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In-Bond Process Updates Include Electronic Filing, Requirement for More Information

Friday, September 29, 2017
Sandler, Travis & Rosenberg Trade Report

Effective Nov. 28, U.S. Customs and Border Protection is amending its regulations to enhance its ability to regulate and track in-bond goods and to simplify and facilitate the in-bond process. CBP states that the requirements of this rule including filing in-bond transactions and reporting in-bond arrivals electronically, providing additional data elements, requesting diversions, and meeting allowable transit times.

The in-bond process allows imported goods to be entered at one U.S. port of entry without appraisement or payment of duties and transported by a bonded carrier to another U.S. port of entry or other authorized destination where the goods are entered or exported. There are three types of in-bond transportation entries: immediate transportation, which allows goods arriving at one port of entry to be transported to another where an entry must be filed; transportation and exportation, which allows goods to be entered at a U.S. port for transit through the U.S. to another U.S. port where the goods are exported without the payment of duties; and immediate exportation, which  allows cargo that has arrived at a U.S. port to be immediately exported from that same port without the payment of duties.

Major changes CBP is making to the in-bond process through this final rule include the following.

Application. The paper in-bond application (CBP Form 7512) is being eliminated and carriers or their agents will instead be required to file this application electronically.

Additional information will be required on the in-bond application, including the six-digit HTSUS number. CBP states that this number should be available to in-bond filers because importers need this information to determine duty, cost, and admissibility status prior to finalizing purchase or shipment contracts. It is also one of the required data elements for the importer security filing for all goods arriving by vessel. The rule also require in-bond goods subject to the authority of a U.S. government agency to be described with sufficient accuracy to enable that agency to determine the contents of the shipment.

CBP is removing the proposed requirement to identify prohibited or restricted goods and is allowing (rather than requiring) application filers to provide information regarding goods for which the U.S. government, a foreign government, or other issuing authority has issued a visa, permit, license, or other similar number or identifying information.

Transportation. In-bond goods have up to 30 days to be transported between U.S. ports (60 days for goods transported by barge). Carriers must electronically request and receive permission from CBP before diverting in-bond goods from the intended destination port to another port. Notice of export of in-bond goods must be submitted within two business days (not within 24 hours of export, as proposed).

In-bond goods may be transported with non-bonded goods in a container or compartment that is not sealed if the in-bond goods are corded and sealed or labeled as in-bond goods. CBP states that this change should facilitate the filling of containers that would otherwise be less-than-containerload shipments.

A proposed requirement to notify CBP when goods are transferred from one conveyance to another has been removed. However, when in-bond goods are taken over by a subsequent bonded carrier that assumes liability for the goods, a report of arrival must be filed by the original bonded carrier and the subsequent carrier must submit a new in-bond application.

Reporting. Regulatory provisions that impose a timeframe for reporting or updating in-bond records are being changed to two business days so the requirements are uniform. CBP has decided not to shorten the timeframe for reporting the arrival and location of in-bond goods to within 24 hours of arrival at the port of destination or exportation.

Enforcement. For 90 days after Nov. 28 (or until approximately Feb. 26, 2018), CBP will take the challenges that carriers may face in complying with this rule into account in implementing and enforcing the rule, so long as carriers are making satisfactory progress toward compliance and making a good faith effort to comply to the extent of their ability. CBP will also provide guidance on the new requirements and endeavor to conduct outreach to interested parties to facilitate a smooth transition.

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