IFFCBA Presentation Wednesday, 8/13/14 eBond... · Faster STB Processing for the Trade – Brokers...
Transcript of IFFCBA Presentation Wednesday, 8/13/14 eBond... · Faster STB Processing for the Trade – Brokers...
Seminar This presentation is not open to the press and has a legal Copyright © Aug. 2014
IFFCBA Presentation Wednesday, 8/13/14
This presentation is not open to the press and has a legal Copyright © Aug. 2014
Introduction & Contacts
Lisa Gelsomino, President/CEO – Avalon Risk Management
• COAC Bond Working Group, NCBFAA ISF subcommittee, TSN eBond Subcommittee • Avalon ISF and eBond outreach to over 3,000 trade participants • ISF-http://www.avalonrisk.com/isf.html eBond-http://www.avalonrisk.com/ebond.html
• 847-700-8192 or [email protected] Hotline: 847-700-TISF(8473)
M. Craig Clark, Program Manager – CBP Headquarters
Office of Cargo and Conveyance Security (OFO) • As Program Manager, he is national point of contact for all ISF matters • Mr. Clark can be reached directly at 202-344-3052 or [email protected] • Or send questions to [email protected] • Refer to CBP ISF website for current information
http://www.cbp.gov/trade/trade-community/outreach-programs/revenue Avalon eBond Page - http://www.avalonrisk.com/ebond.html
Bruce Ingalls Director, Revenue Division Financial Operations Office of Administration (Indy) • 317-298-1107 • [email protected] • Refer to CBP Website Below
Kara Welty Debt Management Chief Revenue Division, Financial Ops Office of Administration (Indy) • 317-614-4614 • [email protected]
This presentation is not open to the press and has a legal Copyright © Aug. 2014
This presentation is not open to the press and has a legal Copyright © Aug. 2014
CBP Revenue Division Topics
• Revenue Modernization
• Bond Centralization
• eBond by 1/3/15
• PM Statement
• Bond Sufficiency
• Bad Address
• Duty Refunds (4811)
• Importer Sanctions
CBP Revenue Modernization
ISFs 33-40%
This presentation is not open to the press and has a legal Copyright © Aug. 2014
This presentation is not open to the press and has a legal Copyright © Aug. 2014
• Activity Code 1 – Importer/Broker (Entry/ISF)
• Activity Code 1a – Drawback
• Activity Code 2 – Bonded Carrier (Bonded Goods)
• Activity Code 3 – International Carrier (AMS/ACAS Filer)
• Activity Code 4 – Foreign Trade Zone (GPZ/Subzone)
Customs Bond (CBPF 301)
Continuous Bond Centralization
eSTB Bond Centralization • June 2011 DHS OIG report cited bond execution errors, deficiencies in bond
retention, and other issues that challenge CBP’s ability to collect on STBs.
• CBP has limited ability to report to Congress or Treasury on key inquiries regarding bonds.
• Enables CBP Officers to focus on trade and law enforcement mission and reduces the burden on Entry and Import personnel.
• Protects CBP by informing CBP Officers that a valid bond has been secured before cargo is released into commerce.
Trade Community Focus
• Brokers restricted to normal business hours to process bonds and entries
• Broker and Surety systems and processes are more modern and advanced than CBP’s systems, which leads to inefficiencies in accepting and processing STBs
• Standardizes the way CBP interacts with the Trade across ports
VIGILANCE SERVICE INTEGRITY
eBond Project Update
VIGILANCE SERVICE INTEGRITY
• CBP organized and hosted e-STB and eBond working group meetings: • December 2, 2013 focus on e-STB concept with limited discussion • April 2, 2014 finalize e-STB issues, start eBond discussions • June 11, 2014 TSN eBond Committee Meeting
• Key anticipated dates for eBond: • May 7, 2014 – Begin development of eBond (ACE Increment 6) • August 5, 2014 – Complete system development of eBond • January 3, 2015 – Planned deployment of e-STB and eBond in ACE
• OA and ACE Business Office continue to engage CBP and Trade to refine user requirements gathered over the last several years and prepare for development of user stories for system development.
• Process under eBond (continuous bond) will remain largely the same; continuous bond submissions will not be tied to an individual entry and Surety will still submit bond to CBP.
eBond High Level Data Flow
VIGILANCE SERVICE INTEGRITY
SNP + CX Message
Surety Sends
Reject
eSTB Bond Data Elements:
http://www.avalonrisk.com/pdf/eSTB%20Process%20Flow%20and%20Data%20Elements%20New.pdf
eBond ACE Development (Part 1)
VIGILANCE SERVICE INTEGRITY
Develop Bond Intake System (Increment 5) Provide capability to receive a bond submission via EDI
Provide capability to validate the information received in the bond submission.
Provide capability to store bond information received for use in additional processes.
