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10 + 2 Shipping Requirements

In October 2006, U.S. Customs and Border Patrol (CBP) signed into law the security and Accountability For Every Port Act (SAFE Port). The SAFE Port Act sets forth requirements to enhance the capability of CBP's Automated Targeting System (ATS). In addition to the current information required under the 24-Hour Rule, the SAFE Port Act requires importers and carriers to supply additional data elements at least 24 hours prior to vessel loading. The additional elements will allow CBP to further screen cargo for risks prior to it entering the U.S. It speculated that CBP will announce the final rule by the end of 2008. Currently, the Importer Security Filing ruling only applies to ocean shipments that call a U.S. port directly. Initially, shipments moving through a Canadian or Mexican port and trucked to a final U.S. destination would not be affected. Once the final rule is announced, the trade is anticipating a phased in enforcement period, similar to eManifest, which became mandatory after 90 days. While CBP will require the data elements 24 hours prior to loading to avoid any sailing delays. These data elements include sensitive information and go much more indepth than the information currently required by the Automated Manifest System (AMS). The proposed rule states that the filing would need to be performed via the Automated Broker Interface (ABI) or AMS. It is important to note that this is an additional filing and does not replace the Customs entry. However, CBP has sated that Customs brokers will be given the option to file the normal entry and the 10+2 filing in a unified transmission to help ensure compliance by reducing conflicting data.

10 Data Elements that the Importer is Required to Submit:

1. Manufacturer Name & Address
2. Container Stuffing Location and Container Number/Seal and Size
3. Seller Name & Address
4. Consolidator Name & Address
5. Buyer Name & Address
6. Ship to Name & Address / Consignee Number
7. Importer of Record
8. Master Bill of Lading Number and House Bill of Lading Number for LCL Cargo
9. Country of Origin
10. Harmonized Tariff Schedule Number (6 digit)

2 Additional Data Elements that the Carrier is Required to Submit:

1. Stow Plan - which includes:
   • Vessel Name
   • Vessel Operator
   • Container Operator
   • Equipment Number
   • Equipment Size/Type
   • Hazmat-UN Code
   • Vessel Location
2. Container Status Messages - which includes:
   • Equipment Number
   • Event
   • Event Data and Time
   • Event Location
   • Vessel Indentification Associated with Message

CBP has stated that a message of acceptance or rejection will be sent to the ISF filter confirming that the Importer Security Filing has been successfully submitted. However, they will not validate whether or not the data was complete and accurately transmitted, as this is the responsibility of the Importer of Record. This new rule, which will be implemented within the year, will have a striking impact on importers, carriers, and Customs brokers. Many importers will find it challenging to obtain the required information from there suppliers. A review of sourcing partners by importers may require them to make changes to their business model. This goes beyond the corporate compliance department as corporate officers, purchasing, traffic, and IT departments need to understand the scope of this new regulation and how it can drastically affect the company's bottom line. It is advisable that companies begin to review their supply chain, as well their suppliers, vendors, and partners, to ensure that they will be able to gather the required information in a timely manner. Companies may find it difficult to get information from overseas manufacturers depending on the location of the factory. Best in class companies are view this new rule as an opportunity to analyze their current business practices. This will enable them to identify ways of becoming more effcient and potentially improve delivery times, reduce inventory levels, improve supply chain visibility, and create a competitive advantage. Companies that are illprepared for the change can expect shipment delays, increased cycle times, as well as the potential of lost sales.

Failure to cmply with this new rule would not only result in shipment delays and the potential loss of sales, but could also mean the assessment of penalties. The proposed rule states, "If the principal fails to comply with the Importer Security FIling requirements, the principal and surety (jointly and severally) would pay liquidated damages equal to the merchandise involved in the default." If a company has a shipment valued at $150,00, then the company could be fined $150,000. Carriers also face penalties of up to $50,000 if they do not submit the two additional data elements. Therefore, shipping companies will be adjusting cut off dates to ensure that all of the proper information is submitted prior to loading the vessel. If comapnies are unable to supply the information for the filling prior to loading, then their goods will not be loaded and shipments will be delayed. Demurrage chargers, allong with longer transit times to customers, can inflate landed costs very quickly.

How Robs Borkerage Service Can Help:

Robs Borkerage Service is teamed with one of the largest privately held Customs brokers in the U.S., as well as licensed Freight Forwarder, Ocean Transportation Intermediary (OTI), and Non-Vessel Operating Common carrier (NVOCC). My Customes Broker has an exemplary relationship with CBP and plays an important role in the formation of trade policies. My Customs Broker senior executives sit on committees with CBP, including almost every Trade Support Network (TSN) committee. They also worked very closely with CBP during the test phase of eManifest and was the first company to submit an eManifest on a carrier's behalf. Based on its strong relationship with CBP and its commitment to service excellence, importers can be confident that My Customes Broker will be one of the first brokers able to provide assistance with the new Importer Security Filing.

They offers an electronic solution to stisfy the new Importer Security Filing requirements. The electronic solution will not only eunsure that importers are able to submit required data elements in a timely and compliant manner, but will also help them manage the data in a central location, as well as add visibility to their supply chain. Based on a clients specific processes, the can / will offer a variety of options to enable clients to store and manage pertinent information on all products and assist in making the Importer Security Filing requirements as seamless as possible.