Transcript SECURITY AND TRADE: FINDING A BALANCE

Automated Manifest System
(“AMS”)
C. Jonathan Benner
Troutman Sanders LLP
Washington, D.C.
22 March 2004
Stamford, Connecticut
AMS - DESCRIPTION
• On December 5, 2003, the Bureau of Customs
and Border Protection (“CBP”) issued
regulations requiring “carriers” to submit to CBP
advance electronic cargo Information prior to its
being brought into the U.S., in accordance with
the Trade Act of 2002
• AMS is a CBP-approved electronic data
interchange system, which receives cargo
information reasonably necessary to enable
high-risk shipments to be identified to ensure
cargo safety and security and to prevent
smuggling
AMS - DESCRIPTION
• As of March 4, 2004, all “carriers” must submit to CBP
their cargo declarations electronically via AMS. On
March 1, 2004, CBP granted a 30-day grace period for
bulk and exempted break-bulk cargoes and passenger
vessels to comply with the AMS requirements and,
after April 2, 2004, CBP will enforce penalties against
them.
• Timing: Containerized cargo and non-exempted breakbulk cargo must submit their AMS declarations 24
hours prior to loading at the foreign port. Bulk and
exempted break bulk cargoes must submit their AMS
declarations 24 hours prior to arrival in the U.S. (for
voyages more than 24 hours) or at the time of sailing
(for voyages less than 24 hours).
AMS - DESCRIPTION
• CBP regulations state that the master who fails
to provide the required manifest information in a
timely fashion, or who transmits any document
that is forged, altered, or false may be liable for
civil penalties of $5,000 for the first violation, and
$10,000 for each subsequent violation, in
addition to penalties applicable under other
provisions of law, such as denial of preliminary
entry or denial of unlading.
AMS - BASIC REQUIREMENTS
The cargo declaration must state:
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The last foreign port before the vessel departs for
the U.S.
Carrier’s SCAC code (discussed below)
Carrier-assigned voyage number
Date the vessel is scheduled to arrive at the first
U.S. port
Numbers and quantities from the carrier’s BL
First foreign port where carrier receives cargo
destined to the U.S.
Description or HTS numbers and weight for cargo
classification
AMS - BASIC REQUIREMENTS
The cargo declaration must state (cont’):
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Shipper’s name and address or identification
number from all BL, and the identity of the foreign
vendor, supplier, manufacturer, or other similar party
and its foreign address
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Name and address of the consignee or identification
number from all BL. If the cargo is shipped “to order
of [a named party],” carrier must report as
consignee the name “to order”
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Vessel name, country of documentation, and IMO
vessel number
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Foreign port where the cargo is laden on board
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Internationally recognized hazardous material code,
if applicable
AMS - BASIC REQUIREMENTS
In addition to the cargo declaration, “carriers” must:
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Have a Standard Carrier Alpha Code (SCAC) issued by the
National Motor Freight Traffic Association, in Alexandria, VA
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Have an Activity Code 3 International Carriers Bond and an
Activity Code 2 Custodial Bond, if business practices
involve creating in-bond shipments. These bonds may be
obtained from any U.S. Department of Treasury-approved
surety companies
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Foreign entities that do not have a U.S. federal tax number
or social security number must have a CBP-assigned
number to identify the foreign entity on the bond application
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File with CBP the date and time of departure from foreign
port via AMS 24 hours after departure (for voyages more
than 24 hours) or at time of sailing (for voyages less than
24 hours)
ISSUES CLARIFIED BY CBP’S FAQS
REVISED AS OF MARCH 1, 2004
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AMS requirement applies to vessels commencing voyages on or after 4
March 2004
Penalties for non-compliance will not be assessed against break and
exempted break-bulk cargoes and passenger vessels until 2 April 2004
“Carrier” must submit a letter of intent to join the AMS program on the
carrier’s letterhead, and which contains its contact information and office
location
Definition of “Carrier” - The entity that controls the vessel
ISSUES CLARIFIED BY CBP’S FAQS
REVISED AS OF MARCH 1, 2004
• If cargo has been diverted to a foreign port prior to
arrival in the U.S., carrier must amend the previous
bill indicating the change in vessel information.
• If carrier skips foreign port and diverts directly to the
U.S., carrier must notify CBP at the designated first
port of arrival as soon as it realizes the vessel will
not make the foreign port call. Carrier must also
retransmit the manifest with corrections. Upon
arrival, cargo will be placed on hold until CBP
reviews documents. Penalties may be assessed.
ISSUES CLARIFIED BY CBP’S FAQS
REVISED AS OF MARCH 1, 2004
• Bond – A single bond is valid for one entrance and
one clearance for one transaction at one port. A
continuous bond is valid for all conveyances
controlled by the bonded entity.
• Agent can enter cargo declaration information on
behalf of carrier, but agent must use carrier’s SCAC
code and bond information. Carrier remains liable
for the content and timeliness of the data.
• Geographic reach – AMS does not apply to cargoes
between Puerto Rico and the U.S., but does apply
to cargoes between Guam (and other U.S.
possession and territories) and the U.S.
UNANSWERED QUESTIONS
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Carrier Definition – Unclear who the
carrier is in case of time charter, voyage
charter, etc.
Can the owner of the loaded cargo be a
“carrier”?
Is the owner or the shipper responsible
for providing the cargo details to the
vessel’s port agent?
UNANSWERED QUESTIONS
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Can the parties to a charter agreement
designate between them the party responsible
to file the cargo information (e.g., from the time
charterer to the head owner of the vessel or its
management company)?
Date and time of departure from foreign port
via AMS - How and where should carrier file
this information?
Vessel diversion (to the U.S. or to a foreign
port) – when and how submission to CBP of
the cargo manifest and date and departure
information via AMS be made?
UNANSWERED QUESTIONS
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Commercially sensitive information –
sometimes cargo retains more information
concerning the destination than the owner
of the vessel. Can owner and cargo be
assured that the destination information will
be held confidential by CBP during the
voyage?
Scheduled meeting with CBP’s
representatives to discuss these and other
open issues on March 30, 2004