Provide capability to return a positive or negative response to the surety via EDI.
Begin building ACE Portal Functionality for Bonds (Increment 5) Provide a Bond search screen for Trade
Provide a Bond view screen for Trade
Provide a Bond search screen for CBP
Provide a Bond view screen for CBP
Surety Portal 1) Submit information 2) Surety review 3) Transmit Data Elements 4) Riders 5) Terminations
CBP Desired Outcomes & Impact
VIGILANCE SERVICE INTEGRITY
Dedicated Resources with Specialized Knowledge and Expertise – Smaller group of dedicated resources focused primarily on the STB program promotes faster processing and responsiveness to issues and questions raised by the Trade.
Faster STB Processing for the Trade – Brokers and sureties will not have to duplicate efforts to complete paper STBs for data already in their own systems.
Expanded Entry Capabilities for the Trade – Automated STB submission and validation will permit 24/7 bond filing so the Trade does not have to wait for ports to open for business.
Automates Labor-Intensive STB Validation by CBP – Electronic submission and validation can expedite cargo release without increasing risk and free up resources in the field. Based on annual STB volumes (300,000 – 750,000) and avg. manual processing times (6.5 minutes per bond), could save estimated 32,500 – 81,250 man hours (15-39 FTEs) per year.
Save Time and Expedite Trade
Reducing Protests, Write-offs, and Rejections – Improved consistency in the application of STB policies and procedures will drive down potential revenue losses. CBP will have perfected STBs in-hand in all cases prior to cargo release.
Improve Collections for CBP
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Scope of eBond in ACE
• Updated CBP 301 Bond Form 99% of all Customs Bonds
• Out of Scope: Activity Code 12 (ITC), 14 (IBEC), 15 (IPR) and 17 (MTO)
• ACE ABI CATAIR Chapters for the Future Deployment of ACE eBond http://www.cbp.gov/trade/ace/catair • Appendix G Condition Codes and Text (updated to include eBond error codes and conditions) • ACE CATAIR Error Dictionary (Updated to reflect future deployment of ACE eBond) • Customs eBond Create/Update ACE CATAIR Chapter
Activity Code STB Continuous CTB Count
1 – Importer or Broker x x 174,731
1a – Drawback x x 1,049
2 – Custodian of Bonded Merchandise x 5,770
3 – International Carrier x x 5,911
3a – Instrument of International Traffic x 807
4 – Foreign Trade Zone Operator x 862
5–10 (Public Gauger, Wool/Fur, B/L, Detention, Court Costs) x N/A
11 – Airport Security x 510
16 – ISF x x 142
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Avalon eBond Process
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eBond 19CFR113 Rewrite
• 19CFR113 updated to eliminate paper requirement
– Sureties have “absolute” liability; no execution defenses
– Revised Letter of Application Requirements
– eBond will accommodate eRiders and eTerms
– Termination notice will change (from 10/30 to 15 days)
• Recordkeeping requirements (19CFR113.15) – There will be no paper bond record, only data elements – Customs Assigned Bond# will change from 9 to 10 digits
• 5106 Revisions – CBP developing new form, more data on new importers – CBP building a web portal to input information – Look for FRN in 2014
This presentation is not open to the press and has a legal Copyright © Aug. 2014
• Bond Amount: (Customs Directive 099 3510-004)
• Bond Sufficiency: Reviewers vs. Analytical Formula Duties, Taxes & Fees x 10%
(previous 12 months)
+
10% - unpaid bills not protested and less than 210 days or protested
+
$ - delinquent bills not protested and over 210 days or denied protest
+
$for unpaid debit vouchers
+
$paid by surety
= minimum bond amount or $50,000 (rounded up by increments of $10,000, up to $100,000
and then by increments of $100,000)
+
Exact Amount
+
Exact Amount
+
Exact Amount
+
Exact Amount
B
A
C
D
E
B A C D E Total Amount = + + + +
Determining Bond Amounts
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Bond Insufficiency Reviews
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Bad Importer Address
• Effective 4/8/14: CBP will render importer’s continuous bond insufficient for returned mail
• ACE Surety Portal: Avalon receives weekly notices
• Change in Mailing Address: CBP Form 5106
• Change in Physical Address: Bond Rider + CBP Form 5106
• What if Address is Correct? Letter from Importer http://www.cbp.gov/trade/trade-community/outreach-programs/bonds/bond-program/information/insufficient-bonds
• eBond Benefits – Sureties have agreed to match on IOR# – Eliminates needs for Name or Address Riders – Should help avoid many rejections we see today
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Periodic Monthly Statement
• 20,000 ACE accounts
• 68% of all duties/fees
• Over $1.6 billion in duties
• Automates payment
• Up to 600/day
• 60 Day Delay
• 40% Rejected ― No CTB on File
― Bad Address
― Authorization
― Do not request multiple times, only adds to workload and delay http://www.cbp.gov/document/fact-sheets/ace-periodic-monthly-statements-fact-sheet
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Duty Refunds and CBP 4811
• Importer Sanctions (lose immediate entry privileges)
– Obligation to pay duty is “absolute” under laws
– Unpaid Increased Duty Bills at 210 Days
– Debit Vouchers
Questions?
