IE) and transportation and exportation (T&E) in-bond 
shipments, and goods to be delivered to a foreign trade zone (FTZ), 
the importer was proposed to be construed as the party filing the 
IE, T&E, or FTZ documentation with CBP.
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    CBP extended the initial 60-day comment period by 15 days, from 
March 3, 2008 to March 18, 2008. See 73 FR 6061 (Feb. 1, 2008). 
Approximately 200 commenters responded in a timely manner to the NPRM. 
As certain comments pertained to the proposed carrier requirements and 
others pertained to the proposed importer requirements, this interim 
final rule addresses separately the issues presented in the comments 
regarding the proposed carrier requirements and the proposed importer 
requirements.

III. Carrier and Importer Requirements

A. Existing Requirements

    Carriers are currently required to submit advance cargo information 
for vessels, including a vessel's Cargo Declaration, to CBP no later 
than 24 hours before the cargo is laden aboard a vessel at a foreign 
port. See 19 CFR 4.7 and 4.7a. This is generally referred to as the 
``24 Hour Rule.'' This information must be submitted to CBP via the 
Vessel Automated Manifest System (AMS). Carriers are currently not 
required to submit vessel stow plans or container status messages to 
CBP. In addition, importers of record are generally required to file 
entry information, including CBP Form 3461, with CBP within fifteen 
calendar days of the date of arrival of a shipment at a United States 
port of entry and entry summary information, including CBP Form 7501, 
within 10 working days of the entry of the merchandise. Entry and entry 
summary information is submitted to CBP via the Automated Broker 
Interface (ABI) or via paper forms. Importers are not currently 
required to submit advance cargo information to CBP.

B. New Carrier Requirements Under This Interim Final Rule

1. Vessel Stow Plan
    In addition to the existing carrier requirements pursuant to the 24 
Hour Rule, this interim final rule requires

[[Page 71732]]

carriers to submit a vessel stow plan for vessels destined to the 
United States. Carriers must transmit the stow plan for vessels 
transporting containers so that CBP receives the stow plan no later 
than 48 hours after the carrier's departure from the last foreign port. 
For voyages less than 48 hours in duration, CBP must receive the stow 
plan prior to the vessel's arrival at the first port in the United 
States. Bulk and break bulk carriers are exempt from this requirement 
for vessels exclusively carrying bulk and break bulk cargo. Carriers 
must submit the vessel stow plan via the CBP-approved electronic data 
interchange system, which currently includes AMS, secure file transfer 
protocol (sFTP), or e-mail. If CBP approves of different or additional 
electronic data interchange systems, CBP will publish a notice in the 
Federal Register.
    The vessel stow plan must include standard information relating to 
the vessel and each container laden on the vessel, including the 
following standard information:
    With regard to the vessel,
    (1) Vessel name (including international maritime organization 
(IMO) number);
    (2) Vessel operator; and
    (3) Voyage number.
    With regard to each container,
    (1) Container operator;
    (2) Equipment number;
    (3) Equipment size and type;
    (4) Stow position;
    (5) Hazmat code (if applicable);
    (6) Port of lading; and
    (7) Port of discharge.
2. Container Status Messages
    In addition to the existing carrier requirements pursuant to the 24 
Hour Rule, this interim final rule also requires carriers to submit 
container status messages (CSMs) \2\ to CBP daily for certain events 
relating to all containers laden with cargo destined to arrive within 
the limits of a port in the United States by vessel. CSMs created under 
either the American National Standards Institute (ANSI) X.12 standard 
or the United Nations rules for Electronic Data Interchange For 
Administration, Commerce and Transport (UN EDIFACT) standard are 
acceptable.
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    \2\ CSMs are used to report terminal container movements (e.g., 
loading and discharging the vessel) and to report the change in 
status of containers (e.g., empty or full).
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    Carriers must submit a CSM when any of the required events occurs 
if the carrier creates or collects a CSM in its equipment tracking 
system reporting that event. Carriers are not required to create or 
collect any CSM data other than those which the carrier already creates 
or collects on its own and maintains in its electronic equipment 
tracking system. Carriers must submit CSMs no later than 24 hours after 
the message is entered into the carrier's equipment tracking system.
    The events for which CSMs are required are:
    (1) When the booking relating to a container which is destined to 
arrive within the limits of a port in the United States by vessel is 
confirmed;
    (2) When a container destined to arrive within the limits of a port 
in the United States by vessel undergoes a terminal gate inspection;
    (3) When a container, which is destined to arrive within the limits 
of a port in the United States by vessel, arrives or departs a facility 
(These events take place when a container enters or exits a port, 
container yard, or other facility. Generally, these CSMs are referred 
to as ``gate-in'' and ``gate-out'' messages.);
    (4) When a container, which is destined to arrive within the limits 
of a port in the United States by vessel, is loaded on or unloaded from 
a conveyance (This includes vessel, feeder vessel, barge, rail and 
truck movements. Generally, these CSMs are referred to as ``loaded on'' 
and ``unloaded from'' messages.);
    (5) When a vessel transporting a container, which is destined to 
arrive within the limits of a port in the United States by vessel, 
departs from or arrives at a port (These events are commonly referred 
to as ``vessel departure'' and ``vessel arrival'' notices.);
    (6) When a container which is destined to arrive within the limits 
of a port in the United States by vessel undergoes an intra-terminal 
movement;
    (7) When a container which is destined to arrive within the limits 
of a port in the United States by vessel is ordered stuffed or 
stripped;
    (8) When a container which is destined to arrive within the limits 
of a port in the United States by vessel is confirmed stuffed or 
stripped; and
    (9) When a container which is destined to arrive within the limits 
of a port in the United States by vessel is shopped for heavy 
repair.\3\
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    \3\ A container is shopped for heavy repair when it is delivered 
to a facility for the purpose of being repaired.
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    CBP is aware that it might be cost beneficial for some carriers to 
transmit all CSMs, rather than filter out CSMs relating to containers 
destined to the United States or relating only to the required events. 
Therefore, carriers may transmit their ``global'' CSM messages, 
including CSMs relating to containers that do not contain cargo 
destined for importation into the United States and CSMs relating to 
events other than the required events. By transmitting CSMs in addition 
to those required by this interim final rule, a carrier authorizes CBP 
to access and use those data.
    For each CSM submitted to CBP by the carrier, the following 
information must be included:
    (1) Event code being reported, as defined in the ANSI X.12 or UN 
EDIFACT standards;
    (2) Container number;
    (3) Date and time of the event being reported;
    (4) Status of the container (empty or full);
    (5) Location where the event took place; and
    (6) Vessel identification associated with the message if the 
container is associated with a specific vessel.
    Carriers are exempt from the CSM requirement for bulk and break 
bulk cargo. Carriers must submit CSMs via the CBP-approved electronic 
data interchange system. The current electronic data interchange system 
for CSMs approved by CBP is sFTP. If CBP approves of a different or 
additional electronic data interchange system, CBP will publish a 
notice in the Federal Register.
    The following chart illustrates the existing carrier data 
requirements pursuant to the 24 Hour Rule and the new carrier data 
requirements required pursuant to this interim final rule.

                                              Existing Carrier Requirements Versus New Carrier Requirements
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                                            Existing requirements                                                             New requirements
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Requirement......................  Advance Cargo Information (i.e., Trade  Stow Plan                               Container Status Messages
                                    Act Requirements or 24 Hour Rule)

[[Page 71733]]

 
Timing...........................  24 hours prior to lading                48 hours after departure; prior to      24 hours after the message is entered
                                                                            arrival for voyages less than 48 hrs    into the carrier's equipment
                                                                                                                    tracking system
Submission Method................  vessel AMS                              vessel AMS, sFTP, or email              sFTP
Elements.........................  --Bill of Lading Number                 With regard to the vessel,              --Event code being reported, as
                                   --Foreign Port before vessel departs    --Vessel name (including international   defined in the ANSI X.12 or UN
                                    for U.S.                                maritime organization (IMO) number);    EDIFACT standards;
                                   --Carrier SCAC [Standard Carrier Alpha  --Vessel operator; and                  --Container number;
                                    Code]                                  --Voyage number                         --Date and time of the event being
                                   --Carrier Assigned Voyage Number        With regard to each container,           reported;
                                   --Date of Arrival at First U.S. Port    --Container operator;                   --Status of the container (empty or
                                   --Quantity                              --Equipment number;                      full);
                                   --Unit of measure of Quantity           --Equipment size and type;              --Location where the event took
                                   --First Foreign Place of Receipt        --Stow position;                         place; and
                                   --Commodity Description (or six-digit   --Hazmat code (if applicable);          --Vessel identification associated
                                    HTSUS Number)                          --Port of lading; and                    with the message if the container is
                                   --Commodity Weight                      --Port of discharge.                     associated with a specific vessel.
                                   --Shipper Name and Address
                                   --Consignee Name and Address or ID
                                    Number
                                   --Vessel Name
                                   --Vessel Country
                                   --Vessel Number
                                   --Foreign Port of Lading
                                   --Hazmat Code
                                   --Container numbers
                                   --Seal Numbers
                                   --Date of Departure from Foreign Port
                                   --Time of Departure from Foreign Port
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C. New Importer Requirements Under This Interim Final Rule

    This interim final rule requires Importer Security Filing (ISF) 
Importers, as defined in these regulations, or their agents, to 
transmit an Importer Security Filing to CBP, for cargo other than 
foreign cargo remaining on board (FROB), no later than 24 hours before 
cargo is laden aboard a vessel destined to the United States. See the 
``Structured Review and Flexible Enforcement Period'' section of this 
document for flexibilities related to timing for certain Importer 
Security Filing elements. Because FROB is frequently laden based on a 
last-minute decision by the carrier, the Importer Security Filing for 
FROB is required any time prior to lading. An Importer Security Filing 
is required for each shipment, at the lowest bill of lading level 
(i.e., at the house bill of lading level, if applicable). The party 
required to submit the Importer Security Filing is the party causing 
the goods to enter the limits of a port in the United States. This 
party is the carrier for FROB and the party filing for the immediate 
exportation (IE), transportation and exportation (T&E), or foreign 
trade zone (FTZ) documentation for those types of shipments. The ISF 
Importer, as a business decision, may designate an authorized agent to 
file the Importer Security Filing on the ISF Importer's behalf. A party 
can act as an authorized agent for purposes of filing the Importer 
Security Filing if that party obtains access to ABI or AMS.
    ISF Importers, or their agents, must transmit the Importer Security 
Filing via a CBP-approved electronic data interchange system. The 
current approved electronic data interchange systems for the Importer 
Security Filing is ABI and vessel AMS. If CBP approves a different or 
additional electronic data interchange system in the future, CBP will 
publish a notice in the Federal Register.
    The party who filed the Importer Security Filing must update the 
Importer Security Filing if, after the filing and before the goods 
arrive within the limits of a port in the United States, there are 
changes to the information filed or more accurate information becomes 
available.
    ISF Importers, or their agents, must submit 10 elements to CBP for 
shipments consisting of goods intended to be entered into the United 
States and goods intended to be delivered to an FTZ. ISF Importers, or 
their agents, must submit five elements to CBP for shipments consisting 
entirely of FROB and shipments consisting entirely of goods intended to 
be ``transported'' as IE or T&E in-bond shipments.
    For shipments other than those consisting entirely of FROB and 
goods intended to be ``transported'' in-bond as an IE or T&E, the 
Importer Security Filing must consist of 10 elements, unless an element 
is specifically exempted. The manufacturer (or supplier), country of 
origin, and commodity Harmonized Tariff Schedule of the United States 
(HTSUS) number must be linked to one another at the line item level. 
The 10 elements are as follows: (1) Seller; (2) Buyer; (3) Importer of 
record number/Foreign trade zone applicant identification number; (4) 
Consignee number(s); (5) Manufacturer (or supplier); (6) Ship to party; 
(7) Country of origin; (8) Commodity HTSUS number; (9) Container 
stuffing location; and (10) Consolidator (stuffer).
    For shipments consisting entirely of FROB and shipments consisting 
entirely of goods intended to be ``transported'' in-bond as an IE or 
T&E, the Importer Security Filing must consist of five elements, unless 
an element is specifically exempted. The five elements are as follows: 
(1) Booking party; (2) Foreign port of unlading; (3) Place of delivery; 
(4) Ship to party; and (5) Commodity HTSUS number.
    Four of the Importer Security Filing elements are identical to 
elements submitted for entry (CBP Form 3461) and entry summary (CBP 
Form 7501) purposes. These elements are the importer of record number, 
consignee number, country of origin, and

[[Page 71734]]

commodity HTSUS number when provided at the 10-digit level. An importer 
may submit these elements once to be used for both Importer Security 
Filing and entry/entry summary purposes. If an importer chooses to have 
these elements used for entry/entry summary purposes, the Importer 
Security Filing and entry/entry summary must be self-filed by the 
importer or filed by a licensed customs broker in a single transmission 
to CBP no later than 24 hours prior to lading. In addition, the HTSUS 
number must be provided at the 10-digit level.
    Two of the Importer Security Filing elements are identical to 
elements submitted for application to admit goods to an FTZ (CBP Form 
214). These elements are the country of origin and commodity HTSUS 
number when provided at the 10-digit level. The filer may submit the 
Importer Security Filing and CBP Form 214 in the same electronic 
transmission to CBP and may submit the country of origin and commodity 
HTSUS number once to be used for both Importer Security Filing and FTZ 
admission purposes. If the party submitting the Importer Security 
Filing chooses to have this element used for FTZ admission purposes, 
the HTSUS number must be provided at the 10-digit level.
    The following chart illustrates the existing importer data 
requirements for entry and entry summary purposes and the new importer 
data requirements pursuant to this interim final rule.

                         Existing Importer Requirements Versus New Importer Requirements
----------------------------------------------------------------------------------------------------------------
                                      Existing Requirements                         New Requirements
----------------------------------------------------------------------------------------------------------------
Requirement..............  Entry and Entry Summary \4\                 Importer Security Filing
Timing...................  Entry within 15 calendar days of date of    24 hours prior to lading for 8 of the
                            arrival; Entry summary within 10 working    elements; as early as possible, in no
                            days of entry                               event later than 24 hours prior to
                                                                        arrival, for 2 of the elements
Submission Method........  ABI or paper                                ABI or vessel AMS
Elements.................  --Bill of Lading Number                     Shipments Other Than FROB, IE Shipments
                           --Importer of Record Number *                and T&E Shipments:
                                                                       --Seller
                           --Foreign Port before vessel departs for    --Buyer
                            U.S.
                           --Carrier SCAC                              --Importer of record number/FTZ applicant
                                                                        identification number *
                           --Carrier Assigned Voyage Number            --Consignee number(s) *
                           --Date of Arrival at First U.S. Port        --Manufacturer (or supplier)
                           --Quantity                                  --Ship to party
                           --Unit of measure of Quantity               --Country of origin *
                           --First Foreign Place of Receipt            --Commodity HTSUS number *
                           --Commodity Description                     --Container stuffing location
                           --Commodity HTSUS Number *                  --Consolidator (stuffer)
                           --Commodity Weight
                           --Shipper Name and Address
                           --Consignee Name and Address and Number *   FROB, IE Shipments and T&E Shipments:
                           --Country of Origin *                       --Booking party
                           --Vessel Name                               --Foreign port of unlading
                           --Vessel Country                            --Place of delivery
                           --Vessel Number                             --Ship to party
                           --Foreign Port of Lading                    --Commodity HTSUS number
                           --Hazmat Code
                           --Container numbers
                           --Seal Numbers
                           --Date of Departure from Foreign Port
                           --Time of Departure from Foreign Port
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* These elements are provided for Importer Security Filing and entry/entry summary or FTZ admission purposes.

D. Structured Review and Flexible Enforcement Period

    In order to provide the trade sufficient time to adjust to the new 
requirements and in consideration of the business process changes that 
may be necessary to achieve full compliance, CBP will show restraint in 
enforcing the rule, taking into account difficulties that importers may 
face in complying with the rule, so long as importers are making 
satisfactory progress toward compliance and are making a good faith 
effort to comply with the rule to the extent of their current ability. 
This policy will last for twelve months after the effective date and 
will apply to all aspects of the filing rule.
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    \4\ Importers are not currently required to submit any 
information to CBP prior to foreign lading for targeting purposes.
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    In addition, this rule provides flexibility with respect to certain 
elements of the Importer Security Filings. This flexibility falls into 
two categories:
     Two elements of the Importer Security Filings will be 
subject to flexibility as to timing. These elements are the Container 
stuffing location and Consolidator (stuffer). The ISF Importer must 
submit these elements as early as possible, and in any event no later 
than 24 hours prior to arrival in a U.S. port (or upon lading at the 
foreign port if that is later than 24 hours prior to arrival in a U.S. 
port).
     Four elements will be subject to flexibility as to 
interpretation. These elements are the Manufacturer (or supplier), Ship 
to party, Country of origin, and Commodity HTSUS number. There is no 
special timing flexibility for these elements; they must be filed 24 
hours prior to lading. However, CBP has added flexibility by allowing 
ISF Importers, in their initial filing, to provide a range of 
acceptable responses based on facts available to the importer at the 
time, in lieu of a single specific response (which may become known to 
the importer only at a later time). ISF Importers will be required to 
update

[[Page 71735]]

their filings with respect to these elements as soon as more precise or 
more accurate information is available, in no event later than 24 hours 
prior to arrival at a U.S. port (or upon lading at the foreign port if 
that is later than 24 hours prior to arrival in a U.S. port). For 
example, 24 hours prior to lading:
     The ISF Importer could identify the manufacturer as being 
one of three typically used manufacturers, with more precision to be 
provided in subsequent ISF updates.
     The ISF Importer could submit the identity of the 
importer, consignee, or the facility where the goods will be unladen in 
the event that the ship to party is unavailable (e.g., ``to order'' 
shipments).
     If the ISF Importer is, in good faith, unable to determine 
whether the country where the final stage of production of an article 
took place is the country of origin, the ISF Importer may provide the 
country where the final stage of production of the article took place 
in lieu of the country of origin, and update the ISF submission as soon 
as more accurate data are available.
    The purpose of these flexibilities is to allow CBP to conduct a 
structured review of the elements, including an evaluation of any 
specific compliance difficulties that the trade may be encountering 
with respect to these elements. CBP may gather information by 
conducting reviews of particular importers to determine whether 
submission of all 10 data elements 24 hours prior to lading was in fact 
feasible and, if not, what barriers the importer encountered. The 
structured review will cover a range of enterprises, from small to 
large, and will include both integrated and nonintegrated supply 
chains.
    The structured review will further be enhanced by comments filed in 
response to this publication. Although the rule is now final, CBP 
invites comments on the 6 data elements for which CBP is providing some 
type of flexibility (Container stuffing location, Consolidator 
(stuffer), Manufacturer (or supplier), Ship to party, Country of 
origin, and Commodity HTSUS number). These comments are due by June 1, 
2009.
    The structured review will also be enhanced by feedback provided in 
CBP's formal outreach program, described below. The information 
gathering phase of the structured review will end on June 1, 2009. All 
comments must be submitted to CBP by that date. We note, again, that 
CBP is not reopening the proposed rule in this action for comment; 
rather CBP is seeking comment on the requirements discussed in section 
149.2(b) and (f) of this rule and the revised Regulatory Impact 
Assessment.
    On the basis of information obtained during the structured review 
and public comments, DHS will undertake an analysis of the elements 
subject to flexibilities discussed in this section. The analysis will 
examine compliance costs for various industry segments, the impact of 
the flexibilities, the barriers to submitting these data 24 hours prior 
to lading, and the benefits of collecting these data. Based on that 
analysis, DHS, in coordination with other parts of the Executive 
Branch, will determine whether to eliminate, modify, or leave unchanged 
these requirements.
    CBP is committed to fully supporting the trade community in its 
efforts to successfully implement the requirements of this rule. During 
the first months of implementation--(1) CBP will conduct an extended 
round of structured outreach activities to engage with the trade on all 
aspects of the rule with a series of regional seminars and trade round 
table discussions at all of CBP's major seaports of entry and other 
ports as needed or requested by the trade. (2) CBP will identify trade 
community operators who have established processes (or who have 
successfully re-engineered processes) to deliver the data timely to CBP 
to provide their colleagues in the community with business advice on 
how to comply with the regulatory requirements. (3) CBP's seminars will 
focus on all topics related to this rule, technical, operational, and 
process components, such as documentation adjustments (e.g., modifying 
the terms of letters of credit to require receipt of data to effect 
final payment) and developing automated solutions to track supply chain 
partners and commodity orders (e.g. creating vendor/supplier 
databases).
    A proposed schedule for these outreach activities is as follows:

------------------------------------------------------------------------
                Regions                           Proposed dates
------------------------------------------------------------------------
North East Coast:
     Ports of Newark/New York    30 days after publication.
     and Boston.
South East Coast:
     Ports of Baltimore,         45 days after publication.
     Philadelphia, and Norfolk.
     Ports of Charleston,        60 days after publication.
     Savannah, and Jacksonville.
     Ports of Miami, Port        75 days after publication.
     Everglades, and San Juan.
Gulf Coast:
     Ports of Houston and New    90 days after publication.
     Orleans.
Northwest Pacific Coast:
     Ports of Seattle/Tacoma     105 days after publication.
     and Portland.
     Ports of Oakland/San        120 days after publication.
     Francisco.
Pacific Coast:
     Ports of Los Angeles/Long   135 days after publication.
     Beach.
------------------------------------------------------------------------

    Additional sessions will be scheduled based on trade community 
needs and feedback. All material discussed and presented at the 
seminars will be published on the CBP Web site along with Frequently 
Asked Questions (FAQs) and a general ``How to Guide.'' CBP will 
consider an entity's progress in the implementation of the rule during 
the delayed enforcement period as a mitigating factor in any 
enforcement action following the delayed enforcement period.

E. Summary of Changes From NPRM

    As referenced below, CBP is making several significant changes from 
the proposed rule. These changes consist of the following:
    (1) A compliance date of one year from the effective date of this 
final rule is established (in new Sec. Sec.  4.7c(d), 4.7d(f), and 
149.2(g)).
    (2) CBP has added flexibility for four Importer Security Filing 
elements (Manufacturer (or supplier), Ship to party, Country of origin, 
and Commodity HTSUS number). Specifically, CBP is allowing importers, 
in their initial filing, to provide a range of acceptable responses 
based on facts available to the importer at the time, in

[[Page 71736]]

lieu of a single specific response (which may become known to the 
importer only at a later time). Importers will be required to update 
their filings with respect to these elements as soon as more precise or 
more accurate information is available, in no event less than 24 hours 
prior to arrival at a U.S. port (or upon lading at the foreign port if 
that is later than 24 hours prior to arrival in a U.S. port).
    (3) CBP has added flexibility for two Importer Security Filing 
elements (Container stuffing location and Consolidator (stuffer)) by 
requiring submission as early as possible, and in any event no later 
than 24 hours prior to arrival in a U.S. port (or upon lading at the 
foreign port if that is later than 24 hours prior to arrival in a U.S. 
port).
    (4) The requirement that break bulk cargo be included on vessel 
stow plans is removed from Sec.  4.7c.
    (5) The liquidated damages amount for violations of the Importer 
Security Filing requirements are changed from the value of the 
merchandise, as proposed, to $5,000 for each violation in proposed 
Sec. Sec.  113.62(j), 113.64(e), and 113.73(c) and new Sec.  113.63(g) 
and Appendix D to part 113.
    CBP is also making the following additional changes from the 
proposed rule:
    (1) Proposed Sec.  4.7(c)(5) required carriers to provide the 
``Hazmat-UN code.'' This section is changed to allow the carrier to 
provide any Hazmat code, if applicable.
    (2) Proposed Sec.  4.7d(a) is changed to clarify that CSMs are 
required for empty containers.
    (3) The label for the party required to submit the Importer 
Security Filing is changed from the ``importer'' to the ``ISF 
Importer'' in part 149 and proposed Sec.  149.1(a) is changed to 
clarify that the ISF Importer is construed as the owner, purchaser, 
consignee, or agent such as a licensed customs broker.
    (4) Proposed Sec.  149.3(a)(5) is changed to clarify that the 
supplier must be the ``party supplying'' the finished goods in the 
country from which the goods are leaving and that this party does not 
necessarily need to be in the country from which the goods are leaving.
    (5) The definition for the ``Booking party'' element in proposed 
Sec.  149.3(b)(1) is changed to require the identity of the ``party who 
initiates the reservation of the cargo space for the shipment.''
    (6) Proposed Sec.  149.3(a)(1), (2), (5), (6), (9), and (10) and 
(b)(1) and (b)(4) are changed to allow the ISF Importer to provide 
widely recognized commercially accepted identification numbers.
    (7) The section heading for proposed Sec.  149.5 is changed to 
clarify that the eligibility and bond requirements therein apply to an 
ISF Importer who submits an Importer Security Filing on his own behalf 
as well as agents submitting an Importer Security Filing on behalf of 
another party.
    (8) An importer security filing bond is added in a new Appendix D 
of part 113 and provisions for the Importer Security Filing are added 
to Sec.  113.63 in a new paragraph (g).
    (9) The new importer security filing bond and basic custodial bond 
are added to the list of bonds in proposed Sec.  149.5(b) that may be 
posted for Importer Security Filing purposes.
    (10) Proposed Sec.  149.5(b) is changed to require the ISF Importer 
to possess one of the required bonds or to have an agent post the 
agent's bond when submitting an Importer Security Filing on behalf of 
the ISF Importer.
    (11) Proposed Sec.  149.5(c) is changed to clarify that powers of 
attorney must be in English and that powers of attorney and letters of 
revocation must be retained for five years from revocation.
    (12) Proposed new 113.64(c) provides that liquidated damages for 
violations of advance cargo information requirements are capped at 
$100,000 for vessel carriers. Proposed redesignated paragraph (d) of 
Sec.  113.64 is changed to include a $100,000 cap on all other 
conveyance arrivals as well.
    (13) Sections 4.7c, 4.7d, and 149.2 are added to the list of 
approved information collections in Sec.  178.2.

IV. Discussion of Comments Regarding This Rulemaking Generally

Comment

    CBP should postpone implementation until the regulations can be 
implemented through the Automated Commercial Environment (ACE), a 
vigorous outreach to the public sector and other agencies of the 
government is undertaken and CBP is able to further study the costs, 
benefits, and alternatives. CBP should then issue a new Strawman \5\ or 
initially publish the rule as an interim final rule providing details 
of the bonding, liquidated damages, penalty, collection proposal, and 
data requirements, so that companies can develop or adapt their 
information technology systems and software to properly transmit the 
filing. When CBP does proceed, the rule should include a delayed 
effective date of 90 days to 14 months to provide ample time for the 
trade to prepare their systems and processes. Following the delayed 
effective date, CBP should phase-in enforcement over a 12-month period 
during which CBP should accept less than the full complement of data 
elements, accept data at some point less than 24 hours prior to lading, 
phase in individual elements, phase in trade participants, and/or not 
impose any punitive measures.
---------------------------------------------------------------------------

    \5\ Prior to publishing the NPRM, CBP posted a ``strawman'' 
proposal on the CBP website along with a request for comments from 
the trade.
---------------------------------------------------------------------------

CBP Response

    Section 203 of the SAFE Port Act of 2006 provides that the 
Secretary of Homeland Security shall promulgate regulations requiring 
additional data elements for improved high-risk targeting. CBP has 
engaged the trade through the rulemaking process and through 
consultation as required by section 203 of the SAFE Port Act 
(incorporating the requirements of section 343(a) of the Trade Act of 
2002). CBP has met with groups representing the trade while developing 
the proposal, including: The Departmental Advisory Committee on 
Commercial Operations of Customs and Border Protection and Related 
Homeland Security Functions (COAC), the American Association of 
Exporters and Importers (AAEI), the American Association of Port 
Authorities (AAPA), the Joint Industry Group (JIG), the National 
Association of Manufacturers (NAM), the National Customs Brokers and 
Forwarders Association of America (NCBFAA), the International 
Compliance Professionals Association (ICPA), the Retail Industry 
Leaders Association (RILA), the Trade Support Network (TSN), the U.S. 
Chamber of Commerce, and the World Shipping Council (WSC). Prior to 
publishing the NPRM, CBP also posted a ``strawman'' proposal on the CBP 
Web site along with a request for comments from the trade. CBP has also 
considered the costs, benefits, and alternatives and has prepared a 
cost, benefit, and feasibility analysis. An updated cost, benefit, and 
feasibility analysis has been prepared for this interim final rule and 
is available in the public docket and on Regulations.gov.
    After careful consideration, DHS has determined that issuance of 
this interim final rule is necessary at this time to fulfill the SAFE 
Port Act's statutory mandate and increase the security of cargo 
entering the United States by vessel by improving CBP's risk assessment 
capabilities. The information collected pursuant to this interim final 
rule will greatly enhance CBP's enforcement decision making process. 
The sooner that CBP can obtain these data, the sooner CBP can use these 
data to perform better risk analysis and identification of high-risk 
shipments.

[[Page 71737]]

CBP understands that the trade may need time to adjust business 
practices to comply with this interim final rule and that large and 
complex parties may respond to these requirements differently than 
small and less sophisticated importers. Therefore, in order to provide 
the trade sufficient time to adjust to the new requirements and in 
consideration of the business process changes that may be necessary to 
achieve full compliance, CBP will show restraint in enforcing the rule, 
taking into account difficulties that importers may face in complying 
with the rule, so long as importers are making satisfactory progress 
toward compliance and are making a good faith effort to comply with the 
rule to the extent of their current ability. This policy will last for 
twelve months after the effective date and will apply to all aspects of 
the filing rule.
    During this period, CBP will also work with the trade to assist 
them in achieving compliance and will continue to update the trade on 
issues associated with the regulations in the form of FAQs, postings on 
the CBP Web site, other outreach to the trade, and consultation with 
foreign countries. This rule also provides flexibilities with respect 
to certain elements of Importer Security Filings. CBP has also 
committed to a structured review of the elements, including an 
evaluation of any specific compliance difficulties that the trade may 
be encountering with respect to these elements. See the ``Structured 
Review and Flexible Enforcement Period'' section of this document for 
further discussion regarding the delayed compliance period, 
flexibilities, and CBP's structured review.

Comment

    Prior to finalizing the regulations, CBP should undertake a pilot 
test using the required timeframes for data submission and employing 
the actual targeting, validation, and electronic processes that are 
intended to be employed upon implementation

Comment Response

    As part of CBP's pre-existing Advance Trade Data Initiative (ATDI), 
CBP worked with a wide variety of volunteers from the world trade 
community to test the trade's ability to provide data, including some 
elements of the Importer Security Filing, to CBP. ATDI has proven that 
the industry has access to the required data and can get the data to 
CBP. CBP also has proven the ability to incorporate the ATDI data into 
the Automated Targeting System (ATS). Regarding timing requirements, 
some ATDI participants are hitting the 24 hours prior to lading 
deadline today. However, CBP understands that some business practices 
may need to change in order for the ISF Importer to obtain the required 
information 24 hours prior to lading. Therefore, in order to provide 
the trade sufficient time to comply with these requirements, CBP has 
taken several steps, including adoption of a 12-month delayed 
compliance date. This rule also provides flexibilities with respect to 
certain elements of Importer Security Filings. In addition, CBP has 
committed to a structured review of the elements, including an 
evaluation of any specific compliance difficulties that the trade may 
be encountering with respect to these elements. See the ``Structured 
Review and Flexible Enforcement Period'' section of this document for 
further discussion regarding the delayed compliance period, 
flexibilities, and CBP's structured review.

Comment

    CBP should extend the comment period for the NPRM.

CBP Response

    CBP published a document in the Federal Register (73 FR 6061) on 
February 1, 2008, extending the comment period an additional 15 days 
until March 18, 2008.

Comment

    When the technical information has been developed, CBP should 
publish proposed data specifications in the Customs and Trade Automated 
Interface Requirements (CATAIR) and Customs Automated Manifest 
Interface Requirements (CAMIR) without requiring that a confidentiality 
agreement be signed and should re-issue the NPRM with a 90-day comment 
period.

CBP Response

    CBP disagrees that re-issuing the NPRM is necessary. CBP has 
amended the CATAIR, CAMIR, and American National Standards Institute 
(ANSI) X.12 transaction messages, providing the technical requirements 
necessary to comply with these regulations. CBP has posted these 
documents to the CBP Web site. While this interim final rule becomes 
effective 60 days from the date of publication in the Federal 
Register--thus codifying the specific requirements--CBP is extending 
the compliance date to one year from the effective date and is 
providing flexibilities with respect to certain elements of Importer 
Security Filings. See the ``Structured Review and Flexible Enforcement 
Period'' section of this document for further discussion regarding the 
delayed compliance period and flexibilities. CBP believes that, 
especially with the flexibilities that CBP is providing, this is 
sufficient time for the trade to prepare for and comply with the new 
requirements.

Comment

    The proposed regulation runs afoul of section 343(a)(3)(I) of the 
Trade Act of 2002 which requires that, where practicable, the 
regulations shall avoid redundant requirements because the requirement 
for line item information for each shipment will result in redundant 
Importer Security Filing submissions and CBP has announced that it 
intends to target upon receipt of the Importer Security Filing as well 
as upon entry.

CBP Response

    CBP is aware that four of the Importer Security Filing elements, 
while collected at a different time, are identical to elements 
submitted for entry (CBP Form 3461) and entry summary (CBP Form 7501) 
purposes and two of the Importer Security Filing elements, while 
collected at a different time, are identical to elements submitted for 
application to admit goods to an FTZ (CBP Form 214). In an effort to 
minimize the redundancy of data transmitted to CBP, after further 
consideration and in response to public comments, CBP is allowing an 
importer to submit these elements once via the same electronic 
transmission to be used for both Importer Security Filing and entry/
entry summary or FTZ admission purposes. With regard to redundancy of 
multiple Importer Security Filings, CBP understands that for some 
Importer Security Filing filings the 10 data elements will not change 
for multiple bills of lading. Therefore, CBP will accept one Importer 
Security Filing for multiple bills of lading in the same shipment.

Comment

    This rule has become superfluous with the statutory requirement for 
the foreign port image scanning of all containerized maritime cargoes 
prior to their being placed on vessels for shipment to the United 
States. In addition, there has been no demonstration that the Importer 
Security Filing will contribute to the effectiveness of the ATS.

CBP Response

    CBP disagrees. Advance cargo information provides transparency into 
the transaction, including the parties

[[Page 71738]]

and goods involved, which is part of the overall risk analysis. The 
information required by this rule will allow CBP to conduct data 
analysis to more effectively identify high-risk containers for 
increased scrutiny, and screen out shipments for increased scrutiny. 
Additional scrutiny could include additional non-intrusive inspection 
(NII) and physical examination. The value of NII, including radiation 
detection capabilities, is increased when the targeter has a frame of 
reference which is provided by accompanying transaction data such as 
the data required pursuant to these regulations.

Comment

    CBP should scan 100% of cargo in lieu of requiring an Importer 
Security Filing, vessel stow plans and container status messages 
(CSMs).

CBP Response

    CBP disagrees. The physical cargo is only one piece of the puzzle. 
Information, such as the information collected as a result of this 
rulemaking will allow CBP to put the image produced by a scan into 
context. The scan and Importer Security Filing together will provide 
additional transparency and validate the shipment and parties involved.

Comment

    It is unclear how the proposed requirements will enhance the 
security of the United States. This rule could result in increased 
transit time, which could actually increase security risks.

CBP Response

    Pursuant to section 203 of the SAFE Port Act (6 U.S.C. 943), the 
Secretary of Homeland Security, acting through the Commissioner of CBP, 
must promulgate regulations to require the electronic transmission of 
additional data elements for improved high-risk targeting, including 
appropriate security elements of entry data for cargo destined to the 
United States by vessel prior to loading of such cargo on vessels at 
foreign seaports. The Importer Security Filing elements, vessel stow 
plans, and CSMs will enhance CBP's targeting and risk analysis 
capabilities by increasing the transparency of key supply chain 
participants, cargo, and events. CBP does not agree that increased 
transit time (dwell time at a foreign port terminal), if incurred due 
to this rulemaking, will result in an increased security risk. The risk 
reduction provided by the collection of additional information that 
will result from these regulations is significantly greater than any 
risk increase resulting from any increased dwell times. Furthermore, 
CBP is addressing global port security through other initiatives.

Comment

    The Importer Security Filing should be expanded to prevent 
dangerous merchandise, including narcotics and other illegal 
consignments, from being shipped to the United States.

