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[Logistic Security Control and Customs Regulations in USA]
Various security controls corresponding countermeasures for terrorists have introduced to the United States since the 9/11 terrorist attacks. These countermeasures in the United States are outlined as follows, ① not a single security control but means of a multiple security control, ② means of preventing dangerous substances from exporting port, ③ means of centralized control on the goods with high risk.
Such as Container Security Initiative (CSI), Customs-Trade Partnership Against Terrorism (C-TPAT), 24-hour rule, 10+2 program, The Bioterrorism Act, etc. means of multiple security control have introduced as countermeasures.
If do not meet the required implementation of such security control, deferred extradition, seizure of goods, etc. punishment is followed or even impossible to proceed trade with the United States.
When export goods to the United States, it is recommended to comprehend these systems of the United States beforehand, otherwise liable to be subjected to increased cost, failure to customs clearance, extradition date delayed, etc.
In most cases, implementation of these security controls are performed by following main bodies, such as forwarder, shipping company, customs clearance company, US Customs and Border Protection (CBP) and other government agencies, but since it is closely related to exporters and importers, relevant brief descriptions will be outlined as below.
※ Types of logistic security control in USA
ㅇ Container Security Initiative (CSI)
ㅇ 24-hour rule
ㅇ 10+2 program (ISF)
ㅇ 100% Screening - SFI, CCSP
ㅇ The Bioterrorism Act
■ Control agency
ㅇ Since 9/11 terrorist attack, Customs and Border Protection (CBP) become one of the Department of Homeland Security's largest components in addition to controlling entry. It has a responsibility for keeping terrorists out of the U.S. and securing homeland. so C-TPAT, 24-hour rule, 10+2 rule, etc are controlled by CBP.
For about 40 federal agencies, CBP plays a central role for preventing hazardous entry by CBP itself or cooperation with other relevant Department while enforcing about four hundred of U.S. laws and regulations.
ㅇ Transportation Security Administration (TSA) is one of Department of Homeland Security (DHS) to guide the standard for excellence in air cargo security.
ㅇ Food and Drug Administration (FDA) is responsible for guarding safety of food, drugs, medical devices, cosmetics, radiation-emitting products, etc. as a subordinate agency of Health & Human Services. In order to prevent entry of chemical and biological weapons, FDA executes according to the Bioterrorism Act and place importance on counterterrorism operation at the same time, such as registration of food facilities, advance notice on shipments of imported food, etc.
■ Container Security Initiative (CSI)
ㅇ CSI is implemented on March of 2002 under the jurisdiction of the CBP. CBP officers are sent to foreign port to inspect high-risk cargo destined to the United States together with host customs for prevent terrorism with maritime containerized cargo imported into the United States that can nip in the bud.
ㅇ CSI is now operational at over 70 main ports and over 90% of maritime containerized cargo imported into the United States.
ㅇ Through CSI, CBP officers work with host customs administrations for identifying high-risk containers, so export/import companies are not required to do anything by themselves in this step. However, it is recommended to try to comprehend high-risk factor in advance. once determined as high-risk cargo, the container will be inspected before they are placed on vessels destined for the United States and it may be prohibited or banned based on the result of inspection.
ㅇ High-risk cargo is prescreened and determined with the data of CBP based on cargo information of 24-hour Advance Manifest Rule or 10+2 program.
ㅇ The mission of CSI team arranged to foreign countries is to conduct 100% inspection container destined to the United States according to loading data and identify high-risk cargo. CBP officers and National Targeting Center (NTC) will proceed cargo-screening according to the manifest data and investigate imported cargo with the additional help of foreign customs, if necessary.
※ Customs-Trade Partnership Against Terrorism
☉ What is C-TPAT?
C-TPAT is implemented by CBP beginning 2002 as a part of anti-terrorism and is voluntary choice for enterprise whether growing as partnership or not. C-TAT members are considered low risk and are therefore less likely to be examined based on a company's past compliance history.
C-TPAT is not a program required by law but a program of CBP its controlling, but C-TPAT has included in Safe Port Act which is established on October of 2006.
The purposes are as follows, ① Secure and make sure safety of supply chain from manufacture to arrival of final destination, the United States. ② prevent terrorism by inspection of high-risk cargo. ③ Promote trade by reducing examination rate and share best practices of security measurements among participants.
From CBP's perspective, ① Much more power can be concentrated on high-risk cargo with limited resources by linking the various international industry partnership program. ② The security of the supply chain, including national and international participants, is achieved.