John Everett ACE Business Office Office of International Trade IT Alexandria Office • 571-468-5399 • [email protected] • Refer to Links Below
Randy Slusher ACE Technical Lead ACE Business Office IT Alexandria Office • [email protected]
http://www.cbp.gov/trade/ace/catair
Customs eBond Create/Update ACE CATAIR Chapter
ACE CATAIR Error Dictionary (Updated to reflect future deployment of ACE eBond)
Appendix G Condition Codes and Text (updated to include eBond error codes and conditions)
Avalon eBond Page
http://www.avalonrisk.com/ebond.html
This presentation is not open to the press and has a legal Copyright © Aug. 2014
This presentation is not open to the press and has a legal Copyright © June 2014
This presentation is not open to the press and has a legal Copyright © Aug. 2014
CBP Cargo & Conveyance Security
Augustine Moore
Acting Executive Director
Chris Kennally
Deputy Executive Director
John Landers
Director, Cargo Control
Craig Clark
Program Manager
Regina Park
ACAS Manager
Cheryl Bryce
Supervisor
• Dan Baldwin retired 12/31/13
• Todd Hoffman (LA/LB) was Acting Executive Director for 5 months
• Effective 5/13/14, Augustine Moore now Acting Executive Director
• John Landers became Director effective January 2014.
• Total Staff = 12
• HQ Policy for Cargo & Conveyance Security (CCS) – ISF, ACAS, Vessel, etc.
ISF Action Date
ISF Proposed Rule (NPRM) 01/02/08
ISF Interim Rule 01/26/09
“Flexible” Enforcement 01/26/09
“Informed Compliance” 01/26/10
CBP FAQ 07/09/10
ISF Enforcement 07/09/13
ISF Enforcement Guidance 05/13/14 CBP FAQ on ISF Guidance 05/18/14
NPRM (ISF-5) TBA ISF Final Rule TBA
ISF Document
1st notice of ISF bonds CBP 19CFR149(b)
CBP ISF Interim Rule
CBP ISF Web Page
CBP ISF Mitigation Guidelines
CBP FAQ (updates pending with OR&R)
CBP CSMS Enforcement Message
CBP CSMS #14-000283 ISF Enforcement CBP FAQ dated 05/18/14
Questions or comments to: [email protected]
ISF Timeline & Updates
This presentation is not open to the press and has a legal Copyright © Aug. 2014
This presentation is not open to the press and has a legal Copyright © Aug. 2014
ISF Statistics and Updates
Bond Statistics
10,508,000 ISFs in 2013
74,000 ISF-D Singles/Year (estimate)
99% of ISFs filed against CTBs
2014 Statistics
Over 2,500 Filers
Over 264,000 Importers
Over 13 million ISFs filed since 7/9/13
What about ACE Cargo Release?
Ocean shipments effective 1/4/14
Deployment C released 4/5/14
Will certify summary for release
ACE Cargo Release “will not replace ISF, but it will allow the filer to fulfill the ISF requirements. The approach is that if we have the data in the system, the trade will not have to send it again. CBP cannot say when this will be operational…it may be after Deployment C or a separate deployment just for the ISF integration.”
• The July 2014 deployment included an update that allows Entry and ISF to be filed for ACE Cargo Release (simplified/unified entry) and certified for Entry Summary.
• Entry and ISF data elements must be filed 24 hours prior to vessel departure date. http://www.cbp.gov/document/guidance/ace-development-and-deployment-schedule
This presentation is not open to the press and has a legal Copyright © Aug. 2014
New ISF Enforcement Guidance
ISF Enforcement
Cargo Holds Updated policy remains the same
Does not always mean an NII
Rarely means full inspection
Liquidated Damages Effective 5/13/14
Informed compliance outreach 3 warnings before port will issue
a liquidated damage claim
ISF Enforcement Effective 5/13/14
Vessel Stow Plan
Container Status Message (CSM) Data
1. Booking Party name/address
2. Ship to Party
3. Commodity HTS-6
4. Foreign Port of Unlading
5. Place of Delivery
(FROB*, IE, TE)
ISF-10 “U.S. Bound” Cargo
24 Hrs Prior to Lading*
(3461 Entries, IT, FTZ)
1. Importer of Record or FTZ Number 2. Consignee Number(s) 3. Seller (Owner) name/address 4. Buyer (Owner) name/address 5. Ship to Party name/address 6. Manufacturer (Supplier) name/address 7. Country of Origin 8. Commodity HTS-6 digit level
9. Container Stuffing Location 10. Consolidator (Stuffer) name/address
ASAP, But NLT 24 Hrs Prior to Arrival
ISF-5 “Transit” Cargo
24 Hrs Prior to Lading*
*FROB ISF-5 is required anytime prior to lading
Carrier Requirements
NLT 48 Hrs After Departure*
w/in 24 Hrs of Creation or Receipt
*Anytime prior to arrival for voyages less than 48 Hrs
For all vessels carrying containers
ISFs must contain the lowest bill of lading number (i.e., regular or house B/L) as referenced in the Automated Commercial Environment (ACE).
