[Federal Register Volume 90, Number 7 (Monday, January 13, 2025)]
[Proposed Rules]
[Pages 2874-2919]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-31331]
[[Page 2873]]
Vol. 90
Monday,
No. 7
January 13, 2025
Part IV
Department of Homeland Security
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U.S. Customs and Border Protection
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19 CFR Parts 113 and 123
Automated Commercial Environment (ACE) Electronic Export Manifest for
Rail Cargo; Proposed Rule
Federal Register / Vol. 90 , No. 7 / Monday, January 13, 2025 /
Proposed Rules
[[Page 2874]]
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
19 CFR Parts 113 and 123
[Docket No. USCBP-2024-0030]
RIN 1651-AB52
Automated Commercial Environment (ACE) Electronic Export Manifest
for Rail Cargo
AGENCY: U.S. Customs and Border Protection, DHS.
ACTION: Notice of proposed rulemaking.
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SUMMARY: This document proposes a new regulation pursuant to the Trade
Act of 2002 requiring the submission of export manifest data
electronically to U.S. Customs and Border Protection (CBP) in the
Automated Commercial Environment (ACE) for cargo transported by rail
for any train departing the United States. The proposed regulation
would mandate the electronic transmission of rail export manifest
information, identify the parties eligible to transmit information, and
describe the time frames prior to departure of the train in which the
information is due. This rule would enable CBP to address important
cargo security concerns while providing efficiencies to the trade.
DATES: Comments must be received by March 14, 2025.
ADDRESSES: Please submit comments, identified by docket number, by the
following method:
Federal eRulemaking Portal: http://www.regulations.gov. Follow the
instructions for submitting comments via docket number USCBP-2024-0030.
Instructions: All submissions received must include the agency name
and docket number for this rulemaking. All comments received will be
posted without change to http://www.regulations.gov, including any
personal information provided. For detailed instructions on submitting
comments and additional information on the rulemaking process, see the
``Public Participation'' heading of the SUPPLEMENTARY INFORMATION
section of this document.
Docket: For access to the docket to read the plain language
summary, background documents or comments received, go to http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: David Garcia, Program Manager,
Outbound Enforcement and Policy Branch, Office of Field Operations,
CBP, via email at [email protected], or by telephone, (202)
344-3277.
SUPPLEMENTARY INFORMATION:
I. Public Participation
Interested persons are invited to participate in this rulemaking by
submitting written data, views, or arguments on all aspects of the
notice of proposed rulemaking. U.S. Customs and Border Protection (CBP)
also invites comments that relate to any economic, environmental or
federalism effects that might result from this proposal.
Comments that will provide the most assistance to CBP in developing
these procedures will reference a specific portion of the proposed
rule, explain the reason for any recommended change, and include data,
information, or authority that support such recommended change.
II. Executive Summary
A. Purpose of the Automated Commercial Environment (ACE) Electronic
Export Manifest for Rail Cargo
1. Need for the Regulatory Action
Current regulations are insufficient to adequately capture cargo
data for rail shipments leaving the United States. CBP is proposing
this rule to reduce the data gaps existing under current regulations,
and to address important cargo security concerns resulting from
incomplete data. This proposed rule will apply to all rail cargo
exports and provide efficiencies to the trade. CBP does not presently
require the pre-departure electronic submission of data for all
exported cargo as it does for imported cargo. This can result in a
threat to cargo and broader U.S. national security because CBP has no
regulation prescribing any method or means of review for cargo being
exported by rail. The electronically transmitted cargo data that is
submitted prior to departing the United States by rail is limited
significantly in its scope. Currently, 19 CFR 192.14 requires a U.S.
Principal Party in Interest (USPPI), the USPPI's agent, or the
authorized filing agent of a Foreign Principal Party in Interest (FPPI)
to transmit Electronic Export Information (EEI) to CBP through the
Automated Commercial Environment (ACE). While this pre-departure data
is helpful, EEI is generally only required by the Bureau of Census
regulations on shipments that exceed $2,500 per Schedule B number and
is not generally required for shipments to Canada, unless certain
controlled items are involved or the shipment is being transshipped to
another destination. 15 CFR parts 30 and 758. Because of these
limitations, there is a significant lack of electronic manifest data
which inhibits the enforcement efforts by CBP for such exports because
of the gaps in information. The proposed regulation would create an
integrated pre-departure electronic export manifest which includes
receiving advance information for risk assessment purposes from the
source most likely to have correct information about the cargo. This
proposed regulation closes the gap which currently exists and requires
all information to be manifested which enhances the security of the
rail cargo and aligns the security of exported rail cargo with the
regulations that are required of rail cargo imported into the United
States.
2. Statement of Legal Authority
CBP is authorized to promulgate regulations providing for the
mandatory transmission of electronic cargo information by way of a CBP-
authorized electronic data interchange (EDI) system before the cargo
arrives or departs the United States by any mode of commercial
transportation (sea, air, rail, or truck). Section 343(a) of the Trade
Act of 2002, as amended (Trade Act) (19 U.S.C. 1415). The required
cargo information is reasonably necessary to enable CBP to identify
high-risk shipments for purposes of ensuring cargo safety and security,
including compliance with export controls; preventing smuggling; and
commercial risk assessment targeting, pursuant to the laws enforced and
administered by CBP. 19 U.S.C. 1415(a)(3)(F). CBP needs to obtain
timely and sufficient data prior to cargo arriving or departing the
United States via any mode of commercial transportation in order to
review and conduct risk assessment to identify high-risk shipments and
inspect cargo effectively.
B. Summary of the Major Provisions of ACE EEM for Rail Cargo
This proposed rule would mandate the transmission of EEM data in
addition to the EEI data required under 15 CFR part 30 for all cargo
prior to departing the United States for Canada and Mexico in the rail
environment in lieu of paper submissions. The new regulation that CBP
is seeking to promulgate is proposed 19 CFR 123.93 which would mandate
the electronic transmission of rail export manifest information,
identify the parties eligible to transmit information, describe the
time frames prior to departure of the train in which the information is
due, and identify an initial filing that must occur 24 hours prior to
departure from
[[Page 2875]]
the port of export while requiring the remaining data to be transmitted
at least two hours prior to such departure. The proposed regulation
designates information as transportation data, cargo data, or empty
container data, and lists the data elements to be transmitted while
calling them out as mandatory, conditional, or optional. The data
elements that are identified as mandatory must be submitted, while
elements identified as conditional shall be submitted if available, and
optional elements may be provided at the discretion of the filers.
These elements allow for CBP to inspect cargo effectively, ensure
compliance with U.S. export control laws and regulations and identify
high-risk shipments for purposes of ensuring cargo safety and security.
CBP proposes adding 19 CFR 123.93(c) which identifies the parties
that can file the cargo and conveyance data. The outbound carrier is
responsible for transmitting the export manifest transportation data
and empty container data. If no other party elects to transmit the
initial filing data and the export manifest cargo data, then the
outbound carrier must transmit this data. If another eligible party
elects to transmit either the initial filing data or export manifest
cargo data, the outbound carrier may also choose to, but is not
required to transmit such data. Other eligible parties include USPPI
and FPPI, as defined by the provisions of section 30.1 of the FTR of
the Department of Commerce, Bureau of the Census (15 CFR 30.1), or its
authorized agent. Other eligible filers also include any other party
with direct knowledge of the export information, such as a customs
broker, Automated Broker Interface (ABI) filer, NVOCC as defined by 19
CFR 4.7(b)(3)(ii), or a freight forwarder as defined in 19 CFR 112.1.
If another party does not transmit advance export information, the
party that arranges for and/or delivers the cargo to the outbound
carrier must fully disclose and present to the outbound carrier the
data elements for the initial filing.
Proposed 19 CFR 123.93(d) requires a mandatory initial filing of
seven data elements identified below to be submitted 24 hours prior to
departure to a foreign port, by either the carrier, USPPI, or other
qualified parties or their authorized agents. The results of the test
have shown that some rail carriers would have the export manifest data
available days in advance prior to departure and therefore would have
all the necessary information to submit the initial filing data to CBP
and all other export manifest data well in advance of the 24-hour prior
to departure deadlines. Except for the initial data elements, CBP would
require electronic export manifest information in sections 123.93(e),
and (f) to be transmitted two hours prior to train departure to a
foreign port from the final U.S. port.
Proposed 19 CFR 123.93(g) provides for two types of referrals that
may be issued by CBP after a risk assessment of an outbound export
manifest data transmission. Should any rail cargo be identified by CBP
as requiring review, the cargo will be held until required additional
information related to the shipment is submitted or some other
appropriate action is taken, as specified by CBP. Once the cargo is
cleared for loading, a release message will be generated and
transmitted to the filer. In addition to holds, 19 CFR 123.93(h) would
provide for procedures for when a CBP officer determines during the
review that cargo or a rail car may contain a potential threat to the
train and its vicinity, so that a Do-Not-Load (DNL) instruction can be
issued, which prohibits the rail carrier from transporting that cargo
or rail car so that further examination can be conducted. These
examinations allow for CBP to secure the cargo, conduct risk
assessment, and inspect cargo effectively.
As an enforcement tool, CBP is also proposing changes to the
relevant bond provisions in 19 CFR 113.62 (basic importation and entry
bond), 19 CFR 113.63 (basic custodial bond), and 19 CFR 113.64
(International carrier bond) to provide CBP with authority to impose
liquidated damages on parties that do not provide the mandatory EEM
data in the manner and in the time frame required. Specifically, CBP
proposes to amend 19 CFR 113.62 to add new paragraph (k)(3), amend 19
CFR 113.63 and 19 CFR 113.64, in order to address electronically
provided outbound information in the time frame required as they
currently address electronic transmissions for merchandise or cargo
which is inbound. With each of these regulations, CBP may assess
liquidated damages if a violation occurs. CBP's primary goal is
compliance and CBP seeks to work alongside rail carriers and other
parties to ensure that the proper data is provided in a timely manner,
for CBP to properly review the data, conduct risk assessment of high-
risk shipments, and enforce U.S. export laws and regulations on U.S.
rail exports.
For CBP, the proposed requirement to submit an electronic export
manifest will enhance cargo security in that it would allow for
improvements in risk assessment capabilities by allowing CBP to use its
Automated Targeting System (ATS) to screen all of the data submitted.
Port operations will enjoy considerable efficiencies through the
elimination of paper manifests. Storage space currently reserved for
manifest documents will be freed. Coordination and information exchange
among CBP, the Department of Commerce, and other Government agencies
with export jurisdiction will improve. Carriers, USPPIs, non-vessel
operating common carriers (NVOCC), and other interested parties who
transmit information will receive better and more rapid examination
decisions from CBP and improved communication between CBP and trade
members. The trade will benefit further through the ease of making
information corrections and additions electronically in contradiction
to the process that is required with paper submissions which is more
time consuming to manually complete, distribute, edit and transmit in
addition to the storage required for paper submissions. These benefits,
including targeting which is necessary for security purposes, outweigh
the flexibility of allowing parties to file submissions either by paper
or electronically.
C. Costs and Benefits
CBP anticipates that during the time period of analysis including
the test period and the regulatory period (2016-2030), this proposed
rule would result in costs, cost savings and benefits to CBP and trade
members engaging in exporting merchandise out of the United States in
the rail environment.\1\ CBP estimates present value total costs to CBP
and trade members would be around $9.3 million using a two percent
discount rate, or $0.7 million annualized. CBP identified some other
potential costs from this proposed rule, but CBP was unable to monetize
these costs, including time burdens to CBP officers if the proposed
rule results in additional cargo examinations and trade members
participating in the rail EEM would also need to adjust business
practices, be required to hold or obtain a qualifying bond, be required
to have staff available 24 hours a day 7 days a week to respond to CBP
questions and pay liquidated damages for any violations. Present value
total cost savings to CBP and trade members are expected to be around
$59.1 million using a two percent discount rate, or $4.6 million
annualized. CBP expects
[[Page 2876]]
that there would be additional cost savings to trade members that CBP
was unable to monetize such as reduced paper, printing and storage
costs related to paper forms, and reducing or eliminating instances
where trains need to be deconstructed in order for CBP to examine cargo
would typically results in a delay of up to 2 hours and results in
around $3,000 in freight movement costs. CBP anticipates that benefits
from this proposed rule would include improving CBP's security efforts
by using ATS to conduct risk assessment on all rail exports, improving
communication between Federal Agencies with export jurisdiction and
improving efficiencies to participating trade members from
transitioning from a paper to an electronic process. However, CBP was
unable to monetize the expected benefits from this proposed rule.
Present value total net costs from the implementation of this final
rule would be around $49.8 million using a two percent discount rate,
or approximately $3.9 million annualized.\2\ Table 1 displays CBP's
estimates for future annualized costs, costs savings, benefits, and net
costs from this proposed rule using a two percent discount rate over
the period of analysis (2016-2030).
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\1\ In the Regulatory Impact Analysis for this NPRM, CBP also
discusses and provides estimates for the costs, cost savings and
benefits compared to the baseline (prior to the introduction of the
rail EEM test) during both the rail EEM test pilot period (2016-
2025) and for the regulatory period (2026-2030).
\2\ In the economic analysis for this proposed rule, CBP used a
2% discount rate for estimated future quantified and monetized
costs, costs savings and benefits based on guidance from OMB
Circular A-4 (https://www.whitehouse.gov/wp-content/uploads/2023/11/CircularA-4.pdf).
[GRAPHIC] [TIFF OMITTED] TP13JA25.003
[[Page 2877]]
III. Statutory Authority
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\3\ These costs to participants are discussed in further detail
in the Regulatory Period Costs section in the Regulatory Impact
Analysis below.
\4\ Details on how CBP conducts targeting and risk assessment
prior to this proposed rule using paper forms is discussed in the
`Baseline' section of the regulatory impact analysis for this
proposed rule.
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Section 343(a) of the Trade Act of 2002, as amended (Trade Act) (19
U.S.C. 1415), authorizes CBP to promulgate regulations providing for
the mandatory transmission of electronic cargo information by way of a
CBP-authorized electronic data interchange (EDI) system before the
cargo is brought into or departs the United States by any mode of
commercial transportation (sea, air, rail, or truck). The required
cargo information is reasonably necessary to enable CBP to identify
high-risk shipments for purposes of ensuring cargo safety and security,
preventing smuggling, and commercial risk assessment targeting,
pursuant to the laws enforced and administered by CBP. 19 U.S.C.
1415(a)(3)(F).
CBP consulted with carriers throughout the process of developing
the proposed regulation and during the course of the ACE Export
Manifest for Rail Cargo Test (see Section IV.B below) that has been
administered since 2015. 19 U.S.C. 1415(a)(3)(A). As the statute
requires, the proposed regulation imposes requirements on the party
most likely to have direct knowledge of information to be provided.
When requiring information from the party with direct knowledge of that
information is not practicable, the regulations take into account how,
under ordinary commercial practices, information is acquired by the
party on which the requirement is imposed, and whether and how such
party is able to verify the information. Where information is not
reasonably verifiable by the party on which a requirement is imposed,
the regulations shall permit that party to transmit information on the
basis of what it reasonably believes to be true. 19 U.S.C.
1415(a)(3)(B). The proposed regulation that CBP is seeking to
promulgate would require the submission of the export manifest data
electronically in ACE for cargo transported by rail, pursuant to
section 343(a), of the Trade Act of 2002, as amended. 19 U.S.C.
1415(a)(3)(E). The proposed regulation specifically avoids imposing
requirements that are redundant with one another or that are redundant
with requirements in other provisions of law, as seen below in Section
VII.C. 19 U.S.C. 1415(a)(3)(I).
IV. Background
A. Current Regulations
Under the existing regulations, rail carriers are not required to
submit a paper or electronic manifest for cargo exported from the
United States by rail. CBP does have regulations which support the
transmission of electronic export information (EEI) required by the
Bureau of the Census Foreign Trade Regulations (FTR) or the Bureau of
Industry and Security's Export Administration Regulations (EAR).
Section 192.14 of title 19 of the Code of Federal Regulations (19 CFR
192.14) implements the requirements of the Trade Act regarding cargo
departing the United States. Under 19 CFR 192.14, the U.S. Principal
Party in Interest (USPPI) or its authorized agent or the authorized
filing agent of the Foreign Principal Party in Interest (FPPI) is
required to submit certain advance information to CBP for export cargo
leaving the United States by rail.\5\
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\5\ The USPPI is defined in the Bureau of the Census FTR as the
person or legal entity in the United States that receives the
primary benefit, monetary or otherwise, from the export transaction.
Generally, that person or entity is the U.S. seller, manufacturer,
or order party, or the foreign entity while in the United States
when purchasing or obtaining the goods for export. 15 CFR 30.1.
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Under 19 CFR 192.14, the USPPI or its authorized agent must
transmit and verify system acceptance of this EEI, generally no later
than two hours prior to the arrival of the train at the border. See 19
CFR 192.14(b)(1)(iv). A rail carrier may not load cargo without first
receiving from the USPPI or its authorized agent either the related EEI
filing citation, covering all cargo for which the EEI is required, or
exemption legends, covering cargo for which EEI need not be filed. See
19 CFR 192.14(c)(4)(i). While the rail carrier is not required to
submit a rail cargo export manifest to CBP, the outbound rail carrier
must annotate the carrier's outward manifest, waybill, or other export
documentation with the applicable Automated Export System (AES) proof
of filing, post departure, downtime, exclusion, or exemption citations,
conforming to the approved data formats found in the Bureau of the
Census FTR. See 15 CFR part 30.
The current regulations found in 19 CFR 192.14 also require the
USPPI, the USPPI's authorized agent, or the authorized filing agent of
the FPPI to electronically transmit to CBP through AES certain EEI.
This information supports statistical gathering; however, it falls
short of addressing important cargo security considerations to include
almost all shipments with a value less than $2,500.00 per Schedule B
number and shipments directed to Canada, other than those containing
certain items controlled under the EAR or intended for transshipment
through Canada, creating a gap in security which the proposed
regulation seeks to resolve by requiring information on all exports for
rail cargo. CBP seeks to require the submission of manifest information
providing CBP the opportunity to review and examine cargo such that
high risk shipments such as narcotics, weapons or ammunition, including
any that may not be subject to EEI filing requirements under the FTR or
EAR, have a means of being discovered and withheld thereby enhancing
the security of the United States. This proposed regulation will close
that security gap by requiring compliance with the regulation in order
to export the cargo as parties will have to provide electronic manifest
information which CBP can screen and inspect for the safety of the
United States and its neighboring countries. This proposed regulation
also aligns with the regulation for rail cargo imported into the United
States.
The transmission of EEI is a Bureau of the Census filing regulated
by 15 CFR part 30 and, with few exceptions, only submitted when the
value of merchandise is above $2,500.00 per Schedule B number. The
requirement also does not apply to rail shipments bound for Canada
unless such shipments contain certain export-controlled items or are
destined for transshipment to third countries. This regulatory gap
leaves many shipments outside of CBP security review. The lack of pre-
departure information, which includes commodity information submitted
by rail carriers into CBP targeting systems, hinders CBP's ability to
conduct risk assessment and inspect cargo effectively to ensure
compliance with U.S. export control laws and regulations. The proposed
regulation would create an integrated pre-departure electronic export
manifest which includes receiving advance information for risk
assessment purposes from the source most likely to have correct
information about the cargo.
Currently, for exporting purposes, each carrier submits a train
consist in a format it develops and with the data elements that it
believes should be reported. The train consist identifies what is on
the train, the order of the train, and what the train is consisted of
as it prepares to depart the country. These data elements provide
export information similar to that required by the provisions of 19 CFR
123.91, which
[[Page 2878]]
describes electronic information for rail cargo required in advance of
arrival, and 19 CFR 123.6, which includes a train sheet for arriving
railroad trains.
B. The ACE Export Manifest for Rail Cargo Test
On September 9, 2015, CBP published a general notice in the Federal
Register (80 FR 54305) announcing the National Customs Automation
Program (NCAP) Test for the transmission through ACE of Electronic
Export Manifest (EEM) information for rail shipments, the Automated
Commercial Environment (ACE) Export Manifest for Rail Cargo Test
(``Test''), which was limited to nine rail carriers.
1. The National Customs Automation Program
The NCAP was established in Subtitle B of Title VI--Customs
Modernization, in the North American Free Trade Agreement
Implementation Act, Public Law 103-182, 107 Stat. 2057, 2188 (1993)
(Customs Modernization Act) (19 U.S.C. 1411-14). Through NCAP, the
initial thrust of customs modernization was on trade compliance and the
development of ACE, the planned successor to the Automated Commercial
System (ACS). ACE is an automated and electronic system for commercial
trade processing which is intended to streamline business processes,
facilitate growth in trade, ensure cargo security, and foster
participation in global commerce, while ensuring compliance with U.S.
laws and regulations and reducing costs for CBP and its communities of
interest. The ability to meet these objectives depends on successfully
modernizing CBP's business functions and the information technology
that supports those functions. CBP's modernization efforts are
accomplished through phased releases of ACE component functionality.
In part, the Test has been used in furtherance of International
Trade Data System (ITDS) key initiatives, set forth in section 405 of
the Security and Accountability for Every Port Act of 2006, Public Law
109-347, 120 Stat. 1884, 1929-1931 (SAFE Port Act) (19 U.S.C. 1411(d))
and Executive Order 13659, Streamlining the Export/Import Process for
America's Businesses, 79 FR 10655 (February 25, 2014). The purpose of
ITDS, as stated in section 405, Sec. 411(d)(1)(B) of the SAFE Port Act
(19 U.S.C. 1411(d)(1)(B)), is to eliminate redundant information
requirements, efficiently regulate the flow of commerce, and
effectively enforce laws and regulations relating to international
trade, by establishing a single portal system operated by CBP for the
collection and distribution of standard electronic import and export
data required by all participating Federal agencies. ACE was developed
by CBP as the ``single window'' for the trade community to comply with
the ITDS requirement established by the SAFE Port Act. See sec. 405,
Sec. 411(d)(1)(B) (19 U.S.C. 1411(d)(1)(B)).
2. Data Elements in the Test
The data elements as set forth in the original Test have been
mandatory unless otherwise indicated below. The Test has required that
five conditional data elements must be transmitted to CBP only if the
particular information pertains to the shipment or cargo. The data
elements are required to be submitted at the lowest bill level. The
data elements in the Test for all shipments, including empty rail cars,
consist of:
(1) Mode of Transportation (containerized rail cargo or non-
containerized rail cargo)
(2) Port of Departure from the United States
(3) Date of Departure
(4) Manifest Number
(5) Train Number
(6) Rail Car Order
(7) Car Locator Message
(8) Hazmat Indicator (Yes/No)
(9) 6-character Hazmat Code (conditional) (If the hazmat indicator is
yes, then UN (for United Nations Number) or NA (North American Number)
and the corresponding 4-digit identification number assigned to the
hazardous material must be provided.)
