1. Required Advance Electronic Presentation of Cargo Information Summary of Inbound Vessel Cargo Provisions March 18, 2004

2. 2 Presentation Highlights Background of Regulations Regulatory Provisions Effective Dates and Compliance Dates Vessel AMS Participation Procedures Enforcement Procedures

3. March 18, 2004 3 Background of Regulations Trade Act of 2002 - Section 343(a) as amended by Maritime Transportation Security Act of 2002 - Section 108  Required the Secretary to promulgate regulations providing for the mandatory collection of electronic cargo information prior to its arrival or departure.  The law required the solicitation of comments from a broad range of parties likely to be affected.  The requirement to provide information is to be imposed on the party most likely to have direct knowledge of that information.

4. March 18, 2004 4 Background of Regulations Trade Act of 2002 Provisions  The regulations are to take into account the existence of competitive relationships among the parties.  Where the regulations impose requirements on carriers, they are to account for differences among the various modes of transportation.  The regulations are to take into account the availability of technology to transmit data.  Collected information is to be used for ensuring cargo safety and security and for the prevention of smuggling.

5. March 18, 2004 5 Background of Regulations Trade Act of 2002 Provisions  Business and proprietary information are to be protected.  Impact on the flow of commerce is to be balanced with the impact on security.  Redundant requirements are to be avoided.  The transition period between the promulgation of the rules and the effective date would be given consideration. Different parties may have different effective dates.

6. March 18, 2004 6 Background of Regulations Development of the Regulations  Public Meetings held in Washington, DC, January 2003.  Public meetings announced in Federal Register (67 FR 70706)  Customs presented “Strawman” proposals.  Verbal comments received regarding “Strawman.”  Written comments solicited through e-mail.  Notice of Proposed Rulemaking published on July 23, 2003.  30 day comment period for NPRM.  128 comments received for the NPRM.

7. March 18, 2004 7 Final Rule December 5, 2003 - Final Rule published by CBP In the Federal Register  For the full text of the rule consult the CBP website at www.cbp.gov/xp/cgov/import/communications_to_industry/advance_info/  The final rule also contains provisions for all modes of transportation both inbound and outbound (air, vessel, rail, and truck).  The Federal Register notice also addressed the issues and comments received concerning the proposed rule.

8. March 18, 2004 8 Regulatory Provisions Vessels Required to Enter Title 19, United States Code Section 1434 (a) Formal entry Within 24 hours (or such other period of time as may be provided under subsection (c)(2) of this section) after the arrival at any port or place in the United States of - (1) any vessel from a foreign port or place; (2) any foreign vessel from a domestic port;

9. March 18, 2004 9 Regulatory Provisions Vessels Required to Enter - continued (3) any vessel of the United States having on board foreign merchandise for which entry has not been made; (4) any vessel which has visited a hovering vessel or has delivered or received merchandise while outside the territorial sea; the master of the vessel shall, unless otherwise provided by law, make formal entry at the nearest customs facility or such other place as the Secretary may prescribe by regulation.

10. March 18, 2004 10 Regulatory Provisions Vessels Required to Clear Title 46, United States Code Appendix Sec. 91. - Clearance; vessels (a) When required; vessels of United States Except as otherwise provided by law, any vessel of the United States shall obtain clearance from the Customs Service before proceeding from a port or place in the United States - (1) for a foreign port or place;

11. March 18, 2004 11 Regulatory Provisions Vessels Required to Clear - continued (2) for another port or place in the United States if the vessel has on board foreign merchandise for which entry has not been made; or (3) outside the territorial sea to visit a hovering vessel or to receive merchandise while outside the territorial sea. (b) When required; other vessels Except as otherwise provided by law, any vessel that is not a vessel of the United States shall obtain clearance from the Customs Service before proceeding from a port or place in the United States -

12. March 18, 2004 12 Regulatory Provisions Vessels Required to Clear - continued  (1) for a foreign port or place;  (2) for another port or place in the United States; or  (3) outside the territorial sea to visit a hovering vessel or to receive or deliver merchandise while outside the territorial sea.

13. March 18, 2004 13 Regulatory Provisions Vessels coming into the U.S. that are exempt from manifesting requirements:  War and public vessels.  Vessels chartered by and transporting cargo that is the property of the Department of Defense.  Vessels arriving in distress or for the limited purpose of taking on bunker coal or oil, sea stores and departs within 24 hours after arrival.

14. March 18, 2004 14 Regulatory Provisions Time frames for reporting the cargo declaration information in an electronic format. Containerized and Non-Exempt Break Bulk must be received by CBP:  24 hours prior to the loading of the cargo at the foreign port of load. Bulk and Exempted Break Bulk must be received by CBP:  24 hours prior to arrival in the U.S. for vessel voyages that exceed 24 hours sailing time from the foreign port of load.  At the time of departure to the U.S. for vessel voyages that are less then 24 hours sailing time.

