New Maritime Developments UpdateAugust 2003 No. 14www.BlankRome.com

Electronic Filing of Vessel Cargo Information

© 2003, BLANK ROME LLP. The purpose of the New Maritime Developments Update is to identify select developments that may be of interest to readers. The information contained herein is abridged and summarized from varioussources, the accuracy and completeness of which cannot be assured. The Update should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel.

New DevelopmentOn July 23, 2003, the Bureau of

Customs and Border Protection(CBP) issued a proposed rule, which,among other things, would requirethe electronic submission of vesselcargo information to CBP at least 24hours prior to a vessel departing (1) aforeign port for the United States,and (2) a United States port. Thisrulemaking also provides similarrequirements for inbound and out-bound cargoes shipped via rail, truckand air. Comments are due to CBPby August 22, 2003.

Background In October 2002, CBP promul-

gated a final rule requiring the sub-mission of cargo information to CBP24 hours prior to departing a foreignport for the United States. This ruleapplies to all containerized cargoes.Bulk cargoes are exempt from thisrule and certain break bulk cargoesare exempt on a case-by-case basis.Specifically, the 24-hour rule requires:(1) CBP to receive the vessel’s CargoDeclaration (Customs Form 1302) oran electronic equivalent from a carrier24 hours before the cargo is ladenaboard the vessel at a foreign port; (2)a separate listing of all inbound for-eign cargo not destined for theUnited States and remaining onboard the vessel (excluding emptycontainers); and (3) additional infor-

mation for all inward bound foreigncargo, including the foreign port ofdeparture, the carrier code, the dateof scheduled arrival, the shippers’ andconsignees’ names and addresses forall bills of lading, the vessel name andflag, a precise description of the cargo,and certain other cargo and containerinformation. Vessel carriers voluntarilyparticipating in the AutomatedManifest System (AMS) must submitthis information electronically.

The 24-hour rule also allows non-vessel operating common carriers(NVOCCs) that (1) deliver cargo to avessel carrier for lading aboard thevessel at a foreign port, (2) arelicensed by the Federal MaritimeCommission, and (3) are in posses-sion of an International CarrierBond, to elect to transmit the mani-fest information directly to CBPthrough the AMS. Alternatively,NVOCCs could provide this infor-mation to the carrier, which, if auto-mated, must submit this informationto CBP via the AMS.

SummaryInbound CargoesThe proposed rule would not

modify the 24-hour rule in thisregard, except that it would require allvessel carriers (not only those volun-tarily participating in the AMS) to filecargo manifest information electroni-cally via the AMS. Specifically, with-

in 90 days of promulgation of a finalrule, all vessel carriers, and NVOCCselecting to participate, must be auto-mated on the AMS at all ports ofentry in the United States where theircargo will initially arrive. Once thisoccurs, vessel carriers will no longerbe required to carry on board theirvessel, and produce on demand, theoriginal and a copy of the cargo mani-fest. The Trade Act of 2002 requiresregulations to be promulgated nolater than October 1, 2003.

Outbound CargoesThe proposed rule would require

the “United States principal party ininterest” (USPPI), i.e., exporter, or itsauthorized agent, to electronicallytransmit to CBP outbound cargoinformation no later than 24 hoursprior to departing a U.S. port. Inaddition to the cargo informationcontained in a Shipper’s ExportDeclaration electronically filed by aUSPPI or its authorized agent, vesselcarriers would be required to elec-tronically submit the following infor-mation: (1) carrier data, includingmode of transportation, carrier identi-fication code, vessel name, country ofultimate destination, and port andestimated date of exportation; and(2) proof of electronic filing orexemption statement, which must befurnished by the USPPI or its autho-rized agent to the vessel carrier, which

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MARITIME UPDATE

is a prerequisite to loading the out-bound cargo. To verify that therequired information has beenaccepted as transmitted, the AES willtransmit an internal transaction num-ber, or ITN, to the USPPI or itsauthorized agent.

The 24-hour notice and electron-ic filing requirements for outboundcargoes will apply only to cargoes notrequiring export licenses, and will notbe mandatory until an effective dateto be published by the Department ofCommerce in the Federal Registersometime in 2004.

Conclusion andRecommendations

Affected businesses should reviewthe proposed rule and consider pro-viding comments to CBP regardingthe possible burdens of complyingwith the proposed regulations. Inaddition, actions should be taken inorder to comply with the future elec-tronic submission requirements.Comments are due to CBP on orbefore August 22, 2003.

If you have questions or desire assistance please contact:Jon Waldron • Waldron@BlankRome.com

orJeanne Grasso • Grasso@BlankRome.com

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Maritime Group MembersJonathan K. Waldron 202.772.5964Alex Blanton 202.772.5909Joan M. Bondareff 202.772.5911James S.W. Drewry 202.772.5916Thomas M. Dyer 202.772.5990James B. Ellis 202.772.5993Brett M. Esber 202.772.5919Jeanne M. Grasso 202.772.5927Lara B. Mathews 202.772.5941J. Christopher Naftzger 202.772.5945R. Anthony Salgado 202.772.5948William L. Schachte 202.772.5800Duncan C. Smith III 202.772.5956Sidney A. Wallace 202.772.5931

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