45366 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 

DEPARTMENT OF HOMELAND 

SECURITY 

U.S. Customs and Border Protection 

DEPARTMENT OF THE TREASURY 

19 CFR Parts 4, 10, 18, 19, 113, 122, 

123, 141, 142, 143, 144, 146, 151, and 

181 

[USCBP–2012–0002: CBP Dec. 17–13] 

RIN 1515–AD81 

Changes to the In-Bond Process 

AGENCY: U.S. Customs and Border 

Protection, Department of Homeland 

Security; Department of the Treasury. 

ACTION: Final rule. 

SUMMARY: This final rule adopts, with 

several changes, proposed amendments 

to U.S. Customs and Border Protection 

(CBP) regulations regarding changes to 

the in-bond process published in the 

Federal Register on February 22, 2012. 

The in-bond process allows imported 

merchandise to be entered at one U.S. 

port of entry without appraisement or 

payment of duties and transported by a 

bonded carrier to another U.S. port of 

entry or other authorized destination 

provided all statutory and regulatory 

conditions are met. At the destination 

port, the merchandise is entered or 

exported. The changes in this rule, 

including the automation of the in-bond 

process, will enhance CBP’s ability to 

regulate and track in-bond merchandise 

and ensure that in-bond merchandise is 

properly entered or exported. This 

document addresses comments received 

in response to the proposed rule and 

makes several changes in response to 

the comments that further simplify and 

facilitate the in-bond process. 

DATES: This rule is effective on 

November 27, 2017. 

FOR FURTHER INFORMATION CONTACT: 

James Swanson, Director, Cargo Security 

and Controls, Cargo Conveyance & 

Security, Office of Field Operations, 

(202) 325–1257. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Background 

A. Notice of Proposed Rulemaking 

B. Summary of Main Changes From NPRM 

1. In-Transit Time for Merchandise 

Transported by Barge 

2. Uniform Timeframe for Report of 

Arrival, Notice of Export, and Other 

Events 

3. Description of the Merchandise 

4. Reporting the Quantity of In-Bond 

Merchandise 

5. Divided Shipments 

6. Clarification of the Term ‘‘Bonded 

Carrier’’ 