*Must be linked together as a line-item at the ISF shipment level
*ISFs for “exempt” break bulk shipments are required NLT 24 hrs prior to arrival
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ISF Enforcement - Local Level
Each port will implement based on local needs/resource
Port Date
LA/Long Beach 07/12/13
NY/NJ 07/19/13
Seattle 07/22/13
San Francisco/Oakland 07/25/13
Baltimore 08/05/13
San Francisco/Oakland 07/15/14
NY/NJ 08/04/14
Original ISF Enforcement Notices and New Notices
Port Notice Link
LA 13-026 Public Bulletin
Pipeline 13-027-NWK
CBP Trade Information Notice 13-17 WA
Notice 782-13-09
BWI Port Information Notice 2013-16
Notice 728-14-11
Pipeline 14-024-NWK
• Updated policy maintains local discretion at the port level based on infrastructure and staffing resources (placing cargo holds on freight vs. issuing LD claims).
• For example, non-compliant volume is high in LA/LB
• LA/Long Beach holding cargo on ISFs not filed 48 hours prior
to arrival in the U.S.
This presentation is not open to the press and has a legal Copyright © June 2014
This presentation is not open to the press and has a legal Copyright © Aug. 2014
ISF Enforcement - Local Level
Per Zepol’s 2013 U.S. Port Report: LA/Long Beach is 54% of top 20 volume West Coast: 70% of volume of top 20 volume
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• Local Policy in LA/Long Beach – LA holds cargo without an ISF on file at least 48 hours prior to arrival
– LCL Cargo: CBP places “2O” hold at HB/L level to hold container at terminal
– When CBP sees the electronic PTT, they will override the ISF hold with a “1W” authorization to transfer the goods to the CFS. • Note: CBP will remove the hold only after they have issued the manual hold to the CFS
and acknowledged back.
– CBP will place a “2O” hold on House B/Ls in the container(s), but when the in-bond entry is authorized in M1, CBP will override the hold with a “1J” in-bond authorization so cargo can move.
• Other Port Practices
• Questions/Discussion
ISF Enforcement - Cargo Holds
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ISF Cargo Holds - Carrier Data
• Port of Delivery Holds in 2014 – 698 total, average 34 per week
– 687, no ISF on File (98.5%)
– 11, ISF on file, (1.5%) but the data contains some type of compliance issue, and CBP placed a hold for further review
– Majority of POD Holds in Long Beach/LA, ORF, OAK
– Over 50% reduction from 2013, down from 78 per week
• Port of Loading Holds in 2014 – 6 Do Not Load due to No ISF on File
– Placed in error, removed when CBP was notified
• 704 ISF Holds in 2014 – 490 (70%) did not have exams
– 204 (29%) had NIIs
– 10 (1%) had intensive exams
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• Delays and Extra Costs for Importers – Inventory carrying costs could be 2-5 day shipment delay
– Costs for holding freight at origin or destination if ISF missing or late
– Costs for non-intrusive inspection (NII) or exam plus all applicable fees
– Exam charges must be paid before cargo is released
• Best Practices – File ISF timely, file updates until cargo’s arrival per 19 CFR 149.2(d)
– ACE B/L match 48 hours prior to cargo arrival for targeting purposes.
– Load cargo that has ISF acceptances in same container.
– Consolidate with other C-TPAT cargo as best practice.
– C-TPAT members can search C-TPAT Status Verification Interface
– A Flexible Filing (FR, FT, FX) must be updated 24 hours prior to cargo arrival as a Compliant Transaction (CT).
ISF Cargo Holds - Exposures
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ISF Enforcement - Outreach
• 3 Warnings
—Phone Call
—Letter
• Sample Warning Letter – Norfolk
• Standard format was provided by CBP-HQ, should be consistent
• What if warning is not correct?