CBP Response

    This rule is one part of CBP's layered approach to cargo security. 
CBP has implemented a comprehensive strategy designed to enhance 
national security while protecting the economic vitality of the United 
States. The Container Security Initiative (CSI), the 24 Hour Rule, and 
the Customs-Trade Partnership Against Terrorism (C-TPAT) are 
cornerstone approaches implemented to further this goal. Additionally, 
CBP has developed cargo risk assessment capabilities in its Automated 
Targeting System (ATS) to screen all maritime containers before they 
are loaded aboard vessels in foreign ports. Each of these initiatives 
is dependent upon data supplied by trade entities, including carriers, 
non-vessel operating common carriers (NVOCCs), brokers, importers or 
their agents. Internal and external government reviews have concluded 
that the more complete advance shipment data required pursuant to this 
interim final rule will produce even more effective and more vigorous 
cargo risk assessments. Accordingly, CBP will use these data to ensure 
cargo safety and security and to prevent smuggling.

Comment

    Limiting the proposed requirements to the vessel environment will 
encourage circumvention by transshipment through Canada and Mexico. 
Does CBP plan to apply these requirements to other modes in the future? 
Significant adjustment will be necessary if these rules are applied to 
other modes.

CBP Response

    CBP disagrees that this rule encourages circumvention, as the 
United States has a strong working relationship with both Canadian and 
Mexican border enforcement agencies. CBP will monitor any unexplained 
increases in land border traffic and will take appropriate security 
measures if warranted. This interim final rule is focused on vessel 
cargo pursuant to the requirements under the SAFE Port Act 2006 and the 
Trade Act of 2002. As such, this rule is an incremental step toward 
meeting the goal of securing shipments to the United States. CBP will 
continue to evaluate the effectiveness of this rule. However, at this 
time, CBP is not considering expanding the advance data requirements 
for other modes.

Comment

    CBP should conduct outreach with the trade, including presentation 
of a white paper, PowerPoint presentation, and FAQs, prior to 
implementation and during the implementation phase, including a regular 
and recurring collaborative process with COAC and the TSN. CBP should 
also produce a ``best practices'' document, including detailed process 
flows, for industry and CBP officers to ensure that all trade 
participants understand how to comply with the new requirements. 
Importers will need to implement new processes regardless of whether 
enforcement is phased in.

CBP Response

    CBP agrees that business practices and processes will need to be 
adjusted and that is reflected in our delayed compliance period and 
outreach efforts. See the ``Structured Review and Flexible Enforcement 
Period'' section of this document for further discussion regarding the 
delayed compliance period. CBP has amended the CATAIR, CAMIR, and X.12 
transaction messages, providing the technical requirements necessary 
for submitting Importer Security Filings. These documents have been 
posted to the ``Automated Systems'' section of the CBP Web site. CBP 
will continue to conduct outreach with the trade, in fulfillment of its 
regulatory and statutory obligations, both during the delayed 
compliance period and thereafter, via FAQs, postings on the CBP Web 
site, and other outreach.

Comment

    CBP should provide a Help Desk to assist in the resolution of 
problems associated with the Importer Security Filing requirements.

CBP Response

    CBP will utilize existing resources to resolve problems associated 
with the Importer Security Filing requirements. In order to get access 
to the Automated Broker Interface (ABI) or the Vessel Automated 
Manifest System (vessel AMS), members of the trade should contact a CBP 
Client Representative or the CBP Technology Support Center (TSC), 
formerly known as the CBP Help Desk, for resolution of technical 
problems associated with Importer Security Filings. In addition, CBP 
has

[[Page 71739]]

established a dedicated email account for Importer Security Filing-
related issues. Members of the public are directed to the CBP Web site 
at http://www.cbp.gov for the latest information regarding these 
contacts. CBP will also continue to update the trade in the form of 
FAQs, postings on the CBP Web site, and other outreach to the trade.

Comment

    The information that CBP has requested is the same information that 
thousands of shippers, importers and manufacturers have at their 
fingertips every day. It has long been understood that importing into 
the United States is a privilege, not a right. Thus, it is completely 
proper for CBP to require those who would take advantage of our 
nation's prosperity to help to protect that prosperity. Importers will 
have an added incentive to investigate and identify the identity of 
their suppliers due to the penalties associated with improper Importer 
Security Filings. CBP should also be commended for its open, 
consultative approach in developing this initiative and these 
regulations.

CBP Response

    CBP appreciates the support and cooperation offered by the trade.

V. Discussion of Comments Regarding Proposed Carrier Requirements 
Relating to Vessel Cargo Destined to the United States

A. Overview; Vessel Stow Plan

    CBP proposed to require carriers to submit a vessel stow plan for 
vessels destined to the United States. Under the proposed regulations, 
carriers were required to transmit the stow plan for vessels 
transporting containers and/or break bulk cargo so that CBP received it 
no later than 48 hours after the carrier's departure from the last 
foreign port. For voyages less than 48 hours in duration, CBP was to 
receive the stow plan prior to the vessel's arrival at the first port 
in the United States. Bulk carriers were to be exempt from this 
requirement for vessels exclusively carrying bulk cargo. The proposal 
required carriers to submit the vessel stow plan via the CBP-approved 
electronic data interchange system. The current approved electronic 
data interchange system for the vessel stow plan is vessel AMS. The 
proposal stated that if CBP approves of different or additional 
electronic data interchange systems, CBP would publish a notice in the 
Federal Register.
    Under the proposed regulations, the vessel stow plan was required 
to include standard information relating to the vessel and each 
container and unit of break bulk cargo laden on the vessel. The vessel 
stow plan was to include the following standard information:
    With regard to the vessel,
    (1) Vessel name (including international maritime organization 
(IMO) number);
    (2) Vessel operator; and
    (3) Voyage number.
    With regard to each container or unit of break bulk cargo,
    (1) Container operator, if containerized;
    (2) Equipment number, if containerized;
    (3) Equipment size and type, if containerized;
    (4) Stow position;
    (5) Hazmat-UN code;
    (6) Port of lading; and
    (7) Port of discharge.

B. Public Comments; Vessel Stow Plan

Comments Regarding Responsibilities
    The vessel operating carrier, rather than the non-vessel operating 
common carrier (NVOCC), should be responsible for filing the stow plan. 
The NVOCC may not have the vessel stow plan because they do not operate 
the vessel and have no knowledge of the physical location of cargo as 
loaded on the vessel. Stow plans are not created to meet regulatory 
requirements, and therefore a vessel operating carrier should not be 
responsible for inaccuracies or incompleteness. In addition, carriers 
should not be responsible for errors in information carriers are unable 
to verify.
CBP Response
    CBP agrees that the vessel operating carrier (i.e., vessel 
operator) is responsible for filing the stow plan. While, prior to this 
interim final rule, stow plans were not created to meet regulatory 
requirements, CBP is requiring, through this rulemaking, that vessel 
carriers submit accurate and timely stow plans for containerized cargo. 
CBP will use stow plan data to compare the containers listed on the 
stow plan with containers listed on the vessel's manifest in an effort 
to identify potentially unmanifested containers. CBP may take 
enforcement action against a carrier that fails to comply with the 
requirement to submit stow plans in a timely or accurate manner. CBP 
enforcement actions may include, but are not limited to, claims for 
liquidated damages pursuant to 19 CFR 113.64(f). However, CBP has set a 
compliance date of one year from the effective date of this interim 
final rule. During that one-year delayed compliance period, CBP will 
work with the trade to assist them in achieving compliance. CBP will 
also work with the trade on ongoing issues and will keep updating and 
posting new FAQs to the CBP Web site, while conducting additional 
outreach to the trade and various foreign government entities. See the 
``Structured Review and Flexible Enforcement Period'' section of this 
document for further discussion regarding the delayed compliance period 
and CBP's planned outreach efforts.
Comments Regarding Procedures
    Commenters questioned whether a stow plan is required for every 
U.S. arrival from a foreign port. Some also stated that CBP should 
provide the vessel stow plan filer an electronic acknowledgment, 
containing time and date of receipt and unique identification number, 
as evidence that the vessel stow plan was successfully received. Others 
questioned which formats can be used for submission of vessel stow 
plans and whether CBP will accept vessel stow plans in Adobe Portable 
Document Format (.pdf). Some also stated that CBP should also accept 
the U.S. hazardous material (hazmat) codes or Hazmat class in addition 
to the proposed Hazmat-UN code and that CBP should not use the stow 
plan for securing detailed and complete hazmat information. Where 
reference is made to the equipment number, commenters questioned 
whether CBP wanted carriers to report the unique Vehicle Identification 
Number (VIN) for vehicles or if a simple vehicle count is sufficient.
CBP Response
    CBP must receive a stow plan after the vessel departs from the last 
foreign port. CBP agrees that the vessel stow plan filer should receive 
a status notification message acknowledging that the vessel stow plan 
was accepted by CBP's system. As to formats, CBP will accept vessel 
stow plans in the United Nations rules for Electronic Data Interchange 
For Administration, Commerce and Transport (UN EDIFACT) Bayplan/stowage 
plan occupied and empty locations message (BAPLIE) SMDG format, which 
is the industry-wide standard for carriers who currently use electronic 
stow plans. CBP will also work with carriers to accept the ANSI X.12 
``324'' format on a case-by-case basis. Other formats, such as the 
Adobe.pdf format, are not specifically designed for stow plans and, 
therefore, would be difficult for CBP systems to interpret. Therefore, 
CBP cannot justify the costs associated with supporting these 
additional formats at this time. CBP will continue to consider

[[Page 71740]]

additional formats in the future. Regarding hazardous materials 
reporting on vessel stow plans, the commenter did not provide 
information regarding what was intended by reference to U.S. Hazmat 
codes. The U.S. Department of Transportation Hazardous Materials Table 
lists Hazmat-UN identification numbers and hazard classes. See 49 CFR 
part 172.101. In order to minimize the cost to carriers, CBP will 
accept any widely recognized commercially acceptable hazardous 
materials identification numbers and classifications that the carrier 
uses in the normal course of business, such as those listed on the U.S. 
Department of Transportation Hazardous Materials Table. Regarding VINs, 
a VIN is not required as part of a stow plan. Also, since stow plans 
are not required for break bulk merchandise, they will not be required 
for vehicles unless they are containerized.
Comments Regarding Scope of Requirements for Stow Plan
    CBP should not require stow plans for vessels transporting fewer 
than a threshold number of containers or for vessels traveling solely 
within the U.S. Outer Continental Shelf (OCS). CBP should not require 
stow plans for break bulk cargo (including roll-on/roll-off vessels) 
because break bulk is obvious as to what it is and where it is in the 
cargo hold and, therefore, of limited security value. CBP should also 
not require stow plans for bulk ships carrying either containers or 
break bulk cargoes on deck. Some questioned whether a carrier will need 
to include cargo that is not bound for the United States on a stow 
plan.
CBP Response
    A stow plan must be filed for each vessel carrying containerized 
cargo that is required to transmit an advance cargo declaration 
pursuant to section 343(a) of the Trade Act of 2002. CBP will use stow 
plan data to compare the containers listed on the stow plan with 
containers listed on the vessel's manifest in an effort to identify 
potentially unmanifested containers. Unmanifested containers are 
considered to be of the highest risk to our nation's security since 
there is little information available about the contents or intended 
destination of these containers. Even a single unmanifested container 
poses a possible threat to the security of the United States. For this 
reason, CBP does not intend to establish an exemption from the stow 
plan requirement based on the number of containers carried on a vessel 
or for vessels traveling solely within the U.S. OCS. After further 
consideration and in response to comments, CBP has determined to not 
require break bulk cargo on stow plans. However, regardless of the type 
of vessel (including break bulk and bulk vessels), a vessel stow plan 
accounting for all containers onboard a vessel must be submitted to 
CBP. Finally, carriers will be required to submit stow plans for all 
containerized cargo that will enter the limits of a port in the United 
States.
Comments Regarding the Timing for Submission of the Stow Plan
    Commenters questioned the timing for stow plans for trips of very 
short duration (e.g., Vancouver to Seattle). It was suggested that the 
stow plan not be required earlier than the required United States Coast 
Guard Notice of Arrival, which is 96 hours prior to arrival. It was 
also suggested that CBP should amend the regulations, as proposed, to 
require submission of the stow plan 48 hours after the vessel departs 
from the last foreign port where goods are laden on the vessel rather 
than the last foreign port. Others questioned when a vessel ``arrives'' 
for vessel stow plan timing purposes. Finally, commenters questioned 
whether carriers need to amend stow plans. If so, carriers should only 
be required to amend stow plans when they find that a container has 
been stowed aboard that was not on the stow plan as submitted to CBP 
and not when a container is on a stow plan but was not loaded aboard 
the vessel.
CBP Response
    Stow plans are required for vessels carrying containers destined to 
the United States. For voyages less than 48 hours in duration 
(including very short voyages), CBP must receive the stow plan prior to 
the vessel's arrival at the first port in the United States. CBP 
disagrees with the remaining comments. Under the interim final rule, 
stow plans are required no later than 48 hours after the vessel departs 
from the last foreign port so that CBP has an accurate representation 
of the cargo laden on the vessel as it arrives in the United States. 
Except for voyages less than 48 hours in duration, a vessel stow plan 
must be submitted 48 hours after the vessel departs from the last 
foreign port, whether goods are laden and/or unladen at that port, so 
that the vessel stow plan will accurately depict the cargo onboard when 
the vessel arrives within the limits of a port in the United States. 
Vessel arrival for vessel stow plan purposes is the same as vessel 
arrival for vessel entry purposes. Arrival of a vessel is defined in 19 
CFR 4.0. See also 19 CFR 4.2 regarding reports of arrival of vessels. 
Finally, inasmuch as CBP requires that an accurate and complete stow 
plan be submitted, a carrier must submit a new accurate stow plan 
immediately upon discovery of any inaccuracies. However, the carrier 
will still be liable for enforcement actions resulting from the 
inaccurate vessel stow plan.

C. Overview; Container Status Messages

    Pursuant to section 343(a) of the Trade Act of 2002, CBP proposed 
to require carriers to submit CSMs daily for certain events relating to 
all containers laden with cargo destined to arrive within the limits of 
a port in the United States by vessel.
    Under the proposed regulations, CSMs created under either the ANSI 
X.12 standard or the UN EDIFACT standard were to be acceptable.
    Under the proposed regulations, carriers were required to submit a 
CSM when any of the required events occurs if the carrier creates or 
collects a CSM in its equipment tracking system reporting that event. 
The proposed regulations would not require a carrier to create or 
collect any CSM data other than that which the carrier already creates 
or collects on its own and maintains in its electronic equipment 
tracking system. CSMs were to be submitted no later than 24 hours after 
the message is entered into the carrier's equipment tracking system.
    The events for which CSMs would be required are:
    (1) When the booking relating to a container which is destined to 
arrive within the limits of a port in the United States by vessel is 
confirmed;
    (2) When a container which is destined to arrive within the limits 
of a port in the United States by vessel undergoes a terminal gate 
inspection;
    (3) When a container, which is destined to arrive within the limits 
of a port in the United States by vessel, arrives or departs a facility 
(These events take place when a container enters or exits a port, 
container yard, or other facility. Generally, these CSMs are referred 
to as ``gate-in'' and ``gate-out'' messages.);
    (4) When a container, which is destined to arrive within the limits 
of a port in the United States by vessel, is loaded on or unloaded from 
a conveyance (This includes vessel, feeder vessel, barge, rail and 
truck movements. Generally, these CSMs are referred to as ``loaded on'' 
and ``unloaded from'' messages);
    (5) When a vessel transporting a container, which is destined to 
arrive within the limits of a port in the United States by vessel, 
departs from or arrives

[[Page 71741]]

at a port (These events are commonly referred to as ``vessel 
departure'' and ``vessel arrival'' notices);
    (6) When a container which is destined to arrive within the limits 
of a port in the United States by vessel undergoes an intra-terminal 
movement;
    (7) When a container which is destined to arrive within the limits 
of a port in the United States by vessel is ordered stuffed or 
stripped;
    (8) When a container which is destined to arrive within the limits 
of a port in the United States by vessel is confirmed stuffed or 
stripped; and
    (9) When a container which is destined to arrive within the limits 
of a port in the United States by vessel is shopped for heavy repair.
    CBP is aware that it might be cost beneficial for some carriers to 
transmit all CSMs, rather than filter out CSMs relating to containers 
destined to the United States or relating only to the required events. 
Therefore, CBP proposed to allow carriers to transmit their ``global'' 
CSM messages, including CSMs relating to containers that do not contain 
cargo destined for importation into the United States and CSMs relating 
to events other than the required events. CBP stated in the proposal 
that by transmitting CSMs in addition to those required by the proposed 
regulations, a carrier would authorize CBP to access and use those 
data.
    For each CSM submitted, the following information was proposed to 
be included:
    (1) Event code being reported, as defined in the ANSI X.12 or UN 
EDIFACT standards;
    (2) Container number;
    (3) Date and time of the event being reported;
    (4) Status of the container (empty or full);
    (5) Location where the event took place; and
    (6) Vessel identification associated with the message.
    Carriers would be exempt from the CSM requirement for bulk and 
break bulk cargo. Under the proposed regulations, carriers would be 
required to submit CSMs via the CBP-approved electronic data 
interchange system. The current approved electronic data interchange 
system for CSMs is vessel AMS. The proposal stated that if CBP approves 
of a different or additional electronic data interchange system, CBP 
will publish notice in the Federal Register.

D. Public Comments; Container Status Messages

Comments Regarding Responsibilities
    Some commenters questioned whether the vessel operating carrier or 
NVOCC, when applicable, is required to submit CSMs. Others asked 
whether a carrier that has no electronic equipment tracking system 
needs to report any CSMs and when a carrier may stop sending event 
messages. Some noted that CBP should require all carriers, not just 
those who currently create or collect CSMs, to submit CSMs.
CBP Response
    Vessel operating carriers are required to submit CSMs. If a carrier 
currently does not create or collect CSMs in an equipment tracking 
system, the carrier is not required to submit CSMs to CBP. If a carrier 
does create or collect CSMs, the carrier's obligation to transmit CSMs 
ends upon discharge of the cargo in the United States. However, a 
carrier may transmit other CSMs in addition to those required by these 
regulations. By transmitting additional CSMs, the carrier authorizes 
CBP to access and use those data. In order to minimize the cost to 
carriers whose volume of business does not justify the creation of 
CSMs, CBP is declining to impose an obligation upon carriers to create 
or collect any CSM data pursuant to this rule.
Comments Regarding Scope of Requirements for CSMs
    Some questioned whether CSMs are required for empty containers 
since as proposed, 19 CFR 4.7d would require CSMs for containers laden 
with cargo destined to arrive within the limits of a port in the United 
States from a foreign port by vessel. For each CSM, however, it seems 
that the ``status of the container (empty or full)'' must be reported. 
Others observed that some of the events for which CSMs are required are 
not reported via CSMs in all instances. For example, carriers may not 
create or collect CSMs when bookings are confirmed, when a container 
enters or exits a facility, when a vessel departs or arrives, when a 
container undergoes an intra-terminal movement, or when a container is 
ordered stuffed or stripped or confirmed stuffed or stripped. In 
addition, loaded containers are not ``shopped for heavy repairs.'' 
Others noted that since CSMs are not created to meet regulatory 
requirements a vessel operating carrier should not be responsible for 
inaccuracies or incompleteness. In addition, there should not be an 
obligation to ensure that each of the six data elements is in each CSM 
since there is ``no requirement that a carrier create or collect any 
CSM data.''
CBP Response
    CSMs are required for all containers, including empty containers, 
destined to arrive within the limits of a port in the United States 
from foreign by vessel (if the carrier creates or collects a CSM in its 
equipment tracking system). As commenters pointed out, each CSM must 
include the status of the container as either empty or full. The 
reference in the NPRM to containers ``laden with cargo destined to 
arrive within the port limits in the United States'' was intended to 
differentiate those containers that are destined for the United States 
from containers that are not destined to arrive within the limits of a 
port in the United States. Section 4.7d has been amended to clarify 
that CSMs are required for all containers destined to arrive within the 
limits of a port in the United States. It remains CBP's position at 
this time to minimize the cost to carriers whose volume of business 
does not justify the creation of CSMs by only requiring a carrier to 
submit CSMs if the carrier creates or collects a CSM in its equipment 
tracking system. Nevertheless, CBP believes that every CSM for 
containers laden with cargo destined to arrive within the limits of a 
port in the United States from foreign by vessel, by their very nature, 
must contain the six required elements. Accordingly, while there is no 
requirement that carriers create or collect any CSMs pursuant to this 
rule, every CSM submitted to CBP must contain the six required elements 
with the exception of the ``Vessel identification associated with the 
message.'' This element is not required when a container has not yet 
been associated with a specific vessel.
Comments Regarding Procedures
    When the NPRM refers to ``loaded on'' and ``unloaded from'' 
messages, is CBP referring to CSMs generated when a container is loaded 
or unloaded to or from a vessel or to or from a rail carrier? CBP 
should also clarify whether the ``date and time of the event being 
reported'' refers to the date and time when the event occurred in real-
time and not when it was entered into a carrier's equipment tracking 
system and whether CBP will accept the carrier's definition of location 
where the event took place as currently reported in their equipment 
system. CBP should clarify what type of identification should be 
transmitted for the ``vessel identification associated with the 
message''--i.e., should this be a vessel name, number, IMO, vessel 
operator, or other

[[Page 71742]]

identification? In addition, some CSMs will be created before there is 
a vessel associated with the message. Commenters also stated that CBP 
should clarify when a container is considered to have been ``confirmed 
stuffed or stripped,''--i.e., will it be left up to the carrier's 
discretion to define when they deem a booking has reached a 
``confirmed'' status? A date should be optional for this CSM since 
stuffing and stripping of containers is generally not performed by the 
carrier. Finally, commenters questioned whether a do not load (DNL) 
should be issued; whether an importer's cargo would be subject to 
increased scrutiny if the carrier fails to submit a vessel stow plan or 
container status messages; whether the Importer Security Filing filer 
will be notified if a DNL is issued in this instance; and whether the 
importer be liable for vessel stow plan and CSM related errors (e.g., 
when a carrier ``rolls over'' a container to another vessel and fails 
to report this to CBP).
CBP Response
    CSM events include messages about movements such as when a 
container, which is destined to arrive within the limits of a port in 
the United States by vessel, is loaded on or unloaded from any 
conveyance. This includes vessel, feeder vessel, barge, rail, and truck 
movements. The date and time when the event actually occurred should be 
reported. The location as recorded in the carrier's equipment tracking 
system should be reported. For purposes of the vessel identification, 
CBP will accept whatever unique identifier is used within the carrier's 
tracking system. CBP has changed the proposal in these interim final 
regulations to require the vessel identification associated with the 
message only if a container has been associated with a specific vessel. 
With regard to confirmation of stuffing, a booking is ``confirmed'' by 
a carrier's own booking system. Similarly, a container is confirmed 
stuffed or stripped by a carrier's own booking system. Accordingly, it 
is left up to the carrier's discretion to define when a booking is 
deemed confirmed and a container is confirmed stuffed or stripped. 
Finally, if a carrier fails to submit a vessel stow plan or container 
status messages, when a carrier is required to do so, CBP may take 
appropriate enforcement actions, including but not limited to, issuance 
of a DNL, a prelude to a denial of a permit to unlade the container(s) 
upon arrival in the United States. However, CBP will not notify the 
party who filed the Importer Security Filing regarding DNL messages not 
related to their Importer Security Filing. If parties wish to share 
these data, they will need to do so privately. Regarding vessel stow 
plan and CSM-related errors, the importer is not responsible for 
submitting stow plans and CSMs to CBP and is therefore not liable for 
inaccuracies or errors.

E. Public Comments; Carrier Requirements Generally

Comment
    CBP should require the terminal operator to submit vessel stow 
plans and container status messages. The vessel operator should be 
responsible for filing CSMs and vessel stow plans when there is a 
vessel sharing or space charter agreement. In the alternative, carriers 
should be able to designate a third party to submit CSMs and the vessel 
stow plan on the carrier's behalf.
CBP Response
    CBP disagrees that terminal operators should be required to submit 
vessel stow plans and container status messages. The vessel operator is 
responsible for the submission of the vessel stow plan because it is 
the party operating the vessel and transporting the cargo to the United 
States. All vessel operating carriers who create or collect CSMs for 
cargo that is destined to enter the limits of a port in the United 
States, including slot and other vessel sharing partners, are 
responsible for the submission of CSMs. In response to requests from 
the trade, CBP will allow the responsible carrier to designate a third 
party agent to transmit stow plans and CSMs. However, the obligation 
and liability for those requirements remains with the carrier.

VI. Discussion of Comments Regarding Proposed Importer Requirements for 
Vessel Cargo Destined to the United States

A. Overview; Proposed Importer Requirements

    Pursuant to the authority of section 343(a) of the Trade Act of 
2002, as amended by MTSA, and section 203 of the SAFE Port Act, in 
order to enhance the security of the maritime environment, CBP proposed 
to require importers, as defined in the proposal, or their agents, to 
transmit an Importer Security Filing to CBP, for cargo other than FROB, 
no later than 24 hours before cargo is laden aboard a vessel destined 
to the United States. Because FROB is frequently laden based on a last-
minute decision by the carrier, the Importer Security Filing for FROB 
was to be required any time prior to lading.\6\ Under the proposed 
regulations, an Importer Security Filing was required for each 
shipment, at the lowest bill of lading level (i.e., at the house bill 
of lading level, if applicable). It is information from the relevant 
house bill that CBP proposed to collect.
---------------------------------------------------------------------------

    \6\ CBP did not propose to amend the timing requirements in 19 
CFR part 4 requiring submission of advance manifest information 24 
hours prior to lading.
---------------------------------------------------------------------------

    Under the proposal, the party required to submit the Importer 
Security Filing was the party causing the goods to enter the limits of 
a port in the United States. The proposal stated that this party would 
be construed as the carrier for FROB and as the party filing IE, T&E, 
or FTZ documentation for those types of shipments. CBP proposed to 
allow an importer, as defined in the proposal, as a business decision, 
to designate an authorized agent to file the Importer Security Filing 
on the importer's behalf. Under the proposed regulations, a party could 
act as an authorized agent for purposes of filing the Importer Security 
Filing if that party obtains access to ABI or AMS and obtains a bond.
    Under the proposed regulations, importers, as defined in the 
proposal, or their agents, would be required to transmit the Importer 
Security Filing via a CBP-approved electronic data interchange system. 
The proposal stated that the current approved electronic data 
interchange systems for the Importer Security Filing was ABI and vessel 
AMS and that, if CBP approves a different or additional electronic data 
interchange system in the future, CBP would publish notice in the 
Federal Register.
    Under the proposed regulations, the party who filed the Importer 
Security Filing would be required to update the Importer Security 
Filing if, after the filing and before the goods arrive within the 
limits of a port in the United States, there were changes to the 
information filed or more accurate information becomes available.
    Under the NPRM, CBP proposed to require ISF Importers to submit 10 
elements for shipments consisting of goods intended to be entered into 
the United States and goods intended to be delivered to an FTZ. For 
goods to be delivered to an FTZ, CBP considered the importer to be the 
party filing the FTZ documentation with CBP. CBP proposed to require 
that the importer or the importer's agent must transmit these 10 
elements to CBP. Under the proposal, five elements were required for 
shipments consisting entirely of FROB and shipments consisting entirely 
of

[[Page 71743]]

goods intended to be ``transported'' as IE or T&E in-bond shipments.
    Under the proposal, for FROB, the importer would be construed as 
the international carrier of the vessel arriving in the United States. 
For IE and T&E in-bond shipments, the importer was construed as the 
party filing the IE or T&E documentation with CBP.
1. Shipments Other Than FROB, IE Shipments, and T&E Shipments
    Under the proposed regulations, for the Importer Security Filing 
for shipments other than those consisting entirely of FROB and goods 
intended to be ``transported'' in-bond as an IE or T&E, 10 elements 
were required, unless specifically exempted. The manufacturer (or 
supplier) name and address, country of origin, and commodity Harmonized 
Tariff Schedule of the United States (HTSUS) number were to be linked 
to one another at the line item level.
    The 10 proposed required elements were:
    (1) Manufacturer (or supplier) name and address. Name and address 
of the entity that last manufactures, assembles, produces, or grows the 
commodity or name and address of the supplier of the finished goods in 
the country from which the goods are leaving. In the alternative, the 
name and address of the manufacturer (or supplier) that is currently 
required by the import laws, rules and regulations of the United States 
(i.e., entry procedures) may be provided (this is the information that 
is used to create the existing manufacturer identification (MID) number 
for entry purposes).
    (2) Seller name and address. Name and address of the last known 
entity by whom the goods are sold or agreed to be sold. If the goods 
are to be imported otherwise than in pursuance of a purchase, the name 
and address of the owner of the goods must be provided.\7\
---------------------------------------------------------------------------

    \7\ The party required for this element is consistent with the 
information required on the invoice of imported merchandise. See 19 
CFR 141.86(a)(2).
---------------------------------------------------------------------------

    (3) Buyer name and address. Name and address of the last known 
entity to whom the goods are sold or agreed to be sold. If the goods 
are to be imported otherwise than in pursuance of a purchase, the name 
and address of the owner of the goods must be provided.\8\
---------------------------------------------------------------------------

    \8\ The party required for this element is consistent with the 
information required on the invoice of imported merchandise. See 19 
CFR 141.86(a)(2).
---------------------------------------------------------------------------

    (4) Ship to name and address. Name and address of the first 
deliver-to party scheduled to physically receive the goods after the 
goods have been released from customs custody.
    (5) Container stuffing location. Name and address(es) of the 
physical location(s) where the goods were stuffed into the container. 
For break bulk shipments, the name and address(es) of the physical 
location(s) where the goods were made ``ship ready'' must be provided.
    (6) Consolidator (stuffer) name and address. Name and address of 
the party who stuffed the container or arranged for the stuffing of the 
container. For break bulk shipments, the name and address of the party 
who made the goods ``ship ready'' or the party who arranged for the 
goods to be made ``ship ready'' must be provided.
    (7) Importer of record number/FTZ applicant identification number. 
Internal Revenue Service (IRS) number, Employer Identification Number 
(EIN), Social Security Number (SSN), or CBP assigned number of the 
entity liable for payment of all duties and responsible for meeting all 
statutory and regulatory requirements incurred as a result of 
importation. For goods intended to be delivered to an FTZ, the IRS 
number, EIN, SSN, or CBP assigned number of the party filing the FTZ 
documentation with CBP must be provided. The importer of record number 
for Importer Security Filing purposes is the same as ``importer 
number'' on CBP Form 3461.
    (8) Consignee number(s). Internal Revenue Service (IRS) number, 
Employer Identification Number (EIN), Social Security Number (SSN), or 
CBP assigned number of the individual(s) or firm(s) in the United 
States on whose account the merchandise is shipped. This element is the 
same as the ``consignee number'' on CBP Form 3461.
    (9) Country of origin. Country of manufacture, production, or 
growth of the article, based upon the import laws, rules and 
regulations of the United States. This element is the same as the 
``country of origin'' on CBP Form 3461.
    (10) Commodity HTSUS number. Duty/statistical reporting number 
under which the article is classified in the Harmonized Tariff Schedule 
of the United States (HTSUS). The HTSUS number is required to be 
provided to the six-digit level. The HTSUS number may be provided up to 
the 10-digit level. This element is the same as the ``H.S. number'' on 
CBP Form 3461 and can only be used for entry purposes, if it is 
provided at the 10-digit level or greater.
2. FROB, IE Shipments, and T&E Shipments
    Under the proposed regulations, for the Importer Security Filing 
for shipments consisting entirely of FROB and shipments consisting 
entirely of goods intended to be ``transported'' in-bond as an IE or 
T&E, five elements were to be provided in order to enhance the security 
of the maritime environment.
    The five proposed required elements were:
    (1) Booking party name and address. Name and address of the party 
who is paying for the transportation of the goods.
    (2) Foreign port of unlading. Port code for the foreign port of 
unlading at the intended final destination.
    (3) Place of delivery. City code for the place of delivery.
    (4) Ship to name and address. Name and address of the first 
deliver-to party scheduled to physically receive the goods after the 
goods have been released from customs custody.
    (5) Commodity HTSUS number. Duty/statistical reporting number under 
which the article is classified in the Harmonized Tariff Schedule of 
the United States (HTSUS). The HTSUS number must be provided to the 
six-digit level. The HTSUS number may be provided up to the 10-digit 
level.
    Four of the proposed Importer Security Filing elements are 
identical to elements submitted for entry (CBP Form 3461) and entry 
summary (CBP Form 7501) purposes. These elements are the importer of 
record number, consignee number, country of origin, and commodity HTSUS 
number when provided at the 10-digit level. CBP proposed to allow an 
importer to submit these elements once to be used for both Importer 
Security Filing and entry/entry summary purposes. Under the proposed 
regulations, if an importer chooses to have these elements used for 
entry/entry summary purposes, the Importer Security Filing and entry/
entry summary must be self-filed by the importer or filed by a licensed 
customs broker in a single transmission to CBP. In addition, the HTSUS 
number would be required at the 10-digit level.
    As proposed, two of the Importer Security Filing elements are 
identical to elements submitted for application to admit goods to an 
FTZ (CBP Form 214). These elements are the country of origin and 
commodity HTSUS number when provided at the 10-digit level. CBP 
proposed to allow a filer to submit the Importer Security Filing and 
CBP Form 214 in the same electronic transmission to CBP and to submit 
the country of origin and commodity HTSUS number once to be used for 
both Importer Security Filing and FTZ admission purposes. If the party 
submitting the Importer Security Filing chose to have this element used 
for FTZ admission purposes, the HTSUS number would be required at the 
10-digit level.