7. Transfer (Transshipment) From One 

Conveyance to Another 

8. Seals—Transportation of Bonded 

Merchandise With Non-Bonded 

Merchandise 

9. Other Changes 

C. Flexible Enforcement Period 

II. Discussion of Comments 

A. Comments Regarding This Rulemaking 

Generally 

1. Elimination of In-Bond Types 

2. Scope 

3. Outreach 

4. In-Bond Shipments Between the United 

States and Canada 

B. Electronic Filing and Processing of InBond Applications 

1. Filing the In-Bond Application 

2. Elimination of the CBP Form 7512 

3. Information Required 

4. Updating and Amending the In-Bond 

Record 

5. Who May File 

6. Licensed Customs Brokers 

7. Unauthorized Use of a Bond 

8. Procedures 

9. Change of Foreign Destination 

C. New Information Requirements for InBond Shipments 

1. New Information Requirements 

Generally 

2. Special Classes of Merchandise 

3. Quantity 

4. Location of the Merchandise 

5. Destination 

D. In-Transit Time 

1. In-Transit Time Generally 

2. In-Bond Shipments Transported by 

Barge 

3. Extension of In-Transit Time 

4. Shortening of In-Transit Time 

5. Start of In-Transit Time 

6. Procedures 

7. Intermodal Transportation 

8. Report of Arrival 

9. General Order Merchandise 

E. Transfers 

F. Sealing of Conveyances and Reporting of 

Seal Numbers 

G. Air Cargo 

H. Liability of the Parties 

I. Export of Merchandise 

1. Reporting Arrival at Port of Exportation 

2. Proof of Exportation 

J. Diversion of Merchandise 

K. Immediate Transportation 

L. Divided Shipments and Retention of 

Goods Within Port Limits 

1. Divided Shipments 

2. Retention of Goods Within Port Limits 

M. Potential Impact 

N. Miscellaneous Items 

1. Impact on Inland Ports 

2. Supervision of Rail Shipments 

3. Textiles 

4. Cartmen 

5. Carnets 

6. Sharing of Information and 

Confidentiality 

7. Definitions 

8. Restriction of Immediate Exportation by 

Truck 

9. Express Shipments 

10. Automated Broker Interface (ABI) 

11. Foreign-Trade Zones (FTZs) 

12. Importer Security Filing (ISF) 

13. Redelivery 

14. Pipelines 

III. Adoption of Proposal 

IV. Regulatory Analyses 

A. Executive Order 12866—Regulatory 

Planning and Review 

B. Regulatory Flexibility Act 

Summary FRFA 

C. Unfunded Mandates Reform Act of 1995 

D. Paperwork Reduction Act 

V. Signing Authority 

VI. Regulatory Amendments 

List of Acronyms and Technical Terms 

ABI Automated Broker Interface 

ACE Automated Commercial Environment 

AMS Automated Manifest System 

CBP Customs and Border Protection 

DHS Department of Homeland Security 

EDI Electronic Data Interchange 

EIN Employer Identification Number 

FIRMS Facilities Information and Resources 

Management System 

FTZ Foreign Trade Zone 

GAO Government Accountability Office 

HTSUS Harmonized Tariff Schedule of the 

United States 

ISF Importer Security Filing 

IE Immediate Exportation 

IT Immediate Transportation 

NVOCC Non-Vessel Operating Common 

Carrier 

SCAC Standard Carrier Alpha Code 

SNP Secondary Notify Party 

T&E Transportation and Exportation 

VOC Vessel Operating Carrier 

QP/WP—An ABI hosted in-bond system for 

all modes that allows all parties, carriers 

and non-carriers, to submit electronic inbond applications directly to CBP, as 

well as report their arrival and export. 

The ‘‘QP’’ half is the application 

function, the ‘‘WP’’ half is the arrival/ 

export function. 

I. Background 

Pursuant to 19 U.S.C. 1552 and 19 

U.S.C. 1553, merchandise may be 

entered at a U.S. port of entry, without 

appraisement or the payment of duties, 

for transportation to another port for 

entry, or for exportation, provided that 

all statutory and regulatory conditions 

are met. The applicable regulations 

governing the transportation of in-bond 

merchandise under the above 

authorities are set forth in title 19 of the 

Code of Federal Regulations (19 CFR), 

parts 18, 122, and 123. Part 18 covers 

‘‘Transportation in bond and 

merchandise in transit’’; part 122 covers 

‘‘Air Commerce regulations’’; and part 

123 covers ‘‘CBP relations with Canada 

and Mexico.’’ For a detailed discussion 

of the statutory and regulatory histories, 

and the factors governing development 

of these regulations, see the notice of 

proposed rulemaking (NPRM), ‘‘Changes 

to the In-Bond Process,’’ published in 

the Federal Register on February 22, 

2012 (77 FR 10622). 

Generally, when merchandise reaches 

the United States, the merchandise may 

Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 45367 

be entered for consumption, entered for 

warehouse, admitted into a foreign trade 

zone, or entered for transportation inbond to another port. The focus of this 

rule is on merchandise that is entered 

for transportation in-bond. 

Transportation of merchandise in-bond 

is the movement of imported 

merchandise, secured by a bond, from 

one port to another prior to the 

appraisement of the merchandise and 

without the payment of duties. The 

transportation of in-bond merchandise 

is frequently referred to as an in-bond 

movement or shipment. 

There are three types of in-bond 

transportation entries: Immediate 

Transportation (IT), Transportation and 

Exportation (T&E), and Immediate 

Exportation (IE). An IT entry allows 

merchandise upon its arrival at a U.S. 

port to be transported to another U.S. 

port, where a subsequent entry must be 

filed. See 19 U.S.C. 1552 and 19 CFR 

18.11. A T&E entry allows merchandise 

to be entered at a U.S. port for transit 

through the United States to another 

U.S. port, where the merchandise is 

exported without the payment of duties. 