• Best practices to monitor importer compliance and outreach
This presentation is not open to the press and has a legal Copyright © Aug. 2014
Impact of New ISF Policy
• Another year of “Measured” Enforcement – Over 6 years total since 1/26/09
– Claims issued within 6 months eliminates stacking exposure
• Guidance on “Significantly” Late ISFs and 3 Warnings – Eliminates nuisance claims (1-2 days late)
– 1% of ISF transactions vs. estimated 11-20% of ISF transactions
– 10-12 million ISFs x .01 = 100,000 to 120,000 “potential” violations
• First-Time/One-Shot Importers – Start with “clean” slate for known ISF violations
– Makes bonding easier for “ISF Jail” since no exposure to LD claim unless more than 3 violations; there will still be an ISF Cargo Hold
– ISF Submission Type 5 – Late ISF, No Bond on File (soon to be eliminated)
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• What about claims requested prior to May 13, 2014?
– CBP HQ will not approve liquidated damages prior 5/13/14
– Except in cases of criminal activity or fraud
Impact of New ISF Policy
• Large/High Volume Importers
– Is policy unfair? Per CBP, “no” since ISF laws have been in force since 1/26/09; provided ample time to meet the laws.
– An enforcement policy based on percentage of volume is also unfair to less experienced importers.
– Larger importers have invested in compliance; don’t typically have ISFs that are considered “significantly late”
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Impact of New ISF Policy
• Importer has 5 ISF violations over next year
– All “significantly” late ISFs (based on local port policy)
– Old Policy: $5,000 x 5 = $25,000 / $11,000 / $5,500
– New Policy: $5,000 x 2 = $10,000 / $ 3,500 / $1,750
– Overall Benefit: $15,000 / $ 7,500 / $3,750
# Action Old Policy Mitigate C-TPAT New Policy
1 Email $5,000 $1,000 $ 500 $0
2 Phone Call $5,000 $2,500 $1,250 $0
3 Letter $5,000 $2,500 $1,250 $0
Total $15,000 $6,000 $3,000 $0
4 LD Claim $5,000 $1,000 $ 500 $ 500-$1,000
5 LD Claim $5,000 $2,500 $1,250 $1,250-$2,500
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• Liquidated Damages
– How does the new policy impact LD exposures?
– Will ISF violations receive LD claims routinely like Late Entries?
Impact of New ISF Policy
100/Year % # Worst Best C-TPAT New C-TPAT C1 Bond
Violation 3% 1-3 $ 15,000 $ 6,000 $ 3,000 $0 $0 N/A
Violation 5% 5 $ 25,000 $11,000 $ 5,500 $3,500 $1,250 N/A
Violation 10% 10 $ 50,000 $23,500 $11,750 $17,500 $8,750 $50,000
Violation 20% 20 $100,000 $48,500 $24,250 $41,000 $20,500 $50,000
• Worst assumes $5,000 liquidated damage per violation, no mitigation
• Best assumes $1,000 for 1st time violation, $2,500 for all subsequent violations
• C-TPAT assumes 50% reduction of Best
• New is New Policy but doesn’t reflect 50% C-TPAT reduction
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Mitigating Factors • ISF-5 for FROB cargo is not subject to liquidated damages at this time, but would be subject to same
violation types and mitigating factors.
• 6 Mitigating Factors: 1) ISF progress since 1/26/09; 2) Small # of violations to shipments (as %);
3) C-TPAT Tier 2 or 3 status; 4) Demonstrated action to reduce future violations; 5/6) ISF filed late or inaccurate, can mitigate if due to factors outside importer’s control (such as carrier error).
• 4 Aggravating Factors: 1) Non-cooperative; 2) Multiple errors on the ISF;
3) Rising/Deteriorating Error Rate; 4) Smuggling/Fraud.
Violation Type Cause Max. 1st Violation All Other C-TPAT
ISF-10 Filing Late File $5,000 $1,000-$2,000 $2,500 50%
ISF-10 Filing Inaccurate Filing $5,000 $1,000-$2,000 $2,500 50%
ISF-10 Filing Inaccurate Update(s) $5,000 $1,000-$2,000 $2,500 50%
ISF-10 Filing Withdrawal/Deletion $5,000 $1,000-$2,000 $2,500 50%
ISF Mitigation Guidelines
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ISF Mitigation Best Practices
• Importer’s ISF Performance Record – How long has importer been compliant with ISF?
– Emphasize importer’s compliance record (especially 3 warnings)
• Timeliness/Accuracy (95% timely/98% accurate)
• Include ISF Progress Report (from Filer or ACE portal)
• Overall cooperation
• C-TPAT Status – Request 50% mitigation based on C-TPAT status of importer
and/or ISF Filer.
• Describe Nature of Error or Violation – If clerical in nature, describe why it occurred?
– Was carrier at fault? Provide specific details.
– Was it a one-time or repeat violation? Explain.
– Outline how future violations will be avoided.
