Urgent Notices for September
|Container Seals||First Sale Transaction|
Urgent Notice for Containers Requiring Seals
On August 7, 2008, U.S. Customs and Border Protection (Customs, CBP) issued a Federal Register notice bringing attention to the requirement under the Implementing Recommendations of the 911 Commission Act of 2007 (911 Act) that all containers inbound to the U.S. must be secured with a seal meeting the standards of the International Organization for Standardization Publicly Available Specification 17712 (ISO/PAS 17712). The effective date for this requirement is October 15, 2008.
According to the notice, the 911 Act provides that if, by April 1, 2008, the Department of Homeland Security (DHS) does not issue an interim final rule for establishing minimum standards and procedures for securing inbound containers, then seals that meet the ISO/PAS 17712 standard would be required, effective October 15, 2008. DHS has not issued such minimum standards, bringing the requirement into effect.
The notice describes the ISO/PAS 17712 standard saying that it requires seals to “meet or exceed certain standards for strength and durability so as to prevent accidental breakage, early deterioration (due to weather conditions, chemical action, etc.), or undetectable tampering under normal usage. ISO/PAS 17712 also requires that each seal be clearly and legibly marked with a unique identification number.”
Certain types of containers will be exempt from the rule. These include tanks, non-standard containers such as open top containers, and certain custom-built containers. All other loaded containers, including foreign cargo remaining on board (FROB), are required to be sealed. CBP may assess civil penalties for violations of the container sealing requirement, but will phase in penalty assessments, according to the Federal Register.
As an importer into the United States, you must make sure that your manufacturer/shipper is using ISO/PAS 17712 Standard seals for your inbound cargo by the requirement date of October 15, 2008.
For further information on what ISO/PAS 17712 standards are and what kinds of seals are acceptable to Customs and Border Protection, please go to www.iso.org or www.ismasecurity.com/iso+17712/what+is+iso+pas.
Please note that as your Customs Broker/International Freight Forwarder we cannot guarantee that the seal used on your container will be in compliance with the new regulations, as we do not load or seal your containers unless it is a consolidated container under our control. In the case that it is under our control, we will ensure that the proper seal is used. It will be up to your manufacturer/supplier who loads and seals your containers overseas to use the required seal for your shipments.
Customs and Border Protection (CBP) is now going to implement the First Sale Declaration Requirement which was established under § 15422(a) in the Food, Conservation and Energy Act of 2008, commonly known as the Farm Bill. Under the Farm Bill, the First Sale Transaction declaration was effective August 20, 2008, but Customs has extended the deadline until September 19, 2008 to allow the trade (Customs Brokers, software providers, etc.) time to make the necessary electronic programming changes for electronic filing.
The First Sale Declaration requires that importers, at the time of entry, declare to Customs and Border Protection (CBP) when the transaction value of the goods entered for consumption was determined. Transaction Value determination is based on the price paid by the buyer in a sale occurring earlier than the last sale, prior to the introduction of the merchandise into the United States.
What this means to you, the importer, is that if you are buying through a middleman who pays the factory directly, the price declared to Customs could be the price paid to the factory by your middleman. In some cases, there might be several middlemen involved prior to the final shipping to the United States. In order to declare this First Sale value, you must be able to present a “paper trail” back to the original transaction(s) by the middleman; i.e. purchase order, commercial invoice, monetary exchange, etc. In our opinion, it will be very difficult for the importer to get the middleman to reveal his or her original purchase price or supply the documents needed to declare First Sale Transaction.
If you choose not to declare First Sale Transaction to Customs and wish to continue declaring the value from the middleman to you to Customs upon importation, that is entirely acceptable. You do not have to use First Sale Transaction or declare First Sale Transaction value. You can continue as you have in the past.
The First Sale Transaction rule will be in effect for a period of one year in order for Customs to collect the necessary data to see if this program is working under the requirements of the Farm Bill.
International Freight Systems (of WA) LLC Newsletter is a bulletin for customers and partners. Information contained in this publication has been gathered from a number of public sources that, to the best International Freight Systems’ knowledge, are true and correct. It is our intent to present only accurate information. However, in the event any information contained in this newsletter is erroneous, International Freight Systems (of WA) LLC accepts no liability or responsibility.
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