Background - On August 20, 2008, Customs and Border Protection (“CBP”) issued a General Notice modifying a prior ruling that had allowed containers containing residual chemicals to be entered as empty, which exempted the transaction from the manifest and entry requirements. A subsequent notice revised the implementation date to September 16, 2009. While the manifest and entry requirements have been “implemented” as of September 16, 2009, due to significant concerns expressed by the trade community, CBP committed to not “enforcing” the manifest and entry requirements any earlier than November 16, 2009. At this point in time, CBP has not issued any official communication regarding the commencement of the “enforcement” of the manifest and entry requirements for residue material in containers.
NOTE: While the revoked ruling dealt with chemical products, CBP has indicated that the manifest and entry requirements apply to any residual material in an empty container. Examples may include: chemicals, petroleum products, agricultural products, juices and foods, etc.
Impact - Revocation of the prior ruling results in the requirement that the containers that contain residue must be manifested, classified, valued, entered, and must comply with any other governmental reporting that may apply to the entry of the residual material. Further, the “Background” section of the notice explains that CBP views these types of residues within the containers as subject to advance cargo information transmission (i.e. the ISF requirements).
For importers, this revocation raises the following issues: who is the importer on residual material, identification of containers containing residual material, classification, valuation, quantity declaration, special trade program qualification, U.S. Goods Returned qualification, and other governmental reporting (EPA, DOE, FDA, etc.), among others.
For carriers, this revocation raises the following issues: how to manifest these containers, systems changes required for automated manifest reporting, identification of the proper party on the manifest, among others.
CBP has drafted some initial responses to Frequently Asked Questions (“FAQ”) on this matter; however the draft failed to address many of the issues identified by the trade community. A final version of the FAQ has not been issued at this time. Finally, CBP Office of Field Operations (“OFO”) is expected to issue guidance or a notice of the commencement of enforcement.
Action - Companies must review their operations to determine if their containers are instruments of international traffic that may contain residual material. If the containers contain residual material, then procedures must be implemented to comply with the manifesting requirements, including the ISF filing, and entry of such residual material.
For any questions or concerns regarding this issue, please contact Edmund Cienava ecienava@charterbrokerage.net or Mary Hatch mhatch@charterbrokerage.net at 212.363.9300.