(10) Marks and Numbers
(11) SCAC (Standard Carrier Alpha Code) for exporting carrier
(12) Shipper name and address (For empty rail cars, the shipper may be
the railroad from whom the rail carrier received the empty rail car to
transport.)
(13) Consignee name and address (For empty rail cars, the consignee may
be the railroad to whom the rail carrier is transporting the empty rail
car.)
(14) Place where the rail carrier takes possession of the cargo
shipment or empty rail car
(15) Port of Unlading
(16) Country of Ultimate Destination
(17) Equipment Type Code
(18) Container Number(s) (for containerized shipments) or Rail Car
Number(s) (for all other shipments)
(19) Empty Indicator (Yes/No)
If the empty indicator is no, then the following data elements must
also be provided, as applicable:
(20) Bill of Lading Numbers (Master and House)
(21) Bill of Lading Type (Master, House, Simple or Sub)
(22) Number of House Bills of Lading
(23) Notify Party name and address (conditional)
(24) AES Internal Transaction Number or AES Exemption Statement (per
shipment)
(25) Cargo Description
(26) Weight of Cargo (may be expressed in either pounds or kilograms)
(27) Quantity of Cargo and Unit of Measure
(28) Seal Number
(29) Split Shipment Indicator (Yes/No)
(30) Portion of split shipment (e.g., 1 of 10, 4 of 10, 5 of 10--Final,
etc.) (conditional)
(31) In-bond Number (conditional)
(32) Mexican Pedimento Number (only for shipments for export to Mexico)
(conditional)
3. Test Expansion, Extension, Modification and Second Extension
On August 14, 2017, CBP extended the Test for an additional two-
year period (82 FR 37893). At the same time, the Test began accepting
additional applications for all parties that met the eligibility
requirements of the original nine stakeholders composed of rail
carriers. CBP consulted with the Commercial Customs Operations Advisory
Committee (COAC) to address issues concerning the quality,
accessibility, and timeliness of export manifest data received during
the Test. One issue of concern was the availability of certain data
elements required under the Test two hours prior to loading of the
cargo on the train in preparation for departure from the United States.
COAC urged CBP to change the filing condition of those data elements.
After evaluating the initial phase of the Test and considering
COAC's comments, CBP determined that, to better test the functionality
and feasibility of submitting the specified export data two hours prior
to loading of the cargo on the train, the filing condition for nine of
the data elements should be changed. The modified filing conditions
enabled CBP to better determine the appropriate reporting requirements
for each data element. Data elements which are ``mandatory'' must be
provided to CBP for every shipment. Data elements which are
``conditional'' must be provided to CBP only if the particular
information pertains to the cargo. Data elements which are ``optional''
may be provided to CBP but are not required.
[[Page 2879]]
CBP modified the Test to change the following eight mandatory or
conditional data elements to optional:
Mode of Transportation (containerized rail cargo or non-
containerized rail cargo) (Data Element #1)
Place where the carrier took possession (Data Element #14)
Country of Ultimate Destination (Data Element #16)
Equipment Type Code (Data Element #17)
Number of House Bills of Lading (Data Element #22)
Split Shipment Indicator (Data Element #29)
Portion of Split Shipment (Data Element #30)
Mexican Pedimento Number (Data Element #32)
CBP also modified the Test to change Data Element #10, Marks and
Numbers, from mandatory to conditional.
The remaining data elements under the extended Test continued to be
mandatory, conditional, or optional as provided in the September 9,
2015, notice, and as detailed in Section IV.B.2. above.
CBP identified in the expansion and modification of the Test that
it would reevaluate the filing conditions for each data element to
determine the feasibility of requiring that data element to be filed
electronically in ACE within a specified time before the cargo is
loaded on the train should CBP decide to conduct rulemaking.
Accordingly, as discussed in more detail below, the proposed regulation
changes the timing of presentation of most electronic export manifest
data from two hours prior to loading on the train to two hours prior to
departure of the train to a foreign port.
On April 27, 2022, CBP extended the Test for an additional two
years. (87 FR 25037.)
V. Results of the Test, Modification, Expansion and Extensions
Since its inception, the Test has assessed the feasibility of
requiring rail carriers to file export manifest data for which CBP did
not have regulations established for specific data elements and
obtained train consists in the format and manner in which the rail
carriers chose to provide such elements. In addition, the Test has
assessed the functionality regarding the filing of export manifest data
for rail cargo electronically to ACE in furtherance of the ITDS
initiatives described above. CBP also re-engineered AES to move it to
the ACE platform. The re-engineering and incorporation of AES into ACE
resulted in the creation of a single automated export processing
platform for certain export manifest, commodity, licensing, export
control, and export targeting transactions. This reduces costs for CBP,
partner government agencies, and the trade community, and improves
facilitation of export shipments through the supply chain.
Additionally, the Test has examined the feasibility of requiring
the rail carrier to submit manifest information electronically in ACE
generally within a specified time before the cargo has been loaded on
the train. Test participants were and are required to submit export
manifest data electronically to ACE at least two hours prior to loading
of the cargo or, for empty rail cars, upon assembly of the train. This
time frame has enabled CBP to link the EEI submitted by the USPPI with
the export manifest information. Much of that success has resulted from
the fact that a high percentage of information is being transmitted
well before the two-hour prior to departure deadline. Upon a random
review of data identifying compliance with time frame submission, CBP
found that nearly 94% of data transmissions occurred more than 24 hours
prior to conveyance departure.
The success of the Test has allowed CBP to determine that the
electronic submission of manifests provides improvements in
capabilities at the departure level. As a result of these improvements,
CBP is now seeking to end the Test and codify this program by proposing
new regulations in this document.
VI. Purpose and Need of the Rule
CBP proposes a new regulatory requirement because it does not
currently have regulations in place requiring the submission of an
electronic export manifest for cargo transported by rail to assess
cargo security. The proposed regulatory changes are the culmination of
CBP's efforts with the Test described above.
The proposed regulation will leverage the data elements and train
consist requirements in advance of departure to Mexico and Canada. The
data elements are already included in the current Test, which has been
operational since September 9, 2015. 80 FR 54305. The proposed
regulation identifies the mandatory, conditional, and optional data
elements and who would be required to submit the data. The proposed
regulation also would add an initial filing for seven data elements to
be presented 24 hours prior to departure of the train.
For CBP, the proposed requirement to submit an electronic export
manifest will enhance cargo security in that it would allow for
improvements in risk assessment capabilities at the port level. Port
operations will enjoy considerable efficiencies through the elimination
of paper manifests. Storage space currently reserved for manifest
documents will be freed. Coordination and information exchange among
CBP, the Department of Commerce, and other Government agencies with
export jurisdiction will improve. Carriers, USPPIs, non-vessel
operating common carriers (NVOCC), and other interested parties who
transmit information will receive better and more rapid examination
decisions from CBP. The trade will benefit through the ease of making
information corrections and additions electronically, a process that
requires cumbersome manifest discrepancy reporting in a paper world.
The ACE Export Manifest data submission is used to conduct risk
assessment to identify high-risk rail cargo includes but is not limited
to weapons, ammunition, currency or narcotics. High risk shipments are
based on the totality of the review which includes party name, country
of destination, cargo description, and/or a combination of data
elements. Data supports a conclusion that Test participants have access
to the manifest data early in the planning stages of an export rail
cargo transaction and will be able to comply with these time frames. As
stated, CBP anticipates that these timeframes will provide adequate
time to perform proper risk assessment and identification of shipments
to be inspected early enough in the supply chain to enhance security
while minimizing disruption to the flow of goods. At present,
regulations do not provide for any method to screen or secure rail
cargo exports which this proposed regulation seeks to address. ACE
Export Manifest data submission allows CBP to use its Automated
Targeting System (ATS) to screen all of the data submitted which allows
CBP to make better examination decisions while also reducing the time
required to make such decisions. Although CBP will aim to identify
shipments for inspection prior to loading, inspections could
potentially happen at any time before the train departs the United
States.
Any rail cargo identified by CBP as requiring review will be held
until required additional information related to the shipment is
submitted to clarify non-descriptive, inaccurate, or insufficient
information, a physical inspection is performed, or some other
[[Page 2880]]
appropriate action is taken, as specified by CBP. Once the cargo is
cleared for loading, a release message will be generated and
transmitted to the filer.
VII. Proposed Requirements
CBP is seeking to promulgate a new regulation, proposed 19 CFR
123.93, requiring the submission of export manifest data electronically
in ACE for cargo transported by rail, pursuant to section 343(a), of
the Trade Act of 2002, as amended. The proposed regulation would
mandate the electronic transmission of rail export manifest
information, identify the parties eligible to transmit information,
describe the time frames prior to departure of the train in which the
information is due, and identify an initial filing that must occur 24
hours prior to departure from the port of export while requiring the
remaining data to be transmitted at least two hours prior to such
departure.
Further, to comply with Section 343 of the Trade Act of 2002, as
amended (19 U.S.C. 1415), new 19 CFR 123.93 would require parties with
the most direct knowledge to provide certain information to CBP. In
furtherance of that goal, the proposed regulatory language sets forth
differences between transportation data (always required of the carrier
and carrier only) and cargo data, which can be provided by the party
with direct knowledge of that information.
Consistent with the provisions of 19 U.S.C. 1415(a)(3)(B), when
requiring information from the party with direct knowledge of the
information is not practicable, the proposed regulation would take into
account how, under ordinary commercial practices, information is
acquired by the party on which the requirement is imposed and whether
and how such party is able to verify the information. Where information
is not reasonably verifiable by the party, the proposed regulation
would permit the party to transmit information on the basis of what it
reasonably believes to be true.
The proposed regulation designates information as transportation
data, cargo data, or empty container data, and lists the data elements
to be transmitted while calling them out as mandatory, conditional, or
optional. The data elements that are identified as mandatory must be
submitted. These elements are necessary for CBP to inspect cargo
effectively, ensure compliance with U.S. export control laws and
regulations and identify high-risk shipments for purposes of ensuring
cargo safety and security. Data elements that are identified as
conditional must be provided if available. Data elements identified as
optional provide additional information for purposes of clarity and may
facilitate the clearance process but are not required to be submitted.
The proposed regulation provides for direction regarding
enforcement referrals, Do-Not-Load messages, and Hold messages. Any
rail cargo identified by CBP as requiring review would be held until
required additional information related to the shipment is submitted to
clarify non-descriptive, inaccurate, or insufficient information, a
physical inspection is performed, or some other appropriate action is
taken, as specified by CBP. If the cargo is cleared for loading, a
release message would be generated and transmitted to the filer. If a
potential high-risk cargo is identified, then a CBP officer would
conduct an examination. The rail carriers would be notified of these
holds through the integrated system and if a mandatory examination of
the cargo and/or freight car is required or if CBP needs to conduct
further review of the data transmitted. In addition to holds, if a CBP
officer determines during review that cargo or a rail car may contain a
potential threat to the train and its vicinity, a Do-Not-Load (DNL)
instruction would be issued, which prohibits the rail carrier from
transporting that cargo or railcar. The rail carrier should not
transport any cargo or rail car with a DNL. The advance transmission of
EEM data would help CBP review and issue holds before cargo is loaded
or before a train reaches the U.S. port of export, thus facilitating a
more efficient export process.
Specifically, CBP is proposing to require seven data elements,
characterized as an initial filing, to be transmitted no less than 24
hours prior to train departure. The seven data elements chosen for
mandatory transmission 24 hours prior to departure would be those data
elements that would provide CBP with the cargo information it needs to
perform the appropriate security analysis, including: Bill of Lading
Number, Total Quantity, Total Weight, Cargo Description, Shipper's Name
and Address, Consignee Name and Address, and Automated Export System
(AES) Exemption Statement, as applicable. The proposed rule provides
for the submission of transportation, conveyance, and empty container
information two hours prior to departure of the train rather than two
hours prior to loading (or on assembly of the train in the case of
information pertinent to empty rail cars). This change in transmission
timing for all other data elements would combine with the initial
transmission to afford CBP the ability to better assess risk and
effectively target and inspect shipments prior to the cargo departing
the United States to ensure compliance with all U.S. export laws.
A. Initial Data Elements
Different from the Test's time periods for data presentation,
proposed 19 CFR 123.93 requires a mandatory initial filing of seven
data elements identified below to be submitted 24 hours prior to
departure to a foreign port, by either the carrier, USPPI, or other
qualified parties or their authorized agents. In proposed 19 CFR
123.93(b)(1), CBP has determined that requiring this initial filing in
a time frame even earlier than prescribed in the Test is necessary to
allow for complete vetting of cargo and transportation information for
security purposes. The high percentage of data available for
transmission 24 hours prior to departure supports the feasibility of
requiring this initial filing. In further support of this proposal,
some validations would be relaxed until the carrier links the master
bill and house bill to allow for the submission of advance data. Upon
receipt of the initial filing submission, CBP would validate and notify
the filer of the master bill and house bill data, if any data is
required, or if the house bill has been placed on hold pending the
updating of the bill. Under the proposed regulation, the carrier would
have the ultimate responsibility to load, hold, or not load the cargo.
The carrier, USPPIs and other parties qualified to transmit data (or
their authorized agent) would be eligible to submit the initial data
filing as discussed below.
CBP proposes adding 19 CFR 123.93(c) which identifies the parties
that can file the cargo and conveyance data. The outbound carrier is
responsible for transmitting export manifest transportation data and
empty container data. The outbound carrier must also transmit the
initial filing data and the export manifest cargo data if no other
eligible party elects to do so. If another eligible party elects to
transmit either the initial filing data or export manifest cargo data,
the outbound carrier may also choose to, but is not required to,
transmit such data. Other eligible parties include USPPI and FPPI, as
defined by the provisions of section 30.1 of the FTR of the Department
of Commerce, Bureau of the Census (15 CFR 30.1), or its authorized
agent. Other eligible filers also include any other party with direct
knowledge of the export information, such as a customs broker,
Automated Broker Interface (ABI) filer, NVOCC as defined by 19 CFR
4.7(b)(3)(ii), or a freight forwarder
[[Page 2881]]
as defined in 19 CFR 112.1. If another party does not transmit advance
export information, the party that arranges for and/or delivers the
cargo to the outbound carrier must fully disclose and present to the
outbound carrier the data elements for the initial filing. Any party
transmitting any of the data described in this subsection must be in
possession of either a CBP Basic Importation and Entry Bond containing
the provisions found in 19 CFR 113.62, a Basic Custodial Bond
containing the provisions found in 19 CFR 113.63, or an International
Carrier Bond containing the provisions found in 19 CFR 113.64.
CBP also proposes adding 19 CFR 123.93(d) which identifies the
seven data elements from the Test that are required in the mandatory
initial filing. Descriptions of those data elements have been revised
in the proposed rule to clarify the kind and character of data that is
required. The revised data elements in the proposed rule for the
initial filing and the Test data elements to which they correspond are
as follows:
(1) Bill of lading number, which is necessary to link the
transmission to the cargo throughout the entire electronic manifest
process;
(2) The numbers and quantities of the cargo laden aboard the train
as contained in the carrier's bill of lading, either master or house,
as applicable (this means the quantity of the lowest external packaging
unit; numbers or quantities of containers and pallets do not constitute
acceptable information; for example, a container holding 10 pallets
with 200 cartons should be described as 200 cartons) [Test data element
of Quantity of Cargo and Unit of Measure];
(3) Total weight of cargo expressed in pounds or kilograms [Test
data element of Weight of Cargo (may be expressed in either pounds or
kilograms)];
(4) A precise cargo description (or the Harmonized Tariff Schedule
(HTSUS) number(s) to the 6-digit level under which the cargo is
classified if that information is received from the shipper and weight
of the cargo; or for a sealed container, the shipper's declared
description and weight of the cargo (generic descriptions, specifically
those such as ``FAK'' (``freight of all kinds''), ``general cargo'',
and ``STC'' (``said to contain'') are not acceptable) [Test data
element of Cargo Description];
(5) The shipper's complete name and address, or identification
number, from the bills of lading (for each house bill in a consolidated
shipment) [Test data element of Shipper name and address];
(6) The consignee's complete name and address, or identification
number, from the bill(s) of lading. (The consignee is the party to whom
the cargo will be delivered to in a foreign country. However, in the
case of cargo shipped ``to order of [a named party],'' the ``to order''
party must be named as the consignee; and if there is any other
commercial party listed in the bill of lading for delivery or contact
purposes, the carrier must also report this other commercial party's
identity and contact information including address in the ``Notify
party'' field.) [Test data element of Consignee name and address]; and
(7) The Automated Export System (AES) Exemption Statement, as
applicable [Test data element of AES Exemption Statement (per
shipment)].
Except for these seven data elements re-described or re-formatted
above, CBP would require electronic export manifest information in
sections 123.93(e), and (f) to be transmitted two hours prior to train
departure to a foreign port. That data comprises all additional data
elements to be described as export manifest transportation data, cargo
data, and empty container data. While 32 data elements are described in
the Test, experience has shown that some are no longer necessary for
inclusion in the proposed rule.
B. Transportation Data Elements
Proposed 19 CFR 123.93(e)(1) establishes the obligation on the
carrier or its agent to supply transportation data. The transportation
data elements carried forward from the Test to the proposed rule
include the following:
(1) Port of Departure from the United States (mandatory);
(2) Date of Departure (mandatory);
(3) Mode of Transportation (containerized rail cargo or non-
containerized rail cargo) (optional);
(4) Equipment Type Code (optional);
(5) Place where the rail carrier takes possession of the cargo
shipment or empty rail car (optional);
(6) Carrier-assigned conveyance name, equipment number and trip
number (mandatory);
(7) 6-character Hazmat Code. If the Hazmat Code is provided, then
UN (for United Nations Number) or NA (North American Number) and the
corresponding 4-digit identification number assigned to the hazardous
material must be provided.) (conditional);
(8) Marks and Numbers (conditional);
(9) SCAC (Standard Carrier Alpha Code) for the exporting carrier
(mandatory);
(10) Container or Equipment Numbers (for containerized shipments)
or Rail Car Numbers (for all other shipments) (mandatory);
A transportation data element carried over from the Test to the
proposed 19 CFR 123.3(e) with an expanded definition is as follows:
Seal Number (conditional, only required if container was sealed).
The seal numbers for all seals affixed to containers and/or rail cars
to the extent that CBP's data system can accept this information (for
example, if a container has more than two seals, and only two seal
numbers can be accepted through the system per container, electronic
presentation of two of these seal numbers for the container would be
considered as constituting full compliance with this data element).
In proposed 19 CFR 123.3(e), CBP is adding the transportation data
element of ``Estimated Time of Departure'' (mandatory) to be supplied
by the carrier or its agent that was not required in the Test but
provides important information to CBP.
Proposed 19 CFR 123.3(e) also adds the transportation data element
of ``Train Consist'' (mandatory) to be supplied by the carrier or its
agent. The Train Consist provides CBP with what is on the train from
the engine through the last car and how the cargo is lined up for
departure from the United States. The Train Consist is composed of the
following data elements that were required in the Test:
(1) Manifest Number
(2) Train Number
(3) Rail car order
(4) Empty containers.
C. Cargo Data Elements
Proposed 19 CFR 123.93(f) establishes the obligation on the party
with knowledge of the facts or its agent to supply manifest cargo data.
The cargo data elements carried forward from the Test to the proposed
rule in addition to the seven data elements forming the Initial Data
Filing include the 17 data elements listed below. CBP recognizes that
some cargo data elements would already be requested in the initial data
elements; those data elements would not need to be transmitted again
unless there are updates or changes made. The proposed cargo data
elements are as follows:
(1) Shipper name and address (for empty rail cars, the shipper may
be the railroad from whom the rail carrier received the empty rail car
to transport) (mandatory);
(2) Consignee name and address (for empty rail cars, the consignee
may be the railroad to whom the rail carrier is transporting the empty
rail car) (mandatory);
(3) Port of Lading (mandatory);
(4) Port of Unlading (mandatory);
[[Page 2882]]
(5) Bill of Lading Type (Master, House, Simple or Sub) (mandatory);
(6) Bill of Lading Numbers (Master, House, Simple or Sub)
(mandatory);
(7) AES Internal Transaction Number or In-bond Number (per
shipment) (mandatory);
(8) Cargo description (mandatory);
(9) Weight of cargo (may be expressed in either pounds or
kilograms) (mandatory);
(10) Quantity of cargo and unit of measure (mandatory);
(11) In-bond type (conditional);
(12) Notify party name and address (conditional);
(13) Secondary notify party name and address (conditional);
(14) Mexican Pedimento Number (only for shipments for export to
Mexico) (optional);
(15) Secondary notify party SCAC (optional);
(16) Country of ultimate destination (optional); and
(17) Number of house bills of lading (optional).
CBP has determined that the collection of the following data
elements required in the Test were found to be problematic or
superfluous or are addressed by other regulations and will not be
carried forward in the proposed rule:
(1) Car Locator Message;
(2) Empty Indicator (yes/no);
(3) Hazmat Indicator;
(4) Split Shipment Indicator (Yes/No) \6\; and
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\6\ Although split shipment and portion of split shipment were
data elements identified in the Test, CBP decided it was unnecessary
to carry them into the proposed rule because they are elements
required, to the extent necessary, by 15 CFR 30.28.
---------------------------------------------------------------------------
(5) Portion of split shipment (e.g., 1 of 10, 4 of 10, 5 of 10--
Final, etc.)
D. Examination Referrals
Proposed 19 CFR 123.93(g) provides for two types of referrals that
may be issued by CBP after a risk assessment of an outbound export
manifest data transmission. A referral for information will be
delivered to the rail carrier or its agent if the information provided
fails to appropriately describe the cargo or if the information
provided is inaccurate or insufficient. The data transmitter must then
add or correct the information prior to the departure of the train from
the United States. A referral for screening will be issued if the
potential risk of the cargo is deemed high enough to warrant enhanced
screening. In this instance, the rail carrier is notified of these
holds and the notification lets the rail carrier know that a mandatory
examination of the cargo and or freight car is required or if CBP needs
to conduct further review of the data transmitted.
E. Do-Not-Load (DNL)/Hold Instructions
CBP is also proposing to add 19 CFR 123.93(h) to provide for
procedures for when a CBP officer determines during the review that
cargo or a rail car may contain a potential threat to the train and its
vicinity, so that a Do-Not-Load (DNL) instruction can be issued, which
prohibits the rail carrier from transporting that cargo or rail car.
The rail carrier should not transport any cargo or rail car with a DNL.
A Hold instruction will be issued, even after loading, if further
examination is required. In order to address such issues, data
transmitters must provide a telephone number and email address that is
monitored 24 hours a day/seven days a week. Data transmitters must
respond and fully cooperate when such an instruction or hold is issued.
F. Other Technical Amendments to Part 123
By adding new subpart J, CBP is revising the scope provision (19
CFR 123.0) to reflect that customs procedures at the Canadian and
Mexican borders would include electronic information for cargo in
advance of departure which is not presently addressed in the
regulation.