See 19 U.S.C. 1553 and 19 CFR 18.20. 

An IE entry allows cargo that has 

arrived at a U.S. port to be immediately 

exported from that same port without 

the payment of duties. See 19 CFR 18.7 

and 18.25. 

A. Notice of Proposed Rulemaking 

On February 22, 2012, Customs and 

Border Protection (CBP) published a 

NPRM titled ‘‘Changes to the In-Bond 

Process’’ in the Federal Register (77 FR 

10622), proposing to revise the in-bond 

regulations in part 18 as well as other 

applicable parts of the CBP regulations. 

The proposed amendments would 

change the in-bond process from a 

paper-dependent process to an 

automated paperless process, provide 

CBP with the necessary tools to better 

track in-bond merchandise to improve 

security and trade compliance, and 

address certain weaknesses in the inbond system identified by the 

Government Accountability Office 

(GAO) in a report to Congress dated 

April 17, 2007 (GAO Report). 

CBP proposed making the following 

five major changes to the in-bond 

process: (1) Except for merchandise 

transported by pipeline and truck 

shipments transiting the United States 

from Canada, eliminate the paper inbond application (CBP Form 7512) and 

require carriers or their agents to 

electronically file the in-bond 

application; (2) require additional 

information on the in-bond application 

including the six-digit Harmonized 

Tariff Schedule of the United States 

number if available; (3) establish a 30- 

day maximum transit time to transport 

in-bond merchandise between U.S. 

ports, for all modes of transportation 

except pipeline; (4) require carriers to 

electronically request and receive 

permission from CBP before diverting 

in-bond merchandise from its intended 

destination port to another port; and (5) 

require carriers to report the arrival and 

location of the in-bond merchandise 

within 24 hours of arrival at the port of 

destination or port of exportation. CBP 

did not propose changing the in-bond 

procedures found in the air commerce 

regulations at 19 CFR part 122, subparts 

J and L, except to change the specified 

maximum transit and export times to 

conform to the proposed changes in Part 

18. For a detailed discussion of the 

proposed changes to the regulations and 

the GAO Report see the NPRM. 

CBP requested public comments on 

the NPRM. In response, CBP received 51 

comments from the trade community 

including carriers, brokers, importers, 

freight forwarders, zone operators, and 

trade groups. The comments were 

generally favorable to the rule as a 

whole. However, commenters raised 

concerns about specific proposed 

amendments and how the amendments 

would affect their operations. Many 

comments and questions related to the 

automated systems for the electronic 

filing of in-bond transactions. After 

consideration of all the comments, CBP 

has decided to issue this final rule, 

which adopts the proposed amendments 

with several changes in response to the 

comments. The main changes are 

summarized in Section I.B., Summary of 

Main Changes from NPRM, and 

explained in more detail in Section II, 

Discussion of Comments. Additional 

technical and conforming changes are 

also explained in Section II, Discussion 

of Comments. CBP is also adding a 

flexible implementation and 

enforcement period, as described in 

Section I.C. 

B. Summary of Main Changes From 

NPRM 

1. In-Transit Time for Merchandise 

Transported by Barge 

CBP received many comments 

regarding the proposed requirement that 

all in-bond movements must be 

completed within 30 days. Specifically, 

commenters expressed concern that due 

to the specific circumstances of barge 

transportation, it is not feasible for all 

in-bond shipments transported by barge 

to be completed within 30 days and 

stated that the current 60-day in-bond 

barge transit time should be maintained. 

The specific comments are addressed in 

more detail in Section II, Discussion of 

Comments. 