15. March 18, 2004 15 Regulatory Provisions Vessels Arriving In Ballast Or To Take On Bunkers  Vessels arriving empty (to lade only) are not required to electronically transmit a “nil” cargo manifest.  Vessels carrying empty containers for discharge in the U.S. or FROB must be manifested.  19 U.S.C. 1441 - Vessels arriving for the purpose of taking on bunker coal, bunker oil, sea stores, or ship's stores and which shall depart within twenty-four hours after arrival without having landed or taken on board any passengers, or any merchandise other than bunker coal, bunker oil, sea stores, or ship's stores are exempt from vessel entry and clearance procedures, including AMS reporting requirements.

16. March 18, 2004 16 Regulatory Provisions Empty Ocean Containers  The cargo declaration information (CF 1302) data must be transmitted for empty containers.  A single bill of lading is required for all empty containers at each port of discharge.  Cargo declaration information for empty containers must be received by CBP in AMS 24 hours prior to the arrival of the vessel for voyages 24 hours in duration or more.  For voyages less than 24 hours in duration, the cargo declaration information must be received by CBP in AMS at the time of sailing.

17. March 18, 2004 17 Regulatory Provisions Automation Requirements  The current CBP approved electronic system for ocean cargo is the Sea Automated Manifest System.  Qualified participants must present a letter of intent to the Office of Information & Technology.  Possess an international carriers bond from an approved surety company. http://www.fms.treas.gov/c570/index.html  Possess a Standard Carrier Alpha Code (SCAC) from the National Motor Freight Traffic Association (NMFTA).  Information on becoming an AMS participant can be found at www.cbp.gov, select Trade Act 2002, on right side of screen in the gray section (Related Links - Publications) select AMS.

18. March 18, 2004 18 www.cbp.gov

19. March 18, 2004 19 www.cbp.gov - AMS Information

20. March 18, 2004 20 Regulatory Provisions Data Elements Required The Customs Automated Manifest Interface Requirements (CAMIR) document provides specific procedures for the importing trade community. The incoming vessel carrier is required to transmit the cargo declaration information in AMS for all cargo. (1) The last foreign port before vessel departs to the U.S. (2) Standard Carrier Alpha Code (SCAC). (3) Carriers assigned voyage number. (4) Date vessel is scheduled to arrive in the U.S. (5) Numbers and quantities from the carrier’s bill of lading, either master or house, as applicable.

21. March 18, 2004 21 Regulatory Provisions Data Elements Required (6) First foreign port where the carrier takes possession of the cargo. (7) Precise cargo description or the Harmonized Tariff Schedule numbers to the 6 digit level. (8) Shipper’s complete name and address. (9) Consignee’s complete name and address. (10) Vessel name, country of documentation and the official vessel number. (11)Foreign port of load.

22. March 18, 2004 22 Regulatory Provisions Data Elements Required (12)Internationally recognized hazardous material code when such materials are shipped. (13)Container numbers (for containerized shipments). (14)Seal numbers for all sealed containers. (15)Date of departure from foreign.

23. March 18, 2004 23 Regulatory Provisions Required Elements  Carrier definition:  Due to the complexity of the various contractual agreements and meetings with vessel agent representatives, it was decided that the industry was the best suited to determine the carrier.  If a determination can not be made with regards to a contractual agreement a request for a official binding ruling can be made to CBP.  Information on this procedure can be found on the CBP web site at: www.cbp.gov/xp/cgov/toolbox/legal/Rulings/ruling_letters.x ml

24. March 18, 2004 24 Regulatory Provisions Required Elements  CBP views the carrier as the entity that controls the vessel which includes:  Determining ports of call.  Controlling of loading and discharging cargo.  Knowledge of cargo information.  Issuing bills of lading.  The entity that has typically provided the CF 1302 cargo declaration or the cargo information to prepare the CF 1302 to the vessel agent.

25. March 18, 2004 25 Regulatory Provisions Required Elements  Vessel Agents and AMS:  Agents are not the responsible party for providing cargo information in AMS.  The carrier may designate a vessel agent to enter data on behalf of the carrier; however, the carrier is responsible for the content and timeliness of the data.  A carrier that designates a vessel agent to input AMS information can do so for multiple ports of discharge.  Vessel agents can still obligate their own bond on the CF 3171 for vessel entrance and clearance purposes only, not for cargo declaration purposes.

26. March 18, 2004 26 Regulatory Provisions Required Elements  Shipper/Consignee Name and Address  The name and address of the actual shipper/consignee must be used.  Detailed information is required in making risk determinations.  Information identifying the shipper/consignee as a carrier, bank, NVOCC, etc.. will invite closer scrutiny and increase the likelihood of examination.

27. March 18, 2004 27 Regulatory Provisions Required Elements  “To Order” shipments  “To Order” will be accepted in the consignee field for cargo where there is no consignee.  When 'to order" is used in the consignee field the first notify field must contain the owner or owner's representative with the U.S. name and address.  CBP recognizes that for FROB cargo the actual consignee will not be located in the United States.

28. March 18, 2004 28 Regulatory Provisions Required Elements Vessel departure date and time.  The date and time of departure of the vessel must be given for each foreign port that cargo is loaded to the vessel destined to the United States. The time frame for reporting the vessel departure will be either:  No later than 24 hours after departure from the foreign port of lading, for those vessels that will arrive in the United States more than 24 hours after sailing from that foreign port.