[[Page 71744]]

B. Public Comments; Responsible Party

Comment
    Under section 343(a) of the Trade Act of 2002, as amended, the 
requirement to provide information to CBP is generally to be imposed 
upon the party likely to have direct knowledge of the required 
information. Although CBP has identified the importer (as defined in 
the NPRM) as the party to send the data, it has not demonstrated that 
the importer is in fact that party. The supplier, freight forwarder, 
and/or carrier actually may have the most direct knowledge of the 
required information. For example, some suppliers arrange their own 
carriage and, therefore, the importer will not have the information 
necessary to submit the Importer Security Filing. Similarly, the 
importer may not even be aware that the merchandise has been shipped 
until it arrives in the United States. CBP should require the party 
with the best knowledge of the shipment to submit the Importer Security 
Filing. Commenters suggested that CBP not create a new definition of 
``importer'' for Importer Security Filing purposes only, but rather 
adopt an alternate term. This party should be defined to include the 
``importer'' (as defined in 19 CFR 101.1) or the duly authorized agent 
of that party, and should include the traditional importer of record as 
listed on the CBP Form 7501. In the alternative, the definition of 
``importer'' should be the ``principal party of interest'' as that term 
is used for the Shipper's Export Declaration or parties as defined for 
Incoterms.
CBP Response
    Based on CBP's experience in the movement of goods in international 
trade, there is one party that is ultimately interested in and 
responsible for causing goods to arrive in the United States. CBP has 
determined that the party most likely to have direct knowledge of the 
required information, and therefore, the party considered to be the ISF 
Importer, is the party causing the goods to enter the limits of a port 
in the United States. CBP also has determined that such party must be 
the owner, purchaser, consignee or their agent (such as a licensed 
broker) who as a result of this rulemaking will now have an obligation 
to ascertain and report the data elements that CBP is requiring under 
this rule to enhance its ability to target high risk cargo destined for 
the United States. However, in recognition that there may be 
circumstances where the ISF Importer may not reasonably be able to 
verify the information, these regulations allow this party to submit 
the information on the basis of what it reasonably believes to be true. 
For FROB cargo, the ISF Importer is construed as the carrier. For IE 
and T&E in-bond shipments, and goods to be delivered to an FTZ, the ISF 
Importer is construed as the party filing the IE, T&E, or FTZ 
documentation. For other types of shipments, this party will usually be 
the importer of record. However, the party causing the goods to enter 
the limits of a port in the United States may be different parties to a 
transaction depending on the terms of the transaction and the parties 
involved, and this party may be a party other than the importer of 
record (e.g., for ``to order'' shipments). Therefore, requiring the 
importer of record to submit the Importer Security Filing in all 
instances would be inappropriate.
Comment
    An international carrier may not have house bill of lading level 
information for Importer Security Filings for FROB shipments because 
NVOCCs may not provide the information to the vessel operating 
carriers. Therefore, CBP should make the NVOCC responsible for Importer 
Security Filings in these situations. In addition, NVOCCs do not 
generate unique sub-house bills and, therefore, in order to comply with 
the Importer Security Filing requirements, NVOCCs will need six months 
to convert their systems. If the sub-house bill of lading number is 
required for the Importer Security Filing, this should also be required 
for AMS.
CBP Response
    CBP disagrees that NVOCCs should be required to submit Importer 
Security Filings. The obligation for the Importer Security Filing for 
FROB remains with the vessel operating carrier because this is the 
party choosing to transport the cargo to the United States. CBP 
understands the house bill of lading level information may belong to 
the NVOCCs. Therefore, CBP clarifies that the NVOCC can submit the 
Importer Security Filing directly to CBP, if it does so as the vessel 
operating carrier's agent. CBP is requiring an Importer Security Filing 
at the lowest level to the house bill of lading level, if applicable. 
CBP is not requiring Importer Security Filings for sub-house bills.
Comment
    For FTZ goods, CBP should require the ``applicant on the FTZ 
documentation filed with CBP'' to file the Importer Security Filing 
rather than the ``party filing the FTZ documentation with CBP.'' For IE 
and T&E shipments, commenters questioned whether the party required to 
submit the Importer Security Filing is the party named on the CBP Form 
7512 or the party that submits the CBP Form 7512. Who is responsible 
for filing the Importer Security Filing for personal/household goods 
and military/government shipments? Who is the responsible party for 
delivered duty paid (DDP) shipments where the Importer Security Filing 
``importer'' can be the overseas shipper? Commenters asked how NVOCCs 
will comply with the Importer Security Filing requirements.
CBP Response
    For IE and T&E in-bond shipments and goods to be delivered to an 
FTZ, the ISF Importer is the party filing the documentation with CBP 
and not merely a party delivering the form to CBP. For shipments, 
including personal/household goods, military/government shipments, and 
DDP shipments that are intended to be entered into the United States, 
the ISF Importer would be the owner, purchaser, consignee, or agent 
such as a licensed customs broker, as the party causing the goods to 
enter the limits of the United States. If an NVOCC is the party 
required to submit an Importer Security Filing on its own behalf, or as 
an agent for another party, the NVOCC will need to submit the Importer 
Security Filing pursuant to these regulations.
Comment
    CBP should expand the manifest filing to include elements such as 
the container stuffing location and consolidator (stuffer) rather than 
require a separate Importer Security Filing submission. CBP should 
require entry, with additional elements, be made prior to lading in 
lieu of requiring a separate Importer Security Filing.
CBP Response
    CBP disagrees that the advance cargo declaration filing should be 
expanded. The data elements for the advance cargo declaration and the 
Importer Security Filing are required pursuant to two distinct 
statutory obligations, each with its own enforcement mechanism. With 
regard to the container stuffing location and consolidator (stuffer), 
CBP believes that the ``importer,'' as the party that ultimately has an 
interest in the goods and the responsibility for causing the goods to 
be placed on a vessel for delivery to the United States, has the most 
control over the underlying transaction so the importer can require 
this information be received by it more than 24 hours prior to lading 
as part of terms and conditions of purchase

[[Page 71745]]

contracts. However, in response to requests from the trade, CBP will 
allow carriers to submit an Importer Security Filing for IE, T&E, or 
FROB cargo and the advance cargo declaration via the same electronic 
transmission. CBP also disagrees that entry should be required, with 
additional elements, prior to lading. CBP is not requiring that entry 
be made 24 hours prior to lading. There are only four data elements on 
the current entry (CBP Form 3461) and entry summary (CBP Form 7512) 
that are among the 10 additional data elements CBP deems necessary for 
high risk targeting enhancement under this rule. However, in response 
to requests from the trade, CBP will allow an importer to submit the 
entry or entry/entry summary data via the same electronic transmission 
as the Importer Security Filing. If an importer chooses to do so, 
transmission must be made by the party entitled to make entry pursuant 
to 19 U.S.C. 1484 on its own behalf or a licensed customs broker.
Comment
    In the NPRM, CBP stated that ``one party must aggregate and submit 
all required elements.'' Does one party need to aggregate and submit 
all elements per bill of lading, for each origin port, or for each 
importer at all origin ports? CBP should aggregate portions of a single 
Importer Security Filing, linked by the bill of lading, from multiple 
parties (similar to the Automated Export System (AES)).
CBP Response
    One party must aggregate and submit all required elements for each 
individual Importer Security Filing. CBP will not aggregate portions of 
a single Importer Security Filing because it would be overly burdensome 
and costly for CBP to administer such a system. However, in response to 
requests from the trade, CBP will allow ISF Importers to designate an 
agent to submit the filing on behalf of the importer. While CBP 
understands that some business practices may need to be altered (e.g., 
amendment of shipping documents) to obtain the required information at 
an earlier point, CBP does not anticipate that these changes will be 
unduly burdensome, especially given the one-year delayed compliance 
period and other flexibilities that CBP is providing. See the 
``Structured Review and Flexible Enforcement Period'' section of this 
document for further discussion regarding the delayed compliance period 
and flexibilities. CBP's ATDI testing has demonstrated that, in many 
cases, importers were able to collect this information from 
manufacturers, suppliers, and shippers at an earlier point by requiring 
the container stuffing location and consolidator name and address be 
provided as part of the regular commercial documentation.

C. Public Comments; Agents

Comment
    Commenters stated that CBP should only allow U.S.-based entities or 
Customs-Trade Partnership Against Terrorism (C-TPAT) members to act as 
an agent for Importer Security Filing purposes. CBP should require 
authorized agents, including foreign parties, to meet the standards 
required of customs brokers when filing the Importer Security Filing, 
including standards relating to security. Commenters also stated that 
importers should be able to designate filers with CBP and Importer 
Security Filings submitted by undesignated parties should be rejected. 
Commenters asked what the liability would be for a party who 
misrepresents that they are sending data on behalf of an importer.
CBP Response
    CBP will not create functionality whereby an ISF Importer can 
authorize alternate parties with CBP to file on their behalf. Nor will 
CBP create functionality to document unauthorized parties. CBP does not 
do this in its systems for other purposes and believes that it is best 
for private parties to manage these types of business relationships to 
allow for maximum flexibility. In order to provide this functionality, 
CBP would need to create and maintain a system cross-referencing 
millions of relationships between importers and their agents. This type 
of functionality would be extremely costly to set up and maintain and 
the potential advantages of such a system do not outweigh these costs.
    In response to requests from the trade, an ISF Importer may, as a 
business decision, designate an agent to file the Importer Security 
Filing on the ISF Importer's behalf. CBP is not requiring the use of an 
agent and the ISF Importer is ultimately responsible for the timely, 
accurate, and complete submission of the Importer Security Filing. In 
order to act as an agent for purposes of filing the Importer Security 
Filing, a party must obtain access to ABI or AMS. CBP disagrees that 
agents should be limited to U.S.-based entities or C-TPAT members. 
Doing so would greatly limit the flexibility of ISF Importers in 
selecting agents for Importer Security Filing purposes. The accuracy 
and timeliness of Importer Security Filings is secured by a bond. An 
agent can file the Importer Security Filing under the ISF Importer's 
bond or, if the ISF Importer does not possess a required bond, the ISF 
Importer may choose to designate a bonded agent to file the Importer 
Security Filing under the agent's bond if the agent agrees to do so in 
writing.
Comment
    CBP should require the Importer Security Filing filer, when the 
filer is an agent, to furnish the importer with a copy of the Importer 
Security Filing submitted on the importer's behalf.
CBP Response
    CBP disagrees. CBP believes that this is a matter between private 
parties and, therefore, is not requiring the Importer Security Filing 
to be shared among private parties.
Comment
    Commenters asked whether an importer will be held liable if an 
agent experiences problems with its systems resulting in a late, 
incomplete, or inaccurate Importer Security Filing. Commenters also 
stated that agents should not be liable for any lack of compliance with 
vessel stow plans, container status messages, or Importer Security 
Filings that are submitted on behalf of another party.
CBP Response
    The ISF Importer is ultimately responsible for the timely, 
accurate, and complete submission of the Importer Security Filing, 
regardless of the cause for a late, inaccurate, or incomplete filing. 
After analyzing the results of tests performed through ATDI and in 
response to requests from the trade, CBP will allow ISF Importers and 
carriers to use agents to submit Importer Security Filings, vessel stow 
plans, and container status messages. However, the ISF Importer is 
ultimately liable for the timely, accurate, and complete submission of 
the Importer Security Filing and the carrier is ultimately responsible 
for the timely, accurate, and complete submission of the vessel stow 
plan and container status messages.
Comment
    Because AMS users must be licensed by the Federal Maritime 
Commission, this will severely limit the choices for filers, driving 
self filers and brokers to utilize the Automated Broker Interface.
CBP Response
    CBP disagrees that AMS users must be licensed by the Federal 
Maritime Commission. Any party will be able to

[[Page 71746]]

obtain access to ABI or AMS, with CBP approval, for purposes of filing 
an Importer Security Filing.
Comment
    CBP has proposed to require a power of attorney to file an Importer 
Security Filing on another's behalf, but did not specify a particular 
form, the required language, the length of time, or the manner in which 
powers of attorney must be stored. Under what authority will CBP 
require production of power of attorney records? Is there a penalty for 
not having a power of attorney on file? Will CBP allow an exemption to 
the power of attorney requirement for goods consigned to the military, 
the government, or for household/personal goods?
CBP Response
    CBP is not requiring a particular form for a power of attorney for 
Importer Security Filing purposes. However, 19 CFR 141.32 contains an 
example of an acceptable general power of attorney with unlimited 
authority. CBP has revised the regulations under this interim final 
rule to require that powers of attorney must be in English. Pursuant to 
19 U.S.C. 1508(a), CBP has also clarified in the regulations that 
powers of attorney must be retained until revoked, and revoked powers 
of attorney and letters of revocation must be retained for five years 
after the date of revocation. Finally, CBP will not allow an exemption 
to the power of attorney requirement for goods consigned to the 
military, the government, or for personal/household goods. An exemption 
is not merited as there is no less of a security risk associated with 
these shipments. CBP still requires the certainty that powers of 
attorney provide when parties are interacting with CBP.

D. Public Comments; Customs Business

Comment
    Commenters stated that the Importer Security Filing, including 
providing the HTSUS number (even at the six-digit level), importer of 
record number, and consignee number, is ``customs business.'' 
Therefore, the Importer Security Filing should be restricted to 
licensed Customs brokers. Other commenters stated that classification 
at the 10-digit level is ``customs business'' and, therefore, when the 
Importer Security Filing and entry are filed via the same electronic 
transmission (unified filing), this submission constitutes ``customs 
business.'' Non-brokers should be limited to the filing of the Importer 
Security Filing alone.
CBP Response
    ``Customs business'' does not involve the mere electronic 
transmission of data received for transmission to CBP, but does involve 
classification for entry purposes. See 19 CFR 111.1. The six-digit 
HTSUS number is intended exclusively for ensuring cargo safety and 
security, and not for determining merchandise entry procedures that 
fall within the scope of customs business. However, a 10-digit HTSUS 
number is needed and is used for merchandise entry purposes and, 
therefore, classification at the 10-digit level is considered customs 
business. CBP disagrees that providing the importer of record number 
and consignee number falls within the definition of customs business in 
19 CFR 111.1. Pursuant to this interim final rule, if the Importer 
Security Filing and entry or entry summary are provided via a single 
electronic transmission to CBP, the party making the transmission must 
be an importer acting on its own behalf or a licensed customs broker.

E. Public Comments; Bills of Lading

Comment
    Commenters asked CBP to clarify whether the bill of lading number 
(house and/or master) is a required data field, and whether the house 
or master bill number is required. If the bill of lading number is 
required, CBP should only require the house bill of lading number and 
it should be added as an additional required data element for the 
Importer Security Filing. Other commenters stated that carriers may not 
generate bill of lading numbers early enough for an importer to submit 
this information for Importer Security Filing purposes. Therefore, CBP 
should require the bill of lading number prior to arrival in the United 
States rather than 24 hours prior to lading. In the alternative, CBP 
should require carriers to make the bill of lading number available no 
later than 48 hours prior to lading the vessel or CBP should allow the 
use of booking number in lieu of the bill of lading number. In any 
event, the importer should not be penalized for a late Importer 
Security Filing when a carrier fails to provide the bill of lading 
number early enough. Commenters asked whether multiple Importer 
Security Filings will be required when one bill of lading covers 
multiple shipments. Commenters also stated that CBP should allow an 
importer to file one Importer Security Filing for all bills of lading 
in a shipment where the manufacturer, country of origin, and HTSUS 
numbers are the same. Lastly, commenters asked how the Importer 
Security Filing will be handled if the goods are divided and sold in 
transit to at least two separate parties, resulting in two new bills of 
lading.
CBP Response
    A bill of lading number is integral to the Importer Security Filing 
and therefore, must be provided with the Importer Security Filing. The 
bill of lading number is not a data field, but an identifier which will 
be provided in the header information. However, after further 
consideration, CBP is requiring only the number for the bill of lading 
at the lowest level (i.e., the regular straight/simple bill of lading 
or house bill of lading) and not the master bill of lading number. 
Under existing 24 Hour Rule requirements, the bill of lading number is 
required for containerized cargo 24 hours prior to lading. For bulk 
cargo and exempted break bulk cargo, the carrier must submit the bill 
of lading number 24 hours prior to arrival. Under this interim final 
rule, for containerized cargo, the Importer Security Filing is also 
required 24 hours prior to lading. For break bulk cargo that is 
exempted for 24 Hour Rule purposes, the Importer Security Filing is 
required 24 hours prior to arrival. For bulk cargo, an Importer 
Security Filing is not required. Accordingly, the bill of lading number 
will be available for Importer Security Filing purposes, and has always 
been a part of the transaction identification. CBP understands that 
business processes may need to be changed to ensure that the importer, 
as defined for these regulations, has the bill of lading number in a 
timely fashion. Regarding bills of lading covering multiple shipments, 
CBP has the capability to accept multiple Importer Security Filings per 
bill of lading. CBP will issue a unique identification number for each 
separate, not unified, Importer Security Filing as part of the 
acceptance/rejection acknowledgment response. Modification of a 
particular Importer Security Filing will be possible using the unique 
identification number. Under this interim final rule, one Importer 
Security Filing can satisfy multiple bills of lading. However, the 
manufacturer (or supplier), country of origin, and commodity HTSUS 
number elements must be linked to one another at the line item level. 
Lastly, when a shipment is divided into a new or multiple new 
shipments, each with its own house bill of lading number, the original 
Importer Security Filing will need to be amended. In addition, a new 
Importer Security Filing will be required for each new bill of lading 
number.

[[Page 71747]]

F. Public Comments; Required Elements

1. Manufacturer (or Supplier)
Comment
    Commenters stated that, in some cases, there may be no manufacturer 
or the manufacturer may not be known. This may be the case for personal 
effects entered on a CBP Form 3299, for antiques, or when the importer 
purchases goods from a party who is not willing to provide the identity 
of their supplier due to business confidentiality concerns. Commenters 
also stated that the MID should be accepted for the manufacturer (or 
supplier). If the MID is not accepted, CBP should set up a registration 
system like the U.S. Food and Drug Administration (FDA) did for 
bioterrorism purposes. Commenters asked which law, rule, or regulation 
CBP was referring to in the NPRM which states that the name and address 
of the manufacturer (or supplier) that is currently required by the 
import laws, rules, and regulations of the United States may be 
provided. Commenters stated that the supplier of the goods may not be 
located in the ``country from which the goods are leaving'' and, 
therefore, this element should be changed accordingly. Commenters 
stated that the manufacturer (or supplier) requirements are 
inconsistent with merchandise produced under Outward Processing 
Arrangements (OPAs), for which importers must construct the MID based 
on the origin conferring manufacturer. Commenters asked which address 
should be used when a manufacturer has more than one address, including 
a corporate address.
CBP Response
    CBP recognizes that, in some cases, the manufacturer's identity may 
be unavailable to the party responsible for filing the Importer 
Security Filing. Accordingly, CBP is requiring the identity of the 
manufacturer or the supplier of the finished goods if the actual 
manufacturer is unknown. CBP disagrees that the MID should be accepted 
for the manufacturer (or supplier). In general, the MID does not 
include the complete address of the manufacturer. CBP believes that the 
complete manufacturer's (or supplier's) name and address is a critical 
piece of information to effectively target high risk cargo. Since the 
current MID has limited targeting utility, CBP will not accept the 
current MID as an alternative to the complete name and address of the 
manufacturer. However, CBP will allow the trade to provide widely 
recognized commercially accepted identification numbers such as Dun and 
Bradstreet Data Universal Numbering System (DUNS) numbers as an 
alternative. When referring to previously existing laws and 
regulations, CBP is referring to title 19 of the United States Code 
Annotated and title 19 of the Code of Federal Regulations. CBP agrees 
that the supplier may not be located in the same country where the 
goods are leaving. In this interim final rule, CBP clarifies that this 
is the party supplying the finished goods in the country from which the 
goods are leaving. In many instances, this party will be located in the 
country from which the goods are leaving. In instances where the MID 
for the origin conferring manufacturer is currently supplied for entry 
purposes, the identity for this party should be provided in the 
Importer Security Filing. When a manufacturer has more than one 
address, CBP would like the address where the goods were actually 
manufactured. CBP understands that, in certain cases, this address may 
not be known to the ISF Importer and, therefore, will accept the 
corporate address for the manufacturer or supplier.
2. Buyer
Comment
    The buyer's identity may not be available at the time of shipment 
and, when available, may not be applicable to each individual carton in 
a shipment. This data element, as well as the ship to party, should not 
be required prior to shipment, but at the time of the filing of the 
entry. What party's identity should be provided for multi-tier 
transactions, ``sold in shipments,'' and shipments involving a buying 
agent? What if merchandise is sold in transit?
CBP Response
    The Importer Security Filing elements must be reported at the 
lowest bill of lading level. At this level, the buyer's identity should 
be applicable to the entire shipment. If the buyer's name and address 
is not available at the time of shipment, the identity of the owner, 
consignee, or the buyer's agent should be provided instead on the 
Importer Security Filing. For ``buying agent'' transactions, the buying 
agent should be provided for the buyer element and the party who sold 
the goods to the buying agent should be provided for the seller 
element. If, after the filing is submitted and before the goods enter 
the limits of a port in the United States, any of the information 
submitted in an Importer Security Filing changes or more accurate 
information becomes available, including changes to the buyer's 
identity, the ISF Importer must update the filing.
3. Ship to Party
Comment
    Commenters stated that the ship to party should not be required 
because this party will be the importer of record. In addition, the 
physical location where the container will arrive does not pose a 
security risk as much as who is the party that caused the importation 
to the United States. If the ship to party is required, CBP should 
accept the identity of the importer or consignee as indicated on the 
bill of lading when the ship to party is unknown when the Importer 
Security Filing is submitted. Commenters also stated that the ship to 
party should be kept confidential because it could be used by 
competitors. Commenters also asked whether the ``ship to name'' needs 
to be the name of a legal business entity. Can the importer transmit 
the name of its distribution center, even though the distribution 
center is not a separate legal entity in its own right? Will CBP accept 
Facilities Information and Resources Management System (FIRMS) codes in 
lieu of the name and address for the ship to party? Lastly, commenters 
asked which address should be used when a ship to party has more than 
one address, including a corporate address. Does a container freight 
station constitute the first ship to party?
CBP Response
    CBP has determined, as the result of internal and external 
analysis, including analysis of ATDI testing, that the ship to party's 
identity and address will allow CBP to more effectively assess the risk 
of cargo destined for the United States. In some instances, the ship to 
party may also be the importer of record or consignee. However, this is 
not always the case. In addition, the importer of record's and 
consignee's corporate offices usually differ from the actual delivery 
address which is required for this element. Therefore, both parties' 
identities are necessary for effective risk assessment. If the party 
scheduled to physically receive the goods after the goods will be 
released from CBP custody is unknown 24 hours prior to lading (e.g., 
``to order'' shipments), the filer must provide the identity of the 
facility where the goods will be unladen. The filer must update this 
element if, after the filing is submitted and before the goods enter 
the limits of a port in the United States, the party scheduled to 
physically receive the goods becomes known. All elements of the 
Importer Security Filing, including

[[Page 71748]]

the ship to party information, will be kept confidential as per the 
statutory requirements within the SAFE Port Act of 2006 and section 
343(a) of the Trade Act of 2002. The ISF Importer must identify the 
ship to party, regardless of whether that party is a separate legal 
entity. However, CBP will accept a widely recognized commercially 
accepted identification number such as the DUNS number or FIRMS code, 
when applicable, for the ship to party. The first deliver-to party 
scheduled to physically receive the goods after the goods have been 
released from customs custody must be provided. A container freight 
station can be the ship to party if it meets the parameters of the 
definition in this rule that it is the first place of delivery after 
the goods have been released from customs custody.
4. Container Stuffing Location
Comment
    Commenters stated that importers do not know the container stuffing 
location, except in the case of repetitive movements. Commenters also 
stated that providing the container stuffing location would be 
redundant in cases where shipments are stuffed by the manufacturer. 
Commenters asked which location should be reported when multiple 
containers are included on one bill of lading, and thus one Importer 
Security Filing contains multiple containers stuffed in multiple 
locations. Also, in some cases, there may be multiple stuffing 
locations, such as for ``Less than Container Load'' (LCL) shipments. 
Commenters also stated that CBP should accept the ``scheduled'' 
stuffing location in lieu of the actual stuffing location because the 
actual location cannot be confirmed until stuffing is completed, 
particularly in cases involving the use of a container freight station. 
The container stuffing location may change at the last minute for 
legitimate reasons. Lastly, commenters asked CBP to define ``ship 
ready'' with regard to container stuffing location and consolidator 
(stuffer) for break bulk cargo.
CBP Response
    If an ISF Importer does not know an element, including container 
stuffing location, this party must take steps necessary to obtain the 
information. Where the ISF Importer receives any of the required 
information, including container stuffing location, from another party, 
CBP will take into consideration how, in accordance with ordinary 
commercial practices, that party acquired the information, and whether 
and how the importer is able to verify the information. If the 
container is sealed at the manufacturer or factory facility, as is the 
case for a factory load, this location should be provided for the 
container stuffing location. CBP is aware that the same entity may be 
provided for more than one element. In cases where the consolidator has 
subcontracted out, or arranged a third party to do the actual stuffing, 
the name and address of the party at whose location the container was 
stuffed should be provided. When a container is stuffed at more than 
one location and/or more than one container is on a single bill of 
lading, all of the stuffing locations for the goods listed on the bill 
of lading must be provided. However, an ISF Importer is not required to 
submit container numbers and, when container numbers are reported, an 
ISF Importer is not required to report which container was stuffed at 
which location. CBP agrees that the ``scheduled'' stuffing location 
should be accepted. The ISF Importer is required to report the 
container stuffing location 24 hours prior to lading based on the ISF 
Importer's knowledge at that time. However, the ISF Importer must 
update the filing if, after the filing is submitted and before the 
goods enter the limits of a port in the United States, any of the 
information submitted changes or more accurate information, including 
container stuffing location, becomes available. Regarding break bulk 
cargo, break bulk cargo is made ``ship ready'' when the cargo is 
palletized, lashed, wrapped, or otherwise prepared to be laden on a 
vessel.
5. Consolidator (Stuffer)
Comment
    The consolidator (stuffer) element should only be required when a 
container is stuffed by a consolidator because the container stuffing 
location already spells out the location where the physical container 
will be stuffed.
CBP Response
    CBP disagrees with the comment that the consolidator (stuffer) 
element should be conditional. CBP is aware that the same entity may be 
provided for more than one element. If an element is not provided, CBP 
would have no way of knowing whether the element is not provided 
because the same information is provided for another element or because 
the ISF Importer merely failed to provide the information. In addition, 
when the same information is provided for more than one element, the 
additional burden on the trade should be minimal.
Comment
    The ``last known'' consolidator should be required for the 
consolidator (stuffer) element.
CBP Response
    Even if there are multiple stuffing locations, there should only be 
one party per bill of lading who stuffed the container or arranged for 
the stuffing of the container.
6. Importer of Record Number/FTZ Applicant Identification Number
Comment
    The importer of record number is not always known. For example, 
what number should be provided for household goods and personal effects 
where a foreign party without one of the required unique identification 
numbers is importing their own goods?
CBP Response
    The ISF Importer must submit the IRS number, EIN, SSN, or CBP 
assigned number of the entity liable for payment of all duties and 
responsible for meeting all statutory and regulatory requirements 
incurred as a result of importation. For goods intended to be delivered 
to an FTZ, the IRS number, EIN, SSN, or CBP assigned number of the 
party filing the FTZ documentation with CBP must be provided. If this 
party does not have an IRS number, EIN, SSN, or CBP assigned number 
when the Importer Security Filing is submitted, this party must obtain 
one. For household goods and personal effects where a foreign party 
without one of the required unique identification numbers is importing 
their own goods, the ISF Importer may provide the importer of record's 
passport number, country of issuance, and date of birth.
Comment
    The importer of record number should not be required prior to 
shipment, but at the time of the filing of the entry.
CBP Response
    CBP disagrees. In order for CBP to effectively target cargo before 
it is loaded, the Importer Security Filing, including the importer of 
record number or FTZ applicant identification number, must be received 
by CBP 24 hours prior to lading (any time prior to lading for FROB). 
CBP notes that section 203 of the SAFE Port Act requires that this 
information be provided prior to lading of cargo at foreign seaports.
Comment
    The importer of record may not always be the party responsible for

[[Page 71749]]

filing the Importer Security Filing and, therefore, CBP should clarify 
that penalties and other liabilities will be applicable to the party 
required to file the Importer Security Filing pursuant to proposed 19 
CFR 149.1.
CBP Response
    CBP recognizes that the importer of record may not always be the 
party responsible for filing the Importer Security Filing. The ISF 
Importer is required to post their bond to secure the timely, accurate, 
and complete Importer Security Filing. When necessary, CBP will issue 
penalties and claims for liquidated damages against that party.
7. Consignee Number(s)
Comment
    The consignee number(s) may not be known prior to shipment from 
overseas. What should be submitted for the consignee number(s) when a 
shipment cannot be consigned to the importer at the time of filing? For 
example, some shipments are consigned to a factory or a vendor's 
negotiating bank. What number should be provided for household goods 
and personal effects where a foreign party without one of the required 
unique identification numbers is importing their own goods?
CBP Response
    CBP understands that business practices may need to change in order 
for the ISF Importer to determine who the consignee in the United 
States is for a shipment 24 hours prior to lading. For example, for 
shipments that are consigned to the importer, a factory, or vendor's 
negotiating bank, where those parties will not be the actual consignee 
if the goods are not consigned before arrival in the United States, the 
ISF Importer may need to designate a warehouse in the United States to 
receive the goods and, therefore, to be listed as the consignee. For 
household goods and personal effects where a foreign party without one 
of the required unique identification numbers is importing their own 
goods, the ISF Importer may provide the importer of record's passport 
number, country of issuance, and date of birth.
Comment
    Can the unique identification number for a nominal consignee be 
provided for the consignee number element?
CBP Response
    Yes, the unique identification number for a nominal consignee may 
be provided for the consignee number(s) element.
Comment
    CBP should accept the name and address of the consignee in lieu of 
the consignee number because of the sensitive nature of the consignee 
number.
CBP Response
    CBP disagrees. Based on external and internal analysis, CBP has 
determined that the consignee number will provide more visibility into 
the parties involved in a transaction than the name and address.
Comment
    CBP should allow the use of the ACE ID or other universal 
participating government agency (PGA) identifiers.
CBP Response
    CBP disagrees because these identifiers do not currently exist in 
the CBP systems. CBP will continue to explore the potential use of the 
ACE ID and PGA identifiers in the future and as ACE is developed.
Comment
    The consignee number(s) element should be consistent with the party 
submitted to CBP on the CBP Form 3461 pursuant to 19 CFR 142.3(a)(6).
CBP Response
    The party required for the consignee number(s) element is the same 
party provided on the CBP Form 3461.
8. Country of Origin
Comment
    The importer may not have direct knowledge of the country of 
origin.
CBP Response
    Where the ISF Importer receives any of the information from another 
party, CBP will take into consideration how, in accordance with 
ordinary commercial practices, the ISF Importer acquired such 
information, and whether and how that party is able to verify this 
information. Where that party is not reasonably able to verify such 
information, CBP will permit the party to electronically present the 
information on the basis of what the party reasonably believes to be 
true.
9. Commodity HTSUS Number
Comment
    The precise manifest description should be accepted in lieu of the 
HTSUS number. The ISF Importer may lack the expertise to classify 
merchandise and/or the ISF Importer may not know the HTSUS number prior 
to lading. If CBP does require the HTSUS number, the HTSUS number 
should be limited to the four-digit level because the four-digit number 
provides sufficient information to properly assess risk factors.
CBP Response
    CBP disagrees. Based on external and internal analysis, CBP has 
determined that the six-digit HTSUS number will provide more visibility 
into cargo imported into the United States than the four-digit HTSUS 
number or a textual description because the six-digit number provides a 
more specific classification of the cargo. Furthermore, the tariff 
schedule is harmonized internationally to the six-digit level. If an 
ISF Importer does not know an element that is required pursuant to the 
regulations, including the HTSUS number at the six-digit level, the ISF 
Importer must take steps necessary to obtain the information. CBP 
recognizes that, for most importers, this information is known well 
before the placement of the order for their goods because of the need 
to determine duty cost and admissibility status prior to finalizing the 
purchase contract or shipment contract.
Comment
    CBP should allow the submission of the 10-digit HTSUS code 
regardless of whether the Importer Security Filing is combined with the 
entry. The HTSUS number is subject to change (e.g., based on the quota 
fill status at the date of entry).
CBP Response
    CBP agrees. While CBP is not requiring the HTSUS number at the 10-
digit level unless the Importer Security Filing is submitted via the 
same electronic transmission as entry or entry/entry summary, CBP will 
accept the HTSUS number at the 10-digit level if the Importer Security 
Filing is submitted in a separate transmission. The ISF Importer must 
update the filing if, after the filing is submitted and before the 
goods enter the limits of a port in the United States, any of the 
information submitted changes or more accurate information, including 
HTSUS number, becomes available.
Comment
    Will CBP compare the HTSUS data submitted in the Importer Security 
Filing with the HTSUS data used at entry?
CBP Response
    Yes. CBP will use the information available, including entry data, 
to

[[Page 71750]]

analyze and assess risk and to validate Importer Security Filing data.
Comment
    The HTSUS and country of origin do not have any security value to 
CBP. In addition, this information is already required under the 24 
Hour Rule.
CBP Response
    CBP is requiring this information pursuant to Section 203 of the 
SAFE Port Act, which requires the electronic transmission prior to 
lading of additional data elements, including appropriate security 
elements of entry data, as determined by the Secretary of Homeland 
Security. Based on external and internal analysis, CBP has determined 
that the HTSUS and country of origin will allow CBP to more accurately 
assess risk. CBP is aware that some information is also provided at 
other times and by other parties, such as for entry purposes on CBP 
Forms 3461 and 7501. However, this information is often submitted after 
the cargo departs on a vessel destined for the United States and, in 
many cases, after the cargo arrives in the United States. By collecting 
this information at an earlier point, CBP will be able to more 
effectively target cargo prior to it being laden on a vessel at a 
foreign port and prior to its arrival in the United States. In 
addition, CBP is collecting supply chain information from more than one 
party in order to more effectively validate the information.
Comment
    Can an importer provide a single HTSUS number for multiple parts 
when the number is the same at the six-digit level (i.e., as reported 
on the CBP Form 7501)?
CBP Response
    The HTSUS number is required to be provided to the six-digit level 
and, therefore, a single HTSUS number may be provided for multiple 
parts when the numbers are the same at the six-digit level.
Comment
    Carriers are unable to provide the HTSUS number because they do not 
see the invoice details. The six-digit HTSUS number should be an 
optional element when a carrier submits an Importer Security Filing for 
FROB, IE, and T&E cargo as it is for manifest filings for U.S. import 
cargo. The precise cargo description should be accepted in lieu of the 
HTSUS number.
CBP Response
    CBP disagrees. The six-digit HTSUS number is sometimes provided by 
members of the trade community on T&E and IE in-bond movements. CBP 
understands that, in some cases, business practices may have to be 
altered to obtain the required information in a timely fashion (e.g., 
requiring the information on commercial documents).
10. Booking Party
Comment
    The definition of the booking party does not meet commercial 
practices because the carrier may not know the party ``paying for the 
transportation of the goods'' at the time of filing and there may be 
more than one party that is paying for the transportation. CBP should 
amend the definition of this element to be ``the party who initiates 
the reservation of the cargo space for the shipment.'' In addition, the 
booking party should only be required when it is available to the 
carrier.
CBP Response
    In response to comments and in an effort to align this element with 
commercial practices, CBP has changed the definition for booking party 
to be ``the party who initiates the reservation of the cargo space for 
the shipment.''
11. Foreign Port of Unlading
Comment
    CBP should accept Bureau of Census Schedule K port codes for the 
foreign port of unlading element. When designating a source for port 
codes, CBP should consider that the foreign port of unlading could be 
an air or land port for cargo that is transferred to another mode.
CBP Response
    CBP agrees. CBP will accept Bureau of Census Schedule K port codes 
for the foreign port of unlading element.
12. Place of Delivery
Comment
    Is the ``place of delivery'' the place of delivery under the terms 
of the carrier's contract of carriage? CBP should accept port codes in 
lieu of city codes for this element.
CBP Response
    The place of delivery is the foreign location where the carrier's 
responsibility for the transport of the goods terminates. CBP will 
allow the use of UN Locodes or Schedule K codes, when applicable, for 
this element.

