CBP Updates and Expands its 10+2 FAQ (BOL Numbers, Bonds)

The FAQ is now 53 pages in length (from 36 pages), and covers additional topics.

This is Part I of a multi-part series of summaries detailing CBP's updated FAQ document and highlights the new information regarding bill of lading numbers and bonds for Importer Security Filings (ISFs). See future issues of ITT for additional summaries of the FAQ.

Bill of Lading Numbers

The updated FAQ has added information on amending the BOL number on the ISF, and has expanded the answers to the prior version's three questions (unchanged information is italicized).

BOL number on ISF can be amended. In response to a question, CBP states that the bill of lading number on the ISF can be amended. From a transactional standpoint, the system will allow an ISF Filer to update an existing ISF with a new bill of lading number. However, the ISF Importer is ultimately responsible for the timely, accurate, and complete submission of the Importer Security Filing.

BOL number is part of ISF filing. In response to a question if the BOL number is required at the time of an ISF filing, CBP stated that yes, the ISF Importer, or its agent, must obtain this information and provide it to CBP as part of the ISF filing. The ISF needs to be submitted at the lowest bill of lading level (i.e., house bill or regular bill) that is transmitted into the Automated Manifest System (AMS). The bill of lading number is the only common "link" between the ISF and the customs manifest data.

Advance BOL number already required. In response to a question about what to do if you do not have a bill of lading number at the time you submit the ISF, as most numbers are not issued until after sailing, CBP answered the ISF Importer must obtain the bill of lading number. The bill of lading number is an integral part of the security filing. Without the bill of lading number, the ISF cannot be matched to a customs manifest. The bill of lading number is part of the customs manifest information that is already required to be presented to CBP by the carrier or automated NVOCC 24 hours prior to vessel lading of cargo destined to enter the U.S.

Submission at lowest BOL level.A questioner asked if the NVOCC is a non-AMS participant, should the master bill of lading be filed instead of the house bill of lading with the ISF? CBP answered that the ISF needs to be submitted at the lowest bill of lading level (i.e., house bill or regular bill) that is transmitted into the AMS. If the carrier creates and transmits a regular bill of lading number on behalf of a non-automated NVOCC, the ISF filer must submit the regular bill of lading number that was transmitted into AMS as part of the ISF.

(The Importer Security Filing CATAIR Implementation Guide states that the valid qualifier codes are: OB (Ocean Bill of Lading - used for Regular Bills), and BM (House Bill of Lading).

For purposes of the Importer Security Filing, the following bill of lading definitions apply:

Regular Bill - is defined as a non-Master, bill of lading issued by a Vessel Operating Common Carrier with no underlying house bills. This bill type is also referred to as "Straight Bill" or "Simple Bill".

House Bill - is defined as a bill of lading issued by a Non-Vessel Operating Common Carrier or Freight Forwarder to a customer as a receipt for the goods being shipped with other cargo as one consignment

Master Bill - is defined as an ocean bill of lading issued by a Vessel Operating Common Carrier covering at least one or more underlying house bills of lading. CBP is requiring only the number for the bill of lading at the lowest level (i.e., the regular straight/simple bill of lading or house bill of lading) and not the master bill of lading number.

The SF15 record is used to report House Bills ("BM" qualifier) and Regular Bills ("OB" qualifier). If multiple House Bills and Regular Bills exist, the SF15 record is repeated accordingly.)

Bonds

The updated FAQ has two new sections on bonds that are titled: Single Transaction Bonds (CBP Form 301) and Appendix D ISF Stand-Alone Bonds. It also newly lists certain ISF-coded transactions that will not require bonds. Highlights of this new information is as follows:

(The FAQ continues to state that bonds will not be required until January 26, 2010, the date the flexible enforcement period is scheduled to end.)

STBs (CBP Form 301)

STB cannot be a stand-alone ISF bond. In response to a question on whether a single transaction bond (CBP Form 301) can be used as a stand-alone ISF bond, CBP stated no. A single transaction bond that is submitted on the CBP Form 301 secures the entry, payment of duties, etc. Only the Appendix D stand-alone ISF bond can be used as a stand-alone single transaction ISF bond.