☉ What is benefit of C-TPAT membership?
The benefit of C-TPAT members are reduction of examination rate, priority treatment during examination, given approval for using FAST lane which is designated for Canada and Mexico, or mitigated punishment relating to <10+2 rule>, etc. C-TPAT license is useful for enhancement of trust with the traders and expanding business scale, so currently critical players in the global supply chain, such as carrier, forwarder, customs clearance company, etc. try to get certification in addition to importers.
☉ Eligibility for participating C-TPAT
C-TPAT partners are participants in the international supply chain, including U.S. importers, licensed U.S. customs brokers, U.S. sea carriers, U.S. forwarders, U.S. marine port authority and terminal operators, Mexican and Canadian manufacturers of imported goods to the United States. Only Canadian and Mexican exporters are eligible for C-TPAT member. When validation for importers, exporters are requested cooperation occasionally.
☉ Kinds of C-TPAT certification
Applicants provide company information and sign an agreement to work with CBP profile, also provide CBP with a security profile outlining the specific security measures the company has in place. It has three kinds of certification and corresponding benefits followed from one to another.
① Tier 1
Tier 1 consists of those companies that have submitted their security plan, had security plans approved by CBP, but have not validated by CBP. The Tier 1 companies will receive the benefit of reduction of exam rate for their imported goods to the United States.
② Tier 2
Tier 2 consists of validated C-TPAT companies on the basis of presented security plans. The Tier 2 companies will not only get further reduction of exam rate, also get priority of treatment. These companies are available for using Free and Secure Trade (FAST) lane for entry while transported by truck from the border of Canada and Mexico as well.
③ Tier 3
Tier 3 consists of those fully certified, validated C-TPAT partners who exceed the minimum standards. On the basis of Tier 2 benefit, Tier 2 companies are subjected to relatively infrequent inspection and quickly taking over goods in case of emergency.
Tier 3 is given completely trusted companies by CBP and the number of them is only about hundreds of companies.
※ The application procedures for participants of supply chain, such as forwarder, customs clearance companies, etc. are the same with U.S. importers. However, unlike U.S. importers, there is no tier classification and only after completion of validation can be considered as a C-TPAT member.
☉ C-TPAT security profile
Applicants shall sign an agreement to work with CBP to protect the supply chain and have company information, security profile, etc. entered on CBP web site. Security profile shall include several fields, such as business partner, security procedure, physical security, personnel security, access control, security training, information security, transportation security, etc.
Corresponding company is certified as Tier 1 company after security profile reviewed and get approval from CBP.
☉ Validation of C-TPAT
After C-TPAT security profile certified, validation will be conducted by CBP officers on companies those who want to acquire Tier 2 or supply chain participants in addition to importers.
Safe Port Act stipulates that validation shall be conducted within 1 year after security profile certified and shall be completed within 10 working days.
Check security profile of supply chain and U.S. national, overseas devices; also check whether meet with required C-TPAT guideline. Tier 2, Tier 3 will be separately determined in accordance with company security measures on the evaluation of validation.
Though C-TPAT has been validated, it shall be validated at least every four years.
☉ Company's response
Whether a company participates C-TPAT or not is voluntary choice. but it is quite complex procedure and require expenses and time to complete, so it is better to compare gain or loss for participating C-TPAT.
Whether a company need participate C-TPAT, it depends on the annual cargo volume, whether has delay in inspection cargo and required expenses of taking security measures.
Though forwarders and customs clearance companies and other companies other than importers cannot get direct advantages, it is useful for enhancing trusted relationship between business partners, thus expanding business scope.
Currently, the number of C-TPAT partners is more than 10,000, and the imported cargo to the United States accounts for half of total import volume.
☉ C-TPAT and AEO
After 9/11 terrorist attack, entry delayed for establishment of C-TPAT program, etc. For this reason, AEO system is introduced to strengthen relevant regulations of World Customs Organization (WCO) in 2005.
The purpose, procedure, effect of AEO system are similar to C-TPAT program and all member countries of WCO shall be obliged to introduction of AEO system.(but not all enterprises of corresponding countries are required to get AEO certification, it is voluntary choice for company itself.)
Currently, C-TPAT and AEO are mutual recognized in the United States and some other countries. AEO certification is also considered as C-TPAT in mutual recognition countries.
※ So far, the United States signed mutual recognition agreements with New Zealand, Canada, Jordan, Japan, Korea, EU, Taiwan, etc. and it is on trend of expansion.