Because of the unique nature of barge 

transportation and because of the 

various factors that can delay barge 

shipments, CBP is changing proposed 

§ 18.1(i)(1) in the final rule to extend the 

in-transit time for in-bond merchandise 

transported by barge to 60 days, while 

maintaining the proposed 30-day transit 

time for the other modes of 

transportation. 

2. Uniform Timeframe for Report of 

Arrival, Notice of Export, and Other 

Events 

The current regulations require the 

bonded carrier to report to CBP the 

arrival of any portion of the in-bond 

shipment promptly, but no more than 

two working days after the arrival of the 

merchandise at the port of destination 

or the port of exportation. The bonded 

carrier generally must manually 

surrender the in-bond document, CBP 

Form 7512, to the port director, as 

notice of arrival of the merchandise. See 

19 CFR 18.2(d). 

To allow for better tracking, CBP 

proposed to amend §§ 18.1, 18.7, and 

18.20 to require that the report of arrival 

for each in-bond shipment be made 

within 24 hours of the arrival of the 

merchandise at the port of destination 

or the port of exportation and to require 

the delivering bonded carrier to transmit 

the notice of arrival electronically via a 

CBP-approved EDI system. CBP also 

proposed that when in-bond 

merchandise is exported, CBP be 

notified of the export within 24 hours of 

export. 

CBP received many comments 

expressing concern that the requirement 

to report the arrival of merchandise 

within 24 hours of arrival would result 

in firms having to increase their staffing 

levels and suggested that CBP retain or 

extend the current two-day reporting 

requirement. The specific comments are 

discussed in Section II, Discussion of 

Comments. 

CBP proposed shortening the above 

timeframes to improve CBP’s ability to 

track in-bond merchandise. However, 

after further consideration and a review 

of the comments, CBP decided not to 

shorten the reporting timeframe. 

Therefore, CBP is changing proposed 

§ 18.1(j) in the final rule to retain the 

current time limit of two working days 

for bonded carriers to report the arrival 

of merchandise at the port of destination 

or port of exportation with one technical 

change. CBP is also changing proposed 

§ 18.7(a)(3) regarding the timeframe for 

submitting the notice of export from 24 

hours to two business days. In addition, 

CBP is changing all the provisions in 

45368 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 

part 18 that impose a timeframe for 

reporting or updating the in-bond record 

to two business days so that the 

requirements are uniform. The sections 

in part 18 where these changes have 

been made are §§ 18.1(d)(1)(v), 18.1(h), 

18.1(j), 18.7(a)(1), 18.7(a)(3), 18.20, 

18.23(a), 18.24(b), 18.25(f), and 18.26(e). 

3. Description of the Merchandise 

CBP received many comments about 

the proposed required information on 

the in-bond application as specified in 

proposed § 18.1(d)(1). Among other 

things, CBP proposed requiring the sixdigit Harmonized Tariff Schedule of the 

United States (HTSUS) number if the 

number is available. If the six-digit 

HTSUS number is not available, then a 

detailed description must be provided 

setting forth the exact nature of the 

merchandise with sufficient detail to 

enable CBP and other government 

agencies to determine if the 

merchandise is subject to a rule, 

regulation, law, standard or ban relating 

to health, safety or conservation. CBP 

also proposed that if the carrier or other 

responsible party submitting the inbond application knows that the 

merchandise is subject to a rule, 

regulation, law, standard or ban relating 

to health, safety or conservation 

enforced by CBP or another government 

agency, a statement must be provided 

setting forth the rule, regulation, law, 

standard or ban to which the 

merchandise is subject and the name of 

the government agency responsible for 

enforcing the rule, regulation, law, 

standard or ban. Many commenters 

thought the proposed requirements were 

too onerous and that carriers would not 

have access to the required information. 