STB can be used for a unified entry. CBP answered a question by stating that a single transaction bond (CBP Form 301) can be utilized when making a unified entry filing. In these cases, the single transaction bond will be used to cover both the ISF and customs entry requirements

Procedure for STB in a unified entry. As single transaction bonds for entry require a paper submission to CBP, a questioner asked how will a STB for a unified entry and submitted on the paper CBP Form 301 be matched to an electronic ISF filing? Also, what is the process for notifying CBP that a STB is actually on file?

CBP answered that if a single transaction bond (CBP Form 301) is used for a unified entry, the ISF Importer must denote the usage of the single transaction bond on the ISF by identifying activity type 01 (basic importation), bond type 9 (single transaction), the surety code and the bond reference number. The bond reference number is a unique serial number that appears on CBP Form 301 and is used for surety company tracking purposes. It should be noted that this is not the same as the "Bond Number assigned by CBP", which is found in the "CBP use only" block.

In addition, the unique ISF transaction number should be noted in block 29 of the CBP Form 3461, customs entry, upon paper document submission to CBP for unified entry filings. This will alert CBP that the single transaction bond covers both the ISF and the entry.

STB limit for unified entries. In answer to a question,CBP stated it will issue guidance regarding the limit of liability for a single transaction bond that secures a unified entry filing after discussion with interested trade groups.

Stand-Alone ISF Bonds

CBP's FAQ provides the following new information regarding "Appendix D" stand-alone ISF bonds in response to questions:

ISF bond may be single or continuous. The stand-alone ISF bond may be used as a single or a continuous bond.

Bond activity code. CBP has created a new bond activity code for the stand-alone ISF bond; it will be designated as activity code "99."

Deadline for copy of single ISF bond. CBP requires that an electronic copy of the stand-alone single transaction ISF bond be created and sent to CBP within 12 hours of receipt of an accepted ISF filing. CBP outlines the steps for doing this in its FAQ.

Usage and timeframe for continuous ISF bond. Stand-alone continuous ISF bonds must be submitted to, and approved by CBP's Office of Finance in advance of the filing of an ISF. Once approved, CBP will record the bond information within the Automated Commercial System (ACS) and issue a unique bond identification number.

Upon the filing of an ISF, the ISF Importer, or its agent, must denote the usage of the Appendix D stand-alone continuous ISF bond on the ISF by identifying the bond activity code 99, bond type 8 (continuous) and the importer ID number that the bond was recorded against.

Liability limit, bond formula. The limit of liability for the stand-alone single transaction ISF bond will be $10,000. The bond amount formula for a stand-alone continuous ISF bond is being considered by CBP.

Bond Waived for Certain ISF-Coded Transactions

The interim final rule does not provide any exemptions to the bond requirements. However, as a matter of policy, certain types of ISF coded transactions will not require a bond to cover the ISF filing requirements. The bond requirements have been waived for the following ISF coded transactions:

FAQ Non-Binding, Ruling Requests May be Submitted

CBP notes that its responses to the FAQs are for informational purposes only and are non-binding. Questions relating to specific facts and circumstances of a prospective transaction can be the subject of a ruling request under 19 CFR Part 177. Additional questions that are not included in this document can be sent to Security_Filing_General@cbp.dhs.gov. CBP notes that it will be continually updating and clarifying its FAQ document as necessary.

(See ITT's Online Archives or 08/20/09 news, 09082005, for BP summary of CBP officials discussion of ISF bonds, etc.

See ITT's Online Archives or 03/10/09 news, 09031015, for BP summary of CBP's previous 10+2 FAQ, with links to previous parts.

See ITT's Online Archives or 12/23/08 news, 08122310, for the final part of BP's summary on the details of CBP's 10+2 interim final rule, with links to previous parts.)

CBP's 10+2 FAQs (updated 09/30/09) available at http://www.cbp.gov/linkhandler/cgov/trade/cargo_security/carriers/security_filing/10_2faq.ctt/10_2faq.doc

ISF CATAIR Implementation Guide (June 1, 2009 version) available at: http://www.cbp.gov/linkhandler/cgov/trade/automated/automated_systems/sf_transaction_sets/isf_25_catair.ctt/isf_catair_102008.doc