G. Proposed Amendments to CBP Bond Conditions
As an enforcement tool, CBP is also proposing changes to the
relevant bond provisions in 19 CFR 113.62 (basic importation and entry
bond), in 19 CFR 113.63 (basic custodial bond), and 19 CFR 113.64
(International carrier bond) to provide CBP with authority to impose
liquidated damages on parties that do not provide the mandatory EEM
data in the manner and in the time frame required. Specifically, CBP
proposes to amend 19 CFR 113.62 to add new paragraph (k)(3) to address
electronically provided outbound information. Section 113.62(k)
currently addresses electronic transmissions for merchandise or cargo
which is inbound. CBP also proposes to amend 19 CFR 113.63 to include
advance outbound information provided to CBP electronically and in the
manner and in the time period required under 19 CFR 123.93. CBP is also
seeking to amend 19 CFR 113.64 to include outbound information provided
electronically by international carriers in the manner and time period
required under 19 CFR 123.93. With each of these regulations, CBP may
assess liquidated damages if a violation occurs. Any party that
violates the bond conditions for outbound data transmission as
described above in this proposed rule agrees to pay liquidated damages
of $5,000 for each violation and up to a maximum of $100,000 per
departure. Compliance is CBP's goal and CBP aspires to work alongside
rail carriers and other parties to ensure that trade members provide
the proper data in a timely manner, so that CBP can properly review the
data, conduct risk assessment of high-risk shipments, and enforce U.S.
export laws and regulations on U.S. rail exports.
VIII. Regulatory Analyses
A. Executive Orders 12866 and 13563 (Regulatory Planning and Review)
Executive Orders 12866 (Regulatory Planning and Review), as amended
by Executive Order 14094 (Modernizing Regulatory Review), and 13563
(Improving Regulation and Regulatory Review) direct agencies to assess
the costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying costs and
benefits, reducing costs, harmonizing rules, and promoting flexibility.
The Office of Management and Budget (OMB) has designated this rule
a ``significant regulatory action'' as defined under section 3(f) of
E.O. 12866, as amended by Executive Order 14094. Accordingly, OMB has
reviewed this rule.
In summary, CBP expects that this proposed rule would result in a
present value total combined net cost savings of $49.8 million using a
two percent discount rate, or approximately $3.8 million annualized
(2023 U.S. dollars) to CBP, outbound rail carriers and other related
parties during the period of analysis (2016 to 2030). CBP anticipates
that this proposed rule would also provide added benefits from enhanced
cargo security measures by improving compliance and the enforcement of
U.S. export laws and regulations on U.S. rail exports, while also
improving the facilitation of the export process. The following is the
economic analysis of the potential impacts from this proposed rule.
Purpose and Background
CBP's mission includes ensuring cargo security and preventing
smuggling, while enforcing U.S. trade laws and regulations. CBP needs
to obtain timely and sufficient data prior to
[[Page 2883]]
cargo arriving or departing the United States via any mode of
commercial transportation in order to review and conduct risk
assessment to identify high-risk shipments and inspect cargo
effectively. According to Section 343(a) of the Trade Act of 2002, as
amended (Trade Act) (19 U.S.C. 1415), CBP is authorized to establish
regulations that provide for the mandatory electronic transmission of
data by way of a CBP-approved electronic data interchange before cargo
arrives or departs the United States in all environments (sea, air,
rail, and truck). Transmitting export manifest data electronically,
instead of on paper or via email, allows CBP to use its Automated
Targeting System (ATS) to screen all of the data submitted. This allows
CBP to make better examination decisions while also reducing the time
required to make such decisions. Trade members also experience
efficiencies through quicker CBP examination decisions and improved
communication between CBP and trade members. The requirement to submit
manifest data through an electronic data interchange (ACE) which is the
same system through which data is incorporated from AES is also
important to help facilitate a more efficient trade process for all
federal agencies and trade members involved. Submitting electronic
manifest data (specifically pre-arrival or pre-departure) significantly
increases CBP's ability to conduct risk assessment and identify high-
risk cargo to ensure cargo security and to prevent smuggling. The
electronic environment would improve and expedite communications
between CBP and trade members in resolving examinations where
additional or corrected information of the transmission is required.
Baseline
In the rail environment, CBP currently requires the advance
electronic submission of data for all cargo being brought into the
United States, but CBP does not require the pre-departure electronic
submission of data for all exported cargo. CBP requires some
electronically transmitted cargo data prior to departing the United
States by rail but this data is significantly limited in scope. Current
regulations \7\ require the U.S. Principal Party in Interest (USPPI),
the USPPI's agent, or the authorized filing agent of the Foreign
Principal Party in Interest (FPPI) to transmit Electronic Export
Information (EEI) to CBP through the Automated Commercial Environment
(ACE), no later than two hours prior to the arrival of the train at the
border. Although this pre-departure data is helpful, the information
provided by EEI falls short of what CBP requires for proper
enforcement.
---------------------------------------------------------------------------
\7\ See 19 CFR 192.14.
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The required transmission of EEI is subject to certain exemptions,
as established by the Bureau of the Census regulations,\8\ which
generally only require EEI transmission on shipments greater than
$2,500 and do not require the transmission of EEI for shipments
destined for Canada, unless the shipment contains certain controlled
items or is being transshipped to another destination.\9\ Therefore,
numerous low dollar value shipments and/or Canadian-bound shipments of
merchandise departing the United States by rail do not have EEI
transmitted for CBP to review. The lack of detailed electronic manifest
data for some shipments and the unavailability of electronic cargo data
on lower value merchandise shipments impedes CBP's enforcement efforts
on rail exports.
---------------------------------------------------------------------------
\8\ See 15 CFR part 30.
\9\ See 15 CFR 30.36.
---------------------------------------------------------------------------
Although CBP receives limited pre-departure electronic data for
rail exports, CBP usually receives additional pre-departure data from
rail carriers or their agents. This information, however, is submitted
via attachments to an email, which is not the most efficient or
effective method to obtain such data and perform risk assessment.\10\
During the export cargo process, the rail carrier may not load cargo
without first receiving from the USPPI or its authorized agent either
the related EEI filing citation, covering all cargo for which the EEI
is required, or exemption legends, covering cargo for which EEI need
not be filed. While the rail carrier is not required to submit a rail
cargo export manifest to CBP, the outbound rail carrier must annotate
the carrier's outward manifest, waybill, or other export documentation
with the applicable Automated Export System (AES) proof of filing, post
departure, downtime, exclusion, or exemption citations, conforming to
the approved data formats found in the Bureau of the Census Foreign
Trade Regulations.\11\
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\10\ This information is submitted by rail carriers for trains
transporting cargo out of the United States and is provided
regardless of whether an EEI submission is required.
\11\ See 15 CFR part 30.
---------------------------------------------------------------------------
In the baseline rail carriers or their agents submit finalized
train consists to CBP in a format of the rail carrier's choosing before
a train is granted permission to depart from the U.S. port of
export.12 13 Rail carriers or their agents can provide this
data via email prior to a train's arrival at the U.S. port of export
(pre-departure) or present this data to a CBP officer at departure when
the train arrives at the U.S. port of export (at departure). The
submission of such data pre-departure via email is not mandatory, nor
is there a required time frame for submitting such information.
However, rail carriers have the incentive to provide this information
pre-departure so that CBP has time to review the information before the
train reaches the U.S. port of export, expediting the export process
and usually rail carriers send this information to CBP at least two
hours prior to a train's arrival at the United States border.\14\ If
rail carriers or agents choose not to provide this data pre-departure,
they must present the finalized train consists to CBP upon arrival at
the U.S. port of export at which point CBP officers must complete the
review of the train consists while the train is at the U.S. port of
export, resulting in a delay in the train's departure.
---------------------------------------------------------------------------
\12\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, subject matter expert on
February 25, 2022.
\13\ A train consist is document that generally refers to the
contents of a train including the position of the locomotives and
cars, as well as both non-hazardous and hazardous freight within
those cars.
\14\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, subject matter expert on June
21, 2022.
---------------------------------------------------------------------------
Once this information is received by CBP (either via email or in
person at the port of export) CBP officers will then conduct a review
of the export information, which includes manually reviewing the
finalized train consist (paper version or emailed) and address any
issues. CBP officers must then also compare this data with any EEI
information electronically submitted for that train along with any
other documents. To ensure proper cargo security, during this review
CBP officers must also conduct their targeting, risk assessment
measures and determine if any cargo needs to be examined before a train
departs the United States. In the baseline scenario, CBP is not able to
automatically use ATS for risk assessment on the export information
contained on the train consists provided by rail carriers to CBP.\15\
Although CBP officers can manually query ATS with information provided
on the finalized train consists, CBP notes this is a cumbersome and
time-consuming process and is not a frequent
[[Page 2884]]
occurrence. If during CBP's review of this information, prior to the
train's arrival at the U.S. port of export, CBP officers find any
discrepancies or missing data, CBP communicates via email to the rail
carrier that submitted the data, requesting updates or corrections to
the data provided. The CBP review process, including communications
between CBP and rail carriers about discrepancies discovered while
reviewing train consist information, can be unnecessarily cumbersome
and time consuming because this data is provided via email attachments
and the formats can be inconsistent across rail carriers. If CBP is not
provided the pre-departure data or is not provided the data in a time
frame that allows for CBP to properly review, request, and receive
updates from rail carriers, and conduct proper risk assessment or
manually examine high-risk cargo or shipment, then a CBP officer must
resolve these issues at the U.S. port of export. This usually results
in a delay to the train's departure.
---------------------------------------------------------------------------
\15\ In the baseline scenario CBP is not able use ATS for risk
assessment on export data submitted on paper forms (or via email)
and paper forms cannot be automatically uploaded or submitted to ATS
for risk assessment. A primary benefit of this proposed rule would
be allowing CBP to automatically use ATS for risk assessment on all
rail EEM data provided.
---------------------------------------------------------------------------
CBP does not track how often rail carriers provide this pre-
departure data nor to what extent CBP officers are able to conduct some
or all of their manual review of the data prior to the train's arrival
to the U.S. port of export. Sometimes CBP identifies a high-risk cargo
or shipment during manual review at the U.S. port of export or while
reviewing pre-departure data but does not have time to adjudicate the
shipment prior to a train's arrival at the U.S. port of export. In this
situation, the CBP officer holds the train until one or more freight
car(s) can be removed from the already constructed train for
examination, which can cause delays and can be costly to rail
carriers.\16\
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\16\ Unfortunately, CBP does not track how often manual
examinations occur on average each year as these examinations are
not entered into a system of record.
---------------------------------------------------------------------------
This proposed rule would establish a requirement for the electronic
transmission of export manifest data pre-departure from the United
States for all cargo in the rail environment. CBP defines the process
described above as the regulatory baseline and the analysis of this
proposed rule attempts to measure any incremental costs, cost savings
or benefits compared to the baseline scenario.
The ACE Export Manifest for Rail Cargo Test
CBP has been working toward developing a new process to require the
transmission of electronic export manifest (EEM) data for all cargo
departing the United States by rail to enhance CBP's efforts to ensure
cargo security while also preventing smuggling, and to be compliant
with the Trade Act. CBP expects that the transmission of pre-departure
EEM data would help CBP obtain all the necessary data to successfully
review and conduct risk assessment measures before trains reach the
U.S. port of export, thereby limiting the number of issues that CBP
must address at the U.S. port of export and reducing potential delays.
Rail carriers have also acknowledged that the baseline process of
sending forms of rail export data by email is unnecessarily costly,
time burdensome and inconsistent with the process for providing data on
cargo entering the United States.\17\ As such, rail carriers have been
supportive of CBP's efforts to provide a more efficient process by
allowing for the transmission of rail EEM data.
---------------------------------------------------------------------------
\17\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, on June 21, 2022.
---------------------------------------------------------------------------
In September of 2015, CBP introduced a two-year pilot test program,
referred to in this analysis as the ACE Export Manifest for Rail Cargo
Test (the Test), to determine the feasibility for rail carriers or
their agents to provide pre-departure EEM data for rail exports to CBP
via ACE within a specified time before cargo departs the United States.
To test the functionality of this new process, CBP initially limited
participation in the Test to nine rail carriers. During this initial
phase of the Test, CBP worked with rail carriers who agreed to
participate and submit EEM data to CBP via ACE in addition to providing
paper forms. The participants were large rail companies, similar in
most respects to those that did not participate. As such, CBP believes
their experience with the test is informative for analyzing the effects
of the rule. CBP requests comment on any meaningful differences between
the participants and the non-participants that would affect the
analysis. CBP requested that participants continue to submit data in
paper forms as they did before the Test so that CBP could capture any
inconsistencies or issues with the electronic transmission of rail
export manifest data to CBP. In the Test, CBP requested that
participants provide rail EEM data to CBP at least two hours prior to
loading the cargo onto the train, or in the case of empty rail cars
upon assembly of the train.\18\ Because the ACE system would conduct a
majority of the risk assessment and review of electronically
transmitted data, CBP anticipated that this two-hour window would
provide enough time for CBP to review pre-departure EEM data prior to
the cargo being loaded onto trains and before the trains have been
assembled. The two-hour time frame also provided CBP the opportunity to
notify rail carriers or agents to revise and correct export manifest
data where necessary before the cargo is loaded. This increased the
chance that CBP could conduct cargo inspections before cargo is loaded
and trains are assembled, avoiding costly time burdens if issues were
to be addressed after the train has been constructed. The required
deadline for EEM data also provided CBP an opportunity to compare any
EEI submitted by the USPPI with the export manifest data to properly
conduct safety and security screening for cargo departing the United
States on rail.
---------------------------------------------------------------------------
\18\ CBP notes that although the Test requested export manifest
data to be provided within certain deadlines, participants were not
required to provide data within these time frames. Participants were
given flexibility to provide the data to CBP electronically and were
not penalized if export manifest data was not submitted within the
time frames of the Test. However, CBP experienced high levels of
compliance with submitting EEM data transmissions with 94 percent of
all data transmissions were submitted greater than 24 hours prior to
the departure time.
---------------------------------------------------------------------------
One major improvement of the Test is that rail carriers can provide
and revise export manifest data electronically on a flow basis when the
export data becomes available during the export process. Typically,
rail carriers provide export manifest data in documents known as bills
of lading (bills), which act as a receipt and contract of transporting
cargo and goods. These bills can come from a number of sources
depending on which party is privy to the information and the timing of
when the information is provided. A house bill contains cargo details
and is issued directly by a party such as a Non-Vessel Operating Common
Carrier (NVOCC) or freight forwarder. This bill acts as the receipt of
exported goods and provides export manifest data at its lowest level.
Carriers issue a master bill which includes all other export manifest
information such as transportation details for the transporting train
covering any number of house bills that are included on that train.
Additionally, in the case where a NVOCC or freight forwarder is not
involved in the shipment transaction and the carrier has the specific
cargo data available, the carrier can issue a ``simple bill,'' which is
similar to a house bill and contains cargo details at the lowest bill
level of export manifest data. In the rail environment, house bills and
master bills are not typically issued because rail carriers usually
issue simple bills for all cargo and then submit finalized
[[Page 2885]]
train consists to CBP. These consists include the simple bills
associated with all the cargo on the train and any other transportation
data for the train prior to departure from the U.S. port of export. The
Test allows participants to transmit these simple bills on a flow basis
when the information becomes available. This differs from the baseline
scenario where rail carriers typically waited for simple bills to be
finalized before sending the export manifest data in the finalized
train consist in a paper format to CBP for review. The transmission of
EEM data, via ACE, allows for the integrated system to conduct a large
portion of the review process using data validations, checks and risk
assessment measures prior to the rail carriers loading cargo onto
freight cars or constructing the train. Additionally, upon transmission
of the pre-departure EEM data, CBP can review data on a flow basis
while rail carriers provide updated data throughout the export process.
The integrated system will generate two types of holds when rail
carriers transmit bills: 2H Documentation holds, which notifies the
rail carriers or their agents in the integrated system of outstanding
issues with the data provided, and 1H Enforcement holds, which result
from risk assessment. In the instance of a 2H Documentation hold, the
rail carrier or agent must add or revise the missing or incorrect
reference data in order to release the hold on the cargo prior to
departure from the United States. The 2H Documentation holds
automatically generated by ACE do not require any action or response
from CBP or CBP officers and only affect rail carriers or their agents.
The integrated system assists CBP in its risk assessment efforts and
the identification of high-risk cargo. If during the integrated systems
risk assessment, a potential high-risk cargo is identified, then a 1H
Enforcement hold is generated which requires a CBP officer to conduct a
review of the export manifest data submitted.\19\ The rail carriers are
notified of these holds through the integrated system which lets them
know if a mandatory examination of the cargo and or freight car is
required or if CBP needs to conduct further review of the data
transmitted. These holds can be issued and addressed even after rail
carriers load the cargo. If a 1H Enforcement hold is issued to a rail
carrier after loading the cargo and CBP requests to inspect the cargo,
the rail carrier must provide CBP with a location where CBP can conduct
a proper examination. In addition to holds, if a CBP officer determines
during review that cargo or a rail car may contain a potential threat
to the train and its vicinity, a Do-Not-Load (DNL) instruction is
issued, which prohibits the rail carrier from transporting that cargo
or rail car. The rail carrier should not transport any cargo or rail
car with a DNL. The transmission of EEM data in advance would help CBP
review and issue holds before cargo is loaded or before a train reaches
the U.S. port of export. This transmission facilitates a more efficient
export process by reducing the likelihood of a freight car or cargo
being removed from a constructed train and the resulting delays when
departing the U.S. port of export.
---------------------------------------------------------------------------
\19\ CBP officers can also issue 1H Enforcement holds during
manual review of electronic export manifest data transmitted.
---------------------------------------------------------------------------
Rail carriers participating in the Test provide a number of
mandatory and conditional data elements electronically to CBP via ACE.
CBP determined that the selected data elements (listed below) would
provide the information necessary to conduct proper cargo security
enforcement. Rail carriers were already providing these data elements
by the time of departure from the U.S. port of export to CBP prior to
the Test but in paper form within the finalized train consists. The
Test also required participating rail carriers to submit these data
elements at the lowest bill level possible. The necessary data elements
CBP selected during this initial phase of the Test, including empty
rail cars, consisted of the following:
(1) Mode of Transportation (containerized rail cargo or non-
containerized rail cargo)
(2) Port of Departure from the United States
(3) Date of Departure
(4) Manifest Number
(5) Train Number
(6) Rail Car Order
(7) Car Locator Message
(8) Hazmat Indicator (Yes/No)
(9) 6-character Hazmat Code (conditional) (If the hazmat indicator is
yes, then UN (for United Nations Number) or NA (North American Number)
and the corresponding 4-digit identification number assigned to the
hazardous material must be provided.)
(10) Marks and Numbers
(11) SCAC (Standard Carrier Alpha Code) for exporting carrier
(12) Shipper name and address (For empty rail cars, the shipper may be
the railroad from whom the rail carrier received the empty rail car to
transport.)
(13) Consignee name and address (For empty rail cars, the consignee may
be the railroad to whom the rail carrier is transporting the empty rail
car.)
(14) Place where the rail carrier takes possession of the cargo
shipment or empty rail car
(15) Port of Unlading
(16) Country of Ultimate Destination
(17) Equipment Type Code
(18) Container Number(s) (for containerized shipments) or Rail Car
Number(s) (for all other shipments)
(19) Empty Indicator (Yes/No)
Additionally, if the rail carrier identified that the rail car is
not empty (empty indicator is no), then CBP also required information
for the following data elements for non-empty rail cars, as applicable:
(20) Bill of Lading Numbers (Master and House)
(21) Bill of Lading Type (Master, House, Simple or Sub)
(22) Number of house bills of lading
(23) Notify Party name and address (conditional)
(24) AES Internal Transaction Number or AES Exemption Statement (per
shipment)
(25) Cargo Description
(26) Weight of Cargo (may be expressed in either pounds or kilograms)
(27) Quantity of Cargo and Unit of Measure
(28) Seal Number
(29) Split Shipment Indicator (Yes/No)
(30) Portion of split shipment (e.g., 1 of 10, 4 of 10, 5 of 10--Final,
etc.) (conditional)
(31) In-bond Number (conditional)
(32) Mexican Pedimento Number (only for shipments for export to Mexico)
(conditional)
After the initial two-year period, CBP determined that the initial
phase of the Test had been feasible and functional for participating
rail carriers to provide EEM data and therefore CBP extended the test
in 2017. At that time, CBP expanded the Test and made it available to
all rail carriers and other trade members (beyond the initial nine rail
carrier limit) which met the eligibility criteria.\20\ After the first
two years of the
[[Page 2886]]
Test, CBP received feedback from rail carriers from the Commercial
Customs Operations Advisory Committee (COAC), which stressed that rail
carriers may not have access to certain export manifest data elements
requested by CBP two hours prior to loading of cargo. Therefore, CBP
determined to change the filing condition for nine of the pre-departure
export manifest data elements for the Test moving forward. As part of
the Test extension, CBP separated EEM data elements into three
categories, mandatory, conditional, and optional data, and requested
this information for all cargo and empty rail cars, at least two hours
prior to loading of the cargo. CBP changed the following pre-departure
EEM data elements (which were originally mandatory) to optional for the
Test extension.
---------------------------------------------------------------------------
\20\ Limited to those parties able to electronically transmit
manifest data in the identified acceptable format. Prospective ACE
Export Manifest for Rail Cargo Test participants must have the
technical capability to electronically submit data to CBP and
receive response message sets via Cargo-ANSI X12 (also known as
``Rail X12'') or Unified XML and must successfully complete
certification testing with their client representative. Once parties
have applied to participate, they must complete a test phase to
determine if the data transmission is in the required readable
format. Applicants will be notified once they have successfully
completed testing and are permitted to participate fully in the
test. In selecting participants, CBP takes into consideration the
order in which the applications are received.
---------------------------------------------------------------------------
Mode of Transportation (containerized rail cargo or non-
containerized rail cargo) (Original Data Element #1)
Place where the carrier took possession (Original Data Element
#14)
Country of Ultimate Destination (Original Data Element #16)
Equipment Type Code (Original Data Element #17)
Number of house bills of lading (Original Data Element #22)
Split Shipment Indicator (Original Data Element #29)
Portion of split shipment (Original Data Element #30)
Mexican Pedimento Number (Original Data Element #32)
CBP also modified the Test by changing the following data element
from mandatory to conditional:
Marks and Numbers (Data Element #10)
CBP has continuously extended or renewed the Test to gauge the
functionality and feasibility of implementing the requirement of
providing EEM data to CBP prior to a train's departure. CBP believes
that the Test has been successful and CBP is proposing to make the
transmission of pre-departure EEM data mandatory for all cargo
departing the United States in the rail environment.
