Homeland Security Watch

News and analysis of critical issues in homeland security

November 24, 2008

White House, DHS Lay Down New Rule for Shippers to Share Better Targeting Data

Filed under: Intelligence and Info-Sharing,Port and Maritime Security — by Jonah Czerwinski on November 24, 2008

Today DHS announced a new regulation that requires maritime cargo carriers and importers to submit more data to Customs and Border Protection (CBP) about thier shipments. The goal is to better target risks in the maritime domain with inspections, added screening, security scanning, etc. The private sector must submit the additional information to CBP before vessels and their cargo are permitted to enter the U.S. Small businesses view this as a major setback for their competitiveness – and they have some backing on the Hill.

The Importer Security Filing and Additional Carrier Requirements requires that importers submit an Importer Security Filing (ISF) with the so-called “10+2” data set no later than 24 hours before the cargo is loaded onto a ship destined for the U.S.

Last month, The White House held a meeting with representatives from the private sector and relevant government agencies, including CBP, to discuss the proposed regulation. The meeting, which seems to have been hosted by the White House Office of Management and Budget, was entitled “”10+2″ Importer Security Filing and Additional Carrier Requirements” and took place on October 6. In attendance either by phone or in person were the following:

• Kristy Daphnis OMB/OIRA
• Nelson Garcia Motor & Equipment Manufacturers Assoc.
• Tom Sullivan SBA/Office of Advocacy
• Bruce Lundegren SBA Office of Advocacy
• Peter Friedmann Pac. Coast Council & CONECT
• Ray Bucheger Pac. Coast Council & CONECT
• Bryan Zumwalt National Marine Manufacturers Association
• Shannon Richter OMB
• Bruce Hirsh USTR
• Ted Posner NSC
• Elena Ryan USCBP
• Lorrie Rodbart USCBP
• Chris Pappas USCBP
• Jerry Coleman, Porta-Nails in North Carolina;
• Bill Gullickson, McLaughlin Gormiey King Co in Minnesota;
• Maggie Smith, Coppersmith, Inc. in California;
• Linda Wood, Bennett and Company in Massachusetts;
• Roger Clarke, Williams Clarke Company, Inc. in California;
• Robin Grove, Masterpiece International in California;
• Anne Marie Bush, Veritrade International in Washington;
• Karen Kenney, Liberty Internationai in Massachusetts;
• Silvia Scherer, Trade Tech Inc. in Washington; and
• Patricia Hainline, George S. Bush Co. in Oregon.

Congresswoman Valezquiez, Chairwoman of the Committee on Small Business, wrote a letter to OMB Director Jim Nussle explaining that CBP has failed to meet its obligations under the Regulatory Flexibility Act (“RegFlex”) to “properly analyze the economic impact of the 10 + 2 Rule on small entities.” RegFlex was enacted to limit disproportionate burdens on small businesses and entrepreneurs facing industry-wide regulations.

To accomplish this, RegFlex mandates that federal agencies conduct an analysis with a “description of any significant alternatives to the proposed rule which accomplish the stated objectives of applicable statutes and which minimize any significant economic impact of the proposed rule on small entities.” CBP has stated that it “does not identify any significant alternatives to the proposed rule that specifically address small entities.”

To be fair, the interim final rule includes a delayed compliance date of one year after the interim final rule takes effect. If CBP perceives a “good faith effort and satisfactory progress toward compliance” among the noncompliant during the first year, CBP “will show restraint in enforcing the rule.”

According to Scott Gudes, Vice President, Government Relations, of the National Marine Manufacturers Association (NMMA), CBP will see a number of such cases because Small businesses, including small brokers, do not have:

1. The resources, i.e., customs experts, to help collect and compile the information being required

2. The 10+2 management system needed to allow their clients to collect 10+2 data from all involved parties

3. The integrated computer systems needed to process the information and communicate with suppliers abroad

CBP will conduct a review to determine any specific compliance difficulties that importers and shippers may experience in complying. Both the Congresswoman and the NMMA believe that the unintended consequences likely to be found include increased inventories, additional charges for dwell time, and costly infrastructure and IT system upgrades that larger firms can more easily absorb.

CBP’s review is intended to address just these types of impacts. It will examine compliance costs, the barriers to submitting the data 24 hours prior to lading, and the benefits of collecting the data. CBP states that “based upon the analysis, DHS will determine whether to eliminate, modify or maintain these requirements.”

The Importer Security Filing and Additional Carrier Requirements interim final rule will take effect 60 days from today.

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Comment by William R. Cumming

November 24, 2008 @ 4:32 pm

Just curious! What was the statutory authority or mandate for this regulation?

Comment by Sue Piatt

April 15, 2016 @ 10:29 pm

Invaluable analysis – I loved the facts ! Does someone know where I can acquire a blank DD 1750 document to work with ?

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