CBP Hopes to Begin Next Round of In-Bond Enforcement in July, Swanson Says
CBP hopes to begin its second phase of implementation for its in-bond regulations in July, said Jim Swanson, CBP director of cargo and security controls, at the May 30 meeting of the Commercial Customs Operations Advisory Committee in Laredo, Texas. Beginning in mid-July at the earliest, and no later than the end of the month, CBP will begin mandating electronic reporting for arrivals, exports and diversions, though the agency will not at that time begin issuing liquidated damages, he said.
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Instead, enforcement of electronic reporting will be done through ACE edits, with rejects for incorrectly filed in-bonds, Swanson said. For example, if the shipment is being diverted to another port and arrival is attempted at the wrong port, ACE will reject the filing and the filer will have to file the diversion appropriately before the shipment can proceed.
The air mode initially will be exempt from mandatory electronic reporting because of concerns with system problems related to individual reporting of intermodal shipments, Swanson said. Air will be the only mode of transportation whereby reporting will be allowed via paper. The exemption will continue “for at least a period of time while we evaluate it,” which will be easier with a smaller universe of only air shipments, he said. CBP had initially planned to begin this second round of implementation in February before delaying it as a result of the partial federal government shutdown (see 1808010035 and 1901180023).
Once it begins enforcement, CBP will hold off “for at least 60 days” on reporting of the Facilities Information and Resources Management System (FIRMS) code at arrival, Swanson said. The agency has heard reports of system issues related to FIRMS code tables, and while the issues likely have been resolved, CBP will have to go back and evaluate the data to make sure it's current. Once FIRMS code reporting begins it will be enforced by way of an ACE edit, he said.
Enforcement of the six-digit subheading has been put on hold indefinitely, Swanson said. Questions have been raised “internally and externally” about its value, and CBP is trying to identify, “from a future state perspective,” where it “would fit,” he said.
An updated in-bond business process document should be “out within a couple weeks.” It is about twice as big as the first version published in 2018, Swanson said. The new guide provides some workarounds and answers to frequently asked questions. It also includes information on manipulation, with a table that identifies processes that can be performed on cargo being shipped in-bond, versus what needs to be performed in a bonded warehouse or other facility. CBP hopes to “establish a clear, brighter line as to some of the business processes that have been ongoing here,” Swanson said. The new version will also include scenarios on liability and liability transfers, he said.