The ACE Export Manifest for Rail Cargo Program
This proposed rule would mandate the transmission of EEM data for
all cargo prior to departing the United States in the rail environment
in lieu of paper submissions, see Section VII `Proposed Requirements'
above for discussion on the regulatory requirements of this proposed
rule. CBP anticipates that providing this requirement for the
transmission of pre-departure EEM data would significantly improve
CBP's ability to conduct proper cargo security, prevent smuggling, and
aid in facilitating a more effective and efficient trade process. Under
this proposed rule, the parties most likely to have the correct data on
rail export cargo would be able to provide it to CBP through ACE. The
experience and knowledge CBP gained during the Test influenced CBP to
change some of the requirements for providing EEM data in this proposed
rule.
CBP evaluated the time frames for electronic manifest data
transmission during the Test, the most important data elements needed
for risk assessment and screening cargo, and the unavailability to rail
carriers of certain data elements at given time frames and decided to
group the rail EEM data elements based on the deadlines for submission
of data and on which party likely has the correct information to
provide the export manifest data. The proposed rule would allow rail
carriers, carrier's agents, NVOCCs, freight forwarders, customhouse
brokers (CHB), or anyone with direct knowledge of the export manifest
data to provide specific pre-departure export manifest data to CBP,
using CBP's ACE as a data transmission portal. The proposed rule
mandates that a party transmitting any specific EEM data must have a
bond on file with CBP. Additionally, the party that transmits any EEM
data electronically to CBP is also the responsible party for addressing
any questions, issues, instructions or holds resulting from CBP's
review of that specific data. Therefore, CBP would require that any
party transmitting EEM data to CBP provide a telephone number and email
address that the party monitors 24 hours per day and seven days a week
to quickly address any instructions or holds that CBP issues.
To improve CBP's risk assessment and screening efforts using pre-
departure EEM data, this proposed rule would require an initial filing
of seven mandatory data elements, which must be transmitted to CBP by
any eligible party at least 24 hours prior to the departure from the
U.S. port of export. The rail carrier is responsible for providing the
initial filing data elements to CBP if no other eligible party elects
to transmit the data. Eligible parties should transmit all other pre-
departure EEM data elements to CBP no later than two hours prior to
departure from the U.S. port of export, except for data on empty
containers which would be required upon assembly of the train. From
CBP's experience during the Test, CBP does not anticipate that changing
the time frames for data transmission in this proposed rule would cause
any data transmission issues for parties submitting the
information.\21\ Depending on the party providing the EEM data, the
required export data may be available at different points in time
during the export rail transaction process. Some rail carriers would
have the export manifest data available days in advance prior to
departure and therefore would have all the necessary information to
submit the initial filing data to CBP and all other export manifest
data well in advance of the 24-hour and 2-hour prior to departure
deadlines.\22\ CBP anticipates that all rail carriers would likely
obtain the necessary export data elements to provide the required
transportation and cargo EEM data within the two-hour prior to
departure deadline.\23\ However, for some rail carriers acquiring the
necessary data for the initial filing 24 hours prior to departure may
require a change in business practices and additional coordination with
other trade members or parties that have the required export manifest
data. CBP does not believe that in such instances the export manifest
data does not exist rather, the other trade members have not yet
provided this information to the rail carrier.\24\ CBP expects that in
such instances the costs to rail carriers to obtain this information
from other trade members a few hours earlier would be minimal.
Additionally, if other trade members are reluctant to provide this
information to rail carriers within the 24-hour prior to departure
deadlines, the other trade members would be able to provide this data
to CBP directly as participant in the rail EEM process.
---------------------------------------------------------------------------
\21\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, on June 21, 2022.
\22\ CBP obtained feedback and information from Trade members on
when in the export transaction process, the export manifest data is
typically available for them to submit to CBP. Information obtained
in February 2023.
\23\ CBP obtained feedback and information from Trade members on
when in the export transaction process, the export manifest data is
typically available for them to submit to CBP. Information obtained
in February 2023.
\24\ Information provided during discussion with some Trade
members in regard to the timeline for when export manifest data is
available to provide to CBP and challenges to providing pre-
departure data well in advance. Data obtained in February 2023.
---------------------------------------------------------------------------
CBP notes that during the Test, participants were already providing
most of the data required in the initial filing well in advance of
departure and within the 24 hours prior to departure time frame.\25\
CBP expects that rail carriers and other trade members would
[[Page 2887]]
have access to most export manifest data early in the planning stages
of an export rail cargo transaction and would be able to comply with
these time frames. Additionally, participating parties would be able to
transmit EEM data to CBP on a flow basis whenever it becomes available
to help facilitate CBP's review of the export data and the overall
export process. CBP anticipates that these time frames would provide
CBP adequate time to perform proper risk assessment and identify any
cargo CBP should examine, early enough in the supply chain to enhance
security while minimizing disruption to the flow of goods. Upon
submission of the initial filing, CBP would validate or notify the
responsible party of any holds or DNLs. The party that transmits the
data is responsible for providing answers and updates on the data to
CBP but the ultimate responsibility to load, hold, or not load cargo
falls on the rail carrier.
---------------------------------------------------------------------------
\25\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, on August 2, 2022.
---------------------------------------------------------------------------
The seven data elements CBP selected for the initial filing were
mandatory data elements in the Test; however, CBP revised the
descriptions of these elements in this proposed rule to provide
additional clarity on the data required. The initial filing data
elements required in this proposed rule include the following, listed
as well are the data elements' corresponding descriptions during the
Test:
(1) Bill of lading number,
(2) The numbers and quantities of the cargo laden aboard the train
as contained in the carrier's bill of lading, either master or house,
as applicable (this means the quantity of the lowest external packaging
unit; the numbers or quantities of containers and pallets do not
constitute acceptable information; for example, a container holding 10
pallets with 200 cartons should be described as 200 cartons [Test data
element of Quantity of Cargo and Unit of Measure],
(3) Total weight of cargo expressed in pounds or kilograms [Test
data element of Weight of Cargo (may be expressed in either pounds or
kilograms)],
(4) A precise cargo description (or the Harmonized Tariff Schedule
(HTSUS) number(s) to the 6-digit level under which the cargo is
classified if that information is received from the shipper and weight
of the cargo); or for a sealed container, the shipper's declared
description and weight of the cargo (generic descriptions, specifically
those such as ``FAK'' [``freight of all kinds''], ``general cargo'',
and ``STC'' [``said to contain''] are not acceptable) [Test data
element of Cargo Description],
(5) The shipper's complete name and address, or identification
number, from the bills of lading (for each house bill in a consolidated
shipment) [Test data element of Shipper name and address],
(6) The consignee's complete name and address, or identification
number, from the bill(s) of lading (The consignee is the party to whom
the cargo will be delivered in a foreign country. However, in the case
of cargo shipped ``to order of [a named party],'' the ``to order''
party must be named as the consignee; and if there is any other
commercial party listed in the bill of lading for delivery or contact
purposes, the carrier must also report this other commercial party's
identity and contact information including address in the ``Notify
party'' field.) [Test data element of Consignee name and address], and
(7) AES Exemption Statement, as applicable [Test data element AES
Exemption Statement (per shipment)].
In this proposed rule, CBP groups the remaining rail EEM data
elements based on CBP's understanding of which parties may have the
best knowledge of the export manifest data elements. CBP categorizes
these remaining data elements as export manifest transportation data,
export manifest cargo data, and empty container data. According to this
proposed rule, the rail carrier or its agent is responsible for
transmitting to CBP the EEM data on any empty container rail cars.\26\
This data must be submitted electronically no later than the time of
assembly of the train. For EEM transportation data, the rail carrier or
its agent must also transmit this data at least two hours prior to
departure from the U.S. port of export. The rail carrier or its agent
is responsible for providing the following EEM transportation data
elements to CBP in this proposed rule:
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\26\ If applicable, empty container rail car data would be
included in the Train Consist data element of the mandatory data
elements for transportation data. Empty containers are listed in the
train consist and do not require any additional data to be provided
as per this proposed rule.
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Mandatory Elements
(1) Port of departure from the United States
(2) Date of departure
(3) Estimated time of departure
(4) Carrier-assigned conveyance name, equipment number and trip number
(5) Train Consist, which includes: (A) manifest number, (B) train
number, (C) rail car order, and (D) empty containers (if applicable)
(6) The rail carrier identification SCAC code (the unique Standard
Carrier Alpha Code assigned for each carrier by the National Motor
Freight Traffic Association; see Sec. 4.7a(c)(2)(iii) of this chapter)
(7) Container or equipment numbers (for containerized shipments) or
Rail Car Numbers (for all other shipments)
Conditional Elements
(1) 6-character Hazmat Code. (If the Hazmat indicator is yes, then UN
(for United Nations Number) or NA (North American Number) and the
corresponding 4-digit identification number assigned to the hazardous
material must be provided)
(2) Marks and numbers
(3) Seal number (only required if container was sealed.) \27\
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\27\ The seal numbers for all seals affixed to containers and/or
rail cars to the extent that CBP's data system can accept this
information (for example, if a container has more than two seals,
and only two seal numbers can be accepted through the system per
container, electronic presentation of two of these seal numbers for
the container would be considered as constituting full compliance
with this data element).
---------------------------------------------------------------------------
Optional Elements
(1) Mode of transportation (containerized rail cargo or non-
containerized rail cargo)
(2) Equipment type code
(3) Place where the rail carrier takes possession of the cargo shipment
or empty rail car
CBP provides additional flexibility in this proposed rule by
allowing any eligible party with the most direct information to provide
EEM cargo data to CBP two hours prior to departure from the U.S. port
of export. However, the rail carrier or its agent may also elect to
transmit the mandatory EEM cargo data and in the case that no other
party elects to provide the required EEM cargo data, it is the rail
carrier's responsibility to provide this EEM cargo data to CBP.\28\ The
following data elements comprise the CBP-requested EEM cargo data for
rail EEM in this proposed rule. CBP notes that if the data was provided
during the initial filing it does not need to be transmitted again
unless there were updates or changes made to the data.
---------------------------------------------------------------------------
\28\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, on June 21, 2022.
---------------------------------------------------------------------------
Mandatory Elements
(1) Shipper name and address (For empty rail cars, the shipper may be
the railroad from whom the rail carrier received the empty rail car to
transport.)
(2) Consignee name and address (For empty rail cars, the consignee may
be the railroad to whom the rail carrier is transporting the empty rail
car.)
(3) Port of lading
(4) Port of unlading
(5) Bill of lading type (Master, House, Simple or Sub)
[[Page 2888]]
(6) Bill of lading numbers (Master, House, Simple or Sub)
(7) AES Internal Transaction Number or In-bond number (per shipment)
(8) Cargo description
(9) Weight of cargo (may be expressed in either pounds or kilograms)
(10) Quantity of cargo and unit of measure
Conditional Elements
(1) In-bond type
(2) Notify party name and address
(3) Secondary notify party name and address
Optional Elements
(1) Mexican Pedimento Number (only for shipments for export to Mexico)
(2) Secondary notify party SCAC
(3) Country of ultimate destination
(4) Number of house bills of lading
After participants transmit the EEM cargo and transportation data
to CBP via ACE, CBP would validate or notify the responsible party of
any holds. Additionally, a CBP officer would review the finalized train
consist prior to the train's departure from the U.S. port of export.
CBP anticipates that obtaining this data through the integrated system
would help CBP work with rail carriers and other parties to address
almost all issues identified during the CBP review before the train
reaches the U.S. port of export and possibly some before loading of the
cargo. This would significantly reduce any delays at the U.S. port of
exports from instances where CBP officers conduct review and address
issues while the train is at the U.S. port of export. CBP anticipates
that through the obtaining of pre-departure rail EEM data, CBP officers
would be able to conduct the appropriate risk assessment and screening
and complete their review of all export manifest data prior to a
train's arrival at the U.S. port of export.\29\
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\29\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, on November 8, 2022.
---------------------------------------------------------------------------
In the initial Test, CBP requested that 32 data elements be
submitted two hours prior to the cargo loading. The experience gained
during the Test has allowed CBP to revise which data elements should be
mandatory, conditional, optional, and unnecessary. Of the original 32
data elements put forth in the initial Test, five data elements were
determined by CBP to be unnecessary and CBP no longer requests these
EEM data elements in this proposed rule. CBP lists these below.
(1) Car Locator Message
(2) Empty Indicator (yes/no)
(3) Hazmat Indicator
(4) Split Shipment Indicator (Yes/No)
(5) Portion of split shipment (e.g., 1 of 10, 4 of 10, 5 of 10--Final,
etc.)
As an enforcement tool, this proposed rule provides CBP with
authority to impose liquidated damages on parties that do not provide
the mandatory EEM data in the manner and in the time frame required.
CBP retains the enforcement discretion to assess liquidated damages
when a violation occurs. Any party that violates the requirements for
data transmission as described above in this proposed rule is subject
to pay liquidated damages of $5,000 for each violation and up to a
maximum of $100,000 per departure. Although there is the possibility
for liquidated damages, compliance is CBP's goal and CBP aspires to
work alongside rail carriers and other parties to ensure that trade
members provide the proper data in a timely manner, so that CBP can
properly review the data, conduct risk assessment of high-risk
shipments, and enforce U.S. export laws and regulations on U.S. rail
exports.\30\
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\30\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, on June 21, 2022.
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Time Periods of Analysis
This analysis primarily focuses on the potential impacts of this
proposed rule after it would be in effect, but it also includes a
discussion of the impacts during the Test that is in place before the
proposed rule is finalized. The costs, cost savings and benefits of the
Test are sunk (already incurred and cannot be recovered) for the
purposes of deciding whether to proceed with the proposed rule, but
they are important for understanding the full costs and benefits of
implementing the rail EEM as a whole. To give the reader a full view of
the effects of CBP's requiring rail EEM data through the entire span of
time, CBP analyzes the effects of implementing rail EEM collection over
two time periods comparing each time period to the baseline scenario
that existed prior to the rail EEM test. First, CBP analyzes the
effects from Test used for the collection of pre-departure manifest
data on rail exports during the pilot period, fiscal years 2016-
2025.\31\ Second, CBP analyzes the effects of the proposed rule when
CBP assumes it would be implemented as a final rule which would mandate
the transmission of EEM data in the rail environment during the five-
year regulatory period, beginning in fiscal year 2026 and ending in
fiscal year 2030 For the regulatory period, CBP estimates, to the
extent data is available, the additional total projected costs, cost
savings and benefits to the Federal Government, rail carriers and other
trade members as a result of requiring the transmission of EEM data for
trains departing the United States, compared to the baseline scenario.
In the analysis for this proposed rule, CBP defines the pilot period as
fiscal years 2016-2025 and the regulatory period as fiscal years 2026-
2030. At the conclusion of the analysis, CBP includes tables showing
the effects of the proposed rule across both periods--effectively
showing the full results of the pilot and the proposed rule against the
baseline (the world without the rail EEM test). While CBP provides
information about the two time periods separately for full transparency
and to make clear which costs are sunk and which are incremental to
this proposed rule, CBP also sums the two time periods for a full
accounting of the effects of the rail EEM program as a whole.
Additionally, all references to years are for fiscal years unless
otherwise noted.
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\31\ CBP anticipates that the Test would still be active until
fiscal year 2026 when the proposed rule would be finalized; however,
at the time this analysis was written CBP only had actual data up
through fiscal year 2023. Therefore, CBP provides estimates, not
actual data, for the fiscal years 2024 and 2025 in this analysis.
CBP compares the costs, cost savings and benefits during the Test to
the baseline scenario, CBP assumes these effects to be sunk and are
not incremental to this rule.
---------------------------------------------------------------------------
Population Affected by Rule
CBP expects that this proposed rule would affect a number of
different parties. During the regulatory period, as the transmitting of
EEM data expands, CBP expects broader effects on rail carriers, other
trade members (such as USPPIs, FPPIs, NVOCCs, freight forwarders,
Customhouse Brokers (CHB), or other parties with knowledge of manifest
data elements), CBP, and other government agencies that oversee U.S.
exports. CBP expects that this proposed rule would affect all seven
rail carrier companies currently exporting cargo from the United States
by rail. Although CBP does not have the necessary data to provide an
exact estimate for how many other trade members this proposed rule
would affect, CBP acknowledges that this proposed rule could result in
some minor effects to a large number of other trade members,
specifically in case they elect to provide EEM cargo data directly to
CBP via ACE. CBP expects that this proposed rule would also improve the
facilitation of the export process at around 68 U.S. ports of export,
currently conducting the exportation of goods from the United States in
the rail environment.
[[Page 2889]]
Because the Test was limited in scope, the effects were largely
experienced by a few rail carriers, possibly some other trade members
and CBP during the pilot period. Although CBP only made the initial
Test available to nine carriers, CBP then extended the test to all
eligible parties; however, only two rail carriers actively participated
in the Test. The two rail carriers participating in the rail EEM test
have similar business characteristics to the remaining rail carriers
that would be affected by this proposed rule. All are large carriers
that operate internationally. Therefore, CBP anticipates that the
effects on the rail carriers participating in the rail EEM Test
accurately represents the effects that the remaining rail carriers
would experience from this proposed rule. CBP requests comment on this
matter.
Rail EEM Test Data and Export Rail Projections
CBP was able to identify the number of export manifest data
transmissions and train consists transmitted electronically by
participating rail carriers during the Test from 2016-2023. Because
CBP's pilot period includes future years, CBP does not have actual Test
data available for 2024 and 2025. To address this issue CBP had to
provide estimates the final two years of the pilot period. These
estimates are based on actual data in previous years. From 2016-2023
rail EEM test participants provided a total of 1,563,694 export
manifest data transmissions and 10,308 train consists electronically to
CBP via ACE.\32\ To estimate the number of export manifest data
transmissions that would occur during the final two years of the pilot
period CBP used the average number of rail EEM data transmissions from
2017-2023 (211,225) and the average number of train consists submitted
electronically to CBP from 2021-2023 (2,911).\33\ According to CBP's
projections for the final two years of the pilot period and the actual
data obtained (2016-2023), CBP expects that during the entire pilot
period rail EEM test participants would submit around 1,986,143 export
manifest data transmissions and 16,129 electronic train consists. Total
electronic data transmissions to CBP from participants in the rail EEM
test would be 2,002,276 during the pilot period.\34\ Table 2 below
displays CBP's actual and estimated number of export manifest data
transmissions and train consists submitted electronically to CBP during
the pilot period.
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\32\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, subject matter expert on
December 6, 2022, and May 10, 2024. Data obtained from CBP's ACE.
\33\ CBP excluded 2016 from the average for export manifest data
transmissions due to lack of participation in that year. CBP used
only three years of data 2021-2023 for the electronic train consists
transmitted, because these were the only full years of data during
the pilot period when all train consists were actually transmitted
by participating rail carriers in the Test.
\34\ This number represents the total number of electronic
transmissions sent to CBP by rail EEM test participants (export
manifest data transmissions + electronic train consists).
[GRAPHIC] [TIFF OMITTED] TP13JA25.004
Unfortunately, outside of the limited EEM data provided by Test
participants, all other export rail data (excluding data for EEI
requirements) submitted by rail carriers was on paper forms and
therefore CBP was unable to obtain actual rail export volumes (by train
or by train car). Therefore, CBP used train import volume data as a
proxy for train export volume data to calculate the possible number of
EEM data transmissions as a result from this proposed rule during the
regulatory period. CBP anticipates that the number of train cars
entering the United States with rail imports is likely comparable to
the number of train cars exiting the United States for rail
exports.\35\ CBP used existing internal data on inbound train cars to
project the volume of outbound train cars during the final two years of
the pilot period and the regulatory period. Inbound train car volumes
have been largely consistent from 2017-2023 and CBP anticipates that on
average, rail volume should remain relatively constant in future years
as compared to the volumes recorded over the past seven years.
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\35\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, subject matter expert on June
21, 2022. CBP used car volume instead of train volume because import
volumes by train would be inaccurate since they tracked by rail car
fee payments which are capped per year.
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CBP estimates that from 2016-2023 there were a total of around 35.6
million train cars departing the United States, or
[[Page 2890]]
on average 4.4 million each year.\36\ Because CBP anticipates that the
outbound train volume will remain relatively constant during future
years, CBP used the average number of estimated outbound train cars
during 2017-2023 (4.19 million) for the number of expected outbound
train cars for each future year.\37\ Although CBP has data available on
the number of train cars, CBP does not know how many actual trains
would engage in exporting goods in the rail environment during the
regulatory period. Therefore, CBP does not know exactly how many train
consists rail carriers would submit requiring a CBP officer to review
each year during the regulatory period. To provide an estimate for how
many train departures would likely be involved in exporting goods in
the rail environment during the regulatory period, CBP used 2021, 2022
and 2023 Test data on the number of simple bills transmitted compared
to the number of train consists transmitted. Over the course of these
three years a total of 633,336 simple bills and 8,732 train consists
were electronically transmitted to CBP as part of the Test, or on
average approximately 72.5 simple bills per train consist.\38\ CBP used
this ratio of simple bills (train cars) to train consists (trains) and
the expected outbound train cars to estimate the total number of trains
that would transmit electronic train consists when exporting goods from
the United States during future years.
---------------------------------------------------------------------------
\36\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, subject matter expert on
December 6, 2022, and May 9, 2024. Data obtained from CBP's
Borderstat and OMR databases on inbound rail statistics from FY
2017-FY 2023.
\37\ Inbound rail volume decreased significantly between 2016 to
2017 and volume remained relatively the same between 2017-2023.
Therefore, CBP omitted the 2016 inbound rail volumes for the
estimate for the regulatory period volume because CBP believes this
would have skewed the annual volume upward.
\38\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, subject matter expert on
December 6, 2022, and May 10, 2024. Data obtained from CBP's ACE.
CBP used only three years of data 2021-2023, because these were the
only full years of data during the pilot period when all train
consists were actually transmitted by participating rail carriers in
the Test. Additionally, CBP notes that most of the time the ratio of
a simple bill to train car is 1 to 1, however a simple bill could be
submitted for multiple train cars or vice versa. Because CBP only
knows the number of simple bills transmitted during the Test and not
the number of train cars, CBP assumes in this analysis that the
ratio of a simple bill to train car is 1 to 1, essentially the
number of simple bills represents the number of train cars.
---------------------------------------------------------------------------
CBP anticipates that each year during the regulatory period,
approximately 4,191,807 train cars and 57,794 trains would depart the
United States with export goods requiring the transmission of export
manifest data. In total CBP expects that during the regulatory period,
rail EEM participants would transmit approximately 21,248,006 data
transmissions to CBP or around 4,249,601 annually. Table 3 below
displays CBP's estimate for total outbound train cars and trains during
2016-2023 and projected outbound train cars and trains for the final
two years of the pilot period and the regulatory period, and the
estimated total EEM data transmissions during the regulatory period.