29. March 18, 2004 29 Regulatory Provisions Required Elements  At time of sailing, for those vessels that will arrive in the United States less than 24 hours after sailing from the foreign port. Exception from the departure date and time requirements.  Empty containers - Required 24 hours prior to the arrival of the vessel for voyages 24 hours in duration or more.  Voyages less than 24 hours in duration, the cargo declaration information must be received by CBP in AMS at the time of sailing.

30. March 18, 2004 30 Regulatory Provisions Required Elements  Bulk and approved break bulk - Required at time of sailing for vessel voyages that are less than 24-hours in sailing time to the U.S.  Vessel voyages that exceed 24-hours in sailing time are required to file in AMS 24-hours prior to vessel arrival. Note: The cargo declaration information must be accepted in AMS by CBP prior to sending the departure date and time message.

31. March 18, 2004 31 Regulatory Provisions Break Bulk Exemptions  Exemption requests should be mailed to: Customs and Border Protection Border Targeting and Analysis, Room 5.4-D 1300 Pennsylvania Avenue, NW Washington, D.C. 20229. or E-mail (preferred): 24hour.exemptions@dhs.gov24hour.exemptions@dhs.gov Phone: (202) 927-6060 Fax: (202) 927-1435

32. March 18, 2004 32 Regulatory Provisions Amendments of Transmissions  Amendments made on cargo information that is required 24 hours prior to loading must allow CBP an additional 24 hours to review the cargo from the time of the change. CBP has identified the following exceptions:  change in seal number  change in vessel name and/or voyage number  Amendments must be made for all inaccurate cargo information, even after the vessel has sailed.  It is essential that accurate cargo information be provided in AMS for advanced targeting purposes.

33. March 18, 2004 33 Effective Date of the Regulations The effective date of the regulations is March 4, 2004. Containerized Vessel:  Vessels that begin the entire voyage on or after March 4, 2004. Bulk and Approved Break Bulk:  Vessels that begin the entire voyage on or after March 4, 2004.  A 30-day informed compliance will be given from the March 4, 2004 deadline.  Enforced compliance will begin on April 2, 2004, for any bulk/break bulk vessel that commence the entire voyage on or after the April 2 date.

34. March 18, 2004 34 CBP Analysis of the Data CBP personnel will analyze the information transmitted by Sea AMS participants to determine if the examination of the cargo is necessary. CBP will transmit electronic hold messages to the Sea AMS participant that transmitted the cargo information and other automated party placed in the second notify party field. Once the reason for the hold has been resolved, CBP will transmit a hold release message to the Sea AMS participant.

35. March 18, 2004 35 Informed Compliance Bulk and Approved Break Bulk: Vessels that begin the entire voyage on or after March 4, 2004.  A 30-day informed compliance will be given from the March 4, 2004 deadline.  Informed compliance will include:  Warning letter to the carrier of automation violation.  Monetary penalties that could have been assessed.  Notice of enforced compliance start date.

36. March 18, 2004 36 Enforced Compliance Enforced compliance for bulk/break bulk vessels will begin on April 2 for entire voyages that commence on or after this date.  First Violation - Deny Preliminary Entry at All Ports of Entry.  Second Violation - Issue Penalty at All Ports of Arrival for the Same Voyage.  Third Violation - Deny Unlading of Cargo.

37. March 18, 2004 37 Enforced Compliance Containerized Vessel: Vessels that begin the entire voyage on or after March 4, 2004.  First Violation - Deny Preliminary Entry at All Ports of Entry.  Second Violation - Issue Penalty at All Ports of Arrival for the Same Voyage.  Third Violation - Deny Unlading of Cargo

38. March 18, 2004 38 Penalties and Liquidated Damages Failure to provide the required information in the manner and time period specified may result in a penalty or claim for liquidated damages.  Penalty - $5000 - Issued against the carrier.  Claim for Liquidated Damages - $5000 - Issued against NVOCCs that elect to automate.

39. March 18, 2004 39 Sea AMS Participation To become a Sea AMS participant:  A party may elect to use a service center or port authority to transmit cargo data on their behalf.  A party may wish to develop an interface directly with CBP using the ANSI X12 (version 4010) or Customs Automated Manifest Interface Requirements (CAMIR) formats. Copies of the required formats are available on the CBP web site at: http://www.cbp.gov/xp/cgov/import/operations_support/automated _systems/ams/  A party may purchase a software package from a vendor.  A list of service centers, port authorities and software vendors may be found on the CBP web site listed above.

40. March 18, 2004 40 Sea AMS Participation Sea AMS support  Each Sea AMS carrier is assigned a client representative to assist with its participation.  The client representative will administer the certification test to those Sea AMS participants developing a direct interface or purchasing a software package from a vendor.  The client representative provides on-going technical support.  For day-to-day cargo release questions, the Sea AMS participant should contact the CBP Sea AMS staff at each port.

41. March 18, 2004 41 Sea AMS Participation Sea AMS participation totals include:  Ocean Carriers299  NVOCCs725  Service Centers 82  Port Authorities 14  Software Vendors 28