ISF Mitigation Best Practices
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• Maintain Records for Mitigating Factors in Petitions – CSMS# 14-000428 - Delays in processing X.12 ISF filings 07/20/14
– CSMS# 14-000410 - Delays in ISF Processing 07/11/14
– CSMS# 14-000374 - Delays in ISF Processing 06/27/14
– CSMS# 14-000359 - Delays in ISF Processing 06/20/14
– CSMS# 14-000260 - Disruption to ISF Bill Matches 04/17/14
– CSMS# 14-000219 - Delays in ISF Processing 04/17/14
– CSMS# 14-000129 - ISF Rejections 03/20/14
• Other Mitigating Factors – Carrier changes the B/L number causing a mismatch
– ISF was filed timely but B/L mismatch made it appear late
– One of the 3 ISF warnings was made in error based on the above or another reason, petition 4th claim for relief
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ACE ISF Portal
• All ACE accounts access ISF reports in same manner – Go to References Tab
– Select Task “Links” from Menu Panel on the left
– Button to “Launch ISF” will appear
• “Launch ISF” will open new window – Sign up for reports in Reports Menu
– Reports will then appear in Reports Tab (check daily) CSMS #11-000155 effective 7/13/11 http://apps.cbp.gov/csms/viewmssg.asp?Recid=18395&page=9&srch_argv=11-000155&srchtype=&btype=abi&sortby=&sby= http://apps.cbp.gov/csms/docs/18395_749938721/Final_Information_Notice_ISF_Portal.pdf
This presentation is not open to the press and has a legal Copyright © Aug. 2014
ISF Progress Reports
• Per CBP, only an estimate of ISF compliance
• C-TPAT tier 2 and 3 receive line item detail
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ISF Progress Reports
• Measures ISF Timeliness based on Vessel Departure Messages (VDMs) received by CBP minus 24 hours per local time (based on mother vessel)
• “ISFs Not Measured for Timeliness” occur when no VDM received by CBP.
• Per CBP, these are not late ISFs and do not negatively affect an importer’s compliance rate.
This presentation is not open to the press and has a legal Copyright © Aug. 2014
ISF Reports in ACE
• CSMS #12-000031 dated 2/1/12
• Late ISF Report for ISF Filers and Importers
• By Filer by Importer Report — Available in PDF or Excel
— Allows for line item detail and compliance
This presentation is not open to the press and has a legal Copyright © Aug. 2014
ISF Surety Data in ACE
• Surety receives snapshot of ISF activity (monthly) • Since 3/10/14, surety receiving vessel departure message/date
• ISF Transaction Count based on Avalon Data – Based on Avalon data (ACE portal July 2011, VDMs March 2014
– Format/Filer: 80% ABI; 20% AMS
– Status: 99.89% Accepted; .11% Rejected
– Action Reason: 98.28% CT vs. Flexible Filing (FR, FT, FX)
– Bond Type: 98.4% CBs; 1.6% STBs
– ISFs Late: 16% based on Avalon’s data (not fully populated yet); 11% with more data (not complete data)
Bond
Holder
ISF
Imp #
ISF
Imp
Name
Filer#
Name VDM
ISF
Sent
Date
Formt Action Status Action
Reason
Shipment
Type
ISF
Status
ISF
# SCAC
Bill
#
Bill
Type
Bond
Type
Bond
Code Error
Bond
#
Name
09/10/13
01:38:10
PM
09/06/13
01:38:24
PM ABI Add Active CT 01 Accepted BM 9 16 STB#
IR#
09/08/13
2:10:28
PM
09/13/13
04:19:38
PM AMS Add Active CT 01 Accepted OB 8 1 CTB#
Contact and Links to Information
Avalon Risk Management
ISF/eBond Questions Group email: [email protected], Hot Line: 847-700-8473
ISF Claim Questions Zuleika Medina: [email protected], Surety Claims Manager
eBond Questions: [email protected]; eBond http://www.avalonrisk.com/ebond.html
ISF and ACAS Information http://www.avalonrisk.com/isf.html; http://www.avalonrisk.com/acas.html
CBP
Craig Clark [email protected] or [email protected]
CBP ISF Page http://www.cbp.gov/border-security/ports-entry/cargo-security/importer-security-filing-102
CBP ISF FAQs http://www.cbp.gov/sites/default/files/documents/10_2faq_0.pdf http://www.cbp.gov/sites/default/files/documents/Addendum to FAQ_Updated ISF Enforcement Strategy.pdf
ISF Mitigation Guidelines http://www.avalonrisk.com/questnewsletter/news/mitigation.pdf
Bond/eBond http://www.cbp.gov/trade/trade-community/outreach-programs/revenue http://www.cbp.gov/sites/default/files/documents/bond_form_7.pdf http://www.cbp.gov/trade/ace/catair (eBond/CATAIR)
This presentation is not open to the press and has a legal Copyright © Aug. 2014
Questions?