In response to the above concerns, 

CBP is eliminating or changing several 

proposed required data elements on the 

in-bond application. First, CBP is 

removing the requirement in proposed 

§ 18.1(d)(1)(ii) that, if the party 

submitting the in-bond application 

knows that the merchandise is subject to 

a rule, regulation, law, standard or ban 

relating to healthy safety or 

conservation, the filer must provide that 

information to CBP along with the name 

of the government agency responsible 

for enforcing the rule, regulation, law, 

standard or ban. In its place, CBP is 

changing proposed § 18.1(d)(1)(ii) in the 

final rule to require that in-bond 

merchandise subject to the authority of 

a U.S. government agency be described 

with sufficient accuracy to enable the 

agency concerned to determine the 

contents of the shipment. 

Second, CBP is removing the 

requirement in proposed § 18.1(d)(1)(iii) 

that the in-bond filer identify prohibited 

or restricted merchandise. 

Third, CBP is removing the 

requirement in proposed § 18.1(d)(1)(iv) 

to provide information regarding textiles 

and textile products for all in-bond 

applications. This requirement will be 

retained in a new paragraph (d) in 

§ 18.11 governing T&E in-bond 

movements. This is consistent with 

current regulations and should therefore 

provide no additional burden to parties 

moving merchandise in-bond. 

Fourth, CBP is eliminating the 

requirement in proposed § 18.1(d)(1)(v) 

that the filer of the in-bond application 

‘‘must provide’’ information regarding 

merchandise for which the U.S. 

Government, foreign government or 

other issuing authority, has issued a 

visa, permit, license, or other similar 

number or identifying information and 

stating instead that the filer ‘‘may 

provide’’ this information. In lieu of 

requiring all of the information above, 

CBP is changing proposed § 18.1(d)(l)(i) 

to require the filer to provide the sixdigit HTSUS number. This is necessary 

to ensure that CBP knows what 

merchandise is being transported inbond in light of the above changes to the 

required information. The six-digit 

HTSUS number should be available to 

in-bond filers because importers need 

this information to determine duty, cost 

and admissibility status prior to 

finalizing purchase contracts or 

shipment contracts. The six-digit 

HTSUS number is one of the required 

data elements for the Importer Security 

Filing (ISF) for all merchandise arriving 

by vessel. 

4. Reporting the Quantity of In-Bond 

Merchandise 

CBP received many comments about 

the requirement in proposed 

§ 18.1(d)(1)(vi) to provide ‘‘the quantity 

of the merchandise to be transported to 

the smallest piece count’’ in the in-bond 

application. Commenters found this 

proposal confusing and requested 

clarification. To address this concern, 

CBP is changing proposed 

§ 18.1(d)(1)(vi) to incorporate similar 

language used in §§ 4.7a (inward 

manifest) and 123.92 (electronic 

information for truck cargo required in 

advance of arrival) regarding quantity. 

Specifically, CBP is changing the text in 

the final rule to require ‘‘the quantity of 

the smallest external packing unit.’’ 

5. Divided Shipments 

The current regulations allow an inbond shipment to be split after the 

shipment reaches the port of destination 

with a portion of the shipment entered 

for consumption or warehouse while the 

remainder of the shipment is forwarded 

under a new in-bond to a different port 

of destination. That provision is 

contained in § 18.5, which governs inbond shipments diverted from one 

destination port to another. Because the 

provisions for splitting a shipment are 

not limited to diverted shipments we 

are moving the text of this provision, 

currently proposed § 18.5(d), to a new 

paragraph (m) in § 18.1. 

6. Clarification of the Term ‘‘Bonded 

Carrier’’ 

CBP received several comments and 

questions about which party would be 

considered the ‘‘bonded carrier’’ and 

would therefore be liable for a failure to 

comply with the in-bond requirements. 

To address these comments, CBP is 

adding a definition of the term ‘‘bonded 

carrier’’ in § 18.0(b). ‘‘Bonded carrier’’ is 

defined as a ‘‘carrier of merchandise 

whose bond under § 113.63 of this title 

is obligated for the transportation and 

delivery of merchandise.’’ The party 

that will be ultimately liable is the party 

whose bond is obligated in the in-bond 

record for the in-bond movement. 