■ 24-hour Rule
It is a rule required by CBP in principle, which airline or sea carriers are obligated to submit Manifest data 24 hours before lading at foreign ports for all ocean containers bound for the United States. Submitted manifest data is used for the purpose of identifying high-risk cargo.
☉ submission of obligator, scope, method
ㅇ Manifest data may be submitted by exporters, importers, carriers (shipping company, airline, etc.) or consigned forwarder or Non-Vessel Owning Common Carrier(NVOCC).
ㅇ 24 Hour Rule is applied to cargo destined to the United States and destined to a third country via the United States.
ㅇ Manifest data is submitted electronically and mainly handled by Automated Manifest System (AMS) at present.
ㅇ Manifest data include ① Cargo data(name, dangerous goods codes, B/L number, container number, etc.). ② consignor and consignee's name, address, ID, etc. ③ modes of transportation and shipping data (port of departure , port of arrival, voyage number, vessel name, etc.), totally 14 items to be filed.
☉ Inbound transmission times and responsibility for inaccurate data
The time requirements for carriers to submit manifest data is different depending on modes of transportation.
ㅇ Container vessel : 24 hours before shipments
ㅇ Bulk vessel : 24 hours before arrival of the United States
ㅇ Maritime transportation within 24 hours sailing time : 4 hours before arrival
ㅇ Air : 4 hours before arrival of the United States
ㅇ Air from Canada, Mexico, Central and South America : before departure of airport.
ㅇ Rail : 2 hours before arrival in the United States
ㅇ Truck : 1 hour before arrival in the United States or 30 minutes before arrival for FAST participants.
The cargo without submission manifest data in stipulated time in accordance with 24-hour Rule may be liable for banned shipment, prohibition of unloading, a penalty less than 10,000 dollars at the port of the United States.
☉ Effect on exporters
Due to this rule, cargo is requested to transport to container yard beforehand as shipping company need to transmit correct manifest data to CBP prior to departure.
Thus, exporters should get cargo prepared in advance, port have to burden storage time and circulation of inventory correspondingly.
In addition, though manifest filing fee (AME fee) is collected from shipping company or forwarder, eventually it will be transferred to the exporters and become a reason of raising exporters' cost. (approximately $50 for per B/L)
■ 10+2 Rule (ISF)
<10+2 Rule> applies to import cargo arriving to the United States by vessel and refers to 10 data element provided by importers, 2 data element provided by shipping companies that files CBP.
* Official name : Importer Security Filing and Additional Carrier Requirements (ISF)
<10+2 Rule> is enforced from 2010 to strengthen and supplement above-mentioned systems and for preventing against terrorist attack and identifying high-risk cargo.
☉ What must be filed and who is responsible for filing
ㅇ <10+2 Rule> is only applied to cargo arriving in the United States by ocean vessel; it does not apply to cargo arriving by other modes of transportation.
ㅇ Importer, the goods' owner, purchaser, consignee, or agent such as a licensed customs broker is required to submit the Importer Security Filing by <10+2 Rule> and it is different from entry filing. However, unified filing of entry and ISF is permitted in a electronic method.
ㅇ ISF importer or their agent must electronically submit certain advance cargo information to CBP. Document filing is not permitted. Automated Manifest System (AMS) and Automated Broker Interface (ABI) are used for transmission required information at present. But it will be required to use ACE instead of AMS and ABI to transmit relevant information in near future.
ㅇ Importer is required to submit 10 data elements, it is also possible for entrust an agent. In fact customs clearance company, forwarder, software company and other bodies provide 10 data element declaration service at paid fee.
☉ 10 data elements to be declared
1) Goods intended to be entered into the United States (10 data elements to be declared)
ㅇ Data element to be declared 24 hours before shipment
①Seller (or owner)
②Buyer (or owner)
③Importer of record number/foreign trade zone applicant identification number
ㅇ Data elements to be declared 24 hours before shipment and can be updated not later than 24 hours prior to a ship's arrival at U.S. port.
⑤Manufacturer (or supplier)
⑥ hip-to party
⑦Country of origin
⑧Commodity Harmonized Tariff Schedule number
ㅇ Data elements to be declared 24 hours prior to a ship's arrival at U.S. port
⑨Container stuffing location
2) Goods intended to be delivered to a foreign trade zone (5 data element to be declared)
For goods intended to transport to other countries, Importer Security Filing must consist of five elements, different from goods intended to be consumed in the United States.