G. Public Comments; Technical Issues

Comment
    CBP should include the actual data fields that will need to be 
submitted in the interim final rule. CBP should establish a guide for 
developers that will include sample record sets for different business 
scenarios. A test system and a technical FAQ should be made available 
to developers.
CBP Response
    CBP has amended the guides for developers, including the CATAIR, 
CAMIR, and X.12 transaction messages, providing the technical 
requirements necessary for submitting Importer Security Filings. These 
documents include the actual data fields, and have been posted to the 
``Automated Systems'' section of the CBP Web site. An electronic FAQ 
will also be posted to the CBP Web site. In addition, the ability to 
submit data to a test system and receive responses will be provided.
Comments
    CBP should work with the trade to identify the mechanisms that are 
needed for all parties to manage the Importer Security Filing. 
Importers should receive a timely confirmation message, including a 
unique identification number, indicating that the Importer Security 
Filing has been received and accepted by CBP (or rejected listing 
errors). Unique identifiers should also be created for amendments and 
deletions.
CBP Response
    CBP will send a response message to the Importer Security Filing 
filer indicating whether an Importer Security Filing has been accepted 
or rejected by CBP's systems. The response message will contain a 
unique number generated by CBP. The ISF Importer may choose to share 
this Importer Security Filing number with other parties. However, CBP 
will not issue a new unique identifier when an Importer Security Filing 
is amended or deleted.
Comment
    How will a carrier validate that an Importer Security Filing has 
been filed? Carriers should be notified through AMS. The filer should 
also be able to identify additional parties to be notified of the 
acknowledgement message.
CBP Response
    AMS creates notifications of the status of the bill that go back to 
the filer and any other parties nominated on the bill to receive such 
notification. CBP will notify the filer of the bill of lading that

[[Page 71751]]

an Importer Security Filing has been received for the bill of lading 
through this process.
Comment
    How long will carrier submissions remain in the CBP data system 
without being reconciled with Importer Security Filing submissions?
CBP Response
    The carrier's advance cargo declaration is submitted pursuant to a 
different regulatory requirement and is not dependent upon the 
submission of Importer Security Filings.
Comment
    How must the Importer Security Filings, vessel stow plans, and 
container status messages be transmitted to CBP? The CAMIR should be 
modified accordingly.
CBP Response
    Importer Security Filings, stow plans, and container status 
messages (CSMs) must be submitted via a CBP-approved electronic 
interchange system. The current approved electronic interchange systems 
for Importer Security Filings are the vessel AMS and ABI. CBP has re-
evaluated the electronic interchange systems that will best allow the 
trade to submit vessel stow plans and container status messages and has 
determined that stow plans must be submitted through vessel AMS, secure 
file transfer protocol (sFTP), or email, and CSMs may be submitted 
through sFTP. CBP will publish a notice in the Federal Register if 
different or additional electronic data interchange systems are 
approved in the future. CBP has amended the CATAIR, CAMIR, and X.12 
transaction messages, providing the technical requirements necessary 
for submitting Importer Security Filings. These documents have been 
posted to the ``Automated Systems'' section of the CBP Web site.
Comment
    The Importer Security Filing should be deemed to have taken place 
upon submission, not CBP receipt.
CBP Response
    CBP agrees. This provision of the regulatory text has been changed 
accordingly. In the absence of specific evidence to the contrary, 
however, the time of CBP's receipt of the Importer Security Filing will 
be evidence of the time of submission by the filer. In response to 
requests from the trade, CBP will transmit an acknowledgement to the 
filer to confirm that CBP has received an Importer Security Filing. CBP 
will publish FAQs regarding protocols for when an approved electronic 
interchange system is experiencing technical difficulties (e.g., for 
scheduled maintenance).
Comment
    Importers may not possess the technology to transmit these data 
directly to CBP.
CBP Response
    If an ISF Importer does not possess the technology to transmit the 
Importer Security Filing data to CBP, the importer can either obtain 
the necessary technology or use an agent to submit the Importer 
Security Filing on the ISF Importer's behalf.
Comment
    CBP should allow a filer to initially submit a ``shell record'' of 
partial Importer Security Filing data that can be subsequently amended 
by multiple parties.
CBP Response
    CBP disagrees. A shell record would not serve any targeting or risk 
assessment purposes. Records of this type that could subsequently be 
amended by multiple parties would create numerous problems, including a 
lack of finality (CBP would not know when the final Importer Security 
Filing information has been submitted and/or amended), security and 
privacy issues (who will determine which parties can amend which 
information), and cost (such a system would be expensive to develop and 
maintain). The ISF Importer is ultimately responsible for the timely, 
accurate, and complete submission of the Importer Security Filing. In 
response to requests from the trade, an ISF Importer can designate an 
agent to submit the filing on behalf of the ISF Importer. While CBP 
understands that some business practices may need to be altered to 
obtain the required information at an earlier point, CBP does not 
anticipate that these changes will be unduly burdensome.
Comment
    Importers should be allowed a review period before the Importer 
Security Filing must be filed if it is filed by an agent.
CBP Response
    The Importer Security Filing must be filed no later than 24 hours 
prior to lading (any time prior to lading for FROB). However, see the 
``Structured Review and Flexible Enforcement Period'' section of this 
document for flexibilities related to timing for certain Importer 
Security Filing elements. If an ISF Importer chooses to use an agent, 
the ISF Importer may choose to include a ``review period'' as part of 
their contract with their agent.
Comment
    CBP should transmit an electronic acknowledgement to the filer 
after an Importer Security Filing is received. This acknowledgement 
should include a unique number which can be used by other parties to 
verify that an Importer Security Filing has been filed. The importer 
should be able to designate multiple parties to receive the 
acknowledgement. Parties should also be able to query previously 
submitted Importer Security Filings.
CBP Response
    CBP will transmit an electronic acknowledgement to the filer only 
when CBP receives an Importer Security Filing. The acknowledgement will 
include a unique identification number. This number cannot be used to 
perform a query in ABI or AMS. However, the party who submits the 
advance manifest information and any notify party on the bill of lading 
in AMS will receive all status notifications posted to that bill, 
including the notification that an Importer Security Filing was 
accepted for the bill of lading.
Comment
    What will the procedures be when the Importer Security Filing 
system is down? Will CBP's systems be able to handle the exponential 
increase in data that will result from this rule?
CBP Response
    CBP has planned for the expected increase of data that will result 
from this rule. However, CBP will publish FAQs regarding protocols for 
when an approved electronic interchange system is experiencing 
technical difficulties (e.g., for scheduled maintenance).
Comment
    The technical detail of the construct of the Importer Security 
Filing should be developed consistent with CATAIR and CAMIR standards. 
CBP should immediately release, and accept additional comments on, the 
data formats for the new requirements, including templates and 
instructions relating to the following: data type for each element 
(alphanumeric, numeric, etc.), length for each element, address 
information format, element definitions, hierarchy of message, and what 
validations for existing data will be performed for these filings.

[[Page 71752]]

CBP Response
    CBP has amended the CATAIR, CAMIR, and X.12 transaction messages, 
providing the technical requirements necessary for submitting Importer 
Security Filings. These documents have been posted to the ``Automated 
Systems'' section of the CBP Web site. CBP disagrees that any further 
notice and comment is necessary for technical changes.
Comment
    CBP should codify all elements that require a name and address and 
assign a unique identification number to each entity, or CBP should 
accept widely recognized commercially acceptable identification numbers 
such as DUNS numbers in lieu of the name and address.
CBP Response
    CBP disagrees that a unique identifier number should be assigned to 
each party listed in the Importer Security Filing because, at this 
time, CBP is not technologically prepared to create such a system and 
such a system would be unduly burdensome and expensive. However, CBP 
will continue to explore the potential development and use of the ACE 
ID in the future as ACE is developed. In response to requests from the 
trade, CBP has changed the proposal in this interim final rule so that 
widely recognized commercially accepted identification numbers (such as 
DUNS numbers) will be accepted in lieu of the name and address.
Comment
    CBP should provide a source, such as United Nations Location Codes 
(UN Locodes), for city codes that are required for the ``place of 
delivery'' element. An ABI query would be helpful to maintain the list 
as updates are made to add or delete items on the list.
CBP Response
    CBP agrees and, where applicable, such as ``place of delivery,'' 
CBP has adopted the use of UN Locodes and Schedule K codes. However, 
CBP will not provide a table of codes in ABI or AMS that the trade can 
query because these are available from other sources.\9\
---------------------------------------------------------------------------

    \9\ UN Locodes are available on the United Nations Web site at 
http://www.unece.org/cefact/codesfortrade/codes_index.htm. Schedule 
K codes are available on the U.S. Army Corps of Engineers Web site 
at http://www.iwr.usace.army.mil/NDC/wcsc/scheduleK/schedulek.htm.
---------------------------------------------------------------------------

Comment
    CBP should adopt standards for address information, such as the use 
of Global Location Number (GLN) standards. Such standards should be 
harmonized on a global basis.
CBP Response
    In response to requests from the trade, CBP has changed the 
regulations, as proposed, so that widely recognized commercially 
accepted identification numbers (such as DUNS numbers) will be accepted 
in lieu of the name and address. At this time, however, CBP will not 
accept the GLN because it is unclear whether the GLN is a widely 
recognized and commercially accepted number. However, CBP will continue 
to work with the trade to evaluate existing identification numbers such 
as the GLN to determine which of these are appropriate for Importer 
Security Filing purposes. CBP will also continue to explore the 
potential development and use of the ACE ID in the future as ACE is 
developed. CBP will continue to update the trade regarding acceptable 
numbers in the form of FAQs, postings on the CBP Web site, and other 
outreach to the trade. The technical requirements necessary for 
submitting Importer Security Filings, including guidance relating to 
the submission of address information, has been added to the CATAIR, 
CAMIR, and X.12 transaction messages. These documents have been posted 
to the ``Automated Systems'' section of the CBP Web site.

H. Public Comments; Update and Withdrawal of Importer Security Filing

Comment
    The requirement that the party who initially filed the Importer 
Security Filing must update the filing does not take into consideration 
the dynamic nature of international trade. For example, goods may be 
sold in transit. In addition, the SAFE Port Act and the Trade Act of 
2002 do not contemplate an ongoing duty to update information on a post 
loading basis. Any authorized party should be able to update the 
filing.
CBP Response
    The ISF Importer, as the party who causes the goods to enter the 
limits of a port in the United States, submits (or uses an agent to 
submit) the Importer Security Filing, and posts their bond. Therefore, 
it is ultimately responsible for updating the Importer Security Filing 
if, after the filing is submitted and before the goods enter the limits 
of a port in the United States, any of the information submitted 
changes or more accurate information becomes available. However, that 
party may use an agent to update the Importer Security Filing. If goods 
are sold in transit, the original Importer Security Filing filer must 
notify CBP that the goods have been sold, including the party to whom 
the goods have been sold.
Comment
    The final importer should be able to see and update the Importer 
Security Filing.
CBP Response
    CBP disagrees. Importers will not be able to access specific 
Importer Security Filing elements in CBP systems. Such functionality 
would be too costly and raises security concerns. If an ISF Importer 
wants to access Importer Security Filings that are submitted on their 
behalf by an agent, the ISF Importer should obtain the information from 
their agent.
Comment
    How will a filer designate an update so that it is applied to the 
correct Importer Security Filing, particularly in the case where there 
are multiple filings for a single bill of lading?
CBP Response
    CBP will issue a CBP-generated unique identifier for each Importer 
Security Filing it receives. That unique number can be used by the 
Importer Security Filing filer to amend an Importer Security Filing.
Comment
    What if cargo is diverted while in transit, due to shifting 
inventory/distribution needs? Will an Importer Security Filing need to 
be updated if a shipment is split after the initial Importer Security 
Filing has been filed?
CBP Response
    Pursuant to this interim final rule, the Importer Security Filing 
must be updated if, after the filing and before the goods enter the 
limits of a port in the United States, there are changes to the 
information filed, including when cargo is diverted into a shipment for 
which a different number of elements is required (5 elements to 10 
elements or 10 elements to 5 elements). In addition, when a shipment is 
split resulting in (a) new bill of lading number(s), a new Importer 
Security Filing must be filed for each new bill of lading because each 
Importer Security Filing is associated with a bill of lading.
Comment
    Does an Importer Security Filing need to be updated if a shipment 
is rolled to a different vessel?

[[Page 71753]]

CBP Response
    If the bill of lading number remains the same, a new Importer 
Security Filing is not required, nor is an amendment required. However, 
if a new bill of lading is issued or the bill number changes, a new 
Importer Security Filing must be filed.
Comment
    If a party reported on an Importer Security Filing remains the 
same, but the address for that party changes, is an amendment required?
CBP Response
    The Importer Security Filing must be amended if any of the 
information submitted, including the address of a party, changes or 
more accurate information becomes available.
Comment
    The NPRM states that an Importer Security Filing must be amended if 
there is a change ``before the goods enter the limits of a port in the 
United States.'' Does ``port'' refer to the first port of arrival or 
the port of discharge or the port of destination on the ocean bill of 
lading?
CBP Response
    The Importer Security Filing must be amended if there is a change 
before the goods enter the limits of a port in the United States. For 
goods that will be unladen in the United States, the Importer Security 
Filing must be updated if there is a change before the goods enter the 
port of discharge.
Comment
    When an Importer Security Filing is submitted in the same 
electronic transmission as entry, will both need to be amended 
independently?
CBP Response
    When an Importer Security Filing is initially submitted in the same 
electronic transmission as entry, both can be amended via the same 
electronic transmission. CBP has amended the CATAIR, CAMIR, and X.12 
transaction messages, providing the technical requirements necessary 
for amending Importer Security Filings. These documents have been 
posted to the ``Automated Systems'' section of the CBP Web site. CBP 
will continue to conduct outreach with the trade, fulfilling its 
regulatory and statutory obligations, both during the delayed 
compliance period and thereafter, via FAQs, postings on the CBP Web 
site, and other outreach.
Comment
    CBP should accept the entry information submitted on CBP Forms 
3461, 7501, and 214 as an update of the Importer Security Filing.
CBP Response
    CBP disagrees. Entry information will not be accepted in lieu of an 
Importer Security Filing update. Entry is governed by a different 
statutory provision, 19 U.S.C. 1484, and serves a much different 
function. It is a well settled area of law that has distinct 
limitations as to who may make entry, and what constitutes the act of 
making entry on another's behalf, with its own discrete regulations and 
limitations. Furthermore, most of the Importer Security Filing elements 
are not current entry data elements nor is the totality of what 
constitutes an entry necessarily compatible with what constitutes an 
Importer Security Filing.

I. Public Comments; In-Bond Shipments

Comment
    For shipments consisting entirely of FROB and shipments intended to 
be transported in-bond as an IE or a T&E, does the IE or T&E in-bond 
need to be created before an Importer Security Filing is submitted?
CBP Response
    No. Parties are not required to file an in-bond document prior to 
submission of an Importer Security Filing.
Comment
    The submission of an Importer Security Filing consisting of 10 
elements should serve as the request for permission to convert a 
shipment from an IE or T&E shipment into a shipment that will be 
entered into the United States. If CBP declines to accept the full 
Importer Security Filing as the request for permission, permission 
should be required from the port director of the original port of entry 
or the port of entry filing. How will CBP indicate that permission has 
been granted?
CBP Response
    The ISF Importer must submit the complete Importer Security Filing 
to CBP consisting of 10 elements as soon as a decision is made to 
change the disposition of the cargo. However, CBP disagrees that this 
submission should serve as the request for permission to convert an IE 
or T&E shipment into a shipment that will be entered into the United 
States. Instead, the party wishing to divert the cargo, must present 
the request to CBP in writing at the original port of unlading and CBP 
will indicate permission on the documentation.
Comment
    CBP should clarify the application of proposed 19 CFR 18.5, which 
would require permission to ``divert'' in-bond shipments regarding IE 
in-bond shipment since IE shipments are retained within the port of 
unlading. Will affirmative permission be required for such changes and, 
if so, what is the purpose of such permission and on what basis would 
CBP refuse permission?
CBP Response
    For in-bond shipments which, at the time of transmission of the 
Importer Security Filing are intended to be entered as an IE or T&E 
shipment, permission to divert the in-bond movement to a port other 
than the listed port of destination or export or to change the in-bond 
entry into a consumption entry must be obtained from the port director 
of the port of origin. Since IE shipments cannot be diverted, an ISF 
Importer will need permission to change an IE entry to a consumption 
entry or other type of entry.
Comment
    Will an importer who submitted an Importer Security Filing 
consisting of 10 elements, because the importer intended to enter the 
shipment into the United States or deliver the goods to an FTZ, need to 
file an Importer Security Filing consisting of five elements if the 
shipment is changed to an IE, T&E, or FROB?
CBP Response
    If an Importer Security Filing consisting of 10 elements pursuant 
to new 19 CFR 149.3(a) was initially submitted for a shipment and the 
shipment is changed to an IE, T&E, or FROB, the Importer Security 
Filing must be updated pursuant to new Sec.  149.2(d). This update must 
be performed by submission of an Importer Security Filing consisting of 
five elements as listed in section 149.3(b) because these elements are 
necessary to better assess the security risk of IE, T&E, and FROB 
shipments.
Comment
    CBP should ensure the regulations and AMS permit filing of an in-
bond request and issuance of an immediate transportation (IT) number 
prior to loading at the foreign port.

[[Page 71754]]

CBP Response
    CBP disagrees. CBP is not changing the protocols for filing in-bond 
requests and issuing IT numbers because an IT number is not a required 
data element of the Importer Security Filing and, therefore, amending 
the in-bond system is unnecessary.
Comment
    How will an importer request permission to divert an IE or T&E 
shipment to a port other than the listed port of destination or export?
CBP Response
    Pursuant to existing regulations, IE shipments may not be 
diverted.\10\ The shipper must submit a request to divert a T&E 
shipment to a port other than the listed port of destination or export 
to the port director of the port of origin either in writing or, when 
the function is available, electronically.
---------------------------------------------------------------------------

    \10\ See 19 CFR 18.25. See also Policy and Procedures Manual 
Supplement 3285-02 (February 22, 1982), Customs Directive 3280-01 
(November 25, 1983), and HQ Ruling 113946 (July 7, 1997).
---------------------------------------------------------------------------

Comment
    The importer's (or, truck/rail carrier's) failure to obtain 
permission should not subject an ocean carrier's bond to liability.
CBP Response
    The ISF Importer must provide a bond (or use an agent's bond) when 
the original Importer Security Filing is submitted. This party is 
liable for the accuracy of that Importer Security Filing, including any 
failure to obtain permission for diversion of the cargo as required by 
Sec.  18.5, as amended by this interim final rule. The party requesting 
permission must submit a new Importer Security Filing consisting of 10 
elements and must provide a bond at that time. The party submitting the 
new Importer Security Filing consisting of 10 elements will be liable 
for the accuracy of that Importer Security Filing.
Comment
    Will CBP create special provisions for IT shipments which will be 
cleared at an inland destination? If not, brokers located at inland 
ports will be placed at a disadvantage.
CBP Response
    CBP will not create special provisions for IT shipments that are 
cleared at an inland destination.

J. Public Comments; Importer Security Filing, Entry, and Application 
for FTZ Admission

Comment
    CBP should finish its targeting and pre-clear shipments prior to 
the shipment's arrival in port when entry or an application for 
admission to an FTZ are filed at an earlier point (i.e., when entry, 
entry summary, or FTZ application documentation are submitted via a 
single electronic transmission as the Importer Security Filing).
CBP Response
    CBP disagrees. CBP is not amending, at this time, the procedures 
generally governing entry release and FTZ admission of imported goods. 
The laws governing entry release and FTZ admission are governed by 
different statutory authorities and were enacted for a variety of 
purposes, such as commercial enforcement and preventing fraud, that are 
distinct from assessing security risk. However, CBP will carefully 
consider the merits of completing targeting and pre-clearance at an 
earlier point in the vessel mode in the near future.
Comment
    The Importer Security Filing is duplicative because it is basically 
collecting entry data at an earlier point in time.
CBP Response
    Pursuant to section 203 of the SAFE Port Act, the Secretary of 
Homeland Security, acting through the Commissioner of CBP, must 
promulgate regulations to require the electronic transmission of 
additional data elements for improved high-risk targeting, including 
appropriate security elements of entry data. While CBP recognizes that 
several of the data elements are repeated in both the Importer Security 
Filing and the entry documents, each of these submissions has a 
different purpose. Pursuant to section 343(a) of the Trade Act of 2002, 
``the use of the additional information collected pursuant to these 
regulations is to be only for ensuring cargo safety and security and 
preventing smuggling and not for determining merchandise entry or for 
any other commercial enforcement purposes.'' However, in response to 
requests from the trade, CBP will allow an importer to submit the entry 
or entry/entry summary data via the same electronic transmission as the 
Importer Security Filing, in which case an importer is only required to 
provide the four common elements (importer of record number, consignee 
number, country of origin, and HTSUS number if provided at the 10-digit 
level) one time to be used for Importer Security Filing, entry, or 
entry/entry summary purposes. If an importer chooses to submit the 
Importer Security Filing and entry or entry/entry summary via the same 
electronic transmission, CBP may use these four elements for commercial 
enforcement purposes.
Comment
    It would be commercially unfeasible to accomplish both entry and 
the Importer Security Filing via the same electronic transmission in 
many instances since brokers may not submit entry from outside of the 
United States.
CBP Response
    In response to requests from the trade, CBP will allow an importer 
to submit the entry or entry/entry summary data via the same electronic 
transmission as the Importer Security Filing. CBP is not requiring this 
unified filing. If an importer chooses to do so, the consolidated 
submission of both the Importer Security Filing and entry must be filed 
by the party entitled to make entry pursuant to 19 U.S.C. 1484 on its 
own behalf or a licensed customs broker. All existing requirements 
regarding entry must still be met. CBP is not amending, at this time, 
the regulations generally governing entry of imported goods.
Comment
    Will a modification to the Importer Security Filing affect the 
entry summary and impact the examination of the merchandise?
CBP Response
    Whether filed as an initial submission or as a modification in a 
unified filing, the Importer Security Filing or the entry/entry summary 
will be accepted or rejected individually as separate and distinct 
filings. The Importer Security Filing information, including updates, 
will be used exclusively for ensuring cargo safety and security and 
preventing smuggling and will not be used for determining merchandise 
entry or for any other commercial enforcement purposes.
Comment
    The importer should be able to submit the CBP Form 7501 along with 
the Importer Security Filing 24 hours prior to lading.
CBP Response
    Pursuant to this interim final rule, the Importer Security Filing 
must be submitted 24 hours prior to lading (any

[[Page 71755]]

time prior to lading for FROB). Entry summary can also be submitted 24 
hours prior to lading, either individually or via the same electronic 
transmission as the Importer Security Filing.
Comment
    In addition to the country of origin and the HTSUS number, the 
manufacturer, ship to party, and consignee number elements for FTZ 
goods are also duplicative with the information collected on CBP Form 
214. The filer should only be required to submit these five elements 
one time.
CBP Response
    In an effort to minimize the redundancy of data transmitted to CBP, 
this interim final rule allows a filer to submit the Importer Security 
Filing and CBP Form 214 in the same electronic transmission to CBP and 
to submit the country of origin and commodity HTSUS number once to be 
used for both Importer Security Filing and FTZ admission purposes. If 
the party submitting the Importer Security Filing chooses to have these 
elements used for FTZ admission purposes, the HTSUS number must be 
provided at the 10-digit level. CBP disagrees that the manufacturer, 
ship to party, and consignee number are collected on CBP Form 214.

K. Public Comments; Requests for Special Treatment

Comment
    How does CBP plan to address holds and DNLs on agricultural 
products, where delay could result in irreparable damage to an 
importer's relationship with its buyer(s)?
CBP Response
    CBP will not institute special procedures for agricultural 
products. DNLs are placed for security reasons and the status of a 
shipment as ``perishable'' or ``non-perishable'' does not necessarily 
indicate increased or decreased security risk. In all instances, CBP 
will work with the trade to communicate holds and DNLs as quickly as 
possible. It is the responsibility of the ISF Importer to resolve 
Importer Security Filing issues that result in a hold or DNL.
Comment
    CBP should exempt from the Importer Security Filing requirements 
cargo that is refused admission or for another reason is returned from 
a foreign country after having been exported from the United States.
CBP Response
    CBP disagrees. Cargo refused admission at a foreign port is not 
exempt from these regulations if that cargo will enter the limits of a 
port in the United States via vessel. This cargo has been out of the 
control of the exporter and CBP and, therefore, poses a possible 
security risk.
Comment
    CBP should exempt carnets from the Importer Security Filing 
requirements because they are covered by an international convention. 
If carnets are not exempted, CBP must gain acceptance from the 
international convention that governs carnets prior to enforcement. At 
a minimum, the HTSUS number should not be required for carnet 
shipments.
CBP Response
    CBP disagrees. Carnet shipments are not exempt from these 
regulations if the cargo will enter the limits of a port in the United 
States via vessel. These shipments are not inherently less of a risk 
than other shipments.
Comment
    CBP should exempt temporary importation bond (TIB) shipments from 
the Importer Security Filing requirements.
CBP Response
    CBP disagrees. An Importer Security Filing is required for TIB 
shipments that will enter the limits of a port in the United States via 
vessel. These shipments are not inherently less of a risk than other 
shipments.
Comment
    CBP has already vetted the supply chains of C-TPAT members and, 
therefore, the Importer Security Filing requirements are duplicative 
for C-TPAT members. Therefore, C-TPAT members, specifically tier three 
members, should be exempt from the Importer Security Filing 
requirements, especially when shipments have been subject to pre-export 
scanning at a CSI port. C-TPAT members, including tier two and three 
members, should be permitted to file on an account basis rather than on 
a per-shipment basis (e.g., annual blanket filings). In the 
alternative, C-TPAT members should be subject to a phase-in period, 
permitted to submit fewer than all of the required Importer Security 
Filing elements, permitted to submit the Importer Security Filing 12 
hours prior to lading, and/or subject to reduced penalties.
CBP Response
    CBP disagrees. CBP will use the Importer Security Filing to assess 
the risk of individual shipments. For purposes of this rule, all cargo 
arriving to the United States by vessel, regardless of the parties 
involved, will be subject to the Importer Security Filing requirements. 
CBP is not allowing exemption from, or alteration of, the requirement 
that C-TPAT partners submit Importer Security Filing information in 
advance of arrival. CBP believes that compliance with these regulations 
complements supply chain security and efficiency procedures being 
implemented by C-TPAT partners. Furthermore, it is emphasized that C-
TPAT membership will continue to be viewed in a positive light for 
targeting purposes. It is more likely that shipments made by C-TPAT 
members will be readily and expeditiously cleared, and not be delayed 
for greater scrutiny. Other related advantages of C-TPAT partnership 
may include essential security benefits for suppliers, employees, and 
customers, such as a reduction in the number and extent of border 
inspections and eligibility for account-based processes.
Comment
    Shipments that transit through CSI ports should be exempt from the 
Importer Security Filing requirements.
CBP Response
    CBP disagrees. This rule is one part of CBP's layered approach to 
cargo security. CBP's comprehensive strategy includes CSI, the 24 Hour 
Rule, C-TPAT, and the Importer Security Filing. Importer Security 
Filing data are particularly useful for cargo that transits through a 
CSI port because CSI ports provide CBP the opportunity to review cargo 
before it is laden on a vessel destined for the United States.
Comment
    Shipments intended for a duty-free warehouse should be exempt from 
the Importer Security Filing requirements. For duty-free stores, 
vendors may ship directly to the manufacturer's site, yet later issue 
the invoice from the United States or other location. In these 
circumstances, the shipper only has a packing list or no invoice and 
there is no way to determine the HTSUS number and country of origin at 
the time of shipping.
CBP Response
    CBP disagrees that an exemption is warranted. An Importer Security 
Filing is required for merchandise destined for a duty-free warehouse. 
These shipments

[[Page 71756]]

are not inherently less of a risk than other shipments. CBP is aware 
that business practices may need to change (e.g., amendment of shipping 
documents) to obtain this information 24 hours prior to lading. Where 
the party is not reasonably able to verify the information 24 hours 
prior to lading, the regulations allow the party to submit the 
information on the basis of what it reasonably believes to be true. If 
any of the information changes or more accurate information becomes 
available before the goods enter the limits of a port in the United 
States, the Importer Security Filing must be updated.
Comment
    CBP should allow an exemption for shipments originally destined for 
a foreign port (with the intent to remain foreign) that are diverted to 
the United States because of an emergency. CBP should also allow an 
exemption for shipments diverted to the United States that were 
originally destined for a foreign sea port to be loaded on a rail car 
or truck destined for the United States, in cases where the vessel is 
diverted because of emergency.
CBP Response
    CBP disagrees that a regulatory exemption is warranted. If an 
emergency arises regarding cargo that was never intended to enter the 
limits of a port in the United States for which an Importer Security 
Filing was not filed, the ISF Importer is required to file an Importer 
Security Filing. If an event occurs, including an emergency, affecting 
cargo for which an Importer Security Filing was submitted, and the 
event results in changes to any of the elements for that filing, the 
ISF Importer is required to immediately amend the Importer Security 
Filing. The ISF Importer will still be liable for enforcement actions 
resulting from the late Importer Security Filing submission. However, 
CBP will consider the totality of the circumstances surrounding the 
event before any further CBP actions are taken.
Comment
    CBP should allow an exemption for ferries or barges, especially 
when merchandise is diverted to a ferry or barge when the land border 
crossing is down.
CBP Response
    An Importer Security Filing is not required if the movement of the 
cargo by ferry or barge is considered to have crossed a ``land border'' 
crossing for CBP purposes. However, an Importer Security Filing is 
required for cargo that is transported on a vessel that is required to 
make formal vessel entry pursuant to 19 U.S.C. 1434 (see also 19 U.S.C. 
1441 for vessels exempted from vessel entry).
Comment
    FROB should be exempted from these requirements because, at the 
time of loading, whether a cargo is destined to be FROB may not be 
known or may be subject to change due to changes in port destinations 
or due to last minute cargo being loaded which is destined for the 
United States after cargo for other countries has been loaded.
CBP Response
    CBP disagrees. If the cargo is known to be FROB prior to lading, 
the ISF Importer must submit an Importer Security Filing consisting of 
five elements. If the cargo is not known to be FROB (or an IE or T&E 
shipment) and the cargo is intended to enter the limits of a port in 
the United States 24 hours prior to lading, the importer must submit an 
Importer Security Filing consisting of 10 elements. If an event occurs 
(e.g., an emergency) affecting cargo for which an Importer Security 
Filing was submitted, and the event results in changes to any of the 
elements for that filing, the ISF Importer is required to immediately 
amend the Importer Security Filing. If an Importer Security Filing was 
not filed because the cargo was not intended to enter the limits of a 
port in the United States by vessel, and the cargo will enter the 
limits of a port in the United States, the importer must immediately 
file an Importer Security Filing. In this case, the ISF Importer will 
still be liable for enforcement actions resulting from the late 
Importer Security Filing submission.
Comment
    CBP should clarify that FROB cargo does not include U.S. export 
cargo or foreign-to-foreign cargo.
CBP Response
    U.S. export cargo that was not laden at a foreign port is outside 
of the scope of this rule.
Comment
    Will an Importer Security Filing be required for goods that are 
discharged in a foreign port and transshipped via truck/rail into the 
United States?
CBP Response
    No. This rule only applies to cargo arriving in the limits of a 
port in the United States by vessel.
Comment
    Cargo that is imported by the Department of Defense should be 
exempt from the Importer Security Filing requirements.
CBP Response
    CBP agrees. If cargo arrives on a vessel for which vessel entry and 
a manifest is required, an Importer Security Filing must be submitted. 
However, if Department of Defense cargo arrives on a government vessel 
as per 19 CFR 4.5 for which vessel entry and a manifest is not 
required, an Importer Security Filing is not required.
Comment
    The HTSUS number, manufacturer (or supplier), and seller should not 
be required for personal effects.
CBP Response
    CBP disagrees. The ISF Importer must submit an Importer Security 
Filing for shipments consisting of personal effects. These shipments 
are not inherently less of a risk than other shipments. All data 
elements are required regardless of whether the parties identified in 
the data elements are private or commercial.
Comment
    Ship's equipment and carrier's inter-company moves should be exempt 
from the Importer Security Filing requirements.
CBP Response
    An Importer Security Filing is not required for ship's 
equipment.\11\ However, unless otherwise exempted, the ISF Importer 
must submit an Importer Security Filing for inter-company moves.
---------------------------------------------------------------------------

    \11\ CBP is not amending existing advance manifest information 
requirements in 19 CFR Part 4.
---------------------------------------------------------------------------

Comment
    Why is CBP exempting instruments of international trade (IITs) from 
the Importer Security Filing requirements?
CBP Response
    CBP is requiring that IITs be reported via vessel stow plans and 
container status messages. However, many of the Importer Security 
Filing elements are not applicable to IIT shipments and CBP has 
determined that the additional information would be of limited 
targeting value.
Comment
    CBP should not require Importer Security Filings for shipments 
arriving in the United States via inland waterways, such as the Great 
Lakes.

[[Page 71757]]

CBP Response
    CBP disagrees. The SAFE Port Act of 2006 requires data elements for 
cargo destined to the United States by vessel prior to loading of such 
cargo on vessels at foreign seaports. Accordingly, the ISF Importer 
must submit an Importer Security Filing for cargo arriving in the 
United States via inland waterways.
Comment
    CBP should clarify that these rules are not applicable to cargo 
being returned to the United States from any vessel or outer 
continental shelf (OCS) facility positioned over the U.S. OCS for the 
purposes of engaging in OCS activities, as defined in 33 CFR 140.10. 
CBP should carefully consider the fundamental difference between 
cargoes returned to the United States from offshore locations and 
cargoes imported to the United States from foreign countries in the 
application of this rule. The cargoes shipped (returned) from offshore 
locations to the United States have never made what CBP has in the past 
referred to as ``a meaningful departure'' from the United States. In 
the NPRM, CBP uses the term ``foreign port'' to determine the 
applicability of reporting. The use of the term is significant and 
correct so long as it is clearly defined as meaning the foreign port of 
lading of a cargo container for transport to the United States. The 
term ``foreign port'' has at times been used to include operations 
involving the carriage of cargo to/from ``Hovering Vessels.'' However, 
vessels positioned over the OCS to conduct OCS activities are clearly 
not ``Hovering Vessels.'' In addition, the information required by 
these regulations is, in some instance inapplicable to the OCS (e.g., 
port codes) and would provide no tangible benefit to CBP. The same 
logic used for the Western Hemisphere Travel Initiative whereby persons 
traveling to/from mobile offshore drilling units located on the OCS are 
not required to present a passport to enter/re-enter the U.S. should be 
applied to cargo for these requirements and the regulations should 
exempt cargoes transported to/from the OCS. CBP should exempt equipment 
brought into the United States from an OCS facility, whether the 
equipment is new, unused, or damaged. CBP should exempt such equipment 
as merchandise pursuant to 49 U.S.C. 55102, or as bulk cargo. CBP 
should clarify whether foreign merchandise arriving at an OCS facility 
within the coastwise waters of the United States is subject to the 
Importer Security Filing requirement. CBP should clarify whether 
equipment transported from the customs territory of the United States 
to an OCS facility to be used for repair or emergency work, having 
already been entered or is otherwise domestic, is subject to the 
Importer Security Filing.
CBP Response
    Domestic cargo (whether of U.S. origin, or of foreign origin and 
having been formally entered), including cargo intended for repair or 
emergency work, that is transported between CBP ports, or other places 
within the customs territory of the United States, including an OCS 
facility, is not subject to Importer Security Filing requirements. 
Whether any piece of equipment, new, unused, or damaged, is either 
considered an OCS facility or device attached to an OCS facility, or is 
subject to the provisions of 46 U.S.C. 55102, is decided on a case-by-
case basis. We note here, however, that a vessel that is positioned 
over the OCS and is either anchored or moored to the seabed is 
considered an OCS facility. Conversely, the party causing foreign 
cargo, including cargo intended for repair or emergency work, to be 
brought into the customs territory of the United States, whether it is 
a CBP port or any other point within the customs territory of United 
States, including an OCS facility, from a foreign port or place must 
comply with Importer Security Filing requirements. The party causing 
foreign cargo to arrive at an OCS facility must comply with Importer 
Security Filing requirements using the port code of the nearest CBP 
service port. CBP will consider the exigent circumstances surrounding 
such transportation in the assessment of any liquidated damages claim 
or other enforcement action.
Comment
    Low risk repetitive shipments should be exempt from the Importer 
Security Filing requirements. In the alternative, CBP should consider 
an alternative data submission procedure which would take into account 
repetitive shipments in which the content varies little from shipment 
to shipment.
CBP Response
    CBP disagrees. Repetitive shipments are not inherently of less risk 
than other shipments. CBP will use the Importer Security Filing to 
assess the risk of individual shipments and, therefore, no exemptions 
to the Importer Security Filing requirements will be given for 
repetitive shipments.
Comment
    Roll on/roll off cargo should be exempt from the Importer Security 
Filing requirements.
CBP Response
    CBP disagrees. Roll on/roll off cargo is not inherently less of a 
risk than other shipments. Therefore, an Importer Security Filing is 
required for all cargo other than bulk cargo destined to enter the 
limits of a port in the United States, including roll on/roll off 
cargo.
Comment
    Samples and trade show displays should be exempt from the Importer 
Security Filing requirements. In the alternative, manufacturer (or 
supplier) and country of origin should not be required for these 
shipments.
CBP Response
    CBP disagrees. Samples and trade show displays are not inherently 
less of a risk than other shipments. Therefore, a complete Importer 
Security Filing is required for samples and trade show displays.
Comment
    Goods being imported into the U.S. Virgin Islands should be exempt 
from the Importer Security Filing, stow plan, and CSM requirements.
CBP Response
    The U.S. Virgin Islands are not part of the customs territory of 
the United States and are, therefore, outside of the scope of this 
rule.
Comment
    CBP should maintain a list of break bulk cargo for which an 
Importer Security Filing is required 24 hours prior to arrival. 
Specifically, new and used vehicles and ISO tanks should be considered 
break bulk.
CBP Response
    For purposes of this interim final rule, break bulk cargo is 
defined in new Sec.  149.1(d) as ``cargo that is not containerized, but 
which is otherwise packaged or bundled.'' CBP does not maintain a list 
of break bulk cargo. Rather, CBP considers applications for exemption 
from the timing requirement under the 24 Hour Rule and the Importer 
Security Filing requirements on a case-by-case basis. Regarding 
vehicles, if vehicles are non-containerized, they are considered break 
bulk for purposes of this rule. Bulk cargo is defined in new Sec.  
149.1(c) as ``homogeneous cargo that is stowed loose in the hold and is 
not enclosed in any container such as a box, bale, bag, cask, or the 
like. * * * Specifically, bulk cargo is composed of either: (1) Free 
flowing articles such as oil, grain, coal, ore, and the like, which can 
be pumped or run through a chute or

[[Page 71758]]

handled by dumping; or (2) Articles that require mechanical handling 
such as bricks, pig iron, lumber, steel beams, and the like.'' 
Regarding ISO tanks, a container that carries liquids is still a 
container for purposes of this rule.