7. Transfers (Transshipment) From One 

Conveyance to Another 

A review of the comments addressing 

proposed § 18.3, revealed that there is 

some confusion regarding the scope of 

the term ‘‘transshipment’’ and how the 

provision should be applied. In order to 

clarify the rules that apply when 

merchandise is transferred from one 

conveyance to another, CBP is replacing 

the term ‘‘transshipment’’ with the term 

‘‘transfer.’’ Accordingly, CBP is 

renaming § 18.3 from ‘‘Transshipment; 

transfer by bonded cartmen’’ to 

‘‘Transfers.’’ In the discussion that 

follows, the term ‘‘transfer’’ will be used 

instead of ‘‘transshipment.’’ 

The main concern of the commenters 

with regard to proposed § 18.3 is with 

the requirement to report to CBP each 

time the merchandise is transferred 

from one conveyance to another. 

Because in-bond merchandise may be 

transferred several times during the 

course of its journey, it is claimed that 

this reporting requirement places a 

substantial burden on the bonded 

carrier liable under the bond. 

CBP has reevaluated this requirement 

in light of the comments and has 

concluded that the requirement to notify 

CBP when in-bond merchandise is 

transferred from one conveyance to 

another is not necessary. The important 

information for CBP is which party has 

assumed liability for the shipment of the 

in-bond merchandise. Accordingly, CBP 

is changing proposed § 18.3 by 

removing the requirement to notify CBP 

Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 45369 

1Less than container load, or LCL, is a term 

commonly used in the transportation industry to 

refer to cargo containers that hold goods belonging 

to more than one shipper or consignee. Carriers use 

LCL shipments when a load of merchandise is not 

large enough to fill an entire cargo container. 

Freight in an LCL shipment is frequently 

transported to multiple destinations. 

when merchandise is transferred from 

one conveyance to another. 

In addition, CBP is changing proposed 

§ 18.3 to require that when in-bond 

merchandise is taken over by a 

subsequent bonded carrier which 

assumes liability for the merchandise, a 

report of arrival must be filed by the 

original bonded carrier and the 

subsequent carrier must submit a new 

in-bond application pursuant to § 18.1 

for the merchandise to be transported 

in-bond. 

8. Seals—Transportation of Bonded 

Merchandise With Non-Bonded 

Merchandise 

CBP received many comments 

expressing concern about proposed 

amendments to § 18.4 governing the 

sealing of conveyances and containers. 

One of the principal concerns was that 

the proposed regulations do not allow 

for the transportation of in-bond 

merchandise with non-bonded 

merchandise in the same container, 

unless all of the merchandise, bonded 

and non-bonded, is destined for the 

same port. The result is that in-bond 

merchandise would not be able to be 

shipped in ‘‘less than container loads’’ 

with non-bonded merchandise.1

CBP has reviewed these comments 

and concurs that, as proposed, the 

limitations on transporting in-bond 

merchandise with non-bonded 

merchandise would unnecessarily 

hamper the transportation of in-bond 

merchandise. Accordingly, CBP is 

changing the sealing requirements in 

proposed § 18.4 by adding new 

provisions § 18.4(b)(2) and (3) in the 

final rule that allow for the 

transportation of in-bond merchandise 

with non-bonded merchandise in a 

container or compartment that is not 

sealed, if the in-bond merchandise is 

corded and sealed, or labeled as in-bond 

merchandise. This will allow in-bond 

merchandise to be transported with 

non-bonded merchandise in a container 

that is not sealed and will facilitate the 

filling of containers that would 

otherwise be less than container load 

shipments. 

Additionally, for clarity, the provision 

regarding the breaking of seals in case 

of an emergency or for some other 

reason is being moved from § 18.3 

(transshipment) to § 18.4 (sealing 

conveyances, compartments and 

containers). In response to comments, 

CBP is removing the requirements to 

obtain CBP permission to break and 

replace a seal. However, as provided in 

§ 163.1, the transportation or storage of 

merchandise carried or held under bond 

into or from the customs territory of the 

United States is an activity covered by 

the general recordkeeping requirements 

of part 163. Such activity would include 

the breaking and replacing of seals on 

merchandise transported in-bond. 

