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CBP Announces Test to Ease Entry of Containers with Cargo Residue

Tuesday, August 27, 2013
Sandler, Travis & Rosenberg Trade Report

Effective Nov. 25, U.S. Customs and Border Protection will begin phased-in enforcement of ruling HQ H026715, which holds that containers arriving as instruments of international traffic and having residual cargo should not be manifested as empty and instead requires residue within such containers to be classified, entered and manifested. However, given trade community concerns that this requirement will be overly burdensome, also on or about Nov. 25 CBP will launch a one-year, nationwide test allowing for a new residue entry that can be made off the manifest and is designed to capture residue in containers that will be cleaned or refilled. CBP notes that parties not wishing to participate in this test will be required to classify, enter and manifest (formal or informal entry) residual cargo in accordance with the underlying statutes and their implementing regulations.

CBP officials have said that (a) this test will use existing functionality so virtually no programming changes will be needed, (b) there will be no application process so interested parties may begin participating in the test whenever they like, (c) there will be no additional bonding requirements for the test, and (d) Air Cargo Advance Screening filings will not be required for containers with residue in the air environment.

Under the forthcoming test, any container arriving clean (i.e., with no residue) must be manifested as an empty IIT but entry will not be required.

Any arriving container that contains cargo in excess of a specified percentage of the total capacity of the container by weight or volume, using industry standards, must be manifested. These percentages are 7% for rail shipments, 5% for air shipments, and 3% for truck and vessel shipments. A consumption entry will be required for each such container, either formal or informal, depending on its value and applicable regulations. Entry requirements and payment of duties, taxes and fees, as applicable and as provided by law, will apply.

Any arriving container with cargo not exceeding one of the above percentages of the container’s total capacity by weight or volume, using industry standards, will be considered to contain residual cargo and must be manifested and entered as having residue. If the residual cargo has no commercial value (i.e., the container will either be cleaned with the residue destroyed or refilled for export), CBP will (1) accept the declaration of the carrier, or the importer of record if other than the carrier, that the residue has no commercial value ($0 value) and the country of origin is the country from which the container is arriving, (2) require that the type of residue be described up to the six-digit HTSUS number, and (3) require a residue entry designating that the residue cargo has no commercial value. CBP will release this merchandise under the low value mechanism of 19 USC 1321 so no merchandise processing fee (or harbor maintenance fee, in the case of vessel shipments) will be due.

A manifest record indicating that a residue entry has been filed will be sufficient to meet recordkeeping requirements for residue entries under the specified thresholds. This record must be maintained by the entry filer.

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