The Final Rule for 10+2 is expected to be released by mid November.  Once the final rule is published, it is anticipated that importers will have a 60-day implementation period with an informed compliance period for one year.

Many in the importing community believe this proposal may be pushed forward or cancelled entirely based on the current economic and political environment.  Whether pushed forward or cancelled, Importers should expect the final decision by mid-November.

On August 26^th, the Department of Homeland Security (DHS) forwarded the final rule implementing 10+2 to the Office of Management and Budget (OMB).  OMB is allowed 90 days to review the rulemaking and determine whether to approve it or return it to the DHS for modification.  As part of that process, OMB will give other interested federal agencies until September 16^th to identify their concerns, while the private sector can weigh in over the next few weeks.

Accordingly, a group led by the National Association of Manufacturers has indicated an interest in a series of meetings with OMB to express its desire for a pilot test.  OMB’s ground rules are that it will entertain no new arguments outside the parameters of the views received during the comment process and focus exclusively on whether Customs and Border Protection (CBP) has met the procedural requirements of federal rulemaking in addressing them.

While CBP will apparently make some changes at the margins, insiders believe that there has been little movement on the most significant issues

The public comment period for this proposed rule has ended on March 18^th, 2008. 

U.S. Customs and Border Protection are reviewing the comments received.  Customs

is expected to finalize and publish the rule by the summer of 2008.  The planned implementation will be 6 to 12 months after the final rule is published in the Federal Register. 

The following information is intended to assist our Ocean Import clients in preparing

for the Importer Security Filing requirements.  The proposed rule covers FCL shipments.  Currently, break bulk shipments are excluded from this rule.  This may change once

the Final Rule is published.

How to prepare for the 10+2 Security Filing:

The best course of action for importers at this time would be to identify who in their organization would collect and consolidate the data.  Also, look at what data elements

are currently available and start thinking about how to collect the remaining data elements.  Communicate with your vendors and service providers and ask what are they doing to prepare for the “10+2” Security Filing.

Identify and implement a procedure for advance determination of your commodity’s HTSUS classification.   Implement or improve upon procedures for complete and accurate Country of Origin and Manufacturer determination.

Analyze your current procedures to ensure you are prepared to handle the additional filing requirements. 

The Importer is solely responsible for filing the ISF.  Most Importers will authorize a third party to file the ISF on their behalf.  The third party must be authorized by a Power

of Attorney.       

How this proposed rule could affect your business:

Filing fees - Service providers will likely charge a fee for the ISF transmitted on your behalf.

Increased potential for penalties - U.S. Customs is proposing Liquidated Damages equal to the value of a shipment for failure to file the ISF.  Importers may also face potential charges for inaccurate or missing data.

Customs Bond premium increase - Bond premiums may increase since the Sureties liability is greater due to the increased potential for penalties.

Delay in your supply chain – Collecting and transmitting the ISF data may increase the lead times at origin by two to three days.  We can also anticipate an increase in airfreight volume due to delays of containerized cargo.  Consider if any changes to your current supply chain practices may be needed such as new sourcing strategies or maintaining higher inventory levels.

Stay current with the “10+2” Security Initiative by visiting CBP’s website:

http://www.customs.ustreas.gov/xp/cgov/trade/cargo_security/carriers/security_filing/    

Additional information will be posted on our site once the Final Rule is published.