①Booking party, ②Foreign port of unlading, ③ Place of delivery, ④ Ship to party, ⑤ Commodity HTS Code (6-digit)
It is also required to file by ABI or AMS electronically instead of document and submitted any time prior to lading, which is quite different from above 10 data elements.
For goods intended to transported to other countries, importer here refers to the applicant of shipping company, Immediate Export (IE) or Transportation and Exportation (T&E).
3) B/L number submission
Submitted B/L number in 10 or 5 data elements must be the same as B/L number filed in 24-hour Rule, for CBP review 10 or 5 data elements together with 24- Hour Rule.
☉ 2 data elements declared from carrier
The carrier is required to submit ① Vessel stow plan and ② Container status messages additionally on the basis of manifest data submitted in 24-hour Rule.
ㅇ Vessel Stow plan
Vessel stow plan containing information relating to the vessel and each container laden on the vessel destined to the United States , is submitted no later than 48 hours after carrier's departure from the last foreign port.
ㅇ Container Status Message
Container Status Message refers to specific information relating to container in an tracking system (e.g. Booking information, movement of status arrival and departure of port, etc.). Carriers must submit Container status Message no later than 24 hours after the message is entered into the carrier’s equipment tracking system.
☉ Effect of violation
Violation means failure to complete required filing of <10+2 Rule>, missing filing time or error of filing, etc. Violation of <10+2 Rule> will cause following results.
ㅇ For undeclared and identified evidence of illegality, smuggling or terror ⇒ not
permitted for lading or seizure of cargo.
ㅇ For undeclared and no customs bond ⇒ release of cargo is not permitted.
ㅇ For undeclared and presented customs bond ⇒ goods of release delays and liquidated damages assessed.
ㅇ For filing of delay, incomplete, inaccurate ⇒ liquidated damages assessed.
$5,000 is assessed for per violation of 10 data elements submission and the maximum is up to $10,000 for per violation as liquidated damages.
For 2 data elements from carriers, violation of Vessel Stow plan is assessed $50,000 and violation of Container Status Message is assessed minimum $5,000, maximum $10,000.
Importers are required to position customs bond for assuring above penalties, when have presented continuous bond, no need to prepare additional bond.
☉ Cooperation for collecting information
Though importers are responsible for filing 10 data elements, in most case, the relevant information are actually spread on each body.
For instance, manufacture, country of origin and other information is from exporter, container stuffing location is from exporter or forwarder.
Thus importers should establish method to collect these information rapidly together with exporters.
■ 100% Screening
1. Secure Freight Initiative (SFI)
ㅇ The core of Secure Freight Initiative (SFI) is to ban all the maritime containerized cargo without getting through 100% screening. It is a part of the Safe Port Act which is on the basis of 9/11 commission Act.
ㅇ The main point is that ① all the maritime container (except military cargo) destined for the United States must be scanned ②prior to lading ③by scanning technology including radiation portal monitors, non-intrusive imaging equipment.
ㅇ Unlike centralized management of dangerous cargo, it seriously affects the logistics system if implementing pre-inspection for all the maritime containers.
Though security is strengthened, several counties in addition to the United States oppose to the management method as installation of cargo inspection facility at each port, place of facility installation, serious problems on logistic system still are not resolved.
ㅇ These points had expected to be fully resolved in 2012, but it is held off to July of 2014.
2. Certified Cargo Screening Program (CCSP)
ㅇ The core of Certified Cargo Screening Program (CCSP) is that unless cargo transported in the holds of passenger airplanes originating in the U.S. or destined to the U.S. without 100% screening are subjected to banned release or cannot be loaded.
ㅇ The program is based on the 9/11 Commission Act and begun on December 3rd of 2012. the Transportation Security Administration (TSA) is charged with enforcing it.
ㅇ Characteristics of the program is as below.
① It applies to cargo transported by air.
② It applies to the cargo transported in holds of passengers aircraft.
③ It applies to the cargo transported not only originating from the United States but also cargo destined to the United States from other countries.
④ Inspection on the departure airport and the owner of cargo burden the inspection fee.
⑤ Cargo from known shipper who meets certain standard of TSA can be loaded on an airplane but it is impossible for cargo from unknown shipper who doesn't meet the standard of TSA to load on. It is necessary to load on cargo plane.
⑥ Inspection method is combined with manual inspection by opening or non-contact inspection devices (X-ray or radiation detection devices)
■ Security regulation of The Bioterrorism Act
Since 9/11 terrorist attack, The Bioterrorism Act took into effect on June of 2002 to enhance the overall security of U.S. food supply.