[GRAPHIC] [TIFF OMITTED] TP13JA25.005
[[Page 2891]]
In addition to the number of export manifest data transmissions and
train consists submitted electronically from 2016-2023, CBP also
obtained information from the Test on the number of 2H Documentation
and 1H Enforcement holds that were issued during these years. According
to CBP internal data as part of the rail EEM test from 2016-2023 CBP
issued a total of 31,202 2H Documentation holds and 795 1H Enforcement
holds.\40\ To determine the number of holds that would be issued by CBP
in the final two years of the pilot period CBP used the percent of
export manifest data transmissions submitted that resulted in a 2H
Documentation or a 1H Enforcement hold. Based on the information
obtained during the Test, on average a 2H Documentation hold was issued
on approximately 3.78 percent of all export manifest data transmissions
and on average a 1H Enforcement hold was issued on 0.05 percent of all
export manifest data transmissions.\41\
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\39\ To estimate the number of total outbound train cars in
future years, CBP used the average volume of train cars during the
seven year period (2017-2023) = 4,191,807 annually.
\40\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, subject matter expert on
December 6, 2022, and May 10, 2024. Data obtained from CBP's ACE.
\41\ Based on data from CBP's ACE tracking the total number of
holds issued during the rail EEM test. 2H holds were not initially
issued as complete functionality of the Test was gradually
implemented. CBP notes that 2H holds were only generated starting in
2020 and to calculate the average percent of data transmission that
had a 2H hold issued CBP only used 2020-2023 data. 1H Enforcement
holds were being issued during the entire Test and therefore CBP
calculated the average percent of data transmissions that had a 1H
hold issued using data from 2016-2023.
---------------------------------------------------------------------------
To estimate the number of holds issued in 2024 and 2025 CBP
multiplied the percentage of EEM data transmissions resulting in a 2H
Documentation hold (3.78%) and 1H Enforcement hold (0.05%) by the
expected total number of rail EEM data transmissions during 2024 and
2025 (see Table 2). CBP anticipates that during the pilot period CBP
would issue around 47,375 2H Documentation holds and around 1,049 1H
Enforcement holds.
CBP expects that these holds would be issued at a similar frequency
during the regulatory period. Therefore, to estimate the number of CBP
holds that would be issued during the regulatory period, CBP multiplied
the percentage of data transmissions that were issued 2H Documentation
holds (3.78%) and 1H Enforcement holds (0.05%) by the estimated number
of total data transmissions (see Table 3), for each year of the
regulatory period. According to CBP's estimates, CBP would issue a
total of 802,400 2H Documentation holds or on average 160,480 annually
and around 11,137 1H Enforcement holds or on average 2,227 annually
during the regulatory period. Table 4 displays CBP's estimates for
total holds that would be issued during the regulatory period.
[GRAPHIC] [TIFF OMITTED] TP13JA25.006
[[Page 2892]]
CBP believes that it is possible that the total number of holds
could be less than these estimates during the regulatory period as rail
carriers and other trade members become more familiar and efficient at
providing the pre-departure EEM data, potentially improving compliance
and limiting the number of holds CBP issues. CBP did not issue any DNL
holds during the Test and does not expect a significant number of DNL
holds to be issued during the regulatory period. If DNL holds are
issued this would be an additional cost to rail carriers, who are
ultimately responsible for loading and not loading cargo.
Pilot Period
Costs
CBP expects that CBP, participating rail carriers, other trade
members incur some costs during the pilot period when compared to the
baseline.\42\ CBP's primary cost during the pilot period was from
implementing the Test EEM data tool into ACE. ACE was already in place
prior to the Test; therefore, CBP did not need to develop an entirely
new system. However, there were some development and ongoing systems
costs to CBP during the introduction and operation of the Test.
Initially, CBP incurred systems costs of approximately $608,000 to
develop and implement the Test EEM tool into ACE.\43\ During the pilot
period, CBP incurs ongoing operations and maintenance costs associated
with the Test, which costs CBP on average approximately $101,350 each
year. CBP estimates that total systems costs to CBP for developing and
operating the Test would be approximately $1.6 million during the pilot
period.
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\42\ Other trade members would include USPPIs, FPPIs, NVOCCs,
freight forwarders, or other third parties with knowledge of
manifest data elements.
\43\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, on December 7, 2022. Rail EEM
ACE cost estimates were provided by CBP's Office of Information and
Technology and provided development and ongoing costs that increase
at a fixed rate each year.
---------------------------------------------------------------------------
CBP also incurs some time burdens while conducting additional
review of EEM data when compared to the baseline. As stated earlier, in
the baseline scenario the rail carriers provided export rail data to
CBP all at once in the finalized train consists at or prior to
departure from the United States. Therefore, under the baseline
scenario, CBP was unable to review export data until the finalized
train consist was submitted. During the Test, participants provide EEM
data on a flow basis, so CBP is able to review the data when
participants transmitted the EEM data and does not have to wait for
rail carriers to finalize all the data and submit it together in the
train consist. When participants transmit the EEM data to CBP via ACE,
the integrated system can identify potential high-risk cargo and issue
a 1H Enforcement hold, which requires manual review from a CBP officer.
As discussed earlier, 2H Documentation holds generated by ACE do not
require any action or response from CBP officers, therefore CBP does
not anticipate any time burden to CBP when a 2H Documentation hold is
issued. CBP estimates that this additional review of each 1H
Enforcement hold imposes an average time burden of approximately 5
minutes (0.083 hours) to CBP officers.\44\ In addition to reviewing the
EEM data transmitted, CBP officers also incur time burdens when
addressing and resolving 1H Enforcement holds. Depending on the
complexity of the 1H Enforcement hold, the time burden to CBP officers
to address and resolve these holds varies from a few minutes to a few
hours if a hold requires a CBP officer to manually examine cargo or a
train car.\45\ CBP does not know how many issued 1H Enforcement holds
result in cargo examinations during the pilot period or if the Test
result in additional examinations when compared to the baseline
scenario. However, CBP notes that the majority of these 1H Enforcement
holds do not result in a cargo examination and CBP officers are able to
address and resolve the majority of these holds in a few minutes.\46\
CBP estimates that, on average, CBP officers incur an additional time
burden of 10 minutes (0.167 hours) to address and resolve each 1H
Enforcement hold.\47\ In total, CBP expects on average a CBP officer
incurs a time burden of approximately 15 minutes (0.25 hours) to review
and resolve each 1H Enforcement hold.
---------------------------------------------------------------------------
\44\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, on August 2, 2022. 1H
Enforcement holds can also be issued by CBP officers upon manual
review of export manifest data.
\45\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, on June 21, 2022.
\46\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, on November 8, 2022.
\47\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, subject matter expert on
November 21, 2022. Data obtained from CBP's OMR database.
---------------------------------------------------------------------------
During the pilot period, CBP estimates that rail carriers will
transmit a total of 2,002,272 EEM data submissions as part of the Test,
resulting in approximately 1,049 1H Enforcement holds issued which
require additional review by a CBP officer.\48\ CBP calculates the time
burden to CBP officers during the pilot period by multiplying the
estimated number of 1H Enforcement holds (1,049) by the expected
average time burden to CBP officers to review, address and resolve the
average 1H Enforcement hold (15 minutes, 0.25 hours). CBP expects that
CBP officers incurs a time burden of approximately 262 hours (1,049
holds x 0.25 hours) during the pilot period. CBP estimates the costs to
CBP officers by multiplying the total time burden (262 hours) by the
average hourly loaded rate for a CBP officer ($101.44) = $26,608.\49\
Table 5 shows CBP's estimate for the time and cost burden to CBP
officers when reviewing and resolving 1H Enforcement holds during the
pilot period.
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\48\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, subject matter expert on
December 6, 2022 and May 10, 2024. Data obtained by CBP's ACE and
based on CBP estimates for years 2024-2025.
\49\ CBP bases this wage on the FY 2023 salary, benefits,
premium pay, non-salary costs, and awards of the national average of
CBP Officer Positions, which is equal to a GS-11, Step 10. Source:
Email correspondence with CBP's Office of Finance on September 26,
2023.
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[[Page 2893]]
[GRAPHIC] [TIFF OMITTED] TP13JA25.007
In addition to CBP, rail carrier participants and some other trade
members incur costs during the pilot period. The Test implements a few
changes that affect rail carrier participants, such as providing
advance EEM data within CBP-requested deadlines prior to cargo loading
onto trains, transmitting the requested EEM data elements to CBP, and
responding to and addressing any issued holds or questions from CBP
about the data provided. So far during the pilot period, the
participating rail carriers demonstrate very high levels of compliance
with providing data within the requested deadlines of the Test, as
approximately 94 percent of EEM data provided to CBP was transmitted on
time.\50\ From 2016-2023, the participating rail carriers
electronically transmitted a total of 1,574,002 EEM data submissions,
including 1,563,694 simple bills and 10,308 train consists,
representing around 4 percent of all estimated export manifest data
submissions.\51\
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\50\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, subject matter expert on June
21, 2022.
\51\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, subject matter expert on
December 6, 2022 and May 10, 2024. Data obtained from CBP's ACE,
Borderstat and OMR databases. CBP notes that most of the time the
ratio of a simple bill to train car is 1 to 1, however a simple bill
could be submitted for multiple train cars or vice versa. Because
CBP only knows the number of simple bills transmitted during the
Test and not the number of train cars, CBP assumes in this analysis
that the ratio of a simple bill to train car is 1 to 1, essentially
the number of simple bills represents the number of train cars. CBP
determined the number of total export manifest data submissions
during the pilot period by accounting for if all export manifest
data were transmitted electronically and by assuming one simple bill
per estimated departing train car and one train consist per
departing rain, based on the volume of inbound train cars and CBP's
estimate for the number of simple bills (train cars) per train.
---------------------------------------------------------------------------
Since CBP requests that rail carriers participating in the Test
continue to provide the paper forms in addition to the EEM data, these
rail carriers incur an additional time burden to submit the new
electronic data during the Test. CBP estimates that on average rail
carriers incur a time burden of approximately 40 minutes (0.667 hours)
per train to transmit the EEM data.\52\ Unfortunately, CBP does not
have data on the exact number of total trains for which the
participating rail carriers provide electronic data during the pilot
period.\53\ Therefore, to provide an estimate, CBP used 2021-2023 data
from the Test on the number of simple bills transmitted compared to the
number of train consists transmitted.\54\ Over the course of these
years rail carriers electronically transmitted to CBP a total of
633,336 simple bills and 8,732 train consists as part of the Test, or
on average approximately 72.5 simple bills per train consist. CBP used
this ratio of simple bills (train cars) to train consists (trains) and
the total estimated number of simple bills that would be transmitted
during each year of the pilot period (2016-2025) to estimate the total
number of trains for which rail carriers will transmit electronic
export manifest data to CBP. According to CBP's estimates, there will
be approximately 27,384 trains that will have EEM data transmitted to
CBP when departing the United States. Assuming that the Test
participants will transmit EEM data for approximately 27,384 trains,
CBP estimates that these rail carrier participants incur a time burden
of 18,256 hours for transmission purposes (27,384 trains x 0.667
hours). To estimate the time burden costs, CBP multiplied the time
burden hours by the average hourly loaded wage rate for exporters
($35.62).\55\ CBP estimates that,
[[Page 2894]]
during the pilot period when submitting the EEM data to CBP, Test
participants incur a total cost of around $650,273 or on average
$65,027 annually. Table 6 below displays CBP's estimate for the number
of trains that depart the United States and provide EEM data, the
estimated time burden and costs to rail carriers during each year of
the pilot period.
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\52\ Information was obtained from feedback and discussions with
Trade members on the potential impacts of providing EEM data in
addition to the paper forms. Data obtained in February 2023.
\53\ Rail EEM test participants didn't start providing the train
consists electronically to CBP on a consistent basis until 2021,
therefore CBP does not know how many actual trains had electronic
data transmitted to CBP earlier in the pilot period.
\54\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, subject matter expert on
December 6, 2022, and May 10, 2024. Data obtained from CBP's ACE.
CBP used only three years of year of data 2021-2023, because these
were the only full years of data during the pilot period when all
train consists were actually transmitted by participating rail
carriers in the Test.
\55\ Source of median wage rate: U.S. Bureau of Labor
Statistics. Occupational Employment and Wage Statistics, ``May 2022
National Occupational Employment and Wage Estimates United States.''
Updated April 25, 2023. Available at https://www.bls.gov/oes/2022/may/oes_nat.htm. Accessed August 21, 2023. The total compensation to
wages and salaries ratio is equal to the total compensation cost per
hour worked for Office and Administrative Support occupations
($32.52) divided by the wages and salaries cost per hour worked for
the same occupation category ($22.01). See ``Table 2. Employer Costs
for Employee Compensation for civilian workers by occupational and
industry group.'' Bureau of Labor Statistics, ``Employer Costs for
Employee Compensation--December 2022.'' Released March 17, 2023.
Available at https://www.bls.gov/news.release/archives/ecec_03172023.pdf. Accessed August 29, 2023.. CBP assumes an annual
growth rate of 7.01% based on the prior year's change in the
implicit price deflator, published by the Bureau of Economic
Analysis. To adjust to 2023 dollars, multiply by the 2021-2022
percent change in the Bureau of Economic Analysis's Implicit Price
Deflators for Gross Domestic Product (127.224/118.895-1). See
``Table 1.1.9. Implicit Price Deflators for Gross Domestic
Product,'' Line 1 Gross Domestic Product, annual. Bureau of Economic
Analysis. Updated August 30, 2023. Available at https://apps.bea.gov/iTable/?reqid=19&step=2&isuri=1&categories=survey#eyJhcHBpZCI6MTksInN0ZXBzIjpbMSwyLDMsM10sImRhdGEiOltbImNhdGVnb3JpZXMiLCJTdXJ2ZXkiXSxbIk5JUEFfVGFibGVfTGlzdCIsIjEzIl0sWyJGaXJzdF9ZZWFyIiwiMjAxNiJdLFsiTGFzdF9ZZWFyIiwiMjAyMyJdLFsiU2NhbGUiLCIwIl0sWyJTZXJpZXMiLCJBIl1dfQ==. Accessed
September 20, 2023.
[GRAPHIC] [TIFF OMITTED] TP13JA25.008
CBP expects that rail carriers participating in the Test and other
trade members also face time burdens and costs when responding to 2H
Documentation holds and 1H Enforcement holds. According to CBP internal
data and estimates for 2024 and 2025, during the pilot period, CBP will
issue a total of 47,375 2H Documentation holds and 1,049 1H Enforcement
holds. CBP has not issued any DNL instructions during the Test.\56\ By
the end of 2023, rail carriers have shown high rates of compliance and
responsiveness to CBP holds during the Test, with over 99.8% of holds
being resolved and cargo released.\57\ CBP expects that the time burden
to respond to each hold depends on the complexity of the issue and if
the hold results in an examination of cargo which would be more time
consuming. When responding to holds, if a rail carrier does not have
the necessary information and needs to obtain the data from another
trade member, that would also impose a time burden on the other trade
member. CBP believes that on average the overall time burden to trade
(rail carriers and other trade members) when reviewing and addressing
these holds is approximately 12.5 minutes (0.21 hours) per hold.\58\
Based on CBP Test data and estimates for 2024 and 2025, there will be a
total of 48,424 holds issued during the pilot period (see Table 4) and
CBP estimates these holds will impose a time burden to trade of around
10,088 hours (48,424 holds x 0.21 hours per hold). CBP estimated the
cost to trade by multiplying the total expected hours spent reviewing
and addressing holds (10,088) by the average hourly loaded wage rate
for exporters ($35.62). CBP expects that during the pilot period
reviewing and addressing holds issued by CBP cost trade approximately
$359,350 or on average $35,935 annually. Table 7 shows CBP estimates
for the total number of holds issued, the estimated time burden and
costs to rail carriers during each year of the pilot period.
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\56\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, subject matter expert on
December 6, 2022, and May 10, 2024.
\57\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, subject matter expert on June
21, 2022, and May 10, 2024. Data obtained from CBP's ACE.
\58\ Data obtained from CBP discussion with Trade members on the
potential costs to review and resolve holds issued by CBP in
response to EEM data transmitted. Time burdens vary greatly
depending on the complexity of the issue; CBP took this into
consideration when calculating the average time burden to review and
address an issued hold. Data obtained in February 2023.
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[[Page 2895]]
[GRAPHIC] [TIFF OMITTED] TP13JA25.009
From the Test, CBP does not know to what extent obtaining pre-
departure EEM data improves CBP's enforcement, resulting in identifying
additional high-risk cargo or other compliance issues, beyond what CBP
would have identified prior to the Test. CBP notes that for all pre-
departure EEM that was transmitted to the Test, CBP was able to use ATS
for risk assessment compared to the baseline scenario where CBP was
only able to use ATS on a very limited number of export cargo data in
the rail environment.\59\ If CBP identifies more high-risk cargo as a
result of the Test, that may result in larger time burdens on rail
carriers to respond to and address CBP requests for cargo examination.
---------------------------------------------------------------------------
\59\ CBP can only use ATS on electronically transmitted data;
therefore, because the majority of export manifest data provided to
CBP prior to this proposed rule was submitted in paper and or via
email, CBP was not able to use ATS to screen any cargo associated
with these paper forms.
---------------------------------------------------------------------------
During the pilot period, rail carriers that voluntarily participate
in the Test, incur costs to adjust and maintain their IT systems to
interact with CBP's ACE and provide the required pre-departure EEM data
to CBP. The EEM data requirements are very similar to data requirements
for advance electronic import manifest data required during the import
process.\60\ Because rail carriers have already developed systems for
those electronic processes at import, Test participants do not need to
develop entirely new IT systems to transmit EEM data for the Test, but
rather rail carriers make adjustments to their already existing
internal systems.\61\ As rail carriers already have systems to
interface with ACE for import filings, among other things, systems
needed to be modified rather than developed. In addition, rail carrier
employees who file information for imports are typically the same who
file for export. The cost of adjusting and maintaining internal systems
to support providing EEM data to CBP can vary depending on the rail
carrier or trade member. Therefore, CBP provides a range of estimates
for the internal system costs to the average Test participant during
the pilot period. CBP anticipates that the annual internal systems
costs required to participate in the Test could range from $10,000 to
$60,000 each year.\62\ CBP used the midpoint within the range, $35,000,
as CBP's primary estimate for annual internal systems costs to the
average rail carrier participating in the Test. As alternate estimates,
CBP used a low estimate of $10,000 and the high estimate of $60,000 for
the annual internal systems costs per year. According to CBP's primary
estimate, the two Test participants will incur approximately $700,000
in total costs to adjust and maintain their internal systems for
providing electronic export manifest data to CBP during the pilot
period. CBP's alternate low and high estimate show that internal
systems total costs to the two rail carriers will be between $200,000
and $1,200,000 during the pilot period. Table 8 displays CBP's range of
cost estimates for annual internal systems costs to the two rail
carrier participants during the pilot period.
---------------------------------------------------------------------------
\60\ Data obtained from feedback provided by Trade members on
similarities between providing electronic import manifest data and
the requested EEM. Data obtained in December 2022 and February 2023.
\61\ Data obtained from feedback provided by Trade members on
potential necessary development, adjustments and maintenance of
existing internal systems to support providing EEM to CBP via ACE.
Data obtained in December 2022 and February 2023.
\62\ Data was obtained from feedback from Trade members on the
potential costs to internal systems to support providing EEM to CBP
via ACE. Data was obtained in December 2022 and February 2023.
---------------------------------------------------------------------------
[[Page 2896]]
[GRAPHIC] [TIFF OMITTED] TP13JA25.010
CBP estimates that total overall costs from the Test during the
pilot period will be approximately $3.6 million or on average $335,767.
Total estimated costs to CBP and trade as a result of the Test are
displayed below in Table 9. CBP estimates that during the pilot period
CBP will incur costs of approximately $1.6 million or on average
$164,805 annually. According to CBP's primary estimate for total costs
to trade from participating in the Test during the pilot period, costs
will be approximately 1.7 million or on average $170,962 annually.
[GRAPHIC] [TIFF OMITTED] TP13JA25.011
Cost Savings
CBP anticipates that the implementation of the Test also provides
cost savings during the pilot period. As CBP expected, obtaining EEM
data through the Test is a more efficient process than obtaining export
data from paper forms. As stated earlier, CBP officers manually review
all finalized train consists prior to a train's departure from the
United States, regardless of whether rail carriers submit the train
consists in paper or electronic form. During the pilot period, when CBP
receives electronic finalized train consists from participating rail
carriers the time burden to review those consists decreased
substantially
[[Page 2897]]
compared to reviewing the paper consists. Additionally, CBP officers
are able to conduct and complete their review of a transmitted
electronic train consist prior to that train's arrival to the U.S. port
of export.\63\ CBP's review of these train consists requires on average
35 minutes (0.583 hours) when submitted electronically compared to an
average of 2.5 hours when they were submitted to CBP on paper
forms.\64\ To estimate the total time savings, CBP multiplied the
average time savings of reviewing a train consist transmitted
electronically (2.5 hours-35 minutes = 1.92 hours) by the total number
of estimated train consists that will be transmitted electronically
during the pilot period (16,129, see Table 2). CBP estimates that the
Test will generate time savings of approximately 30,915 hours to CBP
officers. CBP then multiplied the estimated time savings (30,915 hours)
by the average hourly loaded rate for a CBP officer ($101.44) to
estimate the total cost savings of approximately $3.1 million to CBP
during the pilot period. Table 10 shows CBP's estimates for the time
savings and cost savings to CBP officers from swifter review of
electronic train consists for each year of the pilot period.
---------------------------------------------------------------------------
\63\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, subject matter expert on
November 8, 2022. With electronic transmitted data, the system
assists in much of the cargo screening and review of the data
allowing CBP to conduct a quicker and more thorough review of export
manifest data.
\64\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, subject matter expert on
August 2, 2022.
[GRAPHIC] [TIFF OMITTED] TP13JA25.012
CBP anticipates that rail carriers may also experience time and
cost savings from the Test resulting in a more efficient export process
at the U.S. port of export. Rail carriers support CBP's transition to
EEM data because rail carriers acknowledge that the former process of
providing export information on paper forms is inefficient and
unnecessarily burdensome to all parties involved. Additionally, the
existing export process using paper forms is inconsistent with the
import process which has already transitioned to electronic data
transmission. Rail carriers have experienced a more efficient import
process as a result, and they acknowledge the potential for
improvements to the export process from providing electronic data.
CBP's review of electronic train consists is significantly quicker
than train consists in paper form. In the baseline scenario, CBP does
not know how often rail carriers sent finalized train consists by email
in advance of departure and to what extent CBP officers were able to
fully conduct their review of the paper train consist prior to the
train's arrival to the U.S. port of export. If CBP officers, prior to
the Test, were unable to start their review of a train's consist before
the train reached the U.S. port of export and the train was held at the
U.S. port of export until CBP officers conducted a review of the train
consist, then participants in the Test experience a time savings
similar to that estimated above for CBP's officers during CBP's review
process (1.92 hours) when transmitting an electric train consist.