Therefore, records pertaining to such 

activity would be covered under part 

163. 

9. Other Changes 

CBP is making additional wording 

changes and minor editorial changes for 

better organization or to improve clarity. 

Among other changes, CBP is no longer 

using the term ‘‘ultimate destination’’ in 

proposed § 18.1(d)(1)(vi) to avoid 

inconsistency with other export laws 

and regulations and is revising 

paragraph (vi) to clarify the destination 

information that is required on the inbond application for IT shipments and 

T&E/IE shipments. In addition, CBP is 

adding a sentence to proposed 

§ 18.1(i)(1), which sets forth the 

maximum in-transit time, to clarify that 

in-bond merchandise transported by 

pipeline is not subject to the time limits 

in that section. CBP is also revising 

proposed § 18.1(i)(2), which provides 

procedures on requesting an extension 

of the in-transit time, to clarify that the 

decision to extend the in-transit time 

period is within CBP’s discretion and to 

describe some of the factors that may be 

considered in CBP’s decision to extend 

the in-transit time period. For further 

discussion, see Section II, Discussion of 

Comments. 

C. Flexible Enforcement Period 

In order to provide the trade with 

sufficient time to adjust to the new 

requirements and in consideration of 

the business process changes that may 

be necessary to achieve full compliance, 

CBP in implementing and enforcing the 

rule, will take into account challenges 

that carriers may face in complying with 

the rule, so long as carriers are making 

satisfactory progress toward compliance 

and are making a good faith effort to 

comply with the rule to the extent of 

their ability. This flexible enforcement 

will last for 90 days after the effective 

date of this rule. Additionally, CBP will 

provide guidance on the new 

requirements and endeavor to conduct 

outreach to interested parties in order to 

facilitate a smooth transition to the new 

requirements. 

II. Discussion of Comments 

A. Comments Regarding This 

Rulemaking Generally 

1. Elimination of In-Bond Types 

Comment: The specific types of 

transportation entries (IE, T&E, IT) are 

outdated and have no effect on cargo 

security and the movement of goods. 

Therefore, CBP should consider 

eliminating them and apply a generic 

in-bond transportation entry to cover all 

movement types. CBP currently receives 

data elements indicating a domestic (D) 

and international export (I) during the 

in-bond request process and would 

know the anticipated movement as a 

result of these designations. 

CBP Response: The current system 

using specific bond types is derived 

from 19 U.S.C. 1552 and 1553 which 

provide for ‘‘entry for immediate 

transportation’’ and ‘‘entry for 

transportation and exportation,’’ 

respectively. Therefore, CBP cannot 

eliminate them. The current system is 

beneficial in that it clearly specifies the 

intended disposition of the goods, i.e., 

whether the goods will be exported, 

transported to another port for possible 

consumption entry, or transported to 

another port for exportation. There are 

separate rules for the handling and 

processing of in-bond merchandise 

depending on the type of in-bond entry, 

for example an Importer Security Filing 

(ISF) is required for a T&E and not an 

IT. 

2. Scope 

Comment: CBP should clarify the 

relationship between proposed § 18.0(a), 

with respect to requirements and 

procedures in part 18 of the in-bond 

regulations and the requirements and 

procedures of parts 122 and 123 (Air 

Commerce, and Customs Relations with 

Canada and Mexico, respectively). 

CBP Response: Proposed § 18.0 

(Scope; definitions), provides that 

except as provided in parts 122 and 123, 

part 18 sets forth the requirements and 

procedures pertaining to the 

transportation of merchandise in-bond. 