The Bioterrorism Act puts target at assuring food security from terrorism. It including registration of facility, prior notice, instruction of FDA, keeping and providing record of food, etc. Furthermore monitoring system is used at each step of food manufacture and food supply by each area, state or federal government for constant monitoring.
Here, requirements for enterprises are outlined from the point of logistic security. Mainly ① registration of food facility and ② prior notice are described, others are described at food sector in detail.
☉ Registration of Facility
The Bioterrorism Act requires that all domestic and foreign food facilities that manufacture, pack, or hold food for human or animal consumption in the United States must register with the FDA.
imported food without registration of facility are not permitted for entry, even samples for exhibition imported to the United States are required to make registration.
Registrations may be submitted electronically via the internet, or by paper through mail or by fax. Registrations may also be submitted on CD-ROM by mail in case of a lot of registration information.
Required information for facility registration is facility name, address, phone number, and emergency contact phone number; parent company name, address, and phone number of the owner, operator, or agent in charge; all trade names the facility uses, etc. Online registration is free of charge. After facility registration, FDA will confirm the registration and assign a registration number immediately.
If any of the required information on your registration form changes, one of authorized individual must notify within 60 days. Procedures of registration cancellation are taken to going out of business with corresponding facility.
Food facility located outside the United States must also designate a U.S. Agent, who lives or maintains a place of business in the United States.
☉ Prior Notice
While imported food to the United States, it requires prior notice submitted for any shipment in addition to registration of facility.
Anyone who has required information for Prior notice is available for submission. The time of prior notice is 8 hours before arrival by water, 4 hours before arrival of by air. In fact, it is common to be submitted by customs clearance together with filing entry.
Generally, filing entry is submitted electronically to CBP by customs clearance company. Since system interconnection of CBP and FDA, the data of filing entry submitted by customs clearance company automatically provided as prior notice of The Bioterrorism Act.
☉ Restrictions on importation of product containing meat
All the meat products (including beef, pork, chicken, etc.) and products containing less than 2% meat extract are regulated by U.S. Food Safety and Inspection Service (FSIS), beginning June 22 of 2009.
FSIS is responsible for granting approval depending on whether corresponding products is listed directory of possible importation in the United States, whether the corresponding products are produced with <qualified facilities>.
Because handling of product containing meat is regulated by Animal and Plant Health Inspection Service (APHIS) before, few products containing meat were allowed to import to the United States without meeting requirements of FSIS.
However, importer should be noted that all the imported products are inspected by in collaboration of APHIS and FSIS nowadays.
☉ Regulations of Food Safety Modernization Act
Food Safety Modernization Act was signed into law of the United States on January of 2011. It is controlled under the jurisdiction of the FDA and regulated that owner of food-related facility in the national and broad of the United States is obligated for risk analysis and preventive controls.
Specifically, it mainly focus on enhancement of FDA inspection on foreign facilities, update registered information in accordance with The Bioterrorism Act, enhancement obligation of U.S. agent, collection of handling fee on inspection of foreign facility, introducing import food certification system and so on.
Importers and exporters should pay much attention to the food safety as corresponding regulations are greatly strengthened.
☉ Regulations of Lacey Act
In the United States, Lacey Act is applied to importation of wood and packing material of wood. In addition, it must get approval from U.S. Department of Agriculture (USDA) and meet the requirements of Animal and Plant Health Inspection Service (APHIS). Importer must present scientific name of wood, country of origin, quantity, purpose and relevant materials. Importation of wood packaging materials is regulated by APHIS pursuant to 7 CFR 319 from September of 2005.
Articles of 6602,8201,9201,9202,9504.20 are also added into the scope of Lacey Act on the existing articles of Chapter 44 in HTSUS beginning April of 2010.
※ Table - Logistic Security Control
Effect and Others
Container security Initiative, inspection before lading from foreign county
cannot be transported
certification of participants relating to supply chain
U.S.importer, U.S. customs clearance company, forwarder, manufacture, etc.
voluntary choice, but beneficial for quick entry
submit manifest information to CBP before 24 hours.
carrier (airline, shipping company)
not allowed to lading and unlading
10+2 Rule (ISF)
submission of 12 data elements
importers in U.S., carrier
delay for entry, failure to entry, penalty
inspection of maritime container prior to departure from foreign country
enforced from July of 2014
cargo in holds of passenger airline originating or destined to U.S.
cannot be transported, failure to entry, etc.
The Bioterrorism Act
registration of facility,
prior notice for importation.
failure to entry, delay in entry, etc.