L. Public Comments; Importer Security Filing, Other Comments

Comment
    Providing essentially the same information on a shipment-by-
shipment basis, albeit in different combinations and permutations will 
not increase security. Instead, importers should be allowed and/or 
required to provide a profile of suppliers, ship-to locations, etc.
CBP Response
    It is unlikely that every element will be one hundred percent 
identical in different shipments. CBP will use the Importer Security 
Filing to assess the risk of individual shipments and, therefore, an 
Importer Security Filing is required for each shipment. For purposes of 
this rule, all cargo arriving to the United States by vessel, unless 
specifically exempt, is subject to the Importer Security Filing 
requirements.
Comment
    The Importer Security Filing requirements are duplicative with FDA 
submissions. DHS and the FDA should collect this information through 
one submission.
CBP Response
    CBP disagrees. These submissions are authorized by different laws 
with different responsible parties and enforcement actions for failure 
to comply. However, CBP will continue to evaluate all submissions and 
ways to reduce the burden on the trade through eliminating redundant 
submissions.
Comment
    If CBP proceeds before ACE is fully functional, CBP should wait 
until ACE is available before requiring linking of the manufacturer 
name and address, country of origin, and HTSUS number. CBP should also 
fulfill its commitment to integrating this data submission process with 
the future ongoing development work and implementation of ACE. The 
record formats should be compatible with those that will be required in 
ACE without further changes in order to avoid additional programming 
requirements for the trade.
CBP Response
    CBP disagrees that the linking requirement should be postponed 
until ACE is fully functional. The linking of the required data is 
required at the entry level and not necessarily at the bill of lading 
or invoice level. This is a process that is already required upon cargo 
arrival for entry purposes on CBP Form 3461. The linking of the 
required data will allow CBP to more effectively target high risk 
shipments. Absent the linking of the data, CBP would need to consider 
every possible permutation of the data and would, therefore, be forced 
to designate cargo as high risk when it may not, in fact, be high risk. 
As stated previously, CBP will take into account systems changes made 
by the trade to comply with this rule as ACE is developed.
Comment
    CBP will need to allow the filer the ability to designate an 
Importer Security Filing as relating to either a consumption entry or 
FTZ shipment; or an IE, T&E, or FROB shipment.
CBP Response
    CBP agrees. The Importer Security Filing submission must indicate 
whether the submission is for: (1) A shipment intended to be entered 
into the United States or a shipment intended to be delivered to a 
foreign trade zone, requiring an Importer Security Filing consisting of 
10 elements; or (2) an IE, T&E, or FROB shipment, requiring an Importer 
Security Filing consisting of five elements.
Comment
    The NPRM did not propose to require container number as part of the 
Importer Security Filing. How will CBP target containers for 
examination when there are multiple containers on one bill of lading?
CBP Response
    An ISF Importer will be given the option to provide container 
numbers as part of the Importer Security Filing. If the ISF Importer 
chooses to have one bill of lading cover multiple containers, all of 
those containers will be subject to the same risk assessment.
Comment
    Each Importer Security Filing filer should be issued a unique 
``filer'' number.
CBP Response
    Any party not already an ABI or AMS participant intending to 
transmit Importer Security Filings through ABI or AMS will be issued a 
filer code when they obtain ABI or AMS access to uniquely identify them 
as the filer of the transmission.
Comment
    Importers, and other designated parties, should be able to access 
past Importer Security Filings.
CBP Response
    CBP disagrees. Importers and other designated parties will not be 
able to access past Importer Security Filings in CBP systems. As 
discussed in response to another comment, such functionality would be 
too costly and raises security and privacy concerns. However, CBP will 
continue to evaluate this possibility as ACE is developed.
Comment
    The requirement to request a ruling when an element does not exist 
will jeopardize supply chain efficiency. When an element is unknown, 
the importer should be allowed to leave a field blank or provide a code 
indicating lack of knowledge without penalty. In the alternative, CBP 
should provide for an expedited ruling procedure when an importer 
believes that a required data element does not exist for a non-exempt 
transaction type.
CBP Response
    First, CBP is not requiring that the ISF Importer seek a ruling 
when a data element is unknown. If an ISF Importer does not know an 
element that is required pursuant to this interim final rule, the ISF 
Importer must take steps necessary to obtain the information. If the 
ISF Importer believes that a required data element does not exist for a 
non-exempt transaction type, the ISF Importer should request a ruling 
prior to the time required for the Importer Security Filing. The 
advance rulings procedures found in 19 CFR part 177 remain available to 
the public for this purpose. CBP disagrees that separate special ruling 
procedures for Importer Security Filing are necessary because the part 
177 procedures are sufficient to handle all questions that may arise.
Comment
    CBP should not require importers to provide data of which they do 
not have direct knowledge or cannot reasonably be expected to obtain. 
CBP should have flexibility to identify appropriate alternatives to 
elements that are unknown at the time of filing.
CBP Response
    CBP believes that, in most cases, the Importer Security Filing 
information is available to the party causing the goods to enter the 
limits of a port in the United States. However, CBP is aware that 
business practices may need to change (e.g., amendment of shipping

[[Page 71759]]

documents) to obtain this information 24 hours prior to lading. Where 
the ISF Importer is not reasonably able to verify the information, the 
regulations allow the party to submit the information on the basis of 
what it reasonably believes to be true. In addition, as discussed in 
the ``Structured Review and Flexible Enforcement Period'' section of 
this document, this rule provides flexibilities with respect to certain 
elements of Importer Security Filings such as the ability to provide a 
range of possible responses based on the best data available in lieu of 
a single specific response.
Comment
    The importer should not be required to link the manufacturer (or 
supplier), country of origin, and commodity HTSUS number. This 
requirement is not included in the SAFE Port Act. Instead, CBP should 
manipulate the data through the use of an improved algorithm, as 
required by the SAFE Port Act, to best achieve effective security 
screening.
CBP Response
    Pursuant to section 203 of the SAFE Port Act, this interim final 
rule requires the submission of additional data elements for improved 
high-risk targeting, including appropriate security elements of entry 
data. Importers are already required to link data in this way for entry 
purposes and CBP currently uses these data to target. The line-item 
linking will provide CBP with specific information about the origin of 
the goods, the manufacturer/supplier of the goods and an accurate 
description of the goods. For example, manhole covers, in and of 
themselves are relatively benign. Goods with a specific country of 
origin may not merit any special consideration. But manhole covers 
coming from a specific manufacturer in a specific country of origin 
have been found to be contaminated with radioactive waste.
Comment
    Do the manufacturer (or supplier), country of origin, and commodity 
HTSUS number need to be linked to one another at the invoice line item 
level or the entry line item level?
CBP Response
    The manufacturer (or supplier), country of origin, and commodity 
HTSUS number must be linked to one another at the entry line level and 
not at the invoice line item level. This is consistent with what the 
trade provides to CBP for entry purposes and will allow CBP to better 
assess the risk of cargo destined for the United States.
Comment
    How will items with multiple HTSUS numbers be linked (e.g., a suit 
could have up to four different 10-digit HTSUS numbers)?
CBP Response
    Multiple HTSUS numbers will be linked at the line item level with 
country of origin, and manufacturer. This will be similar to the 
current CBP Form 3461 entry procedures.
Comment
    CBP should wait until ACE is available before requiring linking of 
data.
CBP Response
    CBP disagrees. After careful consideration, DHS has determined that 
immediate action is necessary to increase the security of cargo 
entering the United States by vessel by improving CBP's risk assessment 
capabilities. Existing CBP systems are prepared to receive the 
manufacturer (or supplier), country of origin, and commodity HTSUS 
number linked to one another. CBP will take into account systems 
changes made by the trade to comply with this rule as ACE is developed.
Comment
    CBP should require the same 10 elements that are required for 
shipments intended to be entered into the United States for FROB cargo.
CBP Response
    CBP disagrees. Several of the elements (e.g., importer of record 
and consignee number) are not applicable to FROB shipments. Therefore, 
CBP is requiring five elements which are applicable to FROB shipments.
Comment
    CBP should require that an Importer Security Filing be filed 24 
hours prior to lading for all cargo, including FROB.
CBP Response
    Because FROB cargo is frequently laden based on a last-minute 
decision by the carrier, the Importer Security Filing for FROB is not 
required 24 hours prior to lading. Rather, the Importer Security Filing 
for FROB is required any time prior to lading. Therefore, a carrier may 
submit the Importer Security Filing for FROB cargo 24 hours prior to 
lading if the carrier chooses to do so.
Comment
    Carriers would be in the position of non-compliance when cargo is 
transformed into FROB while en route, when cargo that was originally 
intended to remain onboard the vessel (i.e., FROB) will be unladen in 
the United States, or when additional cargo is booked at the last 
minute.
CBP Response
    An Importer Security Filing must be submitted to CBP no later than 
24 hours before cargo that is intended to enter the limits of a port in 
the United States is laden. See the ``Structured Review and Flexible 
Enforcement Period'' section of this document for flexibilities related 
to timing for certain Importer Security Filing elements. For FROB, the 
Importer Security Filing must be submitted prior to lading. The ISF 
Importer must update the filing if, before the goods enter the limits 
of a port in the United States, any of the information submitted 
changes or more accurate information becomes available, including when 
cargo is transformed into FROB. CBP acknowledges the wide range of 
logistical issues that carriers face that may change vessel patterns 
and ultimately cargo status. The change in status of cargo needs to be 
communicated to CBP as soon as that decision is made and Importer 
Security Filing filings must be submitted immediately. However, the ISF 
Importer will still be liable for enforcement actions resulting from 
late Importer Security Filing submissions.

VII. Discussion of Comments Regarding Proposed Amendments to Bond 
Requirements and Enforcement

    In order to provide a clear enforcement mechanism for the proposed 
requirements, CBP proposed to amend the regulations covering certain 
bond conditions to include agreements to pay liquidated damages for 
violations of the new proposed regulations. CBP also proposed to amend 
the bond conditions for violations of the advance cargo information 
requirements under the Trade Act regulations in order to make the 
liquidated damages amounts for those violations consistent with the 
liquidated damages amounts for violations of the proposed requirements.

A. Overview; Bond Conditions and Enforcement Related to the Proposed 
Importer Security Filing, Vessel Stow Plan, and Container Status 
Message Requirements

    CBP will enforce the Importer Security Filing, vessel stow plan, 
and container status message requirements

[[Page 71760]]

through the assessment of liquidated damages, in addition to penalties 
applicable under other provisions of law.
    CBP proposed to add a new condition to those provisions in 19 CFR 
113.62 required to be included in a basic importation and entry bond. 
Specifically, CBP proposed to amend 19 CFR 113.62 to include a 
condition whereby the principal agrees to comply with the proposed 
Importer Security Filing requirements. Under the proposed condition, if 
the principal fails to comply with the proposed Importer Security 
Filing requirements, the principal and surety (jointly and severally) 
would pay liquidated damages equal to the value of the merchandise 
involved in the default.
    CBP also proposed to amend those provisions in 19 CFR 113.64 
required to be included in an international carrier bond. Specifically, 
CBP proposed to amend 19 CFR 113.64 to include three new conditions. 
First, a new condition would be added whereby the principal agrees to 
comply with the proposed Importer Security Filing requirements if the 
principal elects to provide the Importer Security Filing on behalf of 
an importer, as defined in the proposal. If the principal fails to 
comply with the proposed Importer Security Filing 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. 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. Third, a new condition would be added whereby the 
principal agrees to comply with the proposed container status message 
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.
    Lastly, CBP proposed to amend those provisions in 19 CFR 113.73 
required to be included in a foreign trade zone operator bond. 
Specifically, CBP proposed to amend 19 CFR 113.73 to include a 
condition whereby the principal agrees to comply with the Importer 
Security Filing requirements. Under the proposed condition, if the 
principal fails to comply with the proposed Importer Security Filing 
requirements, the principal and surety (jointly and severally) would 
pay liquidated damages equal to the value of the merchandise involved 
in the default.

B. Public Comments; Bond Conditions and Enforcement Related to the 
Proposed Importer Security Filing, Vessel Stow Plan, and Container 
Status Message Requirements

Comment
    When an agent submits an Importer Security Filing on behalf of an 
importer, both parties should not be required to obtain bonds. If both 
parties are required to have a bond, CBP should clarify who will be 
responsible for liquidated damages. Will both parties be responsible? 
Will an additional bond (or a separate bond rider) be required for the 
Importer Security Filing and, if so, which type of bond (or rider)?
CBP Response
    CBP agrees. The regulations have been changed to remove the 
requirement that the filer have a separate bond. The ISF Importer, as 
defined for purposes of these regulations, is ultimately liable for the 
timely, accurate, and complete submission of the Importer Security 
Filing. The regulations have also been changed to include a new 
importer security filing bond and to allow the ISF Importer to use a 
basic custodial bond or new importer security filing bond in addition 
to the bond types included in the proposal. Therefore, the ISF Importer 
must possess a basic importation and entry bond containing all the 
necessary provisions of 19 CFR 113.62, a basic custodial bond 
containing all the necessary provisions of 19 CFR 113.63, an 
international carrier bond containing all the necessary provisions of 
19 CFR 113.64, a foreign trade zone operator bond containing all the 
necessary provisions of 19 CFR 113.73, or an importer security filing 
bond as provided in Appendix D to part 113 of 19 CFR. If the ISF 
Importer does not have one of these bonds, the party must obtain a bond 
or designate a bonded agent to file under the agent's bond if the agent 
agrees in writing.
Comment
    Licensed customs brokers should be exempt from bond requirements 
with regard to the Importer Security Filing.
CBP Response
    A customs broker who submits an Importer Security Filing on behalf 
of another party must do one of the following: (1) Submit the filing 
under its own bond; or (2) at an ISF Importer's direction, submit the 
filing under that party's bond.
Comment
    The requirement that the Importer Security Filing filer have a bond 
will ensure a high degree of diligence and perfection, especially when 
the filer is a foreign entity.
CBP Response
    CBP will enforce the Importer Security Filing, vessel stow plan, 
and container status message requirements through the assessment of 
liquidated damages, in addition to penalties applicable under other 
provisions of law. CBP agrees that the requirement that a bond be 
posted for the Importer Security Filing will ensure a high degree of 
diligence. However, under this interim final rule, if the ISF Importer 
does not have one of the required bonds, the importer may designate a 
bonded agent to file under the agent's bond if the agent agrees in 
writing.
Comment
    Will a continuous or single transaction bond be required?
CBP Response
    Generally, continuous bonds will be accepted for the Importer 
Security Filing. Continuous bonds are verifiable electronically and 
will give CBP more transparency into the party and bond's existence. 
Requests to file single transaction bonds for Importer Security Filings 
will be evaluated by CBP on a case-by-case basis consistent with 
current practices.
Comment
    How can an importer use an importation and entry bond for the 
Importer Security Filing because an importer's liability under an 
importation and entry bond attaches at the time of entry? Moreover, 
liability attaches based on conditions that are beyond the importer's 
control.
CBP Response
    An ISF Importer will obligate its bond for purposes of submission 
of the importer security filing. Not all basic importation bond 
obligations attach at entry (for example, the obligation to comply with 
airport security requirements.) An ISF Importer must possess a basic 
importation and entry bond containing all the provisions of 19 CFR 
113.62, a basic custodial bond containing all the provisions of 19 CFR 
113.63, an international carrier bond containing all the provisions of 
19 CFR 113.64, a foreign trade zone operator

[[Page 71761]]

bond containing all the provisions of 19 CFR 113.73, or an importer 
security filing bond as provided in Appendix D of part 113 of 19 CFR in 
order to submit an importer security filing. CBP has amended the 
relevant bond provisions to provide that the principle agrees to comply 
with Importer Security Filing requirements. CBP has also amended the 
international carrier bond provisions to provide that the principle 
agrees to comply with vessel stow plan and container status message 
requirements.
Comment
    If NVOCCs are excluded from the vessel stow plan and CSM 
requirements, will CBP differentiate between International Carrier 
Bonds required for vessel operating common carriers (VOCCs) and NVOCCs.
CBP Response
    NVOCCs are not required to submit vessel stow plans and CSMs. The 
responsible party's bond will be subject to liquidated damages. 
Therefore, an NVOCC should not be subject to liquidated damages for 
violations of the vessel stow plan and CSM requirements unless the 
NVOCC posts its bond for this purpose (e.g., if the NVOCC submits a 
vessel stow plan or CSMs on behalf of a vessel operating carrier).
Comment
    Will CBP change the required bond amounts? If so, how will the bond 
amount be calculated? The ability to obtain bonds for Importer Security 
Filings would be undermined by an inability to quantify and underwrite 
risks, which would limit importer and broker access to viable customs 
bond providers. Furthermore, the ability to underwrite a foreign 
company is very limited. In addition, some importers and carriers may 
no longer qualify for the required bond because sureties may increase 
their thresholds as a result of these new requirements. In any event, 
the inclusion of liquidated damages provisions will result in a 
significant increase in customs bonds costs. This increased cost has 
not been quantified.
CBP Response
    CBP is not increasing bond amounts through this rulemaking. If CBP 
does increase bond amounts in the future, it will do so through 
established procedures.
Comment
    CBP should clarify that a bond must be in place at the time of 
submission of the Importer Security Filing.
CBP Response
    Pursuant to new 19 CFR 149.5, to be qualified to file Importer 
Security Filing information, an ISF Importer must possess a bond or, if 
an ISF Importer does not have a required bond, the ISF Importer can 
have the agent submitting the Importer Security Filing post the agent's 
bond.
Comment
    Liquidated damages are inappropriate because they are not related 
to the security goals of this rule and because the Importer Security 
Filing is not ``customs business.'' In addition, CBP did not consult 
with the trade regarding the proposed liquidated damages and bond 
provisions and CBP has not offered a rational basis for the use of 
liquidated damages in lieu of other deterrents, including the 
following: Rejection of the Importer Security Filing, do not load 
messages at the port of export, examination of the cargo, and detention 
of the cargo at the port of entry for examination. CBP should only use 
monetary penalties for Importer Security Filing violations.
CBP Response
    The provisions of 19 U.S.C. 1623 authorize CBP to require such 
bonds as deemed necessary to assure compliance with any provision of 
law the CBP may be authorized to enforce. See 19 CFR 113.1. The fact 
that the Importer Security Filing is not ``customs business'' is not 
relevant to this statutory authorization. Liquidated damages for 
breaches of bond conditions are appropriate for violations of the 
Importer Security Filing.
    Other enforcement actions, such as DNL messages and general cargo 
examination authorities, may also be applicable and within the 
discretion of CBP. Liquidated damages will allow for appropriate 
enforcement in lieu of monetary penalties.
Comment
    The proposed inclusion of provisions relating to the Importer 
Security Filing requirements is contrary to the entry (commercial) 
purposes of the basic importation and entry bond.
CBP Response
    In an effort to minimize the burden on the trade, CBP is allowing 
the use of the basic importation and entry bond, as modified by this 
rulemaking, for Importer Security Filing purposes. The ISF Importer may 
also obtain a basic custodial bond, an international carrier bond, a 
foreign trade zone operator bond, or an importer security filing bond. 
CBP disagrees that the inclusion of provisions relating to the Importer 
Security Filing in the basic importation and entry bond is 
inappropriate because, inasmuch as the obligation to provide this 
information vests with the importer, it is reasonable to establish a 
condition in the importer's bond to guarantee performance of that 
obligation.
Comment
    Can a carrier be indemnified for liquidated damages for loading a 
container if the carrier can provide a valid Importer Security Filing 
number and the bond ID of the filer?
CBP Response
    ISF Importers are required to submit Importer Security Filings. A 
carrier's ability to seek indemnification for liquidated damages from 
another party for loading a container with an Importer Security Filing-
related problem is a private matter best handled by private parties 
(i.e., through contractual instruments).
Comment
    There does not appear to be any risk assessment associated with the 
proposed liquidated damage amounts. Liquidated damages should be a set 
amount per container rather than the value of the merchandise as 
proposed.
CBP Response
    After review of the comments and further consideration, CBP has 
changed the liquidated damage amount for failure to timely, accurately, 
and completely file an Importer Security Filing. If a party who is 
responsible for filing the Importer Security Filing fails to timely, 
accurately, and completely submit the Importer Security Filing, that 
party will be subject to a claim for liquidated damages in the amount 
of $5,000 per Importer Security Filing. Any demand for liquidated 
damages will be subject to mitigation on a case-by-case basis. However, 
mitigation will be the exception and not the rule for violations of 
these requirements.
Comment
    Why are liquidated damages amounts different for importers and 
carriers under the proposed regulations?
CBP Response
    In determining liquidated damages amounts, CBP considered the 
nature of the obligation that vests for the bond principal. The 
obligation to submit a vessel stow plan, which is submitted once per 
vessel voyage, versus the obligation to submit Importer Security 
Filings, which are submitted once per

[[Page 71762]]

bill of lading, and container status messages, which may be submitted 
numerous times per container, provide different risk levels to CBP that 
are treated differently when a breach of the obligation occurs. CBP 
does not consider the identity of the bond principal when calculating 
those risks and determining liquidated damages amounts.
Comment
    The proposed liquidated damages provisions do not adhere to section 
343(a)(3)(F) of the Trade Act of 2002 which states that ``[t]he 
information collected pursuant to the regulations shall be used 
exclusively for ensuring cargo safety and security and preventing 
smuggling and shall not be used for determining merchandise entry or 
for any other commercial enforcement purposes'' because the enforcement 
provisions are consistent in scope with 19 U.S.C. 1592, which is for 
commercial enforcement.
CBP Response
    CBP will not use the information collected pursuant to these 
regulations for determining entry or for any other commercial 
enforcement purposes, such as for assessment of a penalty pursuant to 
19 U.S.C. 1592. The liquidated damages provisions are completely 
separate authorities granted to CBP to provide a contractual remedy for 
any actions taken in violation of the customs laws for which a customs 
bond is required to be in place, including Importer Security Filing 
provisions. See 19 U.S.C. 1623 and the implementing regulations 
contained in 19 CFR part 113. The mere similarity in enforcement 
provisions will not affect CBP's ability to enforce provisions relating 
to bonds.
Comment
    CBP fails to link the nature of the violation with the party 
responsible for the breach.
CBP Response
    The party who posts their bond does so for the purpose of securing 
the Importer Security Filing. Obligations that vest under the terms and 
conditions of the bond are the responsibility of the bond principal. 
When those obligations are breached, the bond principal and surety are 
liable, jointly and severally, for any resultant liquidated damages. It 
is, therefore, appropriate for CBP to hold these parties liable for any 
breach of the bond conditions.
Comment
    The proposed penalties are unreasonable and should be reduced, 
capped, or eliminated. Penalties are unnecessary if other avenues such 
as ``no load'' messages are utilized. DNLs are sufficient and the 
imposition of fines of any sort is administratively burdensome and 
actually less effective than other means. If CBP does utilize penalties 
or liquidated damages, CBP should publish revised mitigation guidelines 
governing the failure to comply with the Importer Security Filing 
requirements and should only issue penalties in cases of willful or 
repeat serious violations.
CBP Response
    CBP disagrees. DNL holds are issued by CBP to alleviate risk. 
Penalties and liquidated damages are appropriate responses for breaches 
of the bond conditions or obligations imposed by law or regulation. If 
the Importer Security Filing requirements are not met, CBP reserves the 
right to use any enforcement remedy available in this rule, including, 
but not limited to, the assessment of liquidated damages and penalties. 
CBP will be issuing mitigation guidelines for these claims.
Comment
    The proposed enforcement provisions should require a finding of 
culpability. CBP should consider the party's intent and severity of the 
violation when issuing penalties, and determining the penalty amounts, 
for violations of these regulations. In addition, CBP should issue one 
penalty if multiple violations result from the same fundamental error. 
Importers should not be held accountable for the accuracy of a data 
element they do not own or control. Fines should only be issued when 
false data are knowingly reported, not for failure to file.
CBP Response
    CBP may issue claims if an Importer Security Filing is not filed in 
a timely, accurate, and complete manner. Failing to file is a serious 
violation in that it deprives CBP of the ability to analyze and assess 
the risk with regard to loading the cargo for transport to the United 
States. If an ISF Importer does not know an element that is required 
pursuant to the regulations, the importer must take steps necessary to 
obtain the information. While CBP will not consider levels of 
culpability in claim assessment, the agency will issue mitigation 
guidelines for violations of these regulations.
Comment
    Pursuant to the proposed regulations, ``where the presenting party 
is not reasonably able to verify the [Importer Security Filing] 
information, CBP will permit the party to electronically present the 
information on the basis of what the party reasonably believes to be 
true.'' Clarification is needed on what constitutes that the filer is 
``reasonably able to verify'' and which situations will result in a 
penalty.
CBP Response
    CBP will issue penalties for violations of these regulations in 
accordance with established penalty guidelines. However, where the 
party electronically presenting to CBP the Importer Security Filing 
receives any of this information from another party, CBP will take into 
consideration how, in accordance with ordinary commercial practices, 
the presenting party acquired such information, and whether and how the 
presenting party is able to verify this information. Where the 
presenting party is not reasonably able to verify such information, CBP 
will permit the party to electronically present the information on the 
basis of what the party reasonably believes to be true. CBP will make 
this determination on a case-by-case basis.
Comment
    The proposed amendment to 19 CFR 113.62 whereby the principle 
agrees to ``comply with all Importer Security Filing requirements'' is 
inappropriate.
CBP Response
    CBP disagrees. The amendment to 19 CFR 113.62 is not intended to 
recite the specific obligations, but merely enable CBP to enforce the 
new requirements by allowing CBP to assess liquidated damages for 
failure to comply with the bond provisions. Therefore, CBP believes 
that changing the bond to reflect new obligations in this manner is 
appropriate and allows for existing bonds to be used, thereby reducing 
redundancy and burden for CBP and the trade.
Comment
    Who will receive DNL messages resulting from Importer Security 
Filing problems? CBP should add a mandatory field to the existing 24 
Hour Rule for an Importer Security Filing confirmation number and 
should timely issue a DNL to the carrier against the AMS manifest 
filing when a number is not present or when there are problems with the 
Importer Security Filing. CBP should also transmit DNLs to the importer 
so that Importer Security Filing-related DNLs can be resolved.

[[Page 71763]]

CBP Response
    Consistent with current practice, DNL messages will be sent to the 
AMS filer of the associated bill of lading and any ``secondary notify 
party'' associated with the bill of lading. CBP will also communicate 
electronically to the filer of the Importer Security Filing when there 
are Importer Security Filing-related inaccuracies. In addition, CBP 
will send a status notification message to the AMS filer and any 
``secondary notify party'' when an Importer Security Filing has been 
submitted and matched by CBP with a bill of lading. CBP has not added a 
field to the 24 Hour Rule manifest filing for an Importer Security 
Filing confirmation number because the ISF Filer is not required to 
submit the Importer Security Filing before the carrier submits the 24 
Hour Rule advance cargo information.
Comment
    Will CBP issue ``no load'' directives to carriers and terminal 
operators in the case of failure to file timely and/or complete 
Importer Security Filings?
CBP Response
    CBP has issued internal directives for port personnel in order to 
harmonize actions within CBP. However, CBP will not issue separate ``no 
load'' directives to carriers and terminal operators for Importer 
Security Filing-related DNLs. CBP has adopted a delayed compliance 
period following the effective date of this rule, during which CBP will 
work with the trade to assist them in achieving full compliance, 
thereby minimizing the issuance of DNLs. See the ``Structured Review 
and Flexible Enforcement Period'' section of this document for further 
discussion regarding the delayed compliance period.
Comment
    CBP should issue a DNL for any bill of lading that does not have 
the Importer Security Filing on file at the time the carrier files the 
24 Hour advance manifest data.
CBP Response
    It would be inappropriate and premature for CBP to issue an 
Importer Security Filing-related DNL when the carrier files the 24 Hour 
Rule advance manifest data because the Importer Security Filing is 
required 24 hours prior to lading (any time prior to lading for FROB). 
Therefore, CBP will not issue DNL messages for missing Importer 
Security Filings until the Importer Security Filing time period has 
passed (i.e., 24 hours prior to lading for cargo other than FROB and 
any time prior to lading for FROB).
Comment
    An importer's goods that are part of a consolidated shipment may be 
delayed if the Importer Security Filing by one of the other parties in 
the consolidated shipment is not timely filed, resulting in a DNL for 
the container. CBP should permit the portion of a consolidated shipment 
for which an Importer Security Filing has been received to split from 
the shipment.
CBP Response
    CBP will follow existing DNL procedures for Importer Security 
Filing-related DNLs.
Comment
    CBP should provide an affirmative message that specific cargo is 
approved to be laden.
CBP Response
    CBP disagrees. CBP will continue to follow existing DNL procedures 
and will not issue affirmative load messages.
Comment
    What are the carrier's responsibilities with regard to the Importer 
Security Filing and loading of containers onboard a vessel? Carriers 
should not be impacted in any way, including liability under the 
carrier bond, if there are shipments onboard where a filing was not 
done.
CBP Response
    The ISF Importer is required to submit the Importer Security 
Filing. For FROB, the ISF Importer is construed as the carrier because 
there is no importer of record and the carrier is the party causing the 
goods to enter the limits of a port in the United States by 
transporting the goods to the United States. For IE and T&E in bond 
shipments, and goods to be delivered to an FTZ, the ISF Importer is 
construed as the party filing the IE, T&E, or FTZ documentation because 
there is no importer of record and this is the party principally 
causing the goods to enter the limits of a port in the United States. 
CBP will issue a DNL to instruct a carrier not to load specific cargo, 
including cargo for which a complete and accurate Importer Security 
Filing has not been filed. Vessel operating carriers are prohibited 
from loading such cargo. If a carrier is the party required to submit 
the Importer Security Filing (i.e., FROB cargo), the carrier will be 
liable for the timeliness and accuracy of the Importer Security Filing.

C. Overview; Bond Conditions Related to the Trade Act Regulations

    CBP proposed to amend the liquidated damages amounts for violations 
of the advance cargo information requirements under 19 CFR 4.7 and 4.7a 
to be $5,000 for each violation of the advance cargo information 
requirements, to a maximum of $100,000 per conveyance arrival.

D. Public Comments; Bond Conditions Related to the Trade Act 
Regulations

Comment

    CBP's proposal to amend 19 CFR 4.7, 4.7a, and 113.64 to assess 
liquidated damages in the amount of $5,000 for each violation of the 
advance cargo information requirements, to a maximum of $100,000 per 
conveyance arrival, would have a significant impact on other modes of 
transportation besides vessel.
CBP Response
    CBP agrees that there will be an unintended impact on other modes 
through this regulatory amendment in that there will be a $100,000 
damage cap on vessel conveyance arrivals which does not exist for 
arrivals in other transportation modes. Accordingly, to make assessment 
consistent, CBP is amending the provisions of newly redesignated 19 CFR 
113.64(d) to provide for the $100,000 cap on all other conveyance 
arrivals.

VIII. Discussion of Comments Regarding the Cost, Benefit, and 
Feasibility Study

Comment

    Commenters stated that the Regulatory Assessment underestimates 
costs because it did not account for delay to coordinate data 
collection among relevant parties nor did it account for increased 
infrastructure costs to house delayed goods. Commenters cited an 
economic study (See David Hummels, Time as a Trade Barrier (July 2001) 
(unpublished paper, Purdue University) (on file with author).) which 
estimated that a day of delay is approximately equivalent to a one 
percent tariff on imported goods and that this rule will result in a 
reduced demand for imports.

CBP Response

    Based on the public comments, CBP has revised its cost and benefit 
analysis, a summary of which is presented below. The revised analysis 
includes a new methodology for estimating the costs due to potential 
delays in the supply chain by estimating the economic

[[Page 71764]]

welfare losses to U.S. importers. These estimated losses sufficiently 
account for costs associated with these delays, including additional 
inventory carrying costs, the costs to hold larger buffer-stock 
inventories to accommodate variation in arrival time, depreciation in 
shipment value, and storage and security costs. The analysis relies on 
the economic study that estimated the value of a one-day delay to be 
equivalent to approximately a one percent tariff, however we apply more 
precise percentages obtained directly from the study's author for each 
relevant category of imported goods. Furthermore, our revised analysis 
appropriately includes only consumer surplus lost to U.S. importers, 
whereas the commenters' estimate results in an overestimate of the 
total loss that is greater than the sum of both consumer surplus lost 
to U.S. importers and producer surplus lost to foreign manufacturers, 
suppliers, and distributors.

Comment

    Commenters stated that costs of delay should be applied to all 
shipments, not just consolidated shipments.

CBP Response

    CBP's revised cost and benefit analysis, a summary of which is 
presented below, includes unconsolidated or full container shipments in 
the estimation of welfare losses to U.S. importers arising from 
potential delays in the supply chain.

Comment

    Commenters stated that a risk assessment was not conducted and that 
this rule will not reduce risk. Commenters also asked how the filing of 
the Importer Security Filing would deter terrorist attacks. Lastly, 
commenters stated that CBP did not provide any evidence of a benefit 
from the rule if promulgated.

CBP Response

    The purpose of the rule is to improve CBP's ability to prevent 
smuggling and ensure cargo safety and security. The additional cargo 
information will assist CBP in focusing its security resources on those 
shipments that pose the highest risk. In the ``break-even'' analysis 
presented in the Regulatory Assessment, CBP described several terrorist 
attack scenarios that could potentially be affected by the rule. The 
break-even analysis is not intended to measure the risk of attack that 
will occur with implementation of the rule; rather, the break-even 
analysis is intended to inform the reader of the absolute reduction in 
baseline risk that would have to occur in order for the annualized 
costs of the rule to equal the benefits. CBP cannot determine if this 
risk reduction will occur or if this level of risk reduction is 
achievable through implementation of this rule.
Comment
    Commenters stated that increased bond costs, liquidated damages, 
and penalty costs were not accounted for in the Regulatory Assessment.
CBP Response
    CBP agrees. The economic analysis assumes that parties subject to 
the requirements of the rule will comply with those requirements. 
During the one-year delayed enforcement period, CBP will work with the 
trade to assist them in achieving compliance with this rule.
Comment
    The Regulatory Assessment did not estimate the costs and benefits 
of requiring data elements to be linked at the line-item level.
CBP Response
    CBP agrees. CBP is not able to isolate estimates of costs or 
benefits at this very specific level of detail. The cost estimated for 
a security filing is intended to cover the range of potential 
activities involved with collecting and compiling the data for an 
Importer Security Filing, including the costs of linking data.
Comment
    The Regulatory Assessment did not account for all of the elements 
of an importer's supply chain and the economic analysis did not account 
for start-up costs.
CBP Response
    CBP agrees. However, CBP could not realistically account for the 
tens of thousands of possible supply chain relationships that include 
importers. In addition, many of the supply chain entities are based 
overseas (foreign), and therefore their compliance costs do not 
represent the incremental costs borne by U.S. entities. Instead, 
through conversations with trade representatives, CBP developed a range 
of costs in the form of an Importer Security Filing transaction fee 
that is intended to include any costs incurred by the various parties 
within the supply chain that are then ultimately passed on to the 
importers. CBP's revised cost and benefit analysis, a summary of which 
is presented below, includes an estimate of the start-up or initial 
costs incurred by importers or their designated filing agents to 
implement the rule's requirements.
Comment
    The Regulatory Assessment should account for two days of delay in 
the supply chain as a result of this rule.
CBP Response
    CBP agrees. CBP has revised the cost and benefit analysis, a 
summary of which is presented below, by assuming two or three days of 
delay during the first year of implementation. For subsequent years, 
however, the analysis assumes a decrease in delay to one day, based on 
conversations with trade representatives who were drawing on their 
experience with the 24 Hour Rule. Generally, representatives were in 
agreement that initial implementation of the 24 Hour Rule's 
requirements caused some delays in the supply chain, which decreased 
noticeably in subsequent years as they adapted to the new requirements. 
CBP expects a similar situation upon implementation of this rule, and 
notes that CBP has adopted a delayed compliance period following the 
effective date of this rule. See the ``Structured Review and Flexible 
Enforcement Period'' section of this document for further discussion 
regarding the delayed compliance period.
Comment
    The Regulatory Assessment understated recurring costs for large 
importing operations.
CBP Response
    CBP acknowledges that the recurring costs for a particular importer 
to comply with this rule will be driven largely by factors such as the 
number of Importer Security Filings the importer has to complete, the 
complexity of the importer's supply chain and business style, and the 
level of the importer's sophistication. However, we do not have the 
data or information to characterize each of the estimated 200,000 to 
750,000 unique importers by these factors or to quantify the extent to 
which the recurring costs would reliably change with these factors. Due 
to limitations in the available data, we varied the recurrent, 
transaction costs for Importer Security Filings based on importer 
transaction volume (e.g., highest volume importers have the lowest 
recurrent transaction costs). The trade representatives most commonly 
cited transaction volume as a factor in determining the transaction 
costs. From their experience with entry filing or manifest fees charged 
by brokers or carriers, brokers and carriers are likely

[[Page 71765]]

to charge lower security filing fees to their customers importing a 
large number of shipments on an annual basis. The transaction costs 
applied in the Regulatory Assessment are consistent with quantified per 
transaction cost estimates provided by other commenters.
Comment
    The annual recordkeeping burden estimated was too low.
CBP Response
    CBP disagrees. The annual recordkeeping burden of 52.3 hours per 
importer is intended to represent the average burden for all importers, 
ranging from those that have very few shipments per year to those that 
have more than a thousand shipments per year. The Regulatory Assessment 
finds that most importers are small; specifically, in 2005, more than 
70 to 85 percent of all importers imported fewer than 12 shipments. We 
believe that most of these smaller importers will have a burden lower 
than the 52.3 hours we estimated.
Comment
    The trade representatives interviewed in conjunction with the 
Regulatory Assessment were not a representative sample.
CBP Response
    CBP disagrees. CBP interviewed more than 20 representatives from a 
broad range of the parties likely to be affected by the interim final 
rule, including small and large importers, vessel and non-vessel 
operating common carriers, freight forwarders, brokers, trade groups 
and consultants, and trade software providers. In addition, CBP 
considered the additional input expressed by the trade in their public 
comments to the proposed rule during its revision of the cost and 
benefit analysis, a summary of which is presented below.
Comment
    Commenters stated that the Regulatory Assessment was ``unreliable'' 
and ``flawed.'' The costs of the rule cannot be known until CBP 
releases the data formats that will be required for the Importer 
Security Filing.
CBP Response
    While these commenters were dissatisfied with the economic 
analysis, they did not submit specific information that would enhance 
the current analysis. These commenters did not submit alternative 
analyses that more robustly considered the impacts on affected 
entities. CBP is required to prepare an economic analysis to be 
considered as part of the NPRM. The analysis prepared for the NPRM was 
reviewed by the Office of Management and Budget (OMB) in accordance 
with Executive Order 12866 and OMB Circular A-4. According to OMB 
Circular A-4, a good regulatory analysis should include: (1) A 
statement of the need for the proposed action, (2) an examination of 
alternative approaches, and (3) an evaluation of the benefits and 
costs--quantitative and qualitative--of the proposed action and the 
main alternatives identified by the analysis.
Comment
    Customs brokers would incur additional costs as a result of this 
rule and these costs would be passed on to the importer.
CBP Response
    CBP agrees with this comment, and the cost and benefit analysis 
does assume that any costs, both initial and recurring, incurred by 
brokers to comply with the rule's requirements would be passed on to 
the importers in the form of an Importer Security Filing transaction 
fee.

IX. Adoption of Proposal

    In view of the foregoing, and following careful consideration of 
the comments received and further review of the matter, CBP has 
concluded that the proposed regulations with the modifications 
discussed above should be adopted as follows:
     The requirements in section 149.2(b) regarding the timing 
of transmission for 6 of the 10 Importer Security Filing elements 
(Container stuffing location, Consolidator (stuffer), Manufacturer (or 
supplier), Ship to party, Country of origin, and Commodity HTSUS 
number) and section 149.2(f) regarding the flexible requirements for 4 
of the elements (Manufacturer (or supplier), Ship to party, Country of 
origin, and Commodity HTSUS number) are adopted as an interim final 
rule. CBP invites comments on these requirements.
     All other requirements in this rule are adopted as a final 
rule. CBP is not inviting comments on these requirements.

X. Regulatory Analyses

A. Executive Order 12866

    This rule is considered to be an economically significant 
regulatory action under Executive Order 12866 because it may result in 
the expenditure of over $100 million in any one year. Accordingly, this 
rule has been reviewed by the Office of Management and Budget (OMB). 
The following summary presents the costs and benefits of the rule plus 
a range of alternatives considered. (The ``Regulatory Assessment'' can 
be found in the docket for this rulemaking: http://www.regulations.gov; 
see also http://www.cbp.gov).
    In the analysis that follows, CBP has estimated the costs of the 
rule assuming that all affected entities are compliant upon the 
effective date of the rule, which likely overstates costs. 
Additionally, our analysis presents a low and high cost estimate. The 
costs for the high scenario incorporate potential supply chain delay 
impacts of 1 to 3 days. We analyzed the potential for supply chain 
delays based on our interviews with trade representatives and comments 
to the NPRM. As stated previously, CBP is committed to ensuring that 
its trade partners are positioned to successfully implement the 
requirements of this rule and will work with the trade during the 
delayed compliance period and thereafter. Based on the magnitude of the 
impact of potential delay in the high-cost scenario, estimated at 
billions of dollars annually, CBP has determined that a 12-month 
delayed compliance period for the rule and flexible requirements for 6 
of the 10 Importer Security Filing elements are prudent and necessary 
steps to minimize the delay costs that could result from the rule and 
to ensure that these high costs are not, in fact, realized. See the 
``Structured Review and Flexible Enforcement Period'' section of this 
document for further discussion regarding the delayed compliance period 
and flexibilities. CBP believes that the direct result of these 
modifications and the extensive outreach initiative will be a positive 
downward pressure on supply chain delay costs, and the true impacts of 
this rule are much more likely to be reflected in the low-cost scenario 
presented, where no supply chain delays are assumed.
    In this analysis, we first estimate current and future baseline 
conditions in the absence of the rule using 2005 shipping data. In this 
baseline analysis, we characterize and estimate the number of unique 
shipments, carriers, and vessel-trips potentially affected by the rule. 
We then identify the incremental measures that importers and carriers 
will take to meet the requirements of the rule and estimate the costs 
of these activities, as well as the cost to CBP of implementing the 
rule. Next, relying on published literature, we identify hypothetical

[[Page 71766]]

scenarios describing representative terrorist attacks potentially 
prevented by this regulation and estimate the economic costs (i.e., the 
consequences) of these events. We compare these consequences to the 
costs of the regulation and estimate the reduction in the probability 
of a successful terrorist attack resulting from the regulation that 
would be required for the benefits of the regulation to equal the costs 
of the regulation.
    As of the projected effective date of the regulation, we estimate 
that approximately 11 million import shipments conveyed by 1,000 
different carrier companies operating 37,000 unique voyages or vessel-
trips for delivery to between 200,000 and 750,000 ISF Importers in the 
United States will be subject to the rule. Table 1 summarizes the 
results of the regulatory analysis. We consider and evaluate the 
following four alternatives:
    Alternative 1 (the chosen alternative): Importer Security Filings 
and Additional Carrier Requirements are required. Bulk cargo is exempt 
from the Importer Security Filing requirements; \12\
---------------------------------------------------------------------------

    \12\ For each alternative, the Additional Carrier Requirements 
apply only to containerized cargo.
---------------------------------------------------------------------------

    Alternative 2: Importer Security Filings and Additional Carrier 
Requirements are required. Bulk cargo is not exempt from the Importer 
Security Filing requirements;
    Alternative 3: Only Importer Security Filings are required. Bulk 
cargo is exempt from the Importer Security Filing requirements; and,
    Alternative 4: Only the Additional Carrier Requirements are 
required.
    We estimate costs separately for the Importer Security Filing 
requirements (up to 10 importer data elements) and the Additional 
Carrier Requirements (Vessel Stow Plans and CSMs). The estimated costs 
for the Importer Security Filing requirements are developed on a per-
importer and per-shipment basis and applied to the estimated number of 
importers and shipments annually for a period of 10 years (2009 through 
2018). In addition, we estimate the welfare losses to U.S. importers 
arising from potential delays in the supply chain that may result from 
having to meet the required filing deadline of 24 hours prior to lading 
at the foreign port. The estimated costs for the Additional Carrier 
Requirements are developed on a per-carrier and per-vessel trip basis 
and applied to the estimated number of carriers and vessel trips in 
each year of the 10-year analysis period.

                                          Table 1--Summary of Findings
----------------------------------------------------------------------------------------------------------------
                                                         Percent reductions in baseline
                                                         risk that must be achieved for
                                                             benefits to equal costs
                  Annualized costs                    ------------------------------------
 Discount rate      (2009-2018,      Terrorist attack                     Number of these         Comments
                       $2008)            scenario          Absolute      events that must
                                                         reduction in     be avoided for
                                                         baseline risk      benefits to
                                                           required         equal costs
----------------------------------------------------------------------------------------------------------------
  Alternative 1 (chosen alternative): Importer Security Filings and Additional Carrier Requirements, bulk cargo
                                                     exempt
----------------------------------------------------------------------------------------------------------------
3%.............  $890 million to    Actual West Coast  0.59 to 4.38....  One event in 3    Preferred
                  $6.6 billion.      Port Shutdown                        months to 2       Alternative: Most
                                     (12-days).                           years.            favorable
                                                                                            combination of cost
                                                                                            and stringency.
                                    Hypothetical       < 0.01 to 0.02..  One event in 60
                                     Nuclear Attack.                      to 500 years.
                                    Hypothetical       0.02 to 0.15....  One event in 7
                                     Biological                           to 50 years.
                                     Attack.
7%.............  $990 million to    Actual West Coast  0.66 to 4.64....  One event in 3
                  $7.0 billion.      Port Shutdown                        months to 2
                                     (12-days).                           years.
                                    Hypothetical       < 0.01 to 0.02..  One event in 60
                                     Nuclear Attack.                      to 400 years.
                                    Hypothetical       0.02 to 0.16....  One event in 6
                                     Biological                           to 50 years.
                                     Attack.
----------------------------------------------------------------------------------------------------------------
       Alternative 2: Importer Security Filings and Additional Carrier Requirements, bulk cargo not exempt
----------------------------------------------------------------------------------------------------------------
3%.............  $890 million to    Actual West Coast  0.59 to 4.39....  One event in 3    More stringent than
                  $6.6 billion.      Port Shutdown                        months to 2       Alternative 1, but
                                     (12-days).                           years.            limited expected
                                                                                            additional benefit
                                                                                            for increased cost.
                                    Hypothetical       < 0.01 to 0.02..  One event in 60
                                     Nuclear Attack.                      to 500 years.
                                    Hypothetical       0.02 to 0.15....  One event in 7
                                     Biological                           to 50 years.
                                     Attack.
7%.............  $990 million to    Actual West Coast  0.66 to 4.65....  One event in 3
                  $7.0 billion.      Port Shutdown                        months to 2
                                     (12-days).                           years.
                                    Hypothetical       < 0.01 to 0.02..  One event in 60
                                     Nuclear Attack.                      to 400 years.
                                    Hypothetical       0.02 to 0.16....  One event in 6
                                     Biological                           to 50 years.
                                     Attack.
----------------------------------------------------------------------------------------------------------------

[[Page 71767]]

 
                        Alternative 3: Importer Security Filings only, bulk cargo exempt
----------------------------------------------------------------------------------------------------------------
3%.............  $890 million to    Actual West Coast  0.59 to 4.37....  One event in 3    Similar cost to
                  $6.6 billion.      Port Shutdown                        months to 2       Alternative 1 with
                                     (12-days).                           years.            decreased
                                                                                            effectiveness.
                                                                                            Importer Security
                                                                                            Filings and
                                                                                            Additional Carrier
                                                                                            Requirements are not
                                                                                            working in tandem.
                                    Hypothetical       < 0.01 to 0.02..  One event in 60
                                     Nuclear Attack.                      to 500 years.
                                    Hypothetical       0.02 to 0.15....  One event in 7
                                     Biological                           to 50 years.
                                     Attack.
7%.............  $990 million to    Actual West Coast  0.66 to 4.63....  One event in 3
                  $7.0 billion.      Port Shutdown                        months to 2
                                     (12-days).                           years.
                                    Hypothetical       < 0.01 to 0.02..  One event in 60
                                     Nuclear Attack.                      to 400 years.
                                    Hypothetical       0.02 to 0.16....  One event in 6
                                     Biological                           to 50 years.
                                     Attack.
----------------------------------------------------------------------------------------------------------------
                               Alternative 4: Additional Carrier Requirements only
----------------------------------------------------------------------------------------------------------------
3%.............  $2 million to $11  Actual West Coast  < 0.01 to 0.01..  One event in 100  Least cost, but also
                  million.           Port Shutdown                        to 700 years.     least effective
                                     (12-days).                                             alternative. Does
                                                                                            not meet the
                                                                                            statutory
                                                                                            requirements of
                                                                                            Section 203 of the
                                                                                            SAFE Port Act nor
                                                                                            provide data on
                                                                                            shipment history.
                                                                                            Importer Security
                                                                                            Filings and
                                                                                            Additional Carrier
                                                                                            Requirements are not
                                                                                            working in tandem.
                                    Hypothetical       < 0.01..........  One event in
                                     Nuclear Attack.                      40,000 to
                                                                          200,000 years.
                                    Hypothetical       < 0.01..........  One event in
                                     Biological                           4,000 to 20,000
                                     Attack.                              years.
7%.............  $2 million to $12  Actual West Coast  < 0.01 to 0.01..  One event in 100
                  million.           Port Shutdown                        to 600 years.
                                     (12-days).
                                    Hypothetical       < 0.01..........  One event in
                                     Nuclear Attack.                      30,000 to
                                                                          200,000 years.
                                    Hypothetical       < 0.01..........  One event in
                                     Biological                           4,000 to 20,000
                                     Attack.                              years.
----------------------------------------------------------------------------------------------------------------

    The annualized cost range presented in each cell results from 
varying assumptions about the estimated initial and transaction costs 
for Importer Security Filings, the potential for supply chain delays, 
and the estimated costs to transmit Vessel Stow Plans and CSMs to CBP.
    To estimate the full range of the total costs for complying with 
the rule, for the four alternatives we develop a high cost scenario and 
a low cost scenario by assuming certain values for the key cost 
factors. Annualized costs for Alternatives 1 through 3 range from $890 
million to $7.0 billion, depending on the discount rate applied, the 
cost scenario, whether or not bulk shipments are exempt, and whether or 
not the Additional Carrier Requirements are required. The annualized 
costs for Alternative 4 are substantially lower, ranging from $2 
million to $12 million. However, this alternative is the least 
stringent and effective option because it only collects data on the 
conveyance of the shipment.
    Ideally, the quantification and monetization of the benefits of 
this regulation would involve estimating the current level of risk of a 
successful terrorist attack, absent this regulation, and the 
incremental reduction in risk resulting from implementation of the 
rule. We would then multiply the change by an estimate of the value 
individuals place on such a risk reduction to produce a monetary 
estimate of direct benefits. However, existing data limitations and a 
lack of complete understanding of the true risks posed by terrorists 
prevent us from establishing the incremental risk reduction 
attributable to this rule. As a result, we undertake a break-even 
analysis to inform decision-makers of the necessary incremental change 
in the probability of such an event occurring that would result in 
direct benefits equal to the costs of the rule.
    In the break-even analysis, we identify three types of terrorist 
attack scenarios that may be prevented by the regulation and obtain 
cost estimates of the consequences of these events from publicly 
available literature. The analysis compares the annualized costs

[[Page 71768]]

of the regulation to the avoided costs of each event to estimate the 
reduction in the probability of such events (also presented in terms of 
``odds,'' e.g., a 0.25 reduction in the probability of an event 
occurring in a single year implies that one additional event must be 
avoided in a four-year period) that must be achieved for the benefits 
of the regulation to equal the costs. The reduction in the odds of 
terrorist events are rough estimates that do not take into account 
changes in risk through time or factors that may affect willingness to 
pay to avoid the consequences of these events, such as changes in 
income.
    For each attack scenario, Table 1 indicates what would need to 
occur for the costs of each alternative to equal its benefits, assuming 
the alternative only reduces the risk of a single event of that type of 
attack. As summarized in Table 1, the break-even risk reductions for 
Alternative 4 are significantly lower than the other three 
alternatives, reflecting the significantly lower costs associated with 
requiring only the Additional Carrier Requirements. The breakeven 
results for the remaining three alternatives are similar because the 
costs of these options are not very different. For the most severe 
attack scenario (a hypothetical nuclear attack in a major city), the 
rule must result in the avoidance of one such event in a time period of 
60 to 500 years for the benefits of the regulation to equal the costs. 
For the least severe of the three hypothetical attack scenarios (costs 
of the actual 12-day West Coast port shutdown), the estimated costs of 
a single incident are closer in value to the annualized costs of the 
rule. As a result, if the rule only reduced the risk of a single attack 
on a port, a shutdown would need to be avoided at a rate of once in 
three months to two years for the benefits of the rule to equal costs. 
The results expressed as absolute reductions in baseline risk also show 
higher reductions needed if port attacks only are mitigated (about 0.59 
to 4.65) and lesser reductions associated with prevention of the more 
catastrophic events. We note that this analysis is highly sensitive to 
the chosen incident scenarios.
    Total present value costs of the rule are presented in Table 2, 
based on the cost projections we estimate for the 10-year analysis 
period, 2009 through 2018. Applying a discount rate of three percent, 
the total costs of Alternatives 1, 2, and 3 are projected to range from 
$7.6 billion to $56 billion over 10 years depending on the cost 
scenario, whether or not bulk shipments are exempt, and whether or not 
Additional Carrier Requirements are required. If a discount rate of 
seven percent is applied instead, total costs range from $7.0 billion 
to $49 billion. Under Alternative 2, which requires Importer Security 
Filings for both non-bulk cargo and bulk cargo, costs are not 
significantly higher because the number of bulk shipments is relatively 
small compared to the number of non-bulk shipments. Under Alternative 
3, costs are not significantly lower because the estimated costs for 
the Additional Carrier Requirements are relatively small compared to 
the estimated costs for the Importer Security Filings. The present 
value costs for Alternative 4 are significantly lower than the other 
three alternatives, ranging from $16 million to $95 million.
    As a result, the relatively large difference in values between the 
lower end (e.g., present value cost of $7.6 billion at a discount rate 
of three percent) and higher end ($56 billion) of the estimated total 
cost range for Alternatives 1, 2, and 3 is attributable primarily to 
the cost scenario and not on whether or not Importer Security Filings 
for bulk shipments or the Additional Carrier Requirements are required. 
The higher end of the estimated total cost range reflects the 
variations made for the high cost scenario, and more specifically, the 
assumption that delays in the supply chain would occur as a result of 
this rule. For the high cost scenario, our present value estimate of 
the welfare loss to U.S. importers arising from delays in the supply 
chain is approximately $43 billion (at a discount rate of three 
percent).

           Table 2--Total Present Value Costs, 2009-2018 $2008
------------------------------------------------------------------------
        Discount rate                     Present value costs
------------------------------------------------------------------------
    Alternative 1 (chosen alternative): Importer Security Filings and
           Additional Carrier Requirements, bulk cargo exempt
------------------------------------------------------------------------
3%...........................  $7.6 billion to $56 billion.
7%...........................  $7.0 billion to $49 billion.
------------------------------------------------------------------------
     Alternative 2: Importer Security Filings and Additional Carrier
                   Requirements, bulk cargo not exempt
------------------------------------------------------------------------
3%...........................  $7.6 billion to $56 billion.
7%...........................  $7.0 billion to $49 billion.
------------------------------------------------------------------------
    Alternative 3: Importer Security Filings only, bulk cargo exempt
------------------------------------------------------------------------
3%...........................  $7.6 billion to $56 billion.
7%...........................  $7.0 billion to $49 billion.
------------------------------------------------------------------------
           Alternative 4: Additional Carrier Requirements only
------------------------------------------------------------------------
3%...........................  $0.02 billion to $0.1 billion.
7%...........................  $0.02 billion to $0.09 billion.
------------------------------------------------------------------------

    Again, the range presented in each cell results from varying 
assumptions about the estimated initial and transaction costs for 
Importer Security Filings, the potential for supply chain delays, and 
the estimated costs to transmit Vessel Stow Plans and CSMs to CBP.
    Annual undiscounted costs of the regulation are presented in Table 
3.

[[Page 71769]]



                                       Table 3--Annual Undiscounted Costs by Year, 2009-2018 ($2008, in Millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                   Alternative 1 (chosen
                                  alternative):  importer        Alternative 2:  importer
                                    security filings and           security filings and         Alternative 3:  importer     Alternative 4:  additional
             Year                    additional carrier             additional carrier        security filings only, bulk    carrier  requirements only
                                  requirements, bulk cargo     requirements, bulk cargo not          cargo  exempt
                                           exempt                         exempt
--------------------------------------------------------------------------------------------------------------------------------------------------------
2009.........................  $1,900 to $11,000............  $1,900 to $11,000............  $1,900 to $11,000............  $0.4 to $14.
2010.........................  1,900 to 7,100...............  1,900 to 7,100...............  1,900 to 7,100...............  0.4 to 14.
2011.........................  1,900 to 7,300...............  1,900 to 7,300...............  1,900 to 7,300...............  0.4 to 14.
2012.........................  290 to 4,600.................  290 to 4,600.................  290 to 4,600.................  0.3 to 7.
2013.........................  310 to 4,800.................  310 to 4,800.................  310 to 4,800.................  0.3 to 7.
2014.........................  320 to 5,100.................  330 to 5,100.................  320 to 5,100.................  0.3 to 7.
2015.........................  340 to 5,300.................  340 to 5,300.................  340 to 5,300.................  0.3 to 7.
2016.........................  360 to 5,600.................  360 to 5,600.................  360 to 5,600.................  0.3 to 7.
2017.........................  380 to 5,900.................  380 to 5,900.................  380 to 5,900.................  0.3 to 7.
2018.........................  400 to 6,200.................  400 to 6,300.................  400 to 6,200.................  0.4 to 7.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As shown in Table 3, annual discounted costs are highest in the 
first years of implementation, then decrease notably, then steadily 
increase for the remainder of the 10-year period of analysis. Costs are 
highest in the first year as the potential for supply chain delays are 
greatest during initial implementation of the rule. Also in the first 
years of implementation, we account for software costs incurred by 
those importers who import frequently to the United States. These 
software costs are amortized over the first three years (until 2011), 
not for the full 10 years of the analysis. Steady increases from 2012 
to the end of the analysis period reflect our projected annual 
increases in the number of shipments, the value of shipments, and the 
vessel-trips into the United States.
    The results indicate that Alternative 1 provides the most favorable 
combination of cost and stringency. While Alternative 2 might be 
considered more stringent because it does not exempt bulk cargo from 
the Importer Security Filing requirements, the impact of this is 
expected to be slight, because the number of bulk shipments is 
relatively small compared to the number of non-bulk shipments. 
Alternative 3 is expected to have costs similar to Alternative 1, but 
will be less stringent because it only requires Importer Security 
Filings and does not include data that verify the information on the 
cargo manifest and identify and track the movement, location, and 
status of cargo (and in particular, containerized cargo) from the time 
its transport is booked until its arrival in the United States. Without 
the Additional Carrier Requirements, CBP will not be able to assess the 
specific risks associated with the many individual movements and 
transfers involved in shipping cargo to the United States. Thus, an 
important element of CBP's layered, risk-based approach to cargo 
security would, consequently, be omitted.
    Alternatives 3 and 4 are not chosen, in part, because it is CBP's 
judgment that neither of these options will be as effective as the 
selected option. Specifically, the Importer Security Filing 
requirements and the Additional Carrier Requirements work in tandem. 
The Additional Carrier Requirements focus on the conveyance of the 
goods and are distinct from the Importer Security Filing elements, 
which are focused on the merchandise and the parties involved in the 
acquisition process. Specifically, Vessel Stow Plans will assist CBP in 
validating other advanced cargo information submissions by allowing CBP 
to, among other things, better detect unmanifested containers without 
relying on physical verification methods that are manpower intensive 
and costly. CSMs will provide CBP with additional transparency into the 
custodial environment through which inter-modal containers are handled 
and transported before arrival in the United States. Because CSMs are 
created independently of the manifest, CBP can utilize them to 
corroborate other advanced data elements, including Importer Security 
Filings and those elements related to container and conveyance origin. 
This corroboration with other advanced data messages, including 
Importer Security Filings, and an enhanced view into the international 
supply chain will contribute to the security of the United States and 
the international supply chain through which containers and imported 
cargo are shipped to U.S. ports.
    Based on this analysis of alternatives, CBP has determined that 
Alternative 1 provides the most favorable balance between security 
outcomes and impacts to maritime transportation. As summarized in Table 
4, the incremental costs of this regulation, on a per-shipment basis, 
is a small fraction of the value of a shipment. The relatively high 
cost of the rule over 10 years is driven by the large volume of 
shipments rather than high per-transaction costs. Shipment data 
indicate that the median value of a shipment of goods imported into the 
United States is approximately $38,000. As shown in Table 4, the 
increase in costs of imported shipments will range from $48 to $390 per 
shipment, depending on the discount rate applied, the cost scenario, 
and whether or not bulk shipments are exempt. The added costs of this 
regulation are estimated to be only 0.13 percent to 1.03 percent of the 
median value of $38,000 per shipment.

 Table 4--Costs per Shipment, Median Value of Shipment, Vessel-Trip, and
                                 Carrier
                                 [$2008]
------------------------------------------------------------------------
                                   3% discount rate    7% discount rate
------------------------------------------------------------------------
Importer Security Filing Costs: Alternatives 1 and 3 (bulk cargo exempt)
------------------------------------------------------------------------
Total Present Value Cost........  $7.5 billion to     $6.9 billion to
                                   $56 billion.        $49 billion.
Number of shipments (10-year      144 million.......  144 million.
 total).
Equivalent per shipment cost....  $52 to $390.......  $48 to $341.

[[Page 71770]]

 
Median value per shipment.......  $37,900...........  $37,900.
Cost per median value...........  0.14 to 1.03        0.13 to 0.90
                                   percent.            percent.
------------------------------------------------------------------------
  Importer Security Filing Costs: Alternative 2 (bulk cargo not exempt)
------------------------------------------------------------------------
Total Present Value Cost........  $7.6 billion to     $7.0 billion to
                                   $56 billion.        $49 billion.
Number of shipments (10-year      145 million.......  145 million.
 total).
Equivalent per shipment cost....  $52 to $388.......  $48 to $339.
Median value per shipment.......  $38,200...........  $38,200.
Cost per median value...........  0.14 to 1.02        0.13 to 0.89
                                   percent.            percent.
------------------------------------------------------------------------
            Vessel Stow Plan Costs: Alternatives 1, 2, and 4
------------------------------------------------------------------------
Total present value cost........  $3 million to $27   $2 million to $33
                                   million.            million.
Number of non-bulk vessel-trips,  294,000...........  294,000.
 small and large carriers (10-
 year total).
Equivalent per vessel-trip cost.  $9 to $90.........  $8 to $78.
------------------------------------------------------------------------
        Container Status Message Costs: Alternatives 1, 2, and 4
------------------------------------------------------------------------
Total present value cost........  $0.3 million to     $0.3 million to
                                   $54 million.        $48 million.
Number of container carriers,     74................  74.
 large.
Equivalent per carrier cost.....  $3,900 to $730,000  $3,700 to
                                                       $650,000.
------------------------------------------------------------------------

    The rule may increase the time shipments are in transit, 
particularly for shipments conveyed in containers. Especially for 
shipments consolidated in containers, the supply chain is generally 
more complex and the importer has less control of the flow of goods and 
exchange of associated security filing information. Foreign cargo 
consolidators may be consolidating multiple shipments from one or more 
shippers in a container destined for one or more buyers or consignees. 
In order to ensure that the security filing data are provided by the 
shippers to the ISF Importers (or their designated agents) and is then 
transmitted to and accepted by CBP in advance of the 24 hour deadline, 
carriers and consolidators may advance their cut-off times for receipt 
of shipments and associated Importer Security Filing data.
    These advanced cut-off times would help prevent a carrier or 
consolidator from having to unpack or unload a container in the event 
the security filing for one of the shipments contained in the container 
is inadequate or not accepted by CBP. For example, carriers or 
consolidators may require shippers to submit, transmit, or obtain CBP 
acceptance of their security filing data before their shipments are 
stuffed in the container, before the container is sealed, or before the 
container is delivered to the port for lading. In such cases, importers 
may experience additional delays in their supply chain to accommodate 
these advanced cut-off times imposed by their carriers or 
consolidators. The costs associated with these delays include: (1) 
Higher inventory carrying costs; (2) the need to hold larger buffer-
stock inventories to accommodate variation in arrival time; (3) 
depreciation in shipment value; (4) costs of storage at the 
manufacturer, freight forwarder, consolidator, or port; and (5) costs 
for additional security to protect the freight from tampering. To 
capture all of these costs in our estimate of the impact of time 
delays, we estimate the welfare loss to U.S. importers by relying on 
estimates of the willingness to pay for reducing transit time. The high 
end of the cost ranges presented in Table 4 assumes an initial supply 
chain delay of three days (consolidated container shipments) or two 
days (unconsolidated or full container shipments) for the first year of 
implementation (2009) and a delay of one day for years 2 through 10 
(2010-2018).

B. Regulatory Flexibility Act

    In response to the requirements of the Regulatory Flexibility Act 
(RFA) of 1980, as amended by the Small Business Regulatory Enforcement 
Fairness Act of 1996 (SBREFA) and Executive Order 13272, entitled 
``Proper Consideration of Small Entities in Agency Rulemaking,'' 
federal agencies must consider the potential distributional impact of 
rules on small businesses, small governmental jurisdictions, and small 
organizations during the development of their rules.
    The types of entities subject to the rule's requirements include 
all importers receiving shipments via vessel and all vessel operating 
common carriers (VOCCs) transporting containerized shipments via vessel 
to the United States. One, the other, or both of the types of entities 
will be affected depending on the alternative under consideration. The 
results of our screening analysis indicated that the proposed rule may 
significantly impact a substantial number of small importers or 
carriers, and CBP conducted an Initial Regulatory Flexibility Analysis 
(IRFA) to further assess these impacts. The IRFA provided a detailed 
analysis of the potential impact of the proposed rule on small entities 
and was made available for public comment at the same time as the 
proposed rule on January 2, 2008.
    At the publication of the interim final rule, if CBP still 
determines that it cannot certify the rule, then it must prepare and 
make available a Final Regulatory Flexibility Analysis (FRFA). As 
discussed below, CBP cannot certify that the rule will not have a 
significant impact on a substantial number of small importers. It can 
certify the rule relative to the impact on small carriers; however, for 
the purpose of simplicity, the FRFA presented here includes both 
importers and carriers. The following is a summary of the FRFA. For 
full details on the complete analysis, please refer to the Final 
Regulatory Flexibility Act analysis contained in the ``Regulatory 
Assessment,'' which can be found in the

[[Page 71771]]

docket for this rulemaking: http://www.regulations.gov; see also http://www.cbp.gov. CBP invites comments on this FRFA and will update it with 
the final rule.
    A succinct statement of the objectives of, and legal basis for, the 
rule: Section 203(b) of the Security and Accountability for Every Port 
Act (SAFE Port Act) of 2006 states that the Secretary of Homeland 
Security ``shall require the electronic transmission to the Department 
of additional data elements for improved high-risk targeting, including 
appropriate elements of entry data * * * to be provided as advanced 
information with respect to cargo destined for importation into the 
United States prior to loading of such cargo on vessels at foreign 
ports.'' The information required is that which is reasonably necessary 
to enable high-risk shipments to be identified so as to prevent 
smuggling and ensure cargo safety and security pursuant to the laws 
enforced and administered by CBP. In addition, section 343(a) of the 
Trade Act of 2002 states that the Secretary of Homeland Security 
``shall promulgate regulations providing for the transmission * * * of 
information pertaining to cargo destined for importation into the 
United States.* * *''
    A summary of the significant issues raised by the public comments 
in response to the IRFA, a summary of the assessment of the agency of 
such issues, and a statement of any changes made in the proposed rule 
as a result of such comments: CBP received several comments 
specifically addressing impacts to small entities.
    Comments suggested that CBP should consider an exemption of small 
business from some requirements of the rule. CBP believes that the 
language of the SAFE Port Act does not allow it to exempt small 
entities from the regulation. Furthermore, although we do not have 
explicit information regarding the portion of importers who are small 
entities, the information provided in the screening analysis suggests 
that the majority of affected entities are likely to be small 
businesses. Exempting most importers would significantly diminish the 
effectiveness of the rule.
    Comments suggested that CBP attempt to calculate the number of 
entities that will cease operations as a result of the requirements of 
the rule. Data are not readily-available that would allow us to 
segregate all the importers in the PIERS dataset, which was the primary 
dataset used in the primary analysis (summarized in the previous 
section), the IRFA, and the FRFA by North American Industry 
Classification System (NAICS) code. This step is necessary to identify 
the proportion of small entities affected by the rule. Furthermore, we 
are unable to estimate a distribution of the number of shipments by 
industry and size category. As a result, given the currently available 
data, we are unable to estimate the magnitude of the impact to small 
entities in each industry and the number of businesses that may be 
forced to cease operations as a result of the rule.
    Comments reported that the costs associated with software purchase 
were underestimated for small entities. In response to these comments, 
we revised the primary analysis and the FRFA to include initial, one-
time costs of $25,000 to address this perceived understatement of costs 
in the Regulatory Assessment that accompanied the proposed rule. Note 
that we assume importers transporting only one shipment annually do not 
incur this cost.
    Commenters suggested that CBP conduct a prototype test with small 
entity volunteers to better understand the potential impact to these 
businesses. CBP is adopting a delayed compliance period whereby CBP 
will work with the trade following the effective date of the interim 
final rule to assist them in achieving full compliance with minimal 
disruption. See the ``Structured Review and Flexible Enforcement 
Period'' section of this document for further discussion regarding the 
delayed compliance period. The interim final rule also provides 
flexibility with respect to certain elements of the Importer Security 
Filings. Additionally, as part of CBP's pre-existing Advance Trade Data 
Initiative (ATDI), CBP has worked with a wide variety of volunteers 
from the world trade community to test the trade's ability to provide 
data, including some elements of the Importer Security Filing, to CBP. 
ATDI has proven that the industry has access to the required data and 
can get the data to CBP.
    A description of, and, where feasible, an estimate of the number of 
small entities to which the rule will apply: As discussed earlier, the 
interim final rule applies to all entities importing containerized, 
break-bulk, or Ro-Ro shipments into the United States. The regulation 
also applies to VOCCs transporting shipments via vessel to the United 
States. The majority of the affected entities are likely to be small. 
In the summary of impacts presented here, we focus on Alternative 1, 
the chosen alternative and the interim final rule. For the complete 
results for all alternatives, please refer to the detailed Final 
Regulatory Flexibility Act analysis, which is contained in the 
``Regulatory Assessment,'' which can be found in the docket for this 
rulemaking: http://www.regulations.gov; see also http://www.cbp.gov.
    The regulation will affect importers in the form of initial, one-
time costs and transaction fees for collecting and transmitting the 
security filing as well as consumer surplus losses if the rule delays 
the supply chain. For the purposes of our screening analysis, importers 
are not an industry as defined by SBA. Rather, many industries import 
goods subject to the rule. We must determine the number of importers 
that belong to each of these industries, and then determine the 
appropriate industry-specific measure of a ``small entity.''
    Our PIERS dataset includes information on over 200,000 unique 
importers. We took a random sample of importers from the dataset and 
collected market data on the entities from Dun & Bradstreet until we 
had information describing 400 entities (a statistically significant 
sample, 5 percent margin of error). Table 5 details the top industries 
importing containerized cargo, identified by NAICS code, in our sample 
and ranks them by number of occurrences.

   Table 5--Top Industries From Importers Sample (Containerized Cargo)
------------------------------------------------------------------------
                       Number of      Percent of
    NAICS code        occurrences       sample      Industry description
------------------------------------------------------------------------
424900............              20            5.00  Miscellaneous
                                                     Nondurable Goods
                                                     Merchant
                                                     Wholesalers.
999990............              19  ..............  UNKNOWN INDUSTRY.
423830............              13            3.25  Industrial Machinery
                                                     and Equipment
                                                     Merchant
                                                     Wholesalers.
442110............              11            2.75  Furniture Stores.
488510............              10            2.50  Freight
                                                     Transportation
                                                     Arrangement.
423220............               8            2.00  Home Furnishing
                                                     Merchant
                                                     Wholesalers.