However, CBP does not know in the baseline scenario the extent to which
rail carriers sent finalized pre-departure data via email to CBP
providing CBP officers enough time to review the paper train consists
prior to the train's arrival to the U.S. port of export. Therefore,
during the pilot period CBP does not know exactly how much time savings
rail carriers experience from a swifter CBP review of electronic train
consists at the U.S. port of export. To estimate the potential time
savings to rail carrier participants during the pilot period from
quicker CBP processing time, CBP provides a range of time savings under
a few situations that could occur in the baseline scenario depending on
the amount of review CBP officers complete before the train's arrival
to the U.S. port of export.
In Scenario 1, where CBP officers did not begin the review of paper
train consists until the train arrived at the
[[Page 2898]]
port, rail carriers participating in the Test would experience on
average a time savings of 1.92 hours per train from a more efficient
CBP review using electronic train consists, assuming no 1H Enforcement
holds, or other issues CBP identified during the review of the consist.
In Scenario 2, during the baseline, where rail carriers sent finalized
train consists by email pre-departure and CBP officers were able to
complete their review of these paper train consists prior to all trains
arriving at the U.S. port of export, rail carriers participating in the
Test would likely not experience any time savings from transmitting
electronic train consists. CBP anticipates that in this scenario CBP
officers were able to fully complete their review of the paper or
electronic train consist prior to the train's arrival to the U.S. port
of export avoiding any delays to departure from CBP officers conducting
their review at the U.S. port of export. CBP is uncertain to what
extent these time savings are experienced by rail carriers during the
pilot period; however, CBP believes that it would likely be between the
1.92 hours and zero hours per train. For the purposes of this analysis,
CBP uses Scenario 3, which is the mid-point between the two values
(0.96 hours), as the primary estimate for time savings per electronic
train consist reviewed during the pilot period. CBP also considered a
Scenario 4 which assumes CBP officers were able to complete 25 percent
of the review of finalized train consists prior to a train's arrival at
the U.S. port of export during the baseline.
For illustrative purposes, CBP presents these potential time
savings to rail carriers in range estimates based on how much review
CBP officers completed prior to a train's arrival to the port in the
baseline. CBP multiplied the average time savings per train by the
estimated number of electronic train consists transmitted to CBP
(16,129, see Table 2) during the pilot period to estimate the total
potential time savings from expedited CBP processing at the U.S. port
of export. To calculate the cost savings CBP multiplied these potential
time savings by the average hourly loaded wage rate for exporters
($35.62). CBP's primary estimate for time savings and costs savings to
rail carriers from swifter CBP review of train consists will be
approximately 15,484 hours and $551,546. Table 11 displays CBP's
primary estimate along with range estimates for potential time savings
and cost savings to rail carriers at the U.S. port of export during the
pilot period depending on if during the baseline CBP officers were able
to complete 0 percent of their review of train consists, 25 percent of
their review and 100 percent of their review prior to a train's arrival
at the U.S. port of export.\65\
---------------------------------------------------------------------------
\65\ To provide additional possible outcomes CBP also includes
Scenario 4 which assumes CBP officers were able to complete 25
percent of the review of finalized train consists prior to a train's
arrival at the U.S. port of export.
[GRAPHIC] [TIFF OMITTED] TP13JA25.013
CBP expects that participating rail carriers also experience
additional time savings from the Test when compared to the baseline
when making corrections to submitted data.\66\ Making updates and
corrections to data transmitted electronically is significantly more
efficient than making updates and corrections to emailed paper forms.
Additionally, the Test allows participants to transmit data when it
becomes available, and the Test allows them to continuously edit and
update data in ACE on a flow basis. CBP estimates that during the pilot
period making such corrections when transmitting EEM data save Test
participants on average 15 minutes (0.25 hours) per train.\67\ To
calculate the time savings, CBP used the estimate discussed earlier for
total trains that had electronic data submitted during the pilot period
(27,384 see Table 6) multiplied by the expected time savings per train
(0.25 hours). CBP estimates that the total time savings to rail
carriers from making data corrections in the electronic environment
will be approximately 6,846 hours during the pilot period. CBP
multiplied the estimated time savings by the average hourly loaded wage
rate for exporters ($35.62) and anticipates the total cost savings to
rail carrier participants from making data corrections in the
electronic environment will be approximately $243,852 or on average
$24,385 annually during the pilot period. Table 12 shows CBP's estimate
for time savings and cost savings to rail carrier participants while
making data corrections to EEM compared to paper forms during the pilot
period.
---------------------------------------------------------------------------
\66\ Information was obtained from feedback and discussions with
Trade members on the potential effects of providing EEM data. Data
obtained in February 2023.
\67\ Information was obtained from feedback and discussions with
Trade members on the potential effects of providing EEM data. Data
obtained in February 2023.
---------------------------------------------------------------------------
[[Page 2899]]
[GRAPHIC] [TIFF OMITTED] TP13JA25.014
CBP anticipates there would be a savings to rail carriers during
the Test when CBP identifies issues before trains are loaded and
assembled. In the baseline scenario, when CBP identifies a high-risk
cargo, the cargo has usually already been loaded onto the train,
requiring a burdensome and time-consuming process to detach or unload
the cargo from an assembled train. CBP estimates that to physically
detach a freight car from an assembled train typically costs around
$3,000 and can result in a delay of up to two hours.\68\ This includes
the freight and labor costs to safely decouple a train car from a built
train. Under this rule, the pre-departure EEM data transmitted to CBP
would improve CBP's ability to identify high-risk cargo before it is
loaded onto a train, avoiding the costly action of deconstructing
trains and unloading cargo for examination. CBP does not track the
number of cargo examinations and was unable to generate an estimate for
the average number of cargo examinations each year, but feedback
received from trade members suggests that such examinations are not a
frequent occurrence.\69\
---------------------------------------------------------------------------
\68\ Information was obtained from feedback and discussions with
Trade members on the potential costs and time burden to remove a
train car from a constructed train in order for CBP to conduct an
examination of the cargo or container. Data obtained in February
2023.
\69\ Information was obtained from feedback and discussions with
Trade members on the frequency of cargo examinations prior to the
Test and during the Test suggesting such an occurrence was fairly
uncommon. Data obtained in February 2023.
---------------------------------------------------------------------------
CBP estimates that during the pilot period total cost savings as a
result of the Test will be approximately $3.9 million or on average
$393,137 annually. CBP expects that trade will experience a total cost
savings of approximately $795,398 or on average $79,539 annually. Table
13 displays CBP's estimates for cost savings to CBP, trade and total
overall cost savings during the pilot period as a result of the Test.
[[Page 2900]]
[GRAPHIC] [TIFF OMITTED] TP13JA25.015
CBP requests feedback and comments from rail carriers and other
trade members on the costs and cost savings to rail carriers and other
trade members during the Test pilot period discussed above and any
other costs or cost savings to rail carriers and other trade members
that CBP did not address in this analysis.
Benefits
According to Section 343(a) of the Trade Act of 2002, as amended
(Trade Act) (19 U.S.C. 1415), CBP is authorized to establish
regulations that provide for the mandatory electronic transmission of
data by way of a CBP-approved electronic data interchange before cargo
arrives in or departs the United States in all environments (sea, air,
rail, and truck). The Test was developed and implemented as a way for
CBP to test a feasible process to meet its requirements as per the
Trade Act. In addition to meeting its statutory requirements, CBP
likely experiences benefits during the pilot period. CBP does not have
the data available to quantify these benefits and therefore will
discuss these benefits qualitatively. The primary benefit of requiring
pre-departure EEM data is improving CBP's security efforts and its
ability to use ATS to identify high-risk cargo prior to departing the
United States, while minimizing the disruption to the export process.
In the baseline, CBP officers usually manually review train consists at
the time of departure without using CBP's ATS, so CBP cannot take
advantage of the ATS risk assessment during the rail exit process. All
EEM data transmitted to CBP as part of the Test are screened by CBP
using ATS prior to departure, providing a more robust review and
improving CBP's security efforts. Additionally, the gained efficiencies
from obtaining data in an integrated system allow CBP to review export
rail data more efficiently prior to departure and provide CBP officers
the ability to allocate more time to mission-critical activities of
cargo security and safety.
Net Impact
CBP has provided its primary estimates for the total costs and cost
savings from the Test during the pilot period, displayed in Table 14.
CBP estimates that the net cost savings will be approximately $573,700
or on average $57,370 annually.
[[Page 2901]]
[GRAPHIC] [TIFF OMITTED] TP13JA25.016
Table 15 displays CBP's primary estimate for quantifiable net cost
savings from the Test adjusted for discounting. As shown, CBP expects
that this proposed rule will result in total net cost savings to CBP,
rail carriers and other trade members during the pilot period of around
$343,946 using a two percent discount rate. CBP estimates that
annualized net cost savings will be around $38,290 using a two percent
discount rate.
[GRAPHIC] [TIFF OMITTED] TP13JA25.017
Regulatory Period
For the regulatory period, CBP estimated the future costs, cost
savings, and benefits to rail carriers, the Federal Government, and
other trade members as a result of requiring EEM data in the rail
environment. CBP anticipates the effects of the proposed rule would be
similar to those experienced during the pilot period but on a larger
scale as the proposed rule would make transmission of pre-departure EEM
data mandatory for all U.S. exports in the rail environment.
Costs
CBP anticipates that this proposed rule would result in costs to
both CBP and trade members during the regulatory period. CBP will bear
technology and opportunity costs by expanding the existing test to a
requirement for all rail carriers. CBP does not anticipate it will
incur any costs to develop new systems during the regulatory period
because CBP completed the system development and implementation of the
rail EEM data tool application into ACE during the pilot period. CBP
does expect to incur some ongoing systems operations and maintenance
costs associated with the rail EEM data application in ACE. Over the
course of the regulatory period, CBP estimates that ongoing systems
costs in ACE would be approximately $586,026 or on average $117,205
each year.\70\
---------------------------------------------------------------------------
\70\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, on December 7, 2022. Rail EEM
ACE cost estimates were provided by CBP's Office of Information and
Technology, ongoing costs are expected increase at a fixed rate each
year.
---------------------------------------------------------------------------
In addition to the ongoing systems costs, CBP expects to incur
additional time burdens as a result of CBP officers manually reviewing,
addressing and resolving 1H Enforcement holds. CBP estimates that a
total of 11,137 1H Enforcement holds would be issued during the
regulatory period (see Table 4 above). CBP expects that the time burden
to a CBP officer to manually review a 1H Enforcement hold on average is
about 5 minutes (0.083 hours). CBP also anticipates that CBP officers
will incur an additional time burden to address and resolve these 1H
Enforcement holds. Depending on the complexity of the hold and if it is
determined that a CBP officer needs to manually examine cargo, the time
burden to CBP officers to address and resolve these holds varies from a
few minutes to a few hours.\71\ CBP expects that the majority of these
1H Enforcement holds issued would not result in a cargo
examination.\72\ CBP estimates that the average time burden incurred by
CBP officers during the regulatory period for addressing and resolving
1H Enforcement holds is the
[[Page 2902]]
same as during the pilot period, 10 minutes (0.167 hours).\73\
Combined, CBP expects that that on average the total time burden to CBP
officers during the regulatory period to review, address and resolve a
1H Enforcement hold is approximately 15 minutes (0.25 hours). CBP
estimates that the proposed rule would result in 1H Enforcement holds
that would cause an additional time burden to CBP officers of
approximately 2,784 hours (11,137 1H Enforcement holds x 0.25 hours per
hold). CBP calculated the costs to CBP officers in the regulatory
period, by multiplying the total time burden (2,784) hours by the
average hourly loaded rate for a CBP Officer ($101.44) = $282,433.
Table 16 shows CBP estimates for total costs to CBP during the
regulatory period including ongoing systems and maintenance costs and
the time burden and cost to CBP officers from additional review of 1H
Enforcement holds during the regulatory period. Over the regulatory
period this proposed rule would cost CBP approximately $868,459 or on
average $173,691 annually.
---------------------------------------------------------------------------
\71\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, subject matter expert on June
21, 2022.
\72\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, subject matter expert on
November 8, 2022.
\73\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, subject matter expert on
November 21, 2022.
[GRAPHIC] [TIFF OMITTED] TP13JA25.018
CBP does not expect that this proposed rule would result in
additional cargo examinations when compared to the baseline. In the
case where CBP determines it is necessary to conduct a physical
examination of cargo or a container on average a CBP officer is able to
complete the examination and submit the findings in about 60
minutes.\74\ Given the CBP officer hourly loaded wage rate of $101.44,
CBP estimates the average time burden cost to CBP to conduct a cargo or
container examination is approximately $101.44 per examination. If
there are more manual examinations of cargo as a result of 1H
Enforcement holds when compared to the baseline, then the time burden
to CBP officers during the regulatory period could be larger than CBP
expected. Unfortunately, CBP does not have data on how many 1H
Enforcement holds typically result in a cargo examination. However,
because the EEM data is provided in advance of departure CBP would
likely be able to issue holds before trains reach the U.S. port of
export and possibly before cargo is loaded, limiting the time burden
and costs of conducting these cargo examinations when compared to the
baseline scenario.
---------------------------------------------------------------------------
\74\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, on December 15, 2022.
---------------------------------------------------------------------------
CBP anticipates that this proposed rule would result in costs to
trade members in the form of both systems and opportunity costs. CBP
expects that the remaining rail carriers (five) that did not
participate in the Test would incur costs to adjust and maintain their
IT systems to provide the electronic export manifest data directly to
CBP via ACE. CBP anticipates that the cost of adjusting and maintaining
internal systems can vary depending on the rail carrier or trade member
and therefore CBP provides a range of estimates for the annual internal
system costs to the rail EEM participants during the regulatory period.
CBP anticipates that the annual internal systems costs would range from
the low end $10,000 to as high as $60,000 each year.\75\ For the
primary estimate during the regulatory period CBP used the same
estimate as proposed during the pilot period, $35,000 in internal
system costs to the average rail EEM participant to maintain its
internal systems each year. To provide a range of cost estimates, CBP
also provides estimates if maintaining the internal systems cost the
average Rail EEM participant $10,000 each year or $60,000 each year.
CBP expects that at least the seven rail carriers will incur these
systems costs each year of the regulatory period; however, CBP does not
know how many other trade members would also elect to participate and
provide the EEM cargo data directly to CBP via ACE thus incurring
systems costs. CBP notes that it is voluntary for the other trade
members to provide the EEM cargo data. If no other party provides this
EEM cargo data, then it must be provided by rail carriers. CBP believes
that other trade members would only participate if it were beneficial
for their business or company. Therefore, CBP does not anticipate these
other trade members would participate if it resulted in a net cost. To
estimate the cost to rail carriers from operating and maintaining their
internal systems to support participation in providing EEM data, CBP
multiplied the average annual cost by the number of expected rail
carrier participants each year (seven). According to CBP's primary
estimate for operating and maintaining internal systems, rail EEM
participants would incur costs of approximately $1.2 million or on
average $245,000 annually. Under CBP's low estimate, rail EEM
participants would incur costs of around $350,000 or $70,000 annually
and the high estimate shows internal systems costs of approximately
$2.1
[[Page 2903]]
million or $420,000 annually. Table 17 displays CBP's estimates of
internal systems costs to trade members during the regulatory period.
---------------------------------------------------------------------------
\75\ Data obtained from feedback and discussions with Trade
members on the potential costs associated with internal systems to
support providing EEM to CBP via ACE. Data was obtained in December
2022 and February 2023.
[GRAPHIC] [TIFF OMITTED] TP13JA25.019
The proposed rule adjusted data elements and deadlines for the
transmission of EEM data from what CBP established during the Test.
Rail EEM participants (rail carriers and other trade members such as
USPPIs, FPPIs, NVOCCs, freight forwarders, CHB, or other third-parties
with knowledge of manifest data elements) would provide the initial
filing data elements to CBP 24 hours prior to the cargo and train
departing the U.S. port of export. As stated earlier, during the Test
CBP considered what data elements were most important, CBP's needs, and
what trade members could provide, given the time frames recommended and
CBP adjusted the required data elements for this proposed rule. CBP
expects that most rail carriers would have access to most export
manifest data early in the planning stages of an export rail cargo
transaction and would be able to comply with the new deadlines imposed
by the proposed rule. CBP notes that some rail carriers will have the
export manifest data available days in advance prior to departure and
therefore would have all the necessary information to submit the
initial filing data to CBP and all other export manifest data well in
advance of the 24-hour and 2-hour prior to departure deadlines.\76\ CBP
anticipates that all parties that would participate in transmitting EEM
data to CBP would have the necessary export data elements to provide
the required EEM data within the two-hour prior to departure
deadline.\77\ However, for some rail carriers acquiring the necessary
data for the initial filing 24 hours prior to departure may require a
change in business practices and additional coordination with other
trade members or parties that have the required export information. CBP
does not believe that in such instances the export manifest data does
not exist; rather, the other trade member has not yet provided this
information to the rail carrier.\78\ Based on input from the trade
community, CBP expects that in such instances the net costs to rail
carriers to obtain this information earlier from other trade members
would be minimal. Additionally, if other trade members are reluctant to
provide this information to the rail carriers within the 24-hour prior
to departure deadlines the other trade members would be able to provide
this data to CBP directly as a rail EEM participant.
---------------------------------------------------------------------------
\76\ CBP obtained feedback and information from Trade members on
when in the export transaction process, the export manifest data is
typically available for them to submit to CBP. Information obtained
in February 2023.
\77\ Data obtained from feedback and discussions with Trade
members on the timeline for when export manifest data elements are
made available and can be provided to CBP. Data was obtained in
February 2023.
\78\ Information provided during discussion with some Trade
members in regard to the timeline for when export manifest data is
available to be provided to CBP and challenges to providing pre-
departure data well in advance. Data obtained in February 2023.
---------------------------------------------------------------------------
The transition from a paper form process to an electronic data
process could also result in parties that provide EEM data adjusting
business practices. CBP expects any costs related to adjusting business
practices would be minimal and should not have a large effect on rail
carriers and other trade members, specifically because they likely
already have such practices developed to provide manifest data for rail
imports.\79\ Additionally, participation in directly providing the rail
EEM data to CBP by other trade members is voluntary; CBP expects that
these parties would likely only directly provide data to CBP if the
benefits outweighed the costs to their company. CBP requests comments
from rail carriers and trade members on the potential costs during the
regulatory period related to internal system adjustments, operation and
maintenance needed to support transmitting pre-departure EEM data to
CBP via ACE. CBP also requests comment on any other costs to trade
members associated with transitioning from paper forms to the
transmission of EEM data that CBP did not address in this analysis.
---------------------------------------------------------------------------
\79\ CBP requested feedback from Trade members on the potential
costs from adjusting business practices as a result of this proposed
rule. Trade members suggested that there could be some costs but
were unable to provide additional details on the costs for such
adjustments to business practices or if this would be a one-time
adjustment cost or ongoing adjustment costs.
---------------------------------------------------------------------------
CBP expects that rail carriers and other trade members that provide
EEM data to CBP would incur time burdens and costs while responding to
CBP-issued holds. During the regulatory period, the party that provides
the EEM data to CBP is the party responsible for responding to any
questions, holds or issues that arise from CBP's review of that export
data. During the regulatory period CBP expects that the time burden to
respond to each hold depends on the complexity of the issue. When a
party is reviewing and responding to holds, if that party does not have
the necessary information and needs to obtain the data from another
trade member, that would impose an additional time burden on both
parties. To estimate the time burden to trade to review and resolve the
average hold (including both 2H Documentation holds and 1H Enforcement
holds) during the regulatory period CBP used the same time burden
estimate as proposed during the pilot period of approximately 12.5
minutes (0.21 hours) to trade when reviewing and resolving each 2H
Documentation and 1H Enforcement hold.\80\
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\80\ Data obtained from CBP discussion with Trade members on the
potential costs to review and resolve holds issued by CBP in
response to EEM data transmitted. Time burdens vary greatly
depending on the complexity of the issue. CBP took this into
consideration when calculating the average time burden to review and
address an issued hold. Data obtained in February 2023.
---------------------------------------------------------------------------
CBP does not expect that such holds would result in CBP officers
conducting additional cargo examinations when compared to the baseline.
Cargo examinations conducted after cargo has
[[Page 2904]]
been loaded onto the train is a burdensome and time-consuming process
and would result in a larger time burden to resolve holds that result
in an examination. CBP does not track the number of cargo examinations
and was unable to generate an estimate for the average number of cargo
examinations each year, but feedback received from trade members
suggests that cargo examinations are not a frequent occurrence.\81\
Although CBP does not anticipate examinations would increase as a
result of this proposed rule, if CBP did conduct more examinations when
compared to the baseline then time burden costs to trade members to
review and resolve holds could be higher than what CBP provides in this
analysis. Additionally, CBP does not track and was unable to estimate
the number of holds issued that would result in multiple parties being
involved in reviewing and resolving of holds. If responding to issued
holds always requires multiple parties to be involved, then the time
burden to review and resolve a hold would also likely be higher than
the 12.5-minute estimate CBP provided above.
---------------------------------------------------------------------------
\81\ Information was obtained from feedback and discussions with
Trade members on the frequency of cargo examinations prior to the
Test and during the Test suggesting such an occurrence was fairly
uncommon. Data obtained in February 2023.
---------------------------------------------------------------------------
To estimate the time burden to trade during the regulatory period
when reviewing and resolving holds, CBP multiplied the total number of
expected holds issued each year during the regulatory period by the
estimated average time burden to review and resolve a hold (0.21
hours). CBP expects that during the regulatory period trade will review
and resolve around 813,537 holds (see Table 4) resulting in a total
time burden of approximately 169,487 hours or on average 33,897 hours
annually. CBP calculated the costs to trade from reviewing and
resolving these holds by multiplying the total hours of time burden by
the average hourly loaded wage rate for exporters ($35.62). CBP
anticipates that overall costs to trade from reviewing and resolving
holds as a result of this proposed rule would be around $6.0 million or
on average $1.2 million annually. Table 18 shows CBP's regulatory
period estimates for time burden and costs to trade associated with the
review and resolution of holds issued by CBP.
[GRAPHIC] [TIFF OMITTED] TP13JA25.020
The proposed rule prohibits rail carriers from transporting cargo
with a hold across the border until the issues have been addressed and
the hold has been lifted. Upon notification of a hold being issued on a
specific cargo the party responsible for providing that information to
CBP would need to contact CBP for specifics and further instructions
regarding the hold. If CBP requires a manual examination of cargo, the
rail carrier must coordinate with CBP to identify a place where a
proper examination of cargo can be conducted. CBP would prohibit a
train's departure from a U.S. port of export if there are any
unresolved holds issued for cargo currently loaded onto a train.
Parties that do not address a CBP-issued hold on specific cargo or
freight cars before the required deadlines could face enforcement
actions. Because CBP experienced very high rates of compliance during
the Test (the compliance rate was over 99.8%), CBP expects excellent
rates of compliance during the regulatory period.\82\ As stated
earlier, CBP's primary goal is compliance and CBP intends to work with
parties providing the EEM data during this process to minimize the
disruption of the flow of goods.