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This presentation is not open to the press and has a legal Copyright © Aug. 2014
100% Air Cargo Screening
• The 9/11 Commission Act (Pub.L. 110–53) required 100% air cargo screening by August 1, 2010.
• TSA’s Certified Cargo Screening Program addresses this domestically along with Known Shipper 49 CFR 1548.17
For more information on TSA or the CCSP program,
visit http://www.tsa.gov/certified-cargo-screening-program
or email [email protected]
This presentation is not open to the press and has a legal Copyright © Aug. 2014
The Story of ACAS
• On October 28, 2010, the global counter-terrorism community disrupted a potential attack when individuals with ties to the Al-Qaida in the Arabian Peninsula in Yemen attempted to conceal and ship explosive devices in cargo on board aircraft ultimately destined for the United States.
• The ACAS Pilot was launched December 2010
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CBP & TSA Collaboration
• On November 3, 2010, CBP and TSA began meeting with various trade partners to better understand individual business practices and develop a mechanism to collect advance cargo data as soon as possible in the supply chain as a security filing type.
• CBP found data was available prior to departure.
Action Date
ACAS Pilot Launch Dec. 2010
ACAS Strategic Plan Mar. 2012
ACAS FAQ Jul. 2012
ACAS Pilot FRNs Oct. 2012
ACAS Filer Bonding? Oct. 2013
COAC Recommendations Aug. 2013
ACAS Pilot Extended July 2014
ACAS Documents
19 CFR 122.48a (Air Cargo Manifest)
ACAS Strategic Plan
ACAS FAQ
77 FR 65006, 77 FR 65395, 77 FR 76064
ITSA - 19 CFR 113.64 Sufficient for Filer
COAC ACAS Working Group
FRN 17724 pilot 7/26/15; application 9/26/14
Timeline & Updates
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• 77 FR 65006 is the original FRN that provides ACAS pilot application and eligibility requirements • 77 FR 76064 extended the ACAS pilot until July 24, 2014; FRN 17724 extended through July 26, 2015 • The work products do not contain official COAC recommendations, they contain research, opinion and suggested
recommendations for the appropriate COAC subcommittee members to consider. • ACAS Working Group Paper on ACAS Compliance Regime • ACAS Working Group paper on ACAS Data Elements • ACAS Working Group Paper on ACAS Self-Filer Solution - Freight Forwarder on Conventional Carriers • ACAS Working Group Paper on ACAS Self-Filer Solution - Integrated Carrier on Conventional Carriers
This presentation is not open to the press and has a legal Copyright © Aug. 2014
ACAS Background
• Purpose: Response to October 2010 Yemen cargo plot
• Goal: Target and mitigate high-risk air cargo prior to loading of cargo no later than the last foreign port of departure
• Targeting: Joint targeting performed by CBP and TSA at the National Targeting Center-Cargo
• Scope: Global
• Duration: 3+ years
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ACAS Background
Partners: • The Transportation Security Administration • Air Cargo Stakeholders—Express Carriers, Passenger Airlines,
Freight Forwarders, and Heavy All-Cargo Carriers
Lessons: • Pre-loading shipment information is available early in the supply
chain, sometimes as much as 12-20 hours prior to departure. • Shipment risk can be identified with subset of currently required
data and existing data elements. • Industry partnership is key in balancing security and facilitation • http://www.cbp.gov/newsroom/video-gallery/2014/02/advance-screening-initiative
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0
20000000
40000000
60000000
80000000
100000000
120000000
140000000
160000000
2011 2012 2013 2014
Shipments
ACAS Shipments
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ACAS Countries
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ACAS Pilot Participants
57
Operational (Transmitting Data and
NTC Holds)
• 17 total in Pilot
• 4 Express Carriers
• 7 F/Fs
• 6 Passenger Airlines
Pre-Operational
• 32 Pre-operational
• 16 Passenger Airlines
• 9 F/Fs
• 6 Heavy Cargo
• 1 Express Carrier
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ACAS NPRM Status
• Earlier this year, CBP started the NPRM process.
• The NPRM will be published after all the legal and economic impact reviews are completed and cleared through the relevant U.S. government agencies.
NPRM Public
Comment Final Rule
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ACAS Pilot – Participation
• Pilot Expires July 26, 2015
– Will NPRM be issued by then?
– Pilot Application now open through September 26, 2014
• Pilot Participation (Requirements 77 FR 65006)
– Those interested in participating in the ACAS pilot should submit an email to [email protected] from designated point of contact stating their interest and their qualifications.
– The email will serve as an electronic signature of intent.
– Pilot participants will receive technical, operational, and policy guidance through all stages of pilot.
– Number of applicants CBP will accept will depend on CBP resources
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ACAS Pilot – Eligibility
• Restrictions – No restrictions with regard to organization size, location, or commodity
type. ACAS participant can pick desired trade lane.