[[Page 71772]]

 
423120............               7            1.75  Motor Vehicle
                                                     Supplies and New
                                                     Parts Merchant
                                                     Wholesalers.
423710............               7            1.75  Hardware Merchant
                                                     Wholesalers.
424320............               7            1.75  Men's and Boys'
                                                     Clothing and
                                                     Furnishings
                                                     Merchant
                                                     Wholesalers.
424330............               7            1.75  Women's, Children's,
                                                     and Infants'
                                                     Clothing and
                                                     Accessories
                                                     Merchant
                                                     Wholesalers.
424490............               7            1.75  Other Grocery and
                                                     Related Products
                                                     Merchant
                                                     Wholesalers.
423910............               6            1.50  Sporting and
                                                     Recreational Goods
                                                     and Supplies
                                                     Merchant
                                                     Wholesalers.
326199............               5            1.25  All Other Plastics
                                                     Product
                                                     Manufacturing.
423690............               5            1.25  Other Electronic
                                                     Parts and Equipment
                                                     Merchant
                                                     Wholesalers.
423990............               5            1.25  Other Miscellaneous
                                                     Durable Goods
                                                     Merchant
                                                     Wholesalers.
424310............               5            1.25  Piece Goods,
                                                     Notions, and Other
                                                     Dry Goods Merchant
                                                     Wholesalers.
561499............               5            1.25  All Other Business
                                                     Support Services.
423210............               4            1.00  Furniture Merchant
                                                     Wholesalers.
423430............               4            1.00  Computer and
                                                     Computer Peripheral
                                                     Equipment and
                                                     Software Merchant
                                                     Wholesalers.
423440............               4            1.00  Other Commercial
                                                     Equipment Merchant
                                                     Wholesalers.
423450............               4            1.00  Medical, Dental, and
                                                     Hospital Equipment
                                                     and Supplies
                                                     Merchant
                                                     Wholesalers.
424460............               4            1.00  Fish and Seafood
                                                     Merchant
                                                     Wholesalers.
424480............               4            1.00  Fresh Fruit and
                                                     Vegetable Merchant
                                                     Wholesalers.
442299............               4            1.00  All Other Home
                                                     Furnishings Stores.
453220............               4            1.00  Gift, Novelty, and
                                                     Souvenir Stores.
236115............               3            0.75  New Single-Family
                                                     Housing
                                                     Construction
                                                     (except Operative
                                                     Builders).
315191............               3            0.75  Outerwear Knitting
                                                     Mills.
325620............               3            0.75  Toilet Preparation
                                                     Manufacturing.
332510............               3            0.75  Hardware
                                                     Manufacturing.
333911............               3            0.75  Pump and Pumping
                                                     Equipment
                                                     Manufacturing.
423320............               3            0.75  Brick, Stone, and
                                                     Related
                                                     Construction
                                                     Material Merchant
                                                     Wholesalers.
423390............               3            0.75  Other Construction
                                                     Material Merchant
                                                     Wholesalers.
423940............               3            0.75  Jewelry, Watch,
                                                     Precious Stone, and
                                                     Precious Metal
                                                     Merchant
                                                     Wholesalers.
424130............               3            0.75  Industrial and
                                                     Personal Service
                                                     Paper Merchant
                                                     Wholesalers.
424340............               3            0.75  Footwear Merchant
                                                     Wholesalers.
441310............               3            0.75  Automotive Parts and
                                                     Accessories Stores.
                               207           51.75  ALL OTHER INDUSTRIES
                                                     RECORDED IN SAMPLE.
------------------------------------------------------------------------

    In most industries, information on revenues or number of employees 
is used to define whether an entity is ``small'' for the purpose of 
RFA/SBREFA analyses. For the top ten industries appearing in our 
sample, Table 6 reports SBA's thresholds used to define ``small'' 
entities in each industry and the share of entities in the United 
States that meet that definition. For each industry, the share of 
entities considered small is at least 50 percent. For most industries, 
the share of entities considered small is at least 75 percent.

             Table 6--Share of Small Entities in Each of the Top 10 Industries (Containerized Cargo)
----------------------------------------------------------------------------------------------------------------
                                                                                                  Share of small
        NAICS code             Industry description        Percent of      ``Small''  threshold     entities in
                                                             sample                               U.S. (percent)
----------------------------------------------------------------------------------------------------------------
424900...................  Miscellaneous Nondurable                5.00  100 employees..........              93
                            Goods Merchant Wholesalers.
423830...................  Industrial Machinery and                3.25  100 employees..........              92
                            Equipment Merchant
                            Wholesalers.
442110...................  Furniture Stores............            2.75  $6.5 million...........              50
488510...................  Freight Transportation                  2.50  $6.5 million...........              75
                            Arrangement.
423220...................  Home Furnishing Merchant                2.00  100 employees..........              75
                            Wholesalers.
423120...................  Motor Vehicle Supplies and              1.75  100 employees..........              71
                            New Parts Merchant
                            Wholesalers.
423710...................  Hardware Merchant                       1.75  100 employees..........              86
                            Wholesalers.
424320...................  Men's and Boys' Clothing and            1.75  100 employees..........              83
                            Furnishings Merchant
                            Wholesalers.
424330...................  Women's, Children's, and                1.75  100 employees..........             100
                            Infants' Clothing and
                            Accessories Merchant
                            Wholesalers.
424490...................  Other Grocery and Related               1.75  100 employees..........              86
                            Products Merchant
                            Wholesalers.
----------------------------------------------------------------------------------------------------------------

    Table 7 reports summary statistics on our sample of 400 importers. 
For example, it shows that four industries appeared more than ten times 
in the sample, accounting for 54 individual firms. Within the United 
States, there are 81,923 entities in those four industries, and 96.4 
percent of those businesses meet SBA's definition of a small entity.

[[Page 71773]]



                           Table 7--Containerized Cargo Importers, Summary Statistics
----------------------------------------------------------------------------------------------------------------
                                     Number of       Number of     Total number      Number of
 Number of appearances in sample   industries in     firms in     of entities in  small entities    Share small
                                      sample          sample           U.S.           in U.S.        (percent)
----------------------------------------------------------------------------------------------------------------
10+.............................               4              54          81,923          78,977            96.4
6-9.............................               7              49       1,371,759       1,341,422            97.8
5...............................               5              25          33,931          32,558            96.0
4...............................               8              32          72,596          70,829            97.6
3...............................              11              33          44,448          42,977            96.7
2...............................              27              54         467,998         461,318            98.6
1...............................             152             153         834,709         812,717            97.4
                                 -------------------------------------------------------------------------------
    Total.......................             214             400       2,907,364       2,840,798            97.7
----------------------------------------------------------------------------------------------------------------

    Based on these summary statistics, we conclude that the majority of 
firms in industries conducting importing activities are likely to be 
small entities. Therefore, a substantial number of small entities are 
likely to be affected by the rule. Next, we estimate whether the costs 
to these importers of implementing the regulation are likely to be 
significant.
    Typically, Federal agencies compare per-business compliance costs 
to annual revenues of small entities in various size classes to 
determine the impact of the regulation on small entities. For this 
rule, such a comparison requires a significant amount of data given 
that the rule potentially affects hundreds of industries. Annual 
compliance costs are driven by the number of shipments an importer 
makes security filings on each year. To estimate the number of 
shipments per small entity, we ideally would: (1) Take our PIERS 
dataset of shipments and group the shipments by business; (2) group the 
businesses by NAICS code; (3) determine the number of businesses in 
each NAICS code that meet the definition of a small entity; (4) and 
examine the number and value of shipments by those entities.
    We have completed the first step: Identifying approximately 200,000 
importers in our sample dataset. As discussed previously, we were able 
to use Dun and Bradstreet data to identify the appropriate NAICS code 
for 400 of these 200,000 importers. Next, we conservatively assume that 
the majority of importers in each NAICS code are small entities. 
However, estimating the typical number of shipments in each industry is 
problematic. In 75 percent of the industries identified in our sample 
of 400 importers, the number of entities affected is less than five. 
Although we have shipment data for these businesses, these data are 
unlikely to provide a meaningful sample of shipment volume or value on 
an industry by industry basis.
    Alternatively, when we extrapolate our PIERS dataset to estimate 
shipments for the entire year, we are able to calculate lower and upper 
bound estimates of the number of importers and stratify these importers 
by shipping volume. However, we cannot reliably translate this 
stratification on a per-industry basis. More importantly, we do not 
believe that shipment volume is necessarily a good predictor of whether 
an entity is considered to be a small business in its industry. For 
example, a small entity with a business model that is heavily dependent 
on overseas manufacturers may import many shipments a month, while a 
large entity relying primarily on domestic suppliers may import only 
one shipment a year.
    For these reasons, we are unable to estimate average shipment 
volume for small entities, preventing us from comparing compliance 
costs to importers' revenues. Instead, we compare per-shipment 
compliance costs to the average value of all affected shipments. This 
comparison may over- or understate small entities' per-shipment 
compliance costs if their shipment value is higher or lower than the 
average. In addition, the ratio of compliance costs to shipment value 
may under- or overstate the significance of the costs depending on the 
purpose of those shipments and their resale value in the United States.
    We calculate information on the mean value of shipments from the 
PIERS database for all industries identified in our sample. We include 
all shipments associated with an entity identified within a certain 
industry. Table 8 presents the mean shipment value and the number of 
shipments for each of the top 10 industries. These mean values are 
provided simply for illustration of our data limitations and to provide 
a sense of the range of mean shipment values.

                 Table 8--Mean Value per Shipment in the Top 10 Industries (Containerized Cargo)
----------------------------------------------------------------------------------------------------------------
                                                                                                    Mean  value
                           NAICS code                                Number of     Total number    per  shipment
                                                                     importers     of shipments         ($)
----------------------------------------------------------------------------------------------------------------
424900..........................................................              20             114        $173,683
423830..........................................................              13              51          47,250
442110..........................................................              11              27          22,081
488510..........................................................              10             175         107,828
423220..........................................................               8              76          45,342
423120..........................................................               7              60          72,895
424330..........................................................               7              25         181,893
424320..........................................................               7             121         130,213
423710..........................................................               7              49          36,614
424490..........................................................               7              10          18,354
----------------------------------------------------------------------------------------------------------------


[[Page 71774]]

    Table 9 reports the initial, one-time costs (reported on a per-
shipment basis) and the security filing fee for importer frequency 
classes. In addition, the table reports the percentage share that the 
cost of the security filing requirements plays as a part of the mean 
value per shipment. In each case presented below, the security filing 
cost represents an increase of less than 4.7 percent of the value of 
the shipment. We recognize that small entities' mean value per shipment 
may be higher or lower than $103,164; therefore, the impact to small 
entities may be greater than the percentages reported in the table. The 
results suggest that costs of complying with the rule may be 
significant relative to the value of an affected shipment.

                                      Table 9--Relative Cost of Security Filing Requirements (Containerized Cargo)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                       Initial,  one-
                                                                    Number of         Number of     Security  filing   time fee  (per     Total cost as
                          NAICS code                                entities          shipments            fee           entity  per     share of  mean
                                                                                                                          shipment)     value  (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Lower Bound Estimate:
    Once per year.............................................                 0                 0            $75.00  ................              0.07
    Twice yearly to less than monthly.........................           134,000           697,000             60.00            $4,817              4.73
    Monthly to less than weekly...............................            44,100         1,230,000             45.00               900              0.92
    Weekly to less than daily.................................             9,900         2,190,000             30.00               113              0.14
    Daily or greater..........................................               615         2,360,000             15.00                 7              0.02
    Anonymous.................................................            38,000         1,300,000             22.50               730              0.73
Upper Bound Estimate:
    Once per year.............................................           370,000           456,000             75.00  ................              0.07
    Twice yearly to less than monthly.........................           262,000         1,380,000             60.00             4,740              4.65
    Monthly to less than weekly...............................            66,900         1,640,000             45.00             1,017              1.03
    Weekly to less than daily.................................            18,100         1,810,000             30.00               250              0.27
    Daily or greater..........................................             1,480         1,180,000             15.00                31              0.04
    Anonymous.................................................           144,000         1,300,000             22.50             2,776              2.71
--------------------------------------------------------------------------------------------------------------------------------------------------------

    In our upper-bound impact estimate, importers of containerized 
shipments may also experience a loss in consumer surplus associated 
with delays. While these losses represent lost value, they do not 
represent actual expenditures. The impact of these losses on small 
entities is unknown.
    The PIERS dataset includes information on over 4,600 unique break-
bulk importers. We took a random sample from that dataset and collected 
financial information on the entities from Dun & Bradstreet until we 
had data on 75 entities. Table 10 details the top industries in our 
sample ranked by number of occurrences.

                                            Table 10--Top Industries From Importers Sample (Break-Bulk Cargo)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Number of
                 NAICS code                    occurrences   Percentage                                Industry description
--------------------------------------------------------------------------------------------------------------------------------------------------------
423510......................................             8         10.67  Metal Service Centers and Other Metal Merchant Wholesalers.
423310......................................             6          8.00  Lumber, Plywood, Millwork, and Wood Panel Merchant Wholesalers.
336611......................................             4          5.33  Ship Building and Repairing.
999990......................................             4  ............  UNKNOWN INDUSTRY.
424480......................................             3          4.00  Fresh Fruit and Vegetable Merchant Wholesalers.
488510......................................             3          4.00  Freight Transportation Arrangement.
423830......................................             2          2.67  Industrial Machinery and Equipment Merchant Wholesalers.
424410......................................             2          2.67  General Line Grocery Merchant Wholesalers.
424470......................................             2          2.67  Meat and Meat Product Merchant Wholesalers.
424490......................................             2          2.67  Other Grocery and Related Products Merchant Wholesalers.
424690......................................             2          2.67  Other Chemical and Allied Products Merchant Wholesalers.
511110......................................             2          2.67  Newspaper Publishers.
                                                        39         52.00  ALL OTHER INDUSTRIES RECORDED IN SAMPLE.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We present the share of entities considered small in each of the 
top ten industries from our PIERS sample. Table 11 reports those 
definitions of ``small'' from the SBA and the share of entities that 
are small. For most industries, the share of entities considered small 
is at least 75 percent. Therefore, we assume that a substantial number 
of small break-bulk importers will be affected by the rule.

[[Page 71775]]



                                      Table 11--Share of Small Entities in the Top 10 Industries (Break-Bulk Cargo)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                         Share of small
              NAICS code                               Industry description                    Percent of        ``Small'' threshold        entities
                                                                                                 sample                                     (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
423510................................  Metal Service Centers and Other Metal Merchant                 10.67  100 employees...........                63
                                         Wholesalers.
423310................................  Lumber, Plywood, Millwork, and Wood Panel Merchant              8.00  100 employees...........               100
                                         Wholesalers.
336611................................  Ship Building and Repairing.......................              5.33  1,000 employees.........                75
424480................................  Fresh Fruit and Vegetable Merchant Wholesalers....              4.00  100 employees...........                33
488510................................  Freight Transportation Arrangement................              4.00  $6.5 million............                 0
423830................................  Industrial Machinery and Equipment Merchant                     2.67  100 employees...........               100
                                         Wholesalers.
424410................................  General Line Grocery Merchant Wholesalers.........              2.67  100 employees...........               100
424470................................  Meat and Meat Product Merchant Wholesalers........              2.67  100 employees...........               100
424490................................  Other Grocery and Related Products Merchant                     2.67  100 employees...........               100
                                         Wholesalers.
424690................................  Other Chemical and Allied Products Merchant                     2.67  100 employees...........                50
                                         Wholesalers.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Table 12 reports summary statistics on our sample of 75 break-bulk 
importers. Only two industries appeared in the sample more than five 
times, accounting for 14 firms. For all industries importing break-bulk 
shipments, over 93 percent of the firms in that industry are small 
entities.

                                                   Table 12--Break-Bulk Importers, Summary Statistics
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Number of                                         Number of  small
               Number of  appearances  in sample                 industries  in   Number of  firms   Total number of    entities  in       Share small
                                                                     sample           in sample     entities in U.S.        U.S.            (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
6+............................................................                 2                14            13,771            12,883              93.6
5.............................................................                 0                 0  ................  ................             \(1)\
4.............................................................                 1                 4             1,670             1,642              98.3
3.............................................................                 2                 6            16,228            15,552              95.8
2.............................................................                 6                12            49,028            46,938              95.7
1.............................................................                34                39           196,116           186,854              95.3
                                                               -----------------------------------------------------------------------------------------
    Total.....................................................                45                75           276,813           263,869              95.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Not applicable.

    Table 13 details the mean shipment value and the number of 
shipments for each of the top 10 industries. These mean values are 
provided simply for illustration of our data limitations and to provide 
a sense of the range of mean shipment values.

                 Table 13--Mean Value per Shipment in the Top Ten Industries (Break-Bulk Cargo)
----------------------------------------------------------------------------------------------------------------
                                                                Number of     Total number  of   Mean value  per
                        NAICS code                              importers         shipments       shipment  ($)
----------------------------------------------------------------------------------------------------------------
423510....................................................                 8               922          $145,731
423310....................................................                 6                28           303,095
336611....................................................                 4                10           509,161
424480....................................................                 3               238            77,106
488510....................................................                 3                31           520,999
423830....................................................                 2                 2           743,823
424410....................................................                 2                10           140,086
424470....................................................                 2                16            40,493
424490....................................................                 2                13            76,597
424690....................................................                 2                68            56,595
----------------------------------------------------------------------------------------------------------------

    Table 14 reports the initial, one-time costs (reported on a per-
shipment basis) and the security filing fee for importer frequency 
classes. In addition, the table reports the percentage share that the 
cost of the security filing requirements plays as a part of the mean 
value per shipment. In each case presented below, the security filing 
cost represents an increase of less than 2 percent of the value of the 
shipment. In most cases, the security filing cost represents an 
increase of less than 0.4 percent of the value of the shipment. We 
recognize that small entities' mean value per shipment may be higher or 
lower than $309,174; therefore, the filing costs may represent a 
smaller or larger percentage of the total value.

[[Page 71776]]



                                       Table 14--Relative Cost of Security Filing Requirements (Break-Bulk Cargo)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                       Initial,  one-
                                                                    Number of         Number of     Security  filing    time fee (per     Total cost as
                          NAICS code                                entities          shipments            fee           entity per       share of mean
                                                                                                                          shipment)     value  (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Lower Bound Estimate:
Once per year.................................................                 0                 0            $75.00  ................              0.02
Twice yearly to less than monthly.............................             2,740            11,400             60.00             6,013              1.96
Monthly to less than weekly...................................               693            15,700             45.00             1,104              0.37
Weekly to less than daily.....................................               216            42,400             30.00               127              0.05
Daily or greater..............................................                14            60,000             15.00                 6              0.01
Anonymous.....................................................               272             9,630             22.50               707              0.24
Upper Bound Estimate:
Once per year.................................................             7,870             7,870             75.00  ................              0.02
Twice yearly to less than monthly.............................             4,470            18,200             60.00             6,157              2.01
Monthly to less than weekly...................................             1,050            25,400             45.00             1,032              0.35
Weekly to less than daily.....................................               490            56,100             30.00               218              0.08
Daily or greater..............................................                30            21,900             15.00                35              0.02
Anonymous.....................................................             1,040             9,630             22.50             2,686              0.88
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The security filing cost as a share of the mean value of shipments 
made by other industries (outside of the top 10) is in many instances 
higher than 1 percent. Therefore, we would ideally compare each 
entity's total annual compliance costs to annual revenues. However, 
based on our 96-day PIERS data sample set, we are not able to predict 
the number of break-bulk shipments made each year by these entities. 
Therefore, we cannot predict annual compliance costs and are unable to 
make a determination as to whether the effects of the rule are 
significant for a substantial number of small break-bulk importers.
    We do not complete the same analysis for roll-on/roll-off (Ro-Ro) 
cargo importers. We referenced Dun & Bradstreet for information on 
approximately 100 importers and found that information was only 
available for six entities. A closer examination of the 100 importers 
suggested that the majority are private individuals, which are not 
considered small entities.
    According to the SBA-defined small business size standards for 
Vessel Operating Common Carriers (VOCCs), which fall under NAICS 483111 
(Deep Sea Freight Transportation), firms with fewer than 500 employees 
are considered to be small entities. Dun and Bradstreet's Market 
Identifiers report 492 entities operating within NAICS 483111. Of these 
492 entities, 477 are firms that report fewer than 500 employees.
    We have concerns about the reliability of the Dun & Bradstreet data 
in the case of this particular business area. First, CBP's Vessel 
Automated Manifest System (Vessel AMS) database identifies 1,179 
carriers importing shipments to the United States in 2005. This is more 
than double the number of entities identified in the Dun & Bradstreet 
list or the 487 entities identified by the U.S. Census Bureau. It would 
appear that a considerable number of VOCCs do not have deep sea cargo 
transportation as their primary area of business and that this NAICS 
classification is missing a significant number of entities. Second, we 
understand the focus of the RFA/SBREFA analysis to be on U.S., and not 
foreign, small businesses. There is no expeditious and economical 
method of assessing the corporate nationality of either the Vessel AMS 
or Dun & Bradstreet list of shipping companies. We are aware, however, 
that the majority of the shipping lines carrying containers into the 
United States, regardless of size, operate under foreign ownership.
    In the absence of alternative data sources, we proceed to conduct 
the screening analysis relying on descriptive financial information 
about NAICS 483111 entities found in the Dun & Bradstreet database and 
the number of VOCCs identified in Vessel AMS. We also conclude that a 
substantial number of small entities are likely to be directly affected 
by the regulation under the rule.
    For data on revenues and employees, we use the Dun & Bradstreet 
data for the 477 entities with fewer than 500 employees. Table 15 
summarizes the total annual average revenues (2004) for firms within 
NAICS 483111, organized by ranges of employee-size classes. 
Specifically, we organize the Dun & Bradstreet company data by the 
employee-size classes and then calculate the average revenue of 
companies within that size class. Businesses with zero to 100 employees 
have average annual revenues of $6 million, those with 101 to 250 
employees have average annual revenues of $59 million, and those with 
251 to 500 employees have average annual revenues of $105 million.

          Table 15--Average Annual Revenue Estimates (Carriers)
------------------------------------------------------------------------
                                          Number of
            Carrier size                  business       Average annual
                                          entities          revenues
------------------------------------------------------------------------
0-100 employees.....................               456        $6,000,000
101-250 employees...................                13        59,000,000
251-500 employees...................                 8       105,000,000
501-5,000 employees.................                15       450,000,000
------------------------------------------------------------------------


[[Page 71777]]

    The first of the two Additional Carrier Requirements is the Vessel 
Stow Plan, which will be required of carriers carrying containerized 
cargo. Our calculations assume that the cost to a small entity of 
submitting a Vessel Stow Plan will depend on the number of vessel trips 
completed. Carriers that complete between one and 100 vessel trips per 
year are assigned a cost of $50 per trip. Larger carriers (those that 
complete at least 101 vessel trips per year) are assigned a one-time 
fixed cost of $50,000 and a variable cost of $100 per trip. Because we 
do not know the number of vessel trips undertaken by carriers in the 
various size classes, we conservatively assume that for every trip 
volume, some of the carriers may be small entities.
    We estimate that the average annual revenue of small carriers is 
$9.1 million, which represents the average of the average annual 
revenues of small business entities identified in Table 15, weighted by 
the number of business entities. In Table 16, we present each category 
of carrier (based on the annual number of vessel trips) with their 
corresponding annual worst-case cost of submitting Vessel Stow Plans. 
We then divide these costs by the average annual revenue of $9.1 
million, and as shown in Table 16, we estimate that the average share 
of revenue of submitting Vessel Stow Plans for small carriers is 0.25 
percent, which does not rise to the level of a significant cost to 
carriers.

                                        Table 16--Vessel Stow Plan Costs
----------------------------------------------------------------------------------------------------------------
                                                                                                 Costs as share
                       Vessel trips                             Container        Worst-case        of revenue
                                                                carriers        annual costs        (percent)
----------------------------------------------------------------------------------------------------------------
1.........................................................                51               $50              0.00
2-10......................................................               116               500              0.01
11-100....................................................               183             5,000              0.05
101-1,000.................................................                70           116,667              1.28
1,001+....................................................                 4           136,667              1.50
                                                           -----------------------------------------------------
    Total.................................................               424            22,851              0.25
----------------------------------------------------------------------------------------------------------------

    The second of the two Additional Carrier Requirements is the 
Container Status Message (CSM), which will be required of carriers 
carrying containerized cargo, provided they already collect and 
maintain CSM data in their electronic equipment tracking systems. Our 
calculations assume that the cost to a small entity associated with 
submitting CSMs will depend on the number of vessel trips completed. 
Carriers that complete between one and 100 vessel trips per year will 
experience no cost associated with submitting CSMs. Larger carriers 
(those that complete at least 101 vessel trips per year) are assigned a 
one-time fixed cost of $250,000 and a variable cost of $55,000 per 
year. In Table 17, we present each category of carrier (based on the 
annual number of vessel trips) with their corresponding annual worst-
case cost of submitting CSMs. We then divide these costs by the average 
annual small carrier revenue of $9.1 million, as calculated previously 
for Vessel Stow Plans. As shown in Table 17, we estimate that the 
average share of revenue of submitting CSMs for small carriers is 0.16 
percent, which again does not rise to the level of a significant cost 
to carriers.

                                    Table 17--Container Status Message Costs
----------------------------------------------------------------------------------------------------------------
                                                                                                 Costs as share
                       Vessel trips                             Container        Worst-case        of revenue
                                                                carriers        annual costs        (percent)
----------------------------------------------------------------------------------------------------------------
1.........................................................                58                $0              0.00
2-10......................................................               162                 0              0.00
11-100....................................................               175                 0              0.00
101-1,000.................................................                45           138,333              1.52
1,001+....................................................                 2           138,333              1.52
                                                           -----------------------------------------------------
    Total.................................................               442            14,710              0.16
----------------------------------------------------------------------------------------------------------------

    The two costs for two additional carrier elements are additive for 
containerized cargo, so the average cost share would be 0.41 percent 
(0.25 percent plus 0.16 percent). Therefore, we conclude that the 
additional data elements required for the VOCCs are unlikely to result 
in a significant cost to small entities.
    A description of the projected reporting, recordkeeping and other 
compliance requirements of the rule, including an estimate of the 
classes of small entities that will be subject to the requirement and 
the type of professional skills necessary for preparation of the report 
or record: The requirements of the rule are expected to be submitted 
electronically by importers or VOCCs (or an agent representing either). 
Professional skills necessary for preparation of the report or record 
include basic administrative and recordkeeping skills used to manage 
data transaction, shipment, manifest, security, and other data used in 
the commercial supply chain environment, along with a working knowledge 
of import shipment arrangements, brokerage, conveyance/shipping, and 
consolidation customs procedures and regulation.
    A description of the steps the agency has taken to minimize the 
significant adverse economic impact on small entities consistent with 
the stated objectives of applicable statutes, including a statement of 
the factual, policy, and legal reasons for selecting the alternative 
adopted in the rule and why each of the other significant alternatives 
to the rule considered by the agency was rejected: We have previously 
described the alternatives and why Alternative 1 was ultimately

[[Page 71778]]

selected as the interim final rule. Given the prevalence of small 
entities conducting importing activities and the need for all entities 
to participate for the rule to be effective, CBP is not exempting small 
entities from the regulation.
    Conclusion: In summary, because the interim final rule affects all 
importers and carriers bringing goods to the United States, it likely 
affects a substantial number of small entities in each industry 
conducting these activities. Based on the data limitations discussed 
above, we are uncertain whether these effects will be significant on a 
per-entity basis for importers. Therefore, based on the results of this 
analysis, CBP cannot certify that the rule will not have a significant 
impact on a substantial number of small importing entities. As a 
result, we have conducted a FRFA. Based on the analysis presented 
above, we believe that a substantial number of small VOCCs are not 
likely to be significantly affected.

C. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandate Reform Act of 1995 (UMRA) requires 
agencies to assess the effects of their regulatory actions on State, 
local, and tribal governments and the private sector. The regulation is 
exempt from these requirements under 2 U.S.C. 1503 (Exclusions) which 
states that UMRA ``shall not apply to any provision in a bill, joint 
resolution, amendment, motion, or conference report before Congress and 
any provision in a proposed or final federal regulation that is 
necessary for the national security or the ratification or 
implementation of international treaty obligations.''

D. Paperwork Reduction Act

    The collections of information encompassed within this interim 
final rule have been submitted to OMB for review in accordance with the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3507) under OMB control 
number 1651-0001. An agency may not conduct, and a person is not 
required to respond to, a collection of information unless the 
collection of information displays a valid control number assigned by 
OMB.
    There are three collections of information in this document. The 
collections are contained in 19 CFR 4.7c, 4.7d, and 149.2. This 
information will be used by CBP to further improve the ability of CBP 
to identify high-risk shipments so as to prevent smuggling and ensure 
cargo safety and security. The likely respondents and/or recordkeepers 
are individuals and businesses.
    Under Sec.  4.7c, a vessel stow plan is required from a carrier 
when that carrier causes a vessel to arrive in the United States. 
Vessel stow plans are used to transmit information about cargo loaded 
aboard a vessel. The estimated average annual burden associated with 
the information collection in Sec.  4.7c is 102.6 hours per carrier.
    Under Sec.  4.7d, container status messages are required from an 
incoming carrier for all containers destined to be transported by that 
carrier and to arrive within the limits of a port in the United States 
by vessel. Container status messages serve to facilitate the intermodal 
handling of containers by streamlining the information exchange between 
trading partners involved in administration, commerce, and transport of 
containerized shipments. The messages can also be used to report 
terminal container movements (e.g., loading and discharging the vessel) 
and to report the change in status of containers (e.g., empty or full). 
Container status messages will provide CBP with additional transparency 
into the custodial environment through which inter-modal containers are 
handled and transported before arrival and after unlading in the United 
States. This enhanced view (in corroboration with other advance data 
messages) into the international supply chain would contribute to the 
security of the United States and in the international supply chain 
through which containers and import cargos reach ports in the United 
States. The estimated average annual burden associated with the 
information collection in Sec.  4.7d is 91.3 hours per carrier.
    Under Sec.  149.2, an Importer Security Filing, consisting of 
security elements of entry data for cargo destined to the United 
States, is required from the ISF Importer, as defined in these 
regulations. For shipments other than FROB cargo, IE and T&E in-bond 
shipments, and goods to be delivered to an FTZ, the ISF Importer will 
be the owner, purchaser, consignee, or agent such as a licensed customs 
broker. For FROB, the ISF Importer will be the carrier. For IE and T&E 
in-bond shipments, and goods to be delivered to an FTZ, the ISF 
Importer will be the party filing the IE, T&E, or FTZ documentation. 
The estimated average annual burden associated with the information 
collection in Sec.  149.2 is 52.3 hours per respondent or recordkeeper.
    Comments on the accuracy of these burden estimates and suggestions 
for reducing this burden should be sent to the Border Security 
Regulations Branch, Office of International Trade, U.S Customs and 
Border Protection, 1300 Pennsylvania Avenue, NW., (Mint Annex), 
Washington, DC 20229.
    The list of approved information collections, contained in 19 CFR 
Part 178, is being amended as appropriate to reflect the approved 
information collections covered by this interim final rule.

XI. Signing Authority

    The signing authority for these amendments falls under 19 CFR 
0.1(b). Accordingly, this document is signed by the Secretary of 
Homeland Security (or his delegate).

XII. Coordination of Interim Final Rule With Congress

    Pursuant to section 343(a)(3)(L) (19 U.S.C. 2071 note, section 
(a)(3)(L)), the required report regarding this interim final rule 
document has been timely made to the Committees on Finance and 
Commerce, Science, and Transportation of the Senate and the Committees 
on Ways and Means and Transportation and Infrastructure of the House of 
Representatives.

XIII. Regulatory Amendments

List of Subjects

19 CFR part 4

    Customs duties and inspection, Freight, Maritime carriers, 
Reporting and recordkeeping requirements, Vessels.

19 CFR part 12

    Customs duties and inspection, Reporting and recordkeeping 
requirements.

19 CFR part 18

    Common carriers, Customs duties and inspection, Freight, Penalties, 
Reporting and recordkeeping requirements, Surety bonds.

19 CFR part 101

    Customs duties and inspection, Vessels.

19 CFR part 103

    Administrative practice and procedure, Confidential business 
information, Courts, Freedom of information, Law enforcement, Privacy, 
Reporting and recordkeeping requirements.

19 CFR part 113

    Common carriers, Customs duties and inspection, Freight, Reporting 
and recordkeeping requirements, Surety bonds.

[[Page 71779]]

19 CFR part 122

    Administrative practice and procedure, Customs duties and 
inspection, Penalties, Reporting and recordkeeping requirements.

19 CFR part 123

    Customs duties and inspection, Freight, Reporting and recordkeeping 
requirements, Vessels.

19 CFR part 141

    Customs duties and inspection, Reporting and recordkeeping 
requirements.

19 CFR part 143

    Customs duties and inspection, Reporting and recordkeeping 
requirements.

19 CFR part 149

    Arrival, Declarations, Customs duties and inspection, Freight, 
Importers, Imports, Merchandise, Reporting and recordkeeping 
requirements, Shipping, Vessels.

19 CFR part 178

    Reporting and recordkeeping requirements.

19 CFR part 192

    Penalties, Reporting and recordkeeping requirements, Vessels.

Amendments to the Regulations

0
Parts 4, 12, 18, 101, 103, 113, 122, 123, 141, 143, 149, and 192 of 
title 19, Code of Federal Regulations (19 CFR parts 4, 12, 18, 101, 
103, 113, 122, 123, 141, 143, 149, 178, and 192), are amended as set 
forth below.

PART 4--VESSELS IN FOREIGN AND DOMESTIC TRADES

0
1. The general authority citation for part 4 is revised, the relevant 
specific authority citations are revised, and the specific authority 
citation for sections 4.7c and 4.7d is added to read as follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1431, 1433, 1434, 1624, 
2071 note; 46 U.S.C. 60105;
* * * * *
    Section 4.7 also issued under 19 U.S.C. 1581(a);
    Section 4.7a also issued under 19 U.S.C. 1498, 1584;
* * * * *
    Sections 4.7c and 4.7d also issued under 6 U.S.C. 943.
* * * * *

0
2. Amend Sec.  4.7 by revising paragraph (b)(2); and
0
a. In paragraph (e), by removing the phrase ``in addition to penalties 
applicable under other provisions of law'' at the end of the first 
sentence and adding in its place the phrase ``in addition to damages 
under the international carrier bond of $5,000 for each violation 
discovered''; and
0
b. In paragraph (e), by removing the phrase ``, in addition to any 
other penalties applicable under other provisions of law'' at the end 
of the paragraph and adding in its place ``of $5,000 for each violation 
discovered''.
    The revised paragraph (b)(2) reads as follows:


Sec.  4.7  Inward foreign manifest; production on demand; contents and 
form; advance filing of cargo declaration.

* * * * *
    (b) * * *
    (2) In addition to the vessel stow plan requirements pursuant to 
Sec.  4.7c of this part and the container status message requirements 
pursuant to Sec.  4.7d of this part, subject to the effective date 
provided in paragraph (b)(5) of this section, and with the exception of 
any bulk or authorized break bulk cargo as prescribed in paragraph 
(b)(4) of this section, Customs and Border Protection (CBP) must 
receive from the incoming carrier, for any vessel covered under 
paragraph (a) of this section, the CBP-approved electronic equivalent 
of the vessel's Cargo Declaration (Customs Form 1302), 24 hours before 
the cargo is laden aboard the vessel at the foreign port (see Sec.  
4.30(n)(1)). The current approved system for presenting electronic 
cargo declaration information to CBP is the Vessel Automated Manifest 
System (AMS).
* * * * *


Sec.  4.7a  [Amended]

0
3. Amend Sec.  4.7a(f) by:
0
a. Removing the phrase ``in addition to penalties applicable under 
other provisions of law'' at the end of the first sentence and adding 
in its place ``in addition to damages under the international carrier 
bond of $5,000 for each violation discovered''; and
0
b. Removing the phrase ``, in addition to other penalties applicable 
under other provisions of law'' at the end of the paragraph and adding 
in its place ``of $5,000 for each violation discovered''.