---------------------------------------------------------------------------
\82\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, subject matter expert on
August 2, 2022.
---------------------------------------------------------------------------
This proposed rule would also require a party providing the EEM
data to CBP to have a bond on file with CBP. Carriers and other
potential filers generally are all subject to other bond requirements
that would qualify them to submit EEM data to CBP.\83\ Therefore, CBP
expects that any costs to rail carriers or other trade members from
being required to have a bond to provide export manifest data
electronically to CBP would be negligible. Rail carriers and other
trade members could also incur some costs to meet the requirement of
this proposed rule of having someone available 24 hours a day 7 days a
week to respond to questions and issues that may arise from CBP's
review for EEM data transmitted. CBP anticipates that any additional
staffing costs to participants would be negligible because they
typically have someone working at all times for other business
operations that can respond to CBP questions and issues.
---------------------------------------------------------------------------
\83\ CBP anticipates that any of the following bonds would be
appropriate depending upon the party filing, CBP Basic Importation
and Entry Bond containing the provisions found in section 113.62 of
this chapter, a Basic Custodial Bond containing the provisions found
in 113.63 of this chapter, or an International Carrier Bond
containing the provisions found in section 113.64 of this chapter.
---------------------------------------------------------------------------
Rail carriers and other trade members may also be subject to claims
for liquidated damages of $5,000 for each
[[Page 2905]]
violation and up to a maximum of $100,000 per departure for
noncompliance. These claims imposed by CBP are a compliance tool and
CBP anticipates that there would be high levels of compliance from
participants during the regulatory period such that violations that
result in claim issuance would likely not be a common occurrence. CBP
acknowledges that compliance is CBP's primary goal and CBP plans to
work with rail carriers and other trade members to ensure they provide
the appropriate EEM data in a timely manner. To the extent that CBP
issues claims against rail carriers or other trade members that would
place an additional cost onto these parties as a result of this
proposed rule, costs that would not be incurred if the charged parties
are compliant.
CBP estimated that during the regulatory period total overall costs
of the proposed rule would be approximately $8.1 million or on average
$1.6 million annually. Table 19 below displays CBP's estimates for
total costs to CBP and trade members as a result of this proposed rule.
CBP requests feedback and comments on the regulatory period costs from
this proposed rule to rail carriers and other trade members discussed
above and any other cost to rail carriers and other trade members that
CBP did not address in this analysis.
[GRAPHIC] [TIFF OMITTED] TP13JA25.021
Cost Savings
The mandatory transmission of pre-departure EEM data would provide
cost savings to CBP and to some trade members during the regulatory
period. As discussed in the pilot period cost savings section of this
analysis, obtaining, and reviewing EEM data is a more efficient process
when compared to working with paper forms. During the regulatory
period, CBP officers would continue to review all train consists prior
to each train departing the U.S. port of export. As the transmission of
EEM data becomes mandatory for all cargo departing the United States in
the rail environment, CBP would experience more time savings through
the expedited review of train consists. To estimate the time savings to
CBP during the regulatory period CBP uses the time savings estimate
provided during the pilot period of 1.92 hours per train consist. CBP
multiplied this time savings per train consist by the forecasted number
of departing trains exporting goods during the regulatory period,
288,969 trains (see Table 3). CBP estimates that as a result of this
proposed rule CBP would experience time savings of approximately
110,771 hours each year or 553,857 hours in total during the regulatory
period. To calculate the total cost savings, CBP multiplied the time
savings estimate by the average loaded hour wage rate for a CBP officer
($101.44). CBP estimates that the total cost savings to CBP during the
regulatory period would be approximately $56.2 million or on average
$11.2 million annually. Table 20 displays these estimated time and cost
savings to CBP for each year of the regulatory period.
[GRAPHIC] [TIFF OMITTED] TP13JA25.022
[[Page 2906]]
Because the transmission of EEM data would be mandatory for all
cargo trains departing across approximately 68 U.S. ports of export as
a result of this proposed rule, rail carriers and other trade members
would likely experience some time and cost savings during the
regulatory period. CBP notes that during the pilot period when Test
participants transmitted all EEM within the required deadlines, CBP
officers are able to complete their review of those train consists
prior to that train's arrival to the U.S. port of export. CBP
anticipates this would also be the case during the regulatory
period.\84\ Therefore, the time savings to rail carriers during the
regulatory period from a swifter CBP processing of an electronic train
consist is dependent on how much review of a paper train consist CBP
completed before the train arrives at the U.S. port of export in the
baseline. CBP defines a few potential scenarios depending on when rail
carriers provided export data to CBP prior to this proposed rule. In
Scenario 1 rail carriers prior to this proposed rule did not provide
export data pre-departure to CBP--meaning CBP officers were unable to
start their review of the train consist until the train is at the U.S.
port of export--in this scenario CBP anticipates these rail carriers
would experience the same amount of time savings per train as CBP
officers: 1.92 hours per outbound train. For Scenario 2, rail carriers
who, prior to this proposed rule, provided pre-departure export data
and the finalized train consists to CBP in advance such that CBP
officers were able to conduct and complete their review of this
information before the train arrived at the U.S. port of export, these
rail carriers would likely not experience any time savings from the
expedited CBP review of train consists. As CBP does not have data prior
to this proposed rule on how many trains submit pre-departure export
data to CBP in time for CBP to review it, CBP anticipates that the time
savings to rail carriers from the expedited review of electronic train
consists would be somewhere between 1.92 hours to 0 hours per departing
train. Similar to the pilot period estimate, CBP determined to use the
midpoint between these two values (0.96 hours) as Scenario 3 and as
CBP's primary estimate for the time savings to rail carriers per
outbound train during the regulatory period. CBP also provides the
potential time savings from Scenario 4 which assumes CBP officers were
able to complete 25 percent of the review of finalized train consists
prior to a train's arrival at the U.S. port of export.
---------------------------------------------------------------------------
\84\ Information provided by CBP's Cargo and Conveyance
Security, Office of Field Operations, subject matter expert on
November 8, 2022.
---------------------------------------------------------------------------
Because of this uncertainty for the actual amount of time savings
to rail carriers from this process CBP provides a range of potential
time savings to rail carriers during the regulatory period using the
same alternate estimates provided in the pilot period portion of this
analysis, assuming CBP officers completed 0 percent of their review of
train consists in Scenario 1 (1.92 hours of time savings per train),
100 percent of their review in Scenario 2 (0 hours of time savings per
train), 50 percent of their review in Scenario 3 (0.96 hours of time
savings per train), and 25 percent of their review in Scenario 4 (0.48
hours of time saving per train) before the train arrives at the U.S.
port of export. CBP estimated the time savings to rail carriers by
multiplying the average time savings per train by the forecasted number
of outbound trains (see Table 3) during each year of the regulatory
period. CBP then calculated a range of potential cost savings each year
of the regulatory period by multiplying the estimated time savings by
the average hourly loaded wage rate for exporters ($35.62). Under CBP's
primary estimate, time savings to rail carriers during the regulatory
period from swifter CBP review of electronic train consists would be
approximately 277,410 hours or on average 55,482 hours annually. Cost
savings to rail carriers would be approximately $9.88 million during
the regulatory period or on average $1.98 million annually. According
to CBP's range of estimates, cost savings to rail carriers from shorter
review time of train consists could be anywhere from $0 to $19.8
million or at most on average $3.95 million annually. Table 21 displays
CBP's primary estimate and alternative range estimates for these
potential time savings and cost savings to rail carriers and other
trade members.
[[Page 2907]]
[GRAPHIC] [TIFF OMITTED] TP13JA25.023
CBP expects that rail carriers and other trade members that decide
to provide EEM cargo data would also experience some other time and
costs savings as a result of this proposed rule. During the regulatory
period, rail carriers would transmit EEM data to CBP and would no
longer submit finalized train consists in paper form to CBP either via
email or at the U.S. port of export. Eliminating the time burden and
cost to provide the paper form train consists would be a cost savings
of this proposed rule, but parties would now incur the time and cost to
provide the EEM data. CBP expects providing the EEM data takes less
time than providing the data on paper forms and rail EEM participants
would experience a time savings when providing EEM data.\85\ During the
regulatory period, CBP estimates that eliminating paper forms and
providing the EEM data would help rail carriers and other trade members
to automate the process for providing export manifest data to CBP and
would generate a time savings of approximately 20 minutes (0.333 hours)
on average for each train exporting goods out of the United States.\86\
---------------------------------------------------------------------------
\85\ Information was obtained from feedback and discussions with
Trade members on the potential effects of providing EEM data instead
of paper forms. Data obtained in February 2023.
\86\ Information was obtained from feedback and discussions with
Trade members on the potential effects of providing EEM data instead
of paper forms. Data obtained in February 2023.
---------------------------------------------------------------------------
CBP used the number of total outbound trains estimated above
288,969 (see Table 3) for the number of trains that would potentially
be affected and experience this time savings during the regulatory
period. According to CBP calculations, trade members would experience a
total of 96,323 hours (288,969 trains x 0.333 hours) in time savings
from a more efficient process of providing the electronic export
manifest data when compared to the baseline. To provide an estimate for
the total cost savings from this process, CBP multiplied the total
expected time savings (96,323 hours) by the average hourly loaded wage
rate for exporters ($35.62). CBP estimates that these cost savings to
trade during the regulatory period would be approximately $3.43 million
or on average $686,204 annually. Additionally, during the regulatory
period CBP expects that rail EEM participants will experience time
savings when making corrections and/or updates to electronically
transmitted data in ACE when compared to making corrections and updates
to paper forms
[[Page 2908]]
in the baseline scenario. CBP uses the same time savings estimate used
in the pilot period of 15 minutes (0.25 hours) per train for the time
savings experienced by rail EEM participants during the regulatory
period. CBP multiplied this time savings per train by the expected
number of outbound trains during each year of the regulatory period
(57,794 trains, see Table 3). CBP estimates that rail EEM participants
would experience a time savings of approximately 72,242 hours on
average and 14,448 each year from being able to make updates and
corrections to EEM data in ACE when compared to paper forms. To provide
an estimate for the total cost savings from this process, CBP
multiplied the total expected time savings during the regulatory period
(72,242 hours) by the average hourly loaded wage rate for exporters
($35.62). CBP estimates that these cost savings to trade during the
regulatory period would be approximately $2.57 million or on average
$514,653 annually. Table 22 displays CBP estimates for time savings to
rail EEM participants from transitioning to transmitting EEM data and
making corrections and updates to electronic data in ACE. Overall, CBP
estimates that transitioning to EEM data transmission would save rail
EEM participants approximately $6.0 million or on average $1.2 million
annually.
[GRAPHIC] [TIFF OMITTED] TP13JA25.024
CBP also expects that rail carriers would experience time and cost
savings if the pre-departure EEM data results in CBP identifying a
high-risk cargo prior to that cargo being loaded or added to a train,
thereby avoiding the costly burden of identifying high-risk cargo after
the train has been constructed. CBP did not track how often such
examinations occur prior to this proposed rule and CBP was unable to
provide an estimate for how often such examinations occur, but CBP
expects that they are fairly uncommon.\87\ Additionally, CBP does not
anticipate this rule would result in additional examinations compared
to the baseline. CBP estimates that the cost to rail carriers to remove
a car from a constructed train for CBP examination is approximately
$3,000 per occurrence and results in a delay of up to two hours.\88\
This includes the freight and labor costs to safely decouple a train
car from a built train. Rail carriers would avoid these costs if CBP
receives pre-departure data and is able to issue holds and examine
these cargo or train cars before constructed to the train.
Additionally, moving to transmission of EEM data would reduce the space
required to store and file paper form manifest documents generating
savings to rail carriers and other trade members. Unfortunately, CBP
does not have data available to provide a quantifiable estimate for the
savings to trade members from reduced storage space as a result of
eliminating paper form manifest documents, but based on feedback from
trade members, does not consider the costs to be substantial.
---------------------------------------------------------------------------
\87\ Information was obtained from feedback and discussions with
Trade members on the frequency of cargo examinations prior to the
Test and during the Test suggesting such an occurrence was fairly
uncommon. Data obtained in February 2023.
\88\ Information was obtained from feedback and discussions with
Trade members on the potential costs and time burden to remove a
train car from a constructed train in order for CBP to conduct an
examination of the cargo or container. Data obtained in February
2023.
---------------------------------------------------------------------------
CBP estimates that total cost savings as a result of this proposed
rule would be approximately $72.1 million or on average $14.4 million
annually during the regulatory period. In total, CBP anticipates that
trade members will experience a cost savings of $15.9 million or on
average $3.2 million during the regulatory period, while CBP would
experience cost savings of around $56.2 million or on average $11.2
million annually. Table 23 below displays CBP's estimates for total
cost savings to CBP and trade during each year of the regulatory
period. CBP requests feedback and comments from rail carriers and trade
members on
[[Page 2909]]
CBP's estimates for the cost savings to trade as a result of this
proposed rule and any other potential cost savings from this proposed
rule that CBP may not have included in this analysis.
[GRAPHIC] [TIFF OMITTED] TP13JA25.025
Benefits
CBP expects that parties involved in U.S. rail exports would likely
experience benefits as a result of this proposed rule during the
regulatory period. Unfortunately, CBP does not have the data available
to quantify these benefits and therefore will discuss these benefits
qualitatively. A primary benefit of requiring pre-departure EEM data
would be an improvement in CBP's security efforts and its ability to
use CBP's ATS to conduct risk assessment for all rail export cargo
prior to departing the United States, while also minimizing the
disruption to the export process. This proposed rule would assist CBP
in preventing illegal, dangerous, and hazardous cargo from being
exported out of the United States and would allow CBP to ensure cargo
safety and security for all exports in the rail environment.
Additionally, transitioning to electronic data would reduce the use of
paper for all parties involved and bring the outbound rail process
level with existing inbound rail processing technology. The deadlines
for submitting EEM data and the gained efficiencies from moving from
paper forms to electronic data transmission using an integrated system
would provide CBP more time to review the necessary detailed export
data prior to a train's departure, allowing CBP officers to allocate
more time to mission-critical activities. CBP also anticipates this
proposed rule would generate benefits to the Federal Government through
improved coordination and communication among CBP, the Department of
Commerce, and other Government agencies with export jurisdiction, while
enforcing U.S. export laws and regulations. In addition, CBP would be
compliant in the rail environment with the Trade Act, which requires
CBP to establish regulations providing for the mandatory electronic
transmission of data by way of a CBP-approved electronic data
interchange before cargo arrives or departs the United States in all
environments.
Net Impact of the Proposed Rule
CBP anticipates that the cost savings generated from this proposed
rule would outweigh the costs during the regulatory period. In
addition, this rule generates meaningful unquantified security
benefits. During the regulatory period, CBP anticipates that this
proposed rule would generate net cost savings to both CBP and trade
members. CBP notes that lack of data available prevented CBP from
providing exact estimates for some of the potential costs and cost
savings from the implementation of rail EEM and therefore the actual
net cost savings could be more or less than what CBP's primary
estimates project in this analysis. Additionally, CBP acknowledges that
for other trade members, participating directly in providing rail EEM
data to CBP is voluntary and CBP expects that they would only do so if
it were beneficial to their company and the benefits or cost savings
outweigh the costs. Because CBP does not have data on how many of these
other trade members would decide to directly participate in providing
rail EEM data during the regulatory period the actual costs and cost
savings from this proposed rule could be higher than what CBP has
provided during the regulatory period of this analysis. For this
reason, CBP presents a range of estimates. CBP estimates that, during
the regulatory period, CBP, rail carriers, and other trade members bear
costs of approximately $8.1 million or an average of $1.6 million per
year. Meanwhile, CBP estimates a total cost savings to CBP, rail
carriers and other trade members of approximately $72.1 million during
the regulatory period, or an average of $14.4 million per year. This
results in a net cost savings of approximately $63.9 million, or an
average of $12.8 million per year. Table 24 displays CBP's estimates
for costs and cost savings to CBP and trade members during each year of
the regulatory period.
[[Page 2910]]
[GRAPHIC] [TIFF OMITTED] TP13JA25.026
[GRAPHIC] [TIFF OMITTED] TP13JA25.027
Table 25 shows the discounted total quantified costs during the
regulatory period from this proposed rule. As shown, the total costs
over the 5-year regulatory period of analysis would be around $7.4
million using a two percent discount rate. Expected annualized costs
from this proposed rule are about 1.6 million using a two percent
discount rate.
[GRAPHIC] [TIFF OMITTED] TP13JA25.028
Table 26 displays the discounted total quantified cost savings as a
result of this proposed rule during the regulatory period. CBP's
primary estimates show that this rule will provide cost savings to CBP,
rail carriers and other trade members of around $68.0 million using a
two percent discount rate. Annualized cost savings from this proposed
rule would be approximately $14.4 million.
[[Page 2911]]
[GRAPHIC] [TIFF OMITTED] TP13JA25.029
Table 27 displays CBP's primary estimate for quantifiable net cost
savings from the implementation of rail EEM. As shown, CBP expects that
this proposed rule would result in total net cost savings to CBP, rail
carriers and other trade members of around $60.3 million using a two
percent discount rate. CBP estimates that annualized net cost savings
are approximately $12.8 million using a two percent discount rate.
Total Impact of the Proposed Rail EEM Program
CBP anticipates that over the entire 15-year time period of
analysis 2016-2030, the proposed rail EEM program would result in
overall net cost savings compared to the baseline (before the rail EEM
test was introduced). Initially as the rail EEM test was introduced,
costs outweighed the cost savings but CBP estimates that as the test
expanded and after the proposed rule would be implemented, cost savings
would far outweigh the costs incurred by this proposed rule. In
addition, CBP expects that this proposed rule would generate meaningful
unquantified security benefits after it is implemented as discussed
above in the regulatory period net impact section. CBP estimates that
between 2016-2030 the rail EEM program would result in total costs of
$11,488,249 or on average $765,883 annually. Additionally, the rail EEM
program would result total cost savings of $76,000,235 or on average
$5,066,682 annually between 2016-2030. CBP estimates that total net
cost savings from the rail EEM program during the period of analysis
2016-2030 would be $64,511,986 or on average $4,300,799 annually when
compared to the baseline. Table 28 displays CBP's estimates for total
costs, cost savings and net cost savings as a result of this proposed
rule from 2016-2030.
[GRAPHIC] [TIFF OMITTED] TP13JA25.030
[[Page 2912]]
[GRAPHIC] [TIFF OMITTED] TP13JA25.031
Table 29 shows the discounted total quantified costs from the rail
EEM program from 2016-2030 compared to the baseline scenario. As shown,
the total costs over the 15-year period of analysis would be $9,330,571
using a two percent discount rate. Expected total annualized costs from
this proposed rule are $726,156 using a two percent discount rate.
[GRAPHIC] [TIFF OMITTED] TP13JA25.032
Table 30 shows the discounted total quantified costs savings as a
result of this proposed rule from 2016-2030. As shown, the total cost
savings over the 15-year period of analysis would be $59,120,631 using
a two percent discount rate. Expected total annualized cost savings
from this proposed rule would be $4,601,091 using a two percent
discount rate.
[GRAPHIC] [TIFF OMITTED] TP13JA25.033
Table 31 shows the discounted total quantified net cost savings
during the regulatory period from this proposed rule. As shown, the
total net cost savings over the 15-year period of analysis compared to
the baseline would be $49,790,060 using a two percent discount rate.
Expected total annualized net cost savings from this proposed rule
would be $3,874,935 using a two percent discount rate. Accounting
statements 1 and 2 show the expected costs, cost savings and benefits
from this proposed rule for the regulatory period and the program as a
whole, respectively. Though CBP presents the costs of the program as a
whole, including both the pilot period and the regulatory period, the
costs of the pilot period are sunk for the purposes of decision-making.
Therefore, CBP considered the net effects for the regulatory period
when deciding whether to proceed with this rule.
[[Page 2913]]
[GRAPHIC] [TIFF OMITTED] TP13JA25.034
[[Page 2914]]
[GRAPHIC] [TIFF OMITTED] TP13JA25.035
[[Page 2915]]
B. Regulatory Flexibility Act
This section examines the impact on small entities as required by
the Regulatory Flexibility Act (5 U.S.C. 601 et. seq.), as amended by
the Small Business Regulatory Enforcement and Fairness Act of 1996. A
small entity may be a small business (defined as any independently
owned and operated business not dominant in its field that qualifies as
a small business per the Small Business Act); a small not-for-profit
organization; or a small governmental jurisdiction (locality with fewer
than 50,000 people).
CBP acknowledges that this proposed rule, requiring pre-departure
transmission of EEM data, could potentially affect a large number of
small U.S. entities. CBP expects that all seven rail carrier companies
that engage in exporting goods from the United States in the rail
environment and an unknown number of other trade members (such as
USPPIs, FPPIs, NVOCCs, freight forwarders, CHB, or other third parties
with knowledge of export manifest data elements) at approximately 68
U.S. ports of export would be affected by this proposed rule. CBP notes
that of the seven rail carriers affected by this proposed rule, two
carriers are Canadian companies and the other five companies are large
companies according to the U.S. Small Business Administration's size
standards for small businesses.\89\ Therefore, CBP does not anticipate
that this proposed rule would affect any small U.S. entity rail
carriers. The scope of impact on small U.S. entities depends largely on
how many other trade members elect to provide electronic manifest cargo
data voluntarily to CBP as a result of this proposed rule. This
proposed rule does not require other trade members to provide
electronic manifest cargo to CBP, and CBP expects that they would only
do so if their benefits outweigh the costs. CBP expects that even if
this proposed rule affects a significant number of small U.S. entities,
such entities would not incur significant net costs. CBP expects that
this proposed rule would save businesses time and money by
transitioning from a paper process to a more efficient electronic
process. CBP anticipates that providing rail export data electronically
would generate time savings to those submitting data to CBP, when
making any corrections to data submitted electronically, and would
reduce paper, and printing costs. According to CBP's calculations on
the impacts from this proposed rule on average the estimated cost to
provide a single rail EEM data transmission to CBP is approximately
$0.34, meanwhile the estimated cost savings per data transmission is
around $0.75, resulting in a net savings per data transmission.\90\ CBP
does not know how many of these trade members will choose to submit
this data to CBP or how often, so CBP is unable to estimate the annual
savings to these trade members as a result of this rule. Overall, as
discussed above, this rule would result in average annual total filing
costs to trade members of $1,452,424 and savings of $3,177,127. We note
that these costs and savings will be split between rail carriers (which
are not small businesses) and other trade members (which may be small
businesses). CBP anticipates that cost savings outweigh costs for
parties affected; hence, CBP does not expect small U.S. entities would
experience net costs as a result of this proposed rule. Therefore, CBP
certifies that this proposed rule would not have a significant economic
impact on a substantial number of small U.S. entities. CBP requests
comments from the public on CBP's certification that this proposed rule
would not have a significant economic impact on a substantial number of
small U.S. entities.
