Client Advisory
November 10, 2002

U.S. Customs 24 Hour Advance Manifest Rule

U.S. Customs filed new regulations on October 31, 2002 that will have significant documentation implications to clients in the import and export business relating to shipment information.

The new regulation will become effective on December 2, 2002, followed by a 60-day grace period after this date to allow the trade community time to implement the new procedures prior to U.S. Customs enforcement.

Recap of the U.S. Customs regulations:

· Effective date: December 2, 2002, followed by a 60 day grace period, during which no penalties will be imposed.

· NVOCCs: NVOCCs that are licensed by the FMC or that have published a tariff and submitted a bond to the FMC may, if they have obtained a Customs bond, submit the cargo declaration information directly to the Customs Service. Other NVOCCs (e.g., those that do not obtain a Customs bond) would be required to submit this information to Customs via the ocean common carrier.

· Shippers' Associations: Will not be allowed to transmit such details on behalf of their members.

· Manifest confidentiality: U.S. Customs will not release information from cargo declarations until the complete manifest is filed with U.S. Customs.

· Liability concerns: U.S. Customs will initiate penalty actions against the entity providing
the information.

· U.S. Military cargo: Is not exempt from the rulemaking.

· "Dummy" Bills of Lading: As expected, will not be allowed by U.S. Customs.

· "Freight all kinds"/"Said to contain": Are prohibited.

· "To order Bills of Lading": Must identify consignee/owner of the cargo, or owner's representative.

· NVOCC co-loading practices: Are still allowed, although the entity participating in the Automated Manifest System (AMS) process will be required to file, and if it is a non-automated NVOCC, they would make details available to the carrier. Automated NVOCCs would not be allowed to submit a paper manifest to the carrier.

· How will ocean carriers know when an NVOCC has filed?: The field identified in the vessel AMS as the "second notify party" will be completed by the NVOCC. This has been optional in the past, but it will now be mandatory and must be completed by NVOCCs and slot charters.

· U.S. Customs will not allow containers to be loaded prior to the expiration of the 24 hr time period.

· "FROB" (Foreign cargo remaining on-board (in other words, remaining on the vessel as it passes through U.S. ports)): is required to transmit manifest information 24 hrs in advance of loading.

· C-TPAT carriers: Participation in the program will be taken into consideration by U.S. Customs in the targeting process.

· Transmission per load port: All manifests must be transmitted 24 hrs in advance of loading, per load port - rather than only in last port of loading.

· Empty containers: The rulemaking is not applicable to empties, however, for AMS participants the container numbers for empties must be included on the B/L and transmitted 48 hrs prior to the arrival in the U.S. port. For paper filings, 24 hrs prior to arrival.

Manifest corrections: Will be allowed, but subject to a separate rulemaking. Please be aware that any change to the original information may affect U.S. Customs 's risk assessment of the cargo and could result in an examination.

· Precise description of the cargo (or the 6-digit HTS number under which cargo is classified if that information is provided by the shipper) and weight of the cargo or, for a sealed container, the shipper's declared description and weight of the cargo. Generic descriptions such as FAK, General Cargo, Said to Contain, Chemicals, and Foodstuffs would NOT be acceptable descriptions.

· Shipper's complete name and address, or the identification number issued to the shipper by the Customs Service upon implementation of the Automated Commercial Environment ("ACE").

· Complete name and address of the consignee, owner or owner's representative or its identification number.

· Internationally recognized hazardous material code when such materials are being shipped.
· Container number(s)
· Seal numbers for all seals affixed to the container.

For more information, you could access to the website www.customs. ustreas.gov

Should you have questions or require any assistance with this change, please contact your local COSCON Sales Representative………………..