0
4. Add a new Sec.  4.7c to read as follows:


Sec.  4.7c  Vessel stow plan.

    Vessel stow plan required. In addition to the advance filing 
requirements pursuant to Sec. Sec.  4.7 and 4.7a of this part and the 
container status message requirements pursuant to Sec.  4.7d of this 
part, for all vessels subject to Sec.  4.7(a) of this part, except for 
any vessel exclusively carrying break bulk cargo or bulk cargo as 
prescribed in Sec.  4.7(b)(4) of this part, the incoming carrier must 
submit a vessel stow plan consisting of vessel and container 
information as specified in paragraphs (b) and (c) of this section 
within the time prescribed in paragraph (a) of this section via the 
CBP-approved electronic data interchange system.
    (a) Time of transmission. Customs and Border Protection (CBP) must 
receive the stow plan no later than 48 hours after the vessel departs 
from the last foreign port. For voyages less than 48 hours in duration, 
CBP must receive the stow plan prior to arrival at the first U.S. port.
    (b) Vessel information required to be reported. The following 
information must be reported for each vessel:
    (1) Vessel name (including international maritime organization 
(IMO) number);
    (2) Vessel operator; and
    (3) Voyage number.
    (c) Container information required to be reported. The following 
information must be reported for each container carried on each vessel:
    (1) Container operator;
    (2) Equipment number;
    (3) Equipment size and type;
    (4) Stow position;
    (5) Hazmat code (if applicable);
    (6) Port of lading; and
    (7) Port of discharge.
    (d) Compliance date of this section. (1) General. Subject to 
paragraph (d)(2) of this section, all affected ocean carriers must 
comply with the requirements of this section on and after January 26, 
2010.
    (2) Delay in compliance date of section. CBP may, at its sole 
discretion, delay the general compliance date set forth in paragraph 
(d)(1) of this section in the event that any necessary modifications to 
the approved electronic data interchange system are not yet in place or 
for any other reason. Notice of any such delay will be provided in the 
Federal Register.

0
5. Add a new section 4.7d to read as follows:


Sec.  4.7d  Container status messages.

    (a) Container status messages required. In addition to the advance 
filing requirements pursuant to Sec. Sec.  4.7 and 4.7a of this part 
and the vessel stow plan requirements pursuant to Sec.  4.7c of this 
part, for all containers destined to arrive within the limits of a port 
in the United States from a foreign port by vessel, the incoming 
carrier must submit messages regarding the status of the events as 
specified in paragraph (b) of this section if the carrier creates or

[[Page 71780]]

collects a container status message (CSM) in its equipment tracking 
system reporting that event. CSMs must be transmitted to Customs and 
Border Protection (CBP) within the time prescribed in paragraph (c) of 
this section via a CBP-approved electronic data interchange system. 
There is no requirement that a carrier create or collect any CSMs under 
this paragraph that the carrier does not otherwise create or collect on 
its own and maintain in its electronic equipment tracking system.
    (b) Events required to be reported. The following events must be 
reported if the carrier creates or collects a container status message 
in its equipment tracking system reporting that event:
    (1) When the booking relating to a container which is destined to 
arrive within the limits of a port in the United States by vessel is 
confirmed;
    (2) When a container which is destined to arrive within the limits 
of a port in the United States by vessel undergoes a terminal gate 
inspection;
    (3) When a container, which is destined to arrive within the limits 
of a port in the United States by vessel, arrives or departs a facility 
(These events take place when a container enters or exits a port, 
container yard, or other facility. Generally, these CSMs are referred 
to as ``gate-in'' and ``gate-out'' messages.);
    (4) When a container, which is destined to arrive within the limits 
of a port in the United States by vessel, is loaded on or unloaded from 
a conveyance (This includes vessel, feeder vessel, barge, rail and 
truck movements. Generally, these CSMs are referred to as ``loaded on'' 
and ``unloaded from'' messages);
    (5) When a vessel transporting a container, which is destined to 
arrive within the limits of a port in the United States by vessel, 
departs from or arrives at a port (These events are commonly referred 
to as ``vessel departure'' and ``vessel arrival'' notices);
    (6) When a container which is destined to arrive within the limits 
of a port in the United States by vessel undergoes an intra-terminal 
movement;
    (7) When a container which is destined to arrive within the limits 
of a port in the United States by vessel is ordered stuffed or 
stripped;
    (8) When a container which is destined to arrive within the limits 
of a port in the United States by vessel is confirmed stuffed or 
stripped; and
    (9) When a container which is destined to arrive within the limits 
of a port in the United States by vessel is stopped for heavy repair.
    (c) Time of transmission. For each event specified in paragraph (b) 
of this section that has occurred, and for which the carrier creates or 
collects a container status message (CSM) in its equipment tracking 
system reporting that event, the carrier must transmit the CSM to CBP 
no later than 24 hours after the CSM is entered into the equipment 
tracking system.
    (d) Contents of report. The report of each event must include the 
following:
    (1) Event code being reported, as defined in the ANSI X.12 or UN 
EDIFACT standards;
    (2) Container number;
    (3) Date and time of the event being reported;
    (4) Status of the container (empty or full);
    (5) Location where the event took place; and
    (6) Vessel identification associated with the message if the 
container is associated with a specific vessel.
    (e) A carrier may transmit other container status messages in 
addition to those required pursuant to paragraph (b) of this section. 
By transmitting additional container status messages, the carrier 
authorizes Customs and Border Protection (CBP) to access and use those 
data.
    (f) Compliance date of this section. (1) General. Subject to 
paragraph (f)(2) of this section, all affected ocean carriers must 
comply with the requirements of this section on and after January 26, 
2010.
    (2) Delay in compliance date of section. CBP may, at its sole 
discretion, delay the general compliance date set forth in paragraph 
(f)(1) of this section in the event that any necessary modifications to 
the approved electronic data interchange system are not yet in place or 
for any other reason. Notice of any such delay will be provided in the 
Federal Register.

PART 12--SPECIAL CLASSES OF MERCHANDISE

0
6. The general authority citation for part 12 and specific authority 
citation for Sec.  12.3 continue to read as follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1202 (General Note 3(i), 
Harmonized Tariff Schedule of the United States (HTSUS)), 1624;
* * * * *
    Section 12.3 also issued under 7 U.S.C. 135h, 21 U.S.C. 381;
* * * * *


Sec.  12.3  [Amended]

0
7. Amend Sec.  12.3(b)(2) and (c) by removing references to ``Sec.  
113.62(l)(1)'' and adding in their place ``Sec.  113.62(m)(1)''.

PART 18--VESSELS IN FOREIGN AND DOMESTIC TRADES

0
8. The general authority citation for part 18 continues to read as 
follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1202 (General Note 3(i), 
Harmonized Tariff Schedule of the United States), 1551, 1552, 1553, 
1623, 1624;
* * * * *

0
9. Amend Sec.  18.5 by:
0
a. In paragraph (a), removing the reference to ``paragraphs (c), (d), 
(e) and (f)'' and adding in its place ``paragraphs (c), (d), (e), (f), 
and (g)''; and
0
b. Adding a new paragraph (g).
    The new paragraph (g) reads as follows:


Sec.  18.5   Diversion.

* * * * *
    (g) For in-bond shipments which, at the time of transmission of the 
Importer Security Filing as required by Sec.  149.2 of this chapter, 
are intended to be entered as an immediate exportation (IE) or 
transportation and exportation (T&E) shipment, permission to divert the 
in-bond movement to a port other than the listed port of destination or 
export or to change the in-bond entry into a consumption entry must be 
obtained from the port director of the port of origin. Such permission 
would only be granted upon receipt by Customs and Border Protection 
(CBP) of a complete Importer Security Filing as required by part 149 of 
this chapter.

PART 103--AVAILABILITY OF INFORMATION

0
10. The general authority citation for part 103 continues, and the 
specific authority citation for Sec.  103.31a is revised to read as 
follows:

    Authority: 5 U.S.C. 301, 552, 552a; 19 U.S.C. 66, 1624; 31 
U.S.C. 9701.
* * * * *
    Section 103.31a also issued under 19 U.S.C. 2071 note and 6 U.S.C. 
943;
* * * * *

0
11. Revise Sec.  103.31a to read as follows:


Sec.  103.31a   Advance electronic information for air, truck, and rail 
cargo; Importer Security Filing information for vessel cargo.

    The following types of advance electronic information are per se 
exempt from disclosure under Sec.  103.12(d), unless CBP receives a 
specific request for such records pursuant to Sec.  103.5, and the 
owner of the information expressly agrees in writing to its release:

[[Page 71781]]

    (a) Advance cargo information that is electronically presented to 
Customs and Border Protection (CBP) for inbound or outbound air, rail, 
or truck cargo in accordance with Sec.  122.48a, 123.91, 123.92, or 
192.14 of this chapter;
    (b) Importer Security Filing information that is electronically 
presented to CBP for inbound vessel cargo in accordance with Sec.  
149.2 of this chapter;
    (c) Vessel stow plan information that is electronically presented 
to CBP for inbound vessels in accordance with Sec.  4.7c of this 
chapter; and
    (d) Container status message information that is electronically 
presented for inbound containers in accordance with Sec.  4.7d of this 
chapter.

PART 113--CUSTOMS BONDS

0
12. The general authority citation for part 113 continues to read as 
follows:

    Authority: 19 U.S.C. 66, 1623, 1624.
* * * * *

0
13. Amend Sec.  113.62 by:
0
a. Redesignating paragraphs (j) through (l) as paragraphs (k) through 
(m);
0
b. Adding new paragraph (j);
0
c. In newly redesignated paragraph (k), removing the phrase ``$5,000 
for each regulation violated'' and adding in its place ``$5,000 for 
each violation''.
0
d. In newly redesignated paragraph (m)(1), removing the reference to 
``paragraphs (a), (g), (i), (j)(2), or (k)'' and adding in its place 
``paragraphs (a), (g), (i), (j), (k)(2), or (l)'';
0
e. In newly redesignated paragraph (m)(4), replacing the reference to 
``paragraph (l)(1)'' and adding in its place ``paragraph (m)(1)''; and
0
f. In newly redesignated paragraph (m)(5), removing the reference to 
``paragraph (k)'' and adding in its place ``paragraph (l)''.
    The new paragraph (j) reads as follows:


Sec.  113.62   Basic importation and entry bond conditions.

* * * * *
    (j) The principal agrees to comply with all Importer Security 
Filing requirements set forth in part 149 of this chapter including but 
not limited to providing security filing information to Customs and 
Border Protection in the manner and in the time period prescribed by 
regulation. If the principal defaults with regard to any obligation, 
the principal and surety (jointly and severally) agree to pay 
liquidated damages of $5,000 for each violation.
* * * * *

0
14. Amend Sec.  113.63 by:
0
a. Redesignating paragraphs (g) and (h) as paragraphs (h) and (i); and
0
b. Adding new paragraph (g);
    The new paragraph (g) reads as follows:


Sec.  113.63   Basic custodial bond conditions.

* * * * *
    (g) The principal agrees to comply with all Importer Security 
Filing requirements set forth in part 149 of this chapter including but 
not limited to providing security filing information to Customs and 
Border Protection in the manner and in the time period prescribed by 
regulation. If the principal defaults with regard to any obligation, 
the principal and surety (jointly and severally) agree to pay 
liquidated damages of $5,000 per violation.
* * * * *

0
15. Amend Sec.  113.64 by:
0
a. Redesignating paragraphs (d) through (g) as paragraphs (h) through 
(k);
0
b. Redesignating paragraph (c) as paragraph (d);
0
c. Adding new paragraphs (c), (e), (f), and (g); and
0
d. In newly redesignated paragraph (d), removing the phrase ``$5,000 
for each regulation violated'' and adding in its place ``$5,000 for 
each violation, to a maximum of $100,000 per conveyance arrival''.
    New paragraphs (c), (e), (f), and (g) read as follows:


Sec.  113.64   International carrier bond conditions.

* * * * *
    (c) Agreement to provide advance cargo information. The incoming 
carrier agrees to provide advance cargo information to CBP in the 
manner and in the time period required under Sec. Sec.  4.7 and 4.7a of 
this chapter. If the incoming carrier, as principal, defaults with 
regard to these obligations, the principal and surety (jointly and 
severally) agree to pay liquidated damages of $5,000 for each 
violation, to a maximum of $100,000 per conveyance arrival.
* * * * *
    (e) Agreement to comply with Importer Security Filing requirements. 
If the principal elects to provide the Importer Security Filing 
information to Customs and Border Protection (CBP), the principal 
agrees to comply with all Importer Security Filing requirements set 
forth in part 149 of this chapter including but not limited to 
providing security filing information to CBP in the manner and in the 
time period prescribed by regulation. If the principal defaults with 
regard to any obligation, the principal and surety (jointly and 
severally) agree to pay liquidated damages of $5,000 for each 
violation.
    (f) Agreement to comply with vessel stow plan requirements. If the 
principal causes a vessel to arrive within the limits of a port in the 
United States, the principal agrees to submit a stow plan in the manner 
and in the time period required pursuant to part 4.7c of this chapter. 
If the principal defaults with regard to this obligation, the principal 
and surety (jointly and severally) agree to pay liquidated damages of 
$50,000 for each vessel arrival.
    (g) Agreement to comply with container status message requirements. 
If the principal causes a vessel to arrive within the limits of a port 
in the United States, the principal agrees to submit container status 
messages in the manner and in the time period required pursuant to part 
4.7d of this chapter. If the principal defaults with regard to these 
obligations, the principal and surety (jointly and severally) agree to 
pay liquidated damages of $5,000 for each violation, to a maximum of 
$100,000 per vessel arrival.
* * * * *

0
16. Amend Sec.  113.73 by:
0
a. Redesignating paragraphs (c) and (d) as paragraphs (d) and (e); and
0
b. Adding a new paragraph (c).
    The new paragraph (c) reads as follows:


Sec.  113.73   Foreign trade zone operator bond conditions.

* * * * *
    (c) Agreement to comply with Importer Security Filing requirements. 
The principal agrees to comply with all Importer Security Filing 
requirements set forth in part 149 of this chapter including but not 
limited to providing security filing information to Customs and Border 
Protection (CBP) in the manner and in the time period prescribed by 
regulation. If the principal defaults with regard to any obligation, 
the principal and surety (jointly and severally) agree to pay 
liquidated damages of $5,000 for each violation.
* * * * *

0
17. Add a new Appendix D to part 113 to read as follows:

Appendix D to Part 113--Importer Security Filing Bond

Importer Security Filing Bond

KNOW ALL MEN BY THESE PRESENTS, that------ of ------, as principal 
having Customs and Border Protection (CBP) Identification Number --
---- and ------, as surety are held and firmly bound unto the United 
States of America up to the sum of ------ dollars ($--------) for 
the payment of which we bind ourselves, our heirs, executors, 
administrators, successors, and

[[Page 71782]]

assigns, jointly and severally, firmly by these presents.
    Whereas, the named principal (including the named principal's 
employees, agents and contractors) agrees to comply with all 
Importer Security Filing requirements set forth in 19 CFR part 149, 
including but not limited to providing security filing information 
to CBP in the manner and in the time period prescribed by 
regulation.
    Whereas, if the named principal incurs any claim that relates to 
any of the requirements set forth in 19 CFR part 149, the obligors 
(principal and surety, jointly and severally) agree to pay any 
amount prescribed by law or regulation upon demand by CBP.
    This bond is effective ------, 20----, and remains in force for 
one year beginning with the effective date and for each succeeding 
annual period, or until terminated. This bond constitutes a separate 
bond for each period in the amount listed above for liabilities that 
accrue in each period. The intention to terminate this bond must be 
conveyed within the period and manner prescribed in the CBP 
Regulations.

SIGNED, SEALED AND DELIVERED IN THE PRESENCE OF:

-----------------------------------------------------------------------
(Name)
-----------------------------------------------------------------------
(Address)
-----------------------------------------------------------------------
(Name)
-----------------------------------------------------------------------
(Address)
-----------------------------------------------------------------------
(Principal Name) (Seal)
-----------------------------------------------------------------------
-----------------------------------------------------------------------
(Principal Address)
-----------------------------------------------------------------------
(Surety Name) (Seal)
Surety No.-------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
(Surety Mailing Address)
Surety Agent Name------------------------------------------------------
Surety Agent ID Number-------------------------------------------------

PART 122--AIR COMMERCE REGULATIONS

0
18. The general authority citation for part 122 continues to read as 
follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 58b, 66, 1431, 1433, 1436, 
1448, 1459, 1590, 1594, 1623, 1624, 1644, 1644a, 2071 note.
* * * * *


Sec.  122.48a   [Amended]

0
19. Amend Sec.  122.48a(c)(2) by removing the reference to ``Sec.  
113.62(j)(2)'' and adding in its place ``Sec.  113.62(k)(2)''.

PART 123--CUSTOMS RELATIONS WITH CANADA AND MEXICO

0
20. The general authority citation for part 123 continues to read as 
follows:

    Authority: 19 U.S.C. 66, 1202 (General Note 3(i), Harmonized 
Tariff Schedule of the United States (HTSUS)), 1431, 1433, 1436, 
1448, 1624, 2071 note.
* * * * *


Sec.  123.92  [Amended]

0
21. Amend Sec.  123.92(c)(2) by removing the reference to ``Sec.  
113.62(j)(2)'' and adding in its place ``Sec.  113.62(k)(2)''.

PART 141--ENTRY OF MERCHANDISE

0
22. The general authority citation for part 141 and specific authority 
citation for Sec.  141.113 continue to read as follows:

    Authority: 19 U.S.C. 66, 1448, 1484, 1624.
* * * * *
    Section 141.113 also issued under 19 U.S.C. 1499, 1623.


Sec.  141.113  [Amended]

0
23. Amend Sec.  141.113(b) by removing the reference to ``Sec.  
113.62(l)(1)'' and adding in its place ``Sec.  113.62(m)(1)''.

PART 143--SPECIAL ENTRY PROCEDURES

0
24. The general authority citation for part 143 continues to read as 
follows:

    Authority: 19 U.S.C. 66, 1481, 1484, 1498, 1624.

0
25. Revise Sec.  143.1 to read as follows:


Sec.  143.1  Eligibility.

    The Automated Broker Interface (ABI) is a module of the Customs 
Automated Commercial System (ACS) which allows participants to transmit 
data electronically to CBP through ABI and to receive transmissions 
through ACS. Its purposes are to improve administrative efficiency, 
enhance enforcement of customs and related laws, lower costs and 
expedite the release of cargo.
    (a) Participants for entry and entry summary purposes. Participants 
in ABI for the purposes of transmitting data relating to entry and 
entry summary may be:
    (1) Customs brokers as defined in Sec.  111.1 of this chapter;
    (2) Importers as defined in Sec.  101.1 of this chapter; and
    (3) ABI service bureaus, that is, an individual, partnership, 
association or corporation which provides communications facilities and 
data processing services for brokers and importers, but which does not 
engage in the conduct of customs business as defined in Sec.  111.1 of 
this chapter.
    (b) Participants for Importer Security Filing purposes. Any party 
may participate in ABI solely for the purposes of filing the Importer 
Security Filing pursuant to Sec.  149.2 of this chapter if that party 
fulfills the eligibility requirements contained in Sec.  149.5 of this 
chapter. If a party other than a customs broker as defined in Sec.  
111.1 of this chapter or an importer as defined in 19 U.S.C. 1484 
submits the Importer Security Filing, no portion of the Importer 
Security Filing can be used for entry or entry summary purposes 
pursuant to Sec.  149.5 of this chapter.
    (c) Participants for other purposes. Upon approval by CBP, any 
party may participate in ABI for other purposes, including transmission 
of protests, forms relating to in-bond movements (CBP Form 7512), and 
applications for FTZ admission (CBP Form 214).

PART 146--FOREIGN TRADE ZONES

0
26. The general authority citation for part 146 continues to read as 
follows:

    Authority: 19 U.S.C. 66, 81a-81u, 1202 (General Note 3(i), 
Harmonized Tariff Schedule of the United States), 1623, 1624.

0
27. Amend Sec.  146.32 by:
0
a. Removing all references to ``Customs Form 214'' and adding in their 
place ``CBP Form 214'' wherever they appear;
0
b. Redesignating paragraph (a) as paragraph (a)(1); and
0
c. Adding a new paragraph (a)(2).
    The new paragraph (a)(2) reads as follows:


Sec.  146.32  Application and permit for admission of merchandise.

    (a)(1) * * *
    (2) CBP Form 214 and Importer Security Filing submitted via a 
single electronic transmission. If an Importer Security Filing is filed 
pursuant to part 149 of this chapter via the same electronic 
transmission as CBP Form 214, the filer is only required to provide the 
following fields once to be used for Importer Security Filing and CBP 
Form 214 purposes:
    (i) Country of origin; and
    (ii) Commodity HTSUS number if this number is provided at the 10-
digit level.
* * * * *

0
28. Add part 149 to chapter I to read as follows:

PART 149--IMPORTER SECURITY FILING

Sec.
149.1 Definitions.
149.2 Importer security filing--requirement, time of transmission, 
verification of information, update, withdrawal, compliance date.
149.3 Data elements.
149.4 Bulk and break bulk cargo.
149.5 Eligibility to file an Importer Security Filing, authorized 
agents.
149.6 Entry and entry summary documentation and Importer Security

[[Page 71783]]

Filing submitted via a single electronic transmission.

    Authority: 5 U.S.C. 301; 6 U.S.C. 943; 19 U.S.C. 66, 1624, 2071 
note.


Sec.  149.1  Definitions.

    (a) Importer Security Filing Importer. For purposes of this part, 
``Importer Security Filing (ISF) Importer'' means the party causing 
goods to arrive within the limits of a port in the United States by 
vessel. For shipments other than foreign cargo remaining on board 
(FROB), immediate exportation (IE) and transportation and exportation 
(T&E) in-bond shipments, and goods to be delivered to a foreign trade 
zone (FTZ), the ISF Importer will be the goods' owner, purchaser, 
consignee, or agent such as a licensed customs broker. For FROB cargo, 
the ISF Importer will be the carrier. For IE and T&E in-bond shipments, 
and goods to be delivered to an FTZ, the ISF Importer will be the party 
filing the IE, T&E, or FTZ documentation.
    (b) Importation. For purposes of this part, ``importation'' means 
the point at which cargo arrives within the limits of a port in the 
United States.
    (c) Bulk cargo. For purposes of this part, ``bulk cargo'' is 
defined as homogeneous cargo that is stowed loose in the hold and is 
not enclosed in any container such as a box, bale, bag, cask, or the 
like. Such cargo is also described as bulk freight. Specifically, bulk 
cargo is composed of either:
    (1) Free flowing articles such as oil, grain, coal, ore, and the 
like, which can be pumped or run through a chute or handled by dumping; 
or
    (2) Articles that require mechanical handling such as bricks, pig 
iron, lumber, steel beams, and the like.
    (d) Break bulk cargo. For purposes of this part, ``break bulk 
cargo'' is defined as cargo that is not containerized, but which is 
otherwise packaged or bundled.


Sec.  149.2  Importer security filing--requirement, time of 
transmission, verification of information, update, withdrawal, 
compliance date.

    (a) Importer security filing required. For cargo arriving by 
vessel, with the exception of any bulk cargo pursuant to Sec.  149.4(a) 
of this part, the ISF Importer, as defined in Sec.  149.1 of this part, 
or authorized agent (see Sec.  149.5 of this part) must submit in 
English the Importer Security Filing elements prescribed in Sec.  149.3 
of this part within the time specified in paragraph (b) of this section 
via a CBP-approved electronic interchange system.
    (b) Time of transmission. With the exception of any break bulk 
cargo pursuant to Sec.  149.4(b) of this part, ISF Importers must 
submit:
    (1) Seller, buyer, importer of record number / foreign trade zone 
applicant identification number, and consignee number(s) (as defined in 
Sec.  149.3(a)(1) through (4) of this part) no later than 24 hours 
before the cargo is laden aboard the vessel at the foreign port.
    (2) Manufacturer (or supplier), ship to party, country of origin, 
and commodity HTSUS number (as defined in Sec.  149.3(a)(5) through (8) 
of this part) no later than 24 hours before the cargo is laden aboard 
the vessel at the foreign port.
    (3) Container stuffing location and consolidator (stuffer) (as 
defined in Sec.  149.3(a)(9) and (10) of this part) as early as 
possible, in no event later than 24 hours prior to arrival in a United 
States port (or upon lading at a foreign port that is less than a 24 
hour voyage to the closest United States port).
    (4) The data elements required under Sec.  149.3(b) of this part 
for FROB, prior to lading aboard the vessel at the foreign port.
    (c) Verification of information. Where the party electronically 
presenting to CBP the Importer Security Filing required in paragraph 
(a) of this section receives any of this information from another 
party, CBP will take into consideration how, in accordance with 
ordinary commercial practices, the presenting party acquired such 
information, and whether and how the presenting party is able to verify 
this information. Where the presenting party is not reasonably able to 
verify such information, CBP will permit the party to electronically 
present the information on the basis of what the party reasonably 
believes to be true.
    (d) Update of Importer Security Filing. The party who submitted the 
Importer Security Filing pursuant to paragraph (a) of this section must 
update the filing if, after the filing is submitted and before the 
goods enter the limits of a port in the United States, any of the 
information submitted changes or more accurate information becomes 
available.
    (e) Withdrawal of Importer Security Filing. If, after an Importer 
Security Filing is submitted pursuant to paragraph (a) of this section, 
the goods associated with the Importer Security Filing are no longer 
intended to be imported to the United States, the party who submitted 
the Importer Security Filing must withdraw the Importer Security Filing 
and transmit to CBP the reason for such withdrawal.
    (f) Flexible Requirements. For each of the four data elements 
required under paragraph (b)(2) of this section ISF Importers will be 
permitted to submit an initial response or responses based on the best 
available data available at the time that, in accordance with paragraph 
(d) of this section, ISF Importers will be required to update as soon 
as more precise or more accurate information is available, in no event 
less than 24 hours prior to arrival at a U.S. port (or upon lading at a 
foreign port that is less than a 24 hour voyage to the closest U.S. 
port).
    (g) Compliance date of this section. (1) General. Subject to 
paragraph (g)(2) of this section, ISF Importers must comply with the 
requirements of this section on and after January 26, 2010.
    (2) Delay in compliance date of section. CBP may, at its sole 
discretion, delay the general compliance date set forth in paragraph 
(g)(1) of this section in the event that any necessary modifications to 
the approved electronic data interchange system are not yet in place or 
for any other reason. Notice of any such delay will be provided in the 
Federal Register.


Sec.  149.3  Data elements.

    (a) Shipments intended to be entered into the United States and 
shipments intended to be delivered to a foreign trade zone. Except as 
otherwise provided for in paragraph (b) of this section, the following 
elements must be provided for each good listed at the six-digit HTSUS 
number at the lowest bill of lading level (i.e., at the house bill of 
lading level, if applicable). The manufacturer (or supplier), country 
of origin, and commodity HTSUS number must be linked to one another at 
the line item level.
    (1) Seller. Name and address of the last known entity by whom the 
goods are sold or agreed to be sold. If the goods are to be imported 
otherwise than in pursuance of a purchase, the name and address of the 
owner of the goods must be provided. A widely recognized commercially 
accepted identification number for this party may be provided in lieu 
of the name and address.
    (2) Buyer. Name and address of the last known entity to whom the 
goods are sold or agreed to be sold. If the goods are to be imported 
otherwise than in pursuance of a purchase, the name and address of the 
owner of the goods must be provided. A widely recognized commercially 
accepted identification number for this party may be provided in lieu 
of the name and address.
    (3) Importer of record number/Foreign trade zone applicant 
identification number. Internal Revenue Service (IRS) number, Employer 
Identification Number (EIN), Social Security Number (SSN), or CBP 
assigned number of the entity liable for payment of all duties

[[Page 71784]]

and responsible for meeting all statutory and regulatory requirements 
incurred as a result of importation. For goods intended to be delivered 
to a foreign trade zone (FTZ), the IRS number, EIN, SSN, or CBP 
assigned number of the party filing the FTZ documentation with CBP must 
be provided.
    (4) Consignee number(s). Internal Revenue Service (IRS) number, 
Employer Identification Number (EIN), Social Security Number (SSN), or 
CBP assigned number of the individual(s) or firm(s) in the United 
States on whose account the merchandise is shipped.
    (5) Manufacturer (or supplier). Name and address of the entity that 
last manufactures, assembles, produces, or grows the commodity or name 
and address of the party supplying the finished goods in the country 
from which the goods are leaving. In the alternative the name and 
address of the manufacturer (or supplier) that is currently required by 
the import laws, rules and regulations of the United States (i.e., 
entry procedures) may be provided (this is the information that is used 
to create the existing manufacturer identification (MID) number for 
entry purposes). A widely recognized commercially accepted 
identification number for this party may be provided in lieu of the 
name and address.
    (6) Ship to party. Name and address of the first deliver-to party 
scheduled to physically receive the goods after the goods have been 
released from customs custody. A widely recognized commercially 
accepted identification number for this party may be provided in lieu 
of the name and address.
    (7) Country of origin. Country of manufacture, production, or 
growth of the article, based upon the import laws, rules and 
regulations of the United States.
    (8) Commodity HTSUS number. Duty/statistical reporting number under 
which the article is classified in the Harmonized Tariff Schedule of 
the United States (HTSUS). The HTSUS number must be provided to the 
six-digit level. The HTSUS number may be provided up to the 10-digit 
level. This element can only be used for entry purposes if it is 
provided at the 10-digit level or greater by the importer of record or 
its licensed customs broker.
    (9) Container stuffing location. Name and address(es) of the 
physical location(s) where the goods were stuffed into the container. 
For break bulk shipments, as defined in Sec.  149.1 of this part, the 
name and address(es) of the physical location(s) where the goods were 
made ``ship ready'' must be provided. A widely recognized commercially 
accepted identification number for this element may be provided in lieu 
of the name and address.
    (10) Consolidator (stuffer). Name and address of the party who 
stuffed the container or arranged for the stuffing of the container. 
For break bulk shipments, as defined in Sec.  149.1 of this part, the 
name and address of the party who made the goods ``ship ready'' or the 
party who arranged for the goods to be made ``ship ready'' must be 
provided. A widely recognized commercially accepted identification 
number for this party may be provided in lieu of the name and address.
    (b) FROB, IE shipments, and T&E shipments. For shipments consisting 
entirely of foreign cargo remaining on board (FROB) and shipments 
intended to be transported in-bond as an immediate exportation (IE) or 
transportation and exportation (T&E), the following elements must be 
provided for each good listed at the six-digit HTSUS number at the 
lowest bill of lading level (i.e., at the house bill of lading level, 
if applicable).
    (1) Booking party. Name and address of the party who initiates the 
reservation of the cargo space for the shipment. A widely recognized 
commercially accepted identification number for this party may be 
provided in lieu of the name and address.
    (2) Foreign port of unlading. Port code for the foreign port of 
unlading at the intended final destination.
    (3) Place of delivery. City code for the place of delivery.
    (4) Ship to party. Name and address of the first deliver-to party 
scheduled to physically receive the goods after the goods have been 
released from customs custody. A widely recognized commercially 
accepted identification number for this party may be provided in lieu 
of the name and address.
    (5) Commodity HTSUS number. Duty/statistical reporting number under 
which the article is classified in the Harmonized Tariff Schedule of 
the United States (HTSUS). The HTSUS number must be provided to the 
six-digit level. The HTSUS number may be provided to the 10-digit 
level.


Sec.  149.4  Bulk and break bulk cargo.

    (a) Bulk cargo exempted from filing requirement. For bulk cargo 
that is exempt from the requirement set forth in Sec.  4.7(b)(2) of 
this chapter that a cargo declaration be filed with Customs and Border 
Protection (CBP) 24 hours before such cargo is laden aboard the vessel 
at the foreign port, ISF Importers, as defined in Sec.  149.1 of this 
part, of bulk cargo are also exempt from filing an Importer Security 
Filing with respect to that cargo.
    (b) Break bulk cargo exempted from time requirement. For break bulk 
cargo that is exempt from the requirement set forth in Sec.  4.7(b)(2) 
of this chapter for carriers to file a cargo declaration with Customs 
and Border Protection (CBP) 24 hours before such cargo is laden aboard 
the vessel at the foreign port, ISF Importers, as defined in Sec.  
149.1 of this part, of break bulk cargo are also exempt with respect to 
that cargo from the requirement set forth in Sec.  149.2 of this part 
to file an Importer Security Filing with CBP 24 hours before such cargo 
is laden aboard the vessel at the foreign port. Any importers of break 
bulk cargo that are exempted from the filing requirement of Sec.  149.2 
of this part must present the Importer Security Filing to CBP 24 hours 
prior to the cargo's arrival in the United States. These ISF Importers 
must still report 24 hours in advance of loading any containerized or 
non-qualifying break bulk cargo they will be importing.


Sec.  149.5  Eligibility to file an Importer Security Filing, 
authorized agents.

    (a) Eligibility. To be qualified to file Importer Security Filing 
information electronically, a party must establish the communication 
protocol required by Customs and Border Protection for properly 
presenting the Importer Security Filing through the approved data 
interchange system. If the Importer Security Filing and entry or entry 
summary are provided via a single electronic transmission to CBP 
pursuant to Sec.  149.6(b) of this part, the party making the 
transmission must be an importer acting on its own behalf or a licensed 
customs broker.
    (b) Bond required. The ISF Importer must possess a basic 
importation and entry bond containing all the necessary provisions of 
Sec.  113.62 of this chapter, a basic custodial bond containing all the 
necessary provisions of Sec.  113.63 of this chapter, an international 
carrier bond containing all the necessary provisions of Sec.  113.64 of 
this chapter, a foreign trade zone operator bond containing all the 
necessary provisions of Sec.  113.73 of this chapter, or an importer 
security filing bond as provided in Appendix D to part 113 of this 
chapter. If an ISF Importer does not have a required bond, the agent 
submitting the Importer Security Filing on behalf of the ISF Importer 
may post the agent's bond.
    (c) Powers of attorney. Authorized agents must retain powers of 
attorney in English until revoked. Revoked powers of attorney and 
letters of revocation must be retained for five years after the date of 
revocation. Authorized agents

[[Page 71785]]

must make powers of attorney and letters of revocation available to 
representatives of Customs and Border Protection upon request.


Sec.  149.6  Entry and entry summary documentation and Importer 
Security Filing submitted via a single electronic transmission.

    If the Importer Security Filing is filed pursuant to Sec.  149.2 of 
this part via the same electronic transmission as entry or entry/entry 
summary documentation pursuant to Sec.  142.3 of this chapter, the 
importer is only required to provide the following fields once to be 
used for Importer Security Filing, entry, or entry/entry summary 
purposes, as applicable:
    (a) Importer of record number;
    (b) Consignee number;
    (c) Country of origin; and
    (d) Commodity HTSUS number if this number is provided at the 10-
digit level.

PART 178--APPROVAL OF INFORMATION COLLECTION REQUIREMENTS

0
29. The general authority citation for part 178 continues to read as 
follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 1624; 44 U.S.C. 3501 et seq.


0
30. Amend Sec.  178.2 by adding new listings for Sec. Sec.  4.7c, 4.7d, 
and 149.2 in appropriate numerical sequence according to the section 
number under the columns indicated, to read as follows:


Sec.  178.2  Listing of OMB control numbers.

----------------------------------------------------------------------------------------------------------------
            19 CFR section                             Description                        OMB Control No.
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
Sec.   4.7c...........................  Vessel stow plan........................
Sec.   4.7d...........................  Container status messages...............
 
                                                  * * * * * * *
Sec.   149.2..........................  Importer Security Filing................
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

PART 192--EXPORT CONTROL

0
31. The general authority citation for part 192 continues to read as 
follows:

    Authority: 19 U.S.C. 66, 1624, 1646c. Subpart A also issued 
under 19 U.S.C. 1627a, 1646a, 1646b; subpart B also issued under 13 
U.S.C. 303; 19 U.S.C. 2071 note; 46 U.S.C. 91.


Sec.  192.14  [Amended]

0
32. Amend Sec.  192.14(c)(4)(ii) by removing the reference to ``Sec.  
113.64(g)(2)'' and adding in its place ``Sec.  113.64(k)(2)''.

    Dated: November 7, 2008.
Michael Chertoff,
Secretary.
[FR Doc. E8-27048 Filed 11-24-08; 8:45 am]
BILLING CODE 9111-14-P