Parts 122 (Air Commerce) and 123 

(Customs Relations with Canada and 

Mexico) govern the rules and 

procedures for the transportation of inbond merchandise in the air 

environment and merchandise traveling 

through and into the United States by 

truck and train. This means that the 

provisions of part 18 are applicable to 

the in-bond procedures not addressed 

by specific instruction in parts 122 and 

123. For example, proposed § 18.8 

governing the liability of in-bond 

carriers is applicable to all in-bond 

45370 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 

movements, regardless of the mode of 

transportation. Conversely, proposed 

§ 18.4(a)(1) requiring the sealing of 

containers does not apply to in-bond 

merchandise traveling by air, because 

§ 122.92(f) specifically provides that the 

sealing of aircraft, aircraft compartments 

carrying bonded merchandise, or the 

cording and sealing of bonded packages 

carried by the aircraft, is not required. 

More information on the in-bond 

transport of air cargo is discussed in 

Section II.G., Air Cargo. 

3. Outreach 

Comment: CBP should conduct 

multiple public meetings well in 

advance of publication of the final rule. 

These meetings will allow a necessary 

forum by which the entire trade 

community (exporters, freight 

forwarders, warehouse operators, 

agents, and carriers) can engage with 

government to learn about the 

justifications behind these significant 

modifications to the current in-bond 

process. This will also provide all 

affected parties the opportunity to 

discuss mutually beneficial alternatives 

which may accomplish the 

government’s objectives without putting 

any sector of the trade at an economic 

disadvantage when competing in the 

increasingly fast paced global 

marketplace. 

Should CBP decide to adopt a final 

rule which does not adopt many of the 

suggested changes included in the 

comments, CBP should meet with the 

affected commenter prior to the 

finalization and publication of the rule 

in the Federal Register. 

CBP Response: CBP worked closely 

with the various sectors of the trade 

community, the Trade Support Network 

(TSN), the Customs Electronic Systems 

Action Committee (CESAC), and the 

Advisory Committee on Commercial 

Operations of Customs and Border 

Protection (COAC), before publishing 

the NPRM regarding the general changes 

to the in-bond system that were being 

considered, and CBP took into account 

extensive feedback from the trade 

community in the formation of the 

NPRM. Although CBP has not 

conducted public meetings or met 

privately with interested parties 

regarding the proposals published in the 

NPRM, CBP has carefully analyzed the 

various comments that have been 

submitted and has incorporated 

numerous suggestions made by the 

commenters in the drafting of this final 

rule. In order to provide the trade 

sufficient time to adjust to the new 

requirements and in consideration of 

the business process changes that may 

be necessary to achieve full compliance, 

CBP is providing a 60-day delayed 

effective date to be followed by a 90-day 

flexible enforcement period. This means 

that CBP will show flexibility in 

enforcing the rule, taking into account 

challenges that carriers may face in 

complying with the rule, so long as 

carriers are making satisfactory progress 

toward compliance and are making a 

good faith effort to comply with the rule 

to the extent of their current ability. CBP 

will also provide guidance on the new 

requirements and endeavor to conduct 

outreach to interested parties in order to 

facilitate a smooth transition to the new 

requirements. 

4. In-Bond Shipments Between the 

United States and Canada 

Comment: The United States and 

Canada should harmonize the Canadian 

and U.S. rules on in-transit shipments: 

Canada could adopt the U.S. approach 

and require full commercial 

information, effectively terminating intransit movements in both countries; or 

CBP could revise its position on the 

requirement for full commercial 

information and harmonize with the 

current Canadian rules which would 

restore in-transit shipments through the 

United States. 

CBP Response: The NPRM did not 

address this issue, and this comment is 

beyond the scope of this rulemaking. 

B. Electronic Filing and Processing of InBonds 

1. Filing the In-Bond Application 

Comment: Many commenters 

requested further information on the 

filing process, the systems that will be 

used, how to file an in-bond 

application, what functions will be 

available and how the different systems 

will work for the various modes of 

transportation. Some commenters 

wanted to know how CBP will advