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Air Cargo Security Program Rulemaking Expected This Fall

Friday, August 30, 2013
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection officials said recently that they have begun writing and hope to publish by the end of this year a proposed rule that would turn the Air Cargo Advance Screening pilot into a mandatory program.

The ACAS pilot is a voluntary test used to target high-risk air cargo in which participants submit a subset of the required advance air cargo data to CBP at the earliest point practicable prior to loading the cargo onto aircraft destined to or transiting through the United States. The data elements submitted as part of this pilot include air waybill number, total quantity based on the smallest external packing unit, total weight, cargo description, shipper name and address, and consignee name and address. Participants must also (1) mitigate, according to Transportation Security Administration screening protocols, any threat identified by the National Targeting Center; (2) respond promptly with complete and accurate information when contacted by the NTC with questions regarding the data submitted; (3) follow any Do Not Load instructions; and (4) partake in regular teleconferences or meetings established by CBP, when necessary, to ensure that any issues or challenges regarding the pilot are communicated and addressed.

The ACAS pilot is currently scheduled to run through Oct. 25. Thirteen participants are currently operational, including four express consignment carriers, five passenger carriers and four freight forwarders. ACAS participants have transmitted more than 76 million shipments to CBP since December 2010 but ACAS review rates have stayed consistent at 1.23%. Officials say no “Do Not Load” messages have yet been issued.

CBP and industry representatives speaking at a recent meeting of the Advisory Committee on Commercial Operations of CBP (COAC) agreed that it is critical to get ACAS “right” as it moves from the pilot into a regulatory mandate. An unsuccessful outcome would not only damage the reputation of ACAS as a “game-changer,” they said, but also has the potential to result in negative developments in other countries working on advance data initiatives who are looking closely at the U.S. and ACAS in terms of policy and information technology developments. Industry representatives added that because mandatory ACAS implementation will require a significant investment of resources by both the private sector and the government it is important that the regulatory solution be operationally feasible, minimize costs while meeting valid security needs, and position ACAS as a legitimate enhancement to what is already a highly-effective, multi-layered framework for securing cargo. CBP officials responded that they don’t want mandatory ACAS to disrupt existing business processes and that they will do what they can to make it as flexible and accommodating of as many business models as possible.

Recommendations for Regulatory Regime

A COAC subcommittee has made a number of recommendations concerning the further development of ACAS, which are listed below along with CBP’s thoughts.

- Establish an integrated carrier filer category that is subject to enhanced regulatory oversight and responsibilities, in particular the responsibility to file ACAS data and fulfill ACAS requirements for all shipments (whether these are travelling on the integrated carrier or another carrier) and a concurrent limitation on the regulatory responsibility of the carrier that is transporting integrated carrier shipments. CBP says the current details of this recommendation remove too much responsibility from the carrier transporting the cargo into the U.S. Such carriers are responsible for the security and safety of their aircraft and passengers and are therefore responsible for verifying with CBP that all ACAS holds are resolved before departing to the U.S. In addition, since passenger carriers have physical control of the cargo before departing to the U.S., it would be difficult for CBP to hold an express company accountable for violations related to loading and unloading cargo from a passenger carrier. However, CBP has agreed to program additional messages and technical functions that enable carriers to obtain information from CBP about shipments that have or do not have ACAS holds.

- Establish a freight forwarder filer category designed to promote robust forwarder participation via less stringent pre-requisites for participation and a more narrowly-tailored compliance regime than Air AMS. CBP states that it would be extremely challenging for it to allow less stringent requirements for ACAS-only self-filers because it relies on the submission of accurate and timely data from industry to target high-risk cargo and implement its mission. The ACAS regulations will therefore need to be applied evenly to all participants.

- Treat ACAS and Air AMS as programs with distinct requirements with different self-filing regimes. CBP says that it plans to make distinctions between these two programs, that there will be more entities that will be eligible to file ACAS than Air AMS, and that all existing Air AMS participants will be eligible to file ACAS. CBP will also work to ensure that ACAS and Air AMS requirements are as complementary as possible.

- Employ an account-based approach that evaluates an entity’s overall compliance (including quality improvement efforts, trusted trader status, etc.) before liquidated damages are assessed, rather than an approach based on violations per shipment. However, CBP points out that ACAS is about assessing the risk of individual shipments, not the carrier or filer. CBP adds that its existing enforcement model provides significant opportunity for highly compliant parties to petition and mitigate any assessments of liquidated damages and that an account-based approach may require it to develop mitigation guidelines that are much more stringent to ensure that those who continually commit violations are held accountable. Finally, an account-based approach may pose an undue disadvantage to small and medium-sized enterprises who could see a bigger hit from a one-time violation.

- Draft for the ACAS regulatory regime definitions of data elements that promote the earliest possible transmission of data for targeting and match as closely as possible the definitions used during the pilot. CBP does not feel it necessary to change the definition of data elements but will instead continue to focus on the quality of the data. CBP understands that the quality of data will be less precise for ACAS and plans to draft regulatory language accordingly, but filers will be expected to update ACAS data when more accurate information is made available.

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