– Participation is limited to those parties with sufficient information technology infrastructure and support
• Technology Infrastructure (77 FR 65006) – Existing connection and secure VPN with CBP
– Interconnection Security Agreement (ISA)
– ACAS pilot participants will need to establish operational security protocols that correspond to CBP hold messages that require the participant to take responsive action and respond to CBP
– Respond promptly with complete and accurate information when contacted by the NTC with questions regarding the data submitted; and follow any Do Not Load instructions.
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ACAS Pilot – Data Elements
• Minimum ACAS Data Elements (subset of 19 CFR 122.48a) – (1) House Air Waybill Number/Level
– (2) Total Quantity/Piece Count based on the smallest external packing unit
– (3) Total Weight
– (4) Cargo Description
– (5) Shipper Name and Address
– (6) Consignee Name and Address
– Subject to change under future FRN or NPRM
• ACAS Filing Timeframe/Deadlines – Earliest point practicable prior to loading of cargo onto the aircraft
ultimately destined for or transiting through the United States.
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Two-Part Carrier Filing Forwarder-Carrier
Dual Filing Single Filing
Air carrier transmits ACAS data to CBP prior to cargo loading and perform all required screening.
FF transmits pre-loading ACAS data to CBP.
FF may resolve ACAS holds if recognized by TSA.
Air carriers may retransmit previously filed ACAS data
Air carriers accept forwarder cargo for transport after ACAS transmission, and resolves ACAS holds as appropriate.
Air carriers transmit the AMS manifest to CBP prior to cargo loading and perform all required screening
The pre-loading ACAS transmission will be used by CBP to satisfy both ACAS and 19 CFR §122.48a requirements.
All participants must still comply with existing regulations and submit all post-departure
Air Automated Manifest System (AMS) data in accordance with 19 CFR §122.48a.
ACAS Pilot – Filing Options
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ACAS Pilot – Requirements
• ACAS Pilot Participants – (1) Mitigate, according to TSA screening protocols, any threat which is
identified by the NTC;
– (2) respond promptly when contacted by the NTC with questions regarding the data submitted;
– (3) Follow Do Not Load instructions; and
– (4) partake in regular teleconferences or meetings established by CBP
• ACAS Compliance During Pilot – No legally binding obligations on either CBP, TSA or the pilot participant.
– CBP does not intend to enforce claims or punitive measures in ACAS pilot
– Does not alter obligations to comply with applicable statutory and regulatory requirements, including 19 CFR 122.48a penalties.
– Does not exempt TSA security program requirements or sanctions for controlled substance or prohibited articles.
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Freight Forwarder Perspective
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Freight Forwarder Perspective
• Disadvantages
– Air Freight Forwarder Coalition • ACAS should maintain level playing field for all filers
• Unknown how NPRM will address these concerns/issues
– 24/7 Operation and Resources • Office/Agent Network and Supply Chain
– Technology Investment/Requirements • Communication Connections
• Electronic Messaging Capabilities (CargoIMP, flat files)
• DNL Messages
• HAWB Data Collection and Accuracy
• Timeliness to meet ACAS deadlines
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ACAS Bonding Requirements
• During ACAS Pilot (ITSA Opinion) – Participation in the ACAS pilot does not alter obligations to comply
with 19 CFR 122.48a to file Air Cargo Manifest
– International Carrier Bond per 19 CFR 113.64 is required for Manifest
– Bond Conditions for 19 CFR 113.62(k)(2) address advance cargo information similar to AMS Filer
– $5,000/violation (mitigate to $500) up to $100,000/per conveyance
– Liquidated damages limited by bond amount (C3 - $50K to $150K)
• Common International Carrier Claims for Avalon – Failure to report arrival of conveyance (42%)
– Untimely filing of Cargo Declaration (40%)
– Manifest Discrepancies or no Manifest (14%)
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ACAS Enforcement
• Per COAC Meeting Notes 2013
Final regime based on NPRM
CBP Position consistent with transactional approach for
• Entries • ISF • AMS
How will CEEs change this landscape?
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ACAS Filer Liabilities
• Future Perspective – Won’t know until NPRM/Interim Rule issued
– Do Not Load and Screening Requirements are the primary concern
• TSA CCSF Liability Considerations
– Death/Bodily Injury liability
– 3rd Party Property Damage liability
– Workers Compensation/Employer Liability Exposure
– Increased risk of damage or pilferage during handling or screening
– Potential for improper packing during re-palletization
– E&O exposure during pallet breakdown/re-build (CCSF Endorsement)
• Insurance Considerations
– TSA SAFETY Act offered protection in some cases; ACAS is Trade Act
– Scope of CGL policy is critical
– E&O Coverage
This presentation is not open to the press and has a legal Copyright © Aug. 2014
Questions?
This presentation is not open to the press and has a legal Copyright © Aug. 2014