10+2: What's a U.S. Importer To Do?

Recommendations for preparing your supply chain for the U.S. government's latest import security initiative


  • Anticipated transactional costs — CBP estimates incremental supply chain costs of $24-$38 per import transaction and that filing costs will average $10-$50 per transaction.
  • Potential liquidated damages — Importers could be charged fines equal to the value of the shipment if they fail to file. Importers also face potential charges of $5,000 per transaction for inaccurate or missing data.
  • Supply chain delays — Anticipate an increased volume of airfreight due to delays in shipment of containerized cargo and failure to meet customer delivery dates due to delays in shipment.
  • Need for improved collaboration with suppliers — Suppliers, freight forwarders and carriers will need to develop, document and implement better procedures to handle the additional filing requirements. Importers now will be required to manage supplier exports for compliance to ensure the accuracy of the data being filed and transmitted via the Import Security Filing. Shipment pre-alerts or pre-advice will no longer be optional. Bill of Lading detail must be obtained by the importer or its agent prior to container arrival at the foreign port.
  • More stringent product classification — Identify and implement a procedure for advance determination of the commodity's HTSUS classification. The main objective should be consistency down to the six-digit level for export formalities, various filings for entry including "10+2", Automated Manifest System (AMS), free trade agreements, OGA (other government agencies) and Advanced Trade Data Initiative (ATDI). More stringent product classification will force a change in process for many importers as they will no longer be able to declare a single HTSUS at origin and no longer be able to group parts under an "other, other" classification.
  • Adjustment to internal systems — Implement or improve upon procedures for complete and accurate country of origin determination with an emphasis on proper reporting of origin of manufacture. This may require revisions to enterprise resource planning (ERP) systems that default on purchase orders and shipping documents for "place of shipment" as origin.
  • Additional reporting requirements — Document and implement a procedure to accommodate additional reporting requirements associated with Carnet shipments and shipments purchased under the INCOTERM DDP, or Deliver Duty Paid. These transactions did not previously require an electronic submission of data or classification of a product by the importer.
  • Potential revisions to customs bond — Revisions to an Importer's Customs Bond may result from failure to timely or accurately file the "10+2" information and pay liquidated damages.

Recommendations



  • Stay current with the "10+2" initiative by visiting CBP's Web site at http://www.cbp.gov/xp/cgov/import/carriers/security_filing/
  • Analyze your current processes and procedures to ensure that you are prepared to handle the additional filing requirements of "10+2".
  • Focus on how "10+2" affects your supply chain in terms of costs and sourcing. Do changes need to be made to your current supply chain practices? Will new sourcing strategies need to be implemented? Will contracts or service level agreements need to be revised with your forwarders, brokers or carriers?
  • If the filing requirements of "10+2" seem too cumbersome to manage, consider outsourcing to a trade expert.

About the Author www.jpmorgan.com/trade


  • Enhance Your Experience.

    When you register for SDCExec.com you stay connected to the pulse of the industry by signing up for topic-based e-newsletters and information. Registering also allows you to quickly comment on content and request more infomation.

Already have an account? Click here to Log in.

Enhance Your Experience.

When you register for SDCExec.com you stay connected to the pulse of the industry by signing up for topic-based e-newsletters and information. Registering also allows you to quickly comment on content and request more infomation.

OR

Complete the registration form.

Required
Required
Required
Required
Required
Required
Required
Required
Required
Required
Required