---------------------------------------------------------------------------
\89\ CBP compared the five U.S. companies with the given U.S.
Small Business Administration's size standards for small businesses
based on the associated NAICS classification listed in Hoovers
Online Company Reports, available at http://subscriber.hoovers.com/H/home/index.html.
\90\ According to CBP's estimates each year during the
regulatory period total costs to trade members would be $1,452,424,
the total cost savings to trade would be $3,177,127 and the total
expected rail EEM data transmissions each year are expected to be
around 4,249,601. CBP calculated the average cost per rail EEM data
submission by dividing the total cost by the estimated number of
rail EEM data transmission ($1,452,424/4,249,602 = $0.34) and the
average cost savings per rail EEM data submission by dividing the
total cost saving by the estimated number of rail EEM data
transmission ($3,177,127/4,249,601 = $0.75).
---------------------------------------------------------------------------
C. Paperwork Reduction Act
An agency may not conduct, or sponsor, and an individual is not
required to respond to a collection of information unless it displays a
valid OMB control number. The collections of information in the current
regulations have already been approved by the Office of Management and
Budget (OMB) in accordance with the Paperwork Reduction Act of 1995 (44
U.S.C. 3507) and assigned OMB control number 1651-0001. This collection
already provides estimated burdens to the public for voluntarily
participating in the Rail EEM test. CBP anticipates that this proposed
rule would result in an additional time burden to respondents that
would provide rail EEM directly to CBP. This proposed rule establishes
new requirements for trade members to provide rail EEM data to CBP
prior to a train departing from a U.S. port of export. CBP notes that
prior to providing EEM data, rail carriers typically incurred time
burdens to provide some export data to CBP that were not originally
included on this information collection or any other information
collection as the data was not a statutory or regulatory requirement.
Trade members have expressed that providing export data to CBP as part
of the rail EEM did provide a reduction in time burden compared to the
prior process, but because the original time burden to provide export
data to CBP prior to rail EEM was not included in this information
collection CBP estimates that the time burden to the public from this
proposed rule would be insignificant.
As a result of this proposed rule, CBP estimates that at least all
seven major rail carriers that currently engage in exporting goods out
of the United States in the rail environment would be affected.
Collection 1651-0001 would be revised to reflect the changed burden
hours for requiring trade members to provide rail EEM data to CBP prior
to departure of the train from a U.S. port of export. The new
information collection requirements from this proposed rule would
result in the following change in the estimated time burdens to the
public for the information collection number 1651-0001 from submitting
rail EEM data to CBP:
Estimated number of respondents annually: 7.
Average responses per respondent: 598,830.
Total responses: 4,191,807.
Estimated time burden per respondent: 5,506 hours.
Total added time burden: 38,545 hours.
CBP estimates that this added time burden would increase the cost
to the public by $1,372,986 and adjust the total cost to the public for
this information collection to $611,127,188.
CBP also expects that this new information collection requirement
would result in a decrease in the annual cost to the Federal Government
through the automated review of rail EEM data by ATS. CBP officers
would experience a reduced time burden from reviewing only 0.05 percent
of all rail EEM responses provided by the public. This revision to the
total number of responses reviewed by CBP for this information
collection decreased by 12,803 responses resulting in a reduced
[[Page 2916]]
time burden of around 1,067 hours and cost reduction of around $77,884
annually.
D. Privacy
CBP will ensure that all Privacy Act requirements and applicable
DHS privacy policies are adhered as a result of this proposed
regulation.\91\ CBP has issued a Privacy Impact Assessment (PIA) for
the Automated Commercial Environment (ACE),\92\ which outlines how CBP
ensures compliance with Privacy Act protections and DHS privacy
policies, including DHS's Fair Information Practice Principles (FIPPs).
The FIPPs account for the nature and purpose of the information being
collected in relation to DHS's mission to preserve, protect and secure
the United States. The PIA addresses issues such as the security,
integrity, and sharing of data, use limitation and transparency. The
PIA is publicly available at: http://www.dhs.gov/privacy-documents-us-customs-and-border-protection.
---------------------------------------------------------------------------
\91\ See the DHS Privacy Policy web page, available at https://www.dhs.gov/privacy-policy-guidance.
\92\ See U.S. Department of Homeland Security, U.S. Customs and
Border Protection, Privacy Impact Assessment for The Automated
Commercial Environment, DHS/CBP/PIA-003 and all subsequent updates,
available at https://www.dhs.gov/privacy-documents-us-customs-and-border-protection.
---------------------------------------------------------------------------
The Privacy Act of 1974 requires that federal agencies issue a
System of Record Notice (SORN) to provide the public notice regarding
personally identifiable information (PII) collected in a system of
records. SORNs explain how the information is used, retained, and may
be accessed or corrected, and whether certain portions of the system
are subject to Privacy Act exemptions for law enforcement, national
security, or other reasons. CBP issued the DHS/CBP-001 Import
Information Systems (IIS) System of Records and the DHS/CBP-020 Export
Information System (EIS) System of Records, which provide coverage for
the proposed regulation.\93\
---------------------------------------------------------------------------
\93\ See DHS/CBP-001 Import Information System, 81 FR 48826
(July 26, 2016), available at https://www.federalregister.gov/documents/2016/07/26/2016-17596/privacy-act-of-1974-department-of-homeland-security-us-customs-and-border-protection-dhscbp-001; and
DHS/CBP-020 Export Information Systems (EIS), 80 FR 53181 (September
02, 2015), available at https://www.federalregister.gov/documents/2015/09/02/2015-21675/privacy-act-of-1974-department-of-homeland-security-us-customs-and-border-protection-dhscbp-020.
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E. Unfunded Mandates Reform Act of 1995
This rule will not result in the expenditure by State, local, and
tribal governments, in the aggregate, or by the private sector, of $100
million or more in any one year (adjusted for inflation), and it will
not significantly or uniquely affect small governments. Therefore, no
actions are necessary under the provisions of the Unfunded Mandates
Reform Act of 1995.
IX. Signing Authority
The signing authority for these amendments falls under 19 CFR
0.2(a). Accordingly, this document is signed by the Secretary of
Homeland Security (or his delegate).
List of Subjects
19 CFR Part 113
Common Carriers, Exports, Freight, Laboratories, Reporting and
recordkeeping requirements, Surety bonds.
19 CFR Part 123
Canada, Customs duties and inspection, Freight, International
Boundaries, Mexico, Motor Carriers, Railroads, Reporting and
recordkeeping requirements, Vessels.
For the reasons stated in the preamble, parts 113 and 123 of title
19, Code of Federal Regulations (19 CFR parts 113 and 123), are
proposed to be amended as set forth below:
PART 113--CBP Bonds
0
1. The general authority section for part 113 continues to read as
follows:
Authority: 19 U.S.C. 66, 1623, 1624.
0
2. Amend Sec. 113.62 by adding paragraph (k)(3) to read as follows:
Sec. 113.62 Basic importation and entry bond conditions.
* * * * *
(k) Agreement to comply with electronic entry and/or advance cargo
information filing requirements. (1) * * *
(2) * * *
(3) If the principal elects to provide advance outbound information
to CBP electronically, the principal agrees to provide such information
in the manner and in the time period required under Sec. 123.93 of
this chapter. If the principal defaults with regard to these
obligations, the principal and surety (jointly and severally) agree to
pay liquidated damages of $5,000 for each violation.
* * * * *
0
3. Amend Sec. 113.63 by revising and republishing paragraph (g) to
read as follows:
Sec. 113.63 Basic custodial bond conditions.
* * * * *
(g) Agreement to comply with electronic entry and/or advance cargo
information filing requirements. (1) The principal agrees to comply
with all Importer Security Filing requirements set forth in part 149 of
this chapter including but not limited to providing security filing
information to CBP in the manner and in the time period prescribed by
regulation. If the principal defaults with regard to any obligation,
the principal and surety (jointly and severally) agree to pay
liquidated damages of $5,000 per violation.
(2) If the principal elects to provide advance outbound information
to CBP electronically, the principal agrees to provide such information
in the manner and in the time period required under Sec. 123.93 of
this chapter. If the principal defaults with regard to these
obligations, the principal and surety (jointly and severally) agree to
pay liquidated damages of $5,000 for each violation.
* * * * *
0
4. Amend Sec. 113.64 by revising and republishing paragraph (d) to
read as follows:
Sec. 113.64 International carrier bond conditions.
* * * * *
(d) Agreement to provide advance cargo information. (1) The
incoming carrier agrees to provide advance cargo information to CBP in
the manner and in the time period required under Sec. Sec. 4.7 and
4.7a of this chapter. If the incoming carrier, as principal, defaults
with regard to these obligations, the principal and surety (jointly and
severally) agree to pay liquidated damages of $5,000 for each
violation, to a maximum of $100,000 per conveyance arrival.
(2) The outbound carrier agrees to transmit advance outbound
information to CBP electronically, in the manner and in the time period
required under Sec. 123.93 of this chapter. If the outbound carrier,
as principal, defaults with regard to these obligations, the principal
and surety (jointly and severally) agree to pay liquidated damages of
$5,000 for each violation, to a maximum of $100,000 per departure.
* * * * *
PART 123--CBP RELATIONS WITH CANADA AND MEXICO
0
1. The general authority section for part 123 continues to read as
follows:
Authority: 19 U.S.C. 66, 1202 (General Note 3(i), Harmonized
Tariff Schedule of the United States (HTSUS)), 1415, 1431, 1433,
1436, 1448, 1624, 2071 note.
0
2. Revise and republish Sec. 123.0 to read as follows:
Sec. 123.0 Scope.
This part contains special regulations pertaining to Customs
procedures at the
[[Page 2917]]
Canadian and Mexican borders. Included are provisions governing report
of arrival, manifesting, unlading and lading, instruments of
international traffic, shipments in transit through Canada or Mexico or
through the United States, commercial traveler's samples transiting the
United States or Canada, baggage arriving from Canada or Mexico
including baggage transiting the United States or Canada or Mexico, and
electronic information for rail and truck cargo in advance of arrival
or departure. Aircraft arriving from or departing for Canada or Mexico
are governed by the provisions of part 122 of this chapter. The arrival
of all vessels from, and clearance of all vessels departing for, Canada
or Mexico are governed by the provisions of part 4 of this chapter.
Fees for services provided in connection with the arrival of aircraft,
vessels, vehicles and other conveyances from Canada or Mexico are set
forth in Sec. 24.22 of this chapter. Regulations pertaining to the
treatment of goods from Canada or Mexico under the North American Free
Trade Agreement are contained in part 181 of this chapter. The
requirements for the United States Postal Service to transmit advance
electronic information for inbound international mail shipments are set
forth in Sec. 145.74 of this chapter.
0
3. Revise the heading of Subpart J to read as follows:
Subpart J--Advance Information for Cargo Arriving or Departing by
Rail or Truck
0
4. Add section 123.93 to Subpart J to read as follows:
Sec. 123.93 Electronic information for rail conveyance and cargo
required in advance of export.
(a) General requirement. Pursuant to section 343(a), Trade Act of
2002, as amended (19 U.S.C. 1415), for any train departing the United
States, U.S. Customs and Border Protection (CBP) must receive
electronically from the rail carrier, or other eligible filer as
specified in paragraph (c), certain information concerning the train
and cargo, as enumerated in paragraphs (d), (e), and (f) of this
section. CBP must receive this information, known as outbound
electronic rail manifest data, no later than the time frames prescribed
in paragraph (b) of this section. The transmission of the required data
must occur through the Automated Commercial Environment (ACE) or any
other CBP-authorized electronic data interchange system. Any
examination referrals must be resolved in accordance with the
provisions and time frames prescribed in paragraph (g) of this section.
Any Do-Not-Load (DNL) or Hold instructions must be addressed in
accordance with the provisions prescribed in paragraph (h) of this
section.
(b) Time frame for transmitting data. (1) Initial filing. The
required initial filing data enumerated in paragraph (d) of this
section must be transmitted as early as practicable, but no later than
24 hours prior to departure of the train from the United States.
(2) Subsequent Filing. The required subsequent filing will include
the data identified below:
(i) Export manifest cargo data. Export manifest cargo data other
than initial filing data must be transmitted no later than two hours
prior to departure of the train from the United States.
(ii) Export manifest transportation data. Export manifest
transportation data other than initial filing data must be transmitted
no later than two hours prior to departure of the train from the United
States.
(iii) Empty container data. Data related to empty containers must
be transmitted no later than the time of assembly of the train.
(3) Updates. The party who transmits data must update it if, after
the filing is transmitted, any of the transmitted data changes or more
accurate data becomes available. Updates are required upon discovery of
data changes.
(c) Parties filing cargo and conveyance data. (1) Outbound carrier.
The outbound carrier is responsible for transmitting export manifest
transportation data and empty container data. If no other eligible
party elects to transmit the initial filing data or export manifest
cargo data, the outbound carrier must transmit it. If another eligible
party elects to transmit either the initial filing data or export
manifest cargo data, the outbound carrier may also choose to do so.
(2) Other filers. In addition to the outbound carrier for whom
participation is mandatory, one of the following parties meeting the
qualifications of paragraph (a) of this section that require
transmission of information through ACE or any other CBP-authorized
electronic data interchange system may elect to transmit to CBP the
initial filing data and/or the export manifest cargo data for outgoing
cargo listed in paragraph (d) of this section:
(i) The U.S. Principal Party in Interest (USPPI), as defined by the
provisions of section 30.1 of the Foreign Trade Regulations (FTR) of
the Department of Commerce, Bureau of the Census (15 CFR 30.1), or its
authorized agent;
(ii) The Foreign Principal Party in Interest (FPPI) or its
authorized agent with the FPPI being defined by the provisions of
section 30.1 of the Foreign Trade Regulations (FTR) of the Department
of Commerce, Bureau of the Census, (15 CFR 30.1); or
(iii) Any other party with direct knowledge of the export
information, which may include a customs broker, Automated Broker
Interface (ABI) filer, non-vessel operating common carrier (NVOCC) as
defined by Sec. 4.7(b)(3)(ii) of this chapter, or a freight forwarder
as defined in Sec. 112.1 of this chapter.
(3) Nonparticipation by other party. If another party specified in
paragraph (c)(2) of this section does not transmit advance export
information to CBP, the party that arranges for and/or delivers the
cargo to the outbound carrier must fully disclose and present to the
outbound carrier the cargo information listed in paragraph (d) of this
section. The outbound carrier must transmit this information to CBP in
accordance with this section.
(4) Bond required. A party transmitting any of the information
described in this subsection must have at least one of the following
bonds on file with CBP: a CBP Basic Importation and Entry Bond
containing the provisions found in Sec. 113.62 of this chapter, a
Basic Custodial Bond containing the provisions found in Sec. 113.63 of
this chapter, or an International Carrier Bond containing the
provisions found in Sec. 113.64 of this chapter.
(5) Required information in possession of third party. Any entity,
other than the outbound carrier or a party described in paragraph
(c)(2) of this section, in possession of data required to be
transmitted to CBP under this section must fully disclose and present
the required data to either the outbound carrier or other electronic
filer, as applicable, which must transmit such data to CBP.
(6) Party receiving information believed to be accurate. Where the
party electronically transmitting the data required in paragraph (d) of
this section receives any of this information from another party, CBP
will take into consideration how, in accordance with ordinary
commercial practices, the transmitting party acquired such information,
and whether and how the transmitting party is able to verify this
information. Where the transmitting party is not reasonably able to
verify such information, CBP will permit the party to electronically
transmit the information based on what that party reasonably believes
to be true.
(d) Initial Filing. The following information comprises the initial
filing which is mandatory and may be made
[[Page 2918]]
by any party identified in paragraph (c)(1) or (c)(2) of this section:
(1) Bill of lading number;
(2) The numbers and quantities of the cargo laden aboard the train
as contained in the carrier's bill of lading, either master or house,
as applicable (this means the quantity of the lowest external packaging
unit; numbers or quantities of containers and pallets do not constitute
acceptable information; for example, a container holding 10 pallets
with 200 cartons should be described as 200 cartons);
(3) Total weight of cargo expressed in pounds or kilograms;
(4) A precise cargo description (or the Harmonized Tariff Schedule
(HTSUS) number(s) to the 6-digit level under which the cargo is
classified if that information is received from the shipper) and weight
of the cargo; or, for a sealed container, the shipper's declared
description and weight of the cargo (generic descriptions, specifically
those such as ``FAK'' (``freight of all kinds''), ``general cargo,''
and ``STC'' (``said to contain'') are not acceptable);
(5) The shipper's complete name and address, or identification
number, from the bill(s) of lading (for each house bill in a
consolidated shipment);
(6) The consignee's complete name and address, or identification
number, from the bill(s) of lading (The consignee is the party to whom
the cargo will be delivered in the foreign country. However, in the
case of cargo shipped ``to order of [a named party],'' the ``to order''
party must be named as the consignee; and if there is any other
commercial party listed in the bill of lading for delivery or contact
purposes, the carrier must also report this other commercial party's
identity and contact information including address in the ``Notify
party'' field.); and
(7) The Automated Export System (AES) Exemption Statement, as
applicable.
(e) Export manifest transportation data. (1) Mandatory data. The
following transportation data is mandatory and must be transmitted by
the rail carrier or its agent:
(i) Port of departure from the United States;
(ii) Date of departure;
(iii) Estimated time of departure;
(iv) Carrier-assigned conveyance name, equipment number and trip
number;
(v) Train Consist, which includes:
(A) Manifest number;
(B) Train number;
(C) Rail car order; and
(D) Empty containers;
(vi) The rail carrier identification SCAC code (the unique Standard
Carrier Alpha Code assigned for each carrier by the National Motor
Freight Traffic Association; see Sec. 4.7a(c)(2)(iii) of this
chapter); and
(vii) Container or equipment numbers (for containerized shipments)
or rail car Numbers (for all other shipments).
(2) Conditional data. The following transportation data is
conditional and must be transmitted by the rail carrier or agent if
applicable:
(i) 6-character Hazmat Code. The UN (for United Nations Number) or
NA (North American Number) and the corresponding 4-digit identification
number assigned to the hazardous material must be provided;
(ii) Marks and numbers; and
(iii) Seal number (only required if container was sealed). The seal
numbers for all seals affixed to containers and/or rail cars to the
extent that CBP's data system can accept this information (for example,
if a container has more than two seals, and only two seal numbers can
be accepted through the system per container, electronic presentation
of two of these seal numbers for the container would be considered as
constituting full compliance with this data element).
(3) Optional data. The following transportation data is optional
and may be transmitted by the rail carrier or its agent:
(i) Mode of transportation (containerized rail cargo or non-
containerized rail cargo);
(ii) Equipment type code; and
(iii) Place where the rail carrier takes possession of the cargo
shipment or empty rail car.
(f) Export manifest cargo data. (1) Mandatory data. The following
export manifest cargo data is mandatory and may be transmitted by any
party eligible to transmit as described in paragraph (c) of this
section. If the information has been provided in the initial filing, it
need not be transmitted again unless there are updates or changes:
(i) Shipper name and address (for empty rail cars, the shipper may
be the railroad from whom the rail carrier received the empty rail car
to transport);
(ii) Consignee name and address (for empty rail cars, the consignee
may be the railroad to whom the rail carrier is transporting the empty
rail car);
(iii) Port of Lading;
(iv) Port of Unlading;
(v) Bill of Lading type (Master, House, Simple or Sub);
(vi) Bill of Lading Numbers (Master, House, Simple or Sub);
(vii) AES Internal Transaction Number or In-bond Number (per
shipment);
(viii) Cargo description;
(ix) Weight of cargo (may be expressed in either pounds or
kilograms); and
(x) Quantity of cargo and unit of measure.
(2) Conditional data. The following export manifest cargo data is
conditional and must be transmitted if applicable:
(i) In-bond type;
(ii) Notify party name and address; and
(iii) Secondary notify party name and address.
(3) Optional data. The following export manifest cargo data is
optional and may be transmitted by any party eligible to transmit as
described in paragraph (c):
(i) Mexican Pedimento Number (only for shipments for export to
Mexico);
(ii) Secondary notify party Standard Carrier Alpha Code (SCAC);
(iii) Country of ultimate destination; and
(iv) Number of house bills of lading.
(g) Examination referrals. (1) Potential referrals. There are two
types of referrals that may be issued by CBP after a risk assessment of
an outbound export manifest data transmission.
(i) Referral for information. A referral for information will be
issued if a risk assessment of the cargo cannot be conducted due to
non-descriptive, inaccurate, or insufficient data. This can be due to
typographical errors, vague cargo descriptions, and/or unverifiable
information; or
(ii) Referral for screening. A referral for screening will be
issued if the potential risk of the cargo is deemed high enough to
warrant enhanced screening.
(2) Rail export referral resolution. All outbound rail export data
transmitters must respond to and take the necessary action to address
all referrals, no later than prior to departure of the train. The
appropriate protocols and time frame for taking the necessary action to
address these referrals must be followed as directed. The parties
responsible for taking the necessary action to address outbound rail
export data referrals are as follows:
(i) Referral for information. The data transmitter is responsible
for taking the necessary action to address a referral for information.
The last party to file the outbound rail manifest data for which
referral is sought is responsible for such action.
(ii) Referral for screening. If the outbound rail export manifest
transmitter is the rail carrier, it may address a referral for
screening directly. If the outbound rail export manifest transmitter is
a party other than the
[[Page 2919]]
outbound rail carrier, it may choose to address the referral for
screening directly while informing the outbound carrier of the
referral. If the outbound rail export manifest transmitter chooses not
to address the referral for screening, it must notify the outbound rail
carrier of the referral for screening. Upon such notification, the
outbound rail carrier is responsible for taking the necessary action to
address the referral.
(3) Prohibition on transporting cargo with unresolved referrals.
The outbound rail carrier may not transport cargo destined for
departure from the United States until all referrals issued pursuant to
this section with respect to such cargo have been resolved.
(h) Do-Not-Load (DNL)/Hold instructions. (1) A Do-Not-Load (DNL)
instruction will be issued if it is determined that the cargo or rail
car may contain a potential threat to the train and its vicinity.
(2) A Hold instruction will be issued, even after loading, if it is
determined that further examination of the cargo or rail car is
required.
(3) All outbound rail manifest data transmitters must provide a
telephone number and email address that is monitored 24 hours/7 days a
week in case a Do-Not-Load (DNL) instruction is issued. All
transmitters and/or outbound rail carriers, as applicable, must respond
and fully cooperate when the entity is reached by phone and/or email
when a Do-Not-Load (DNL) or Hold instruction is issued. The party with
physical possession of the cargo will be required to carry out the Do-
Not-Load (DNL) or Hold protocols and the directions provided by law
enforcement authorities.
(4) The outbound rail carrier may not transport cargo with a Do-
Not-Load (DNL) or Hold instruction.
Alejandro N. Mayorkas,
Secretary of Homeland Security.
[FR Doc. 2024-31331 Filed 1-7-25; 4:15 pm]
BILLING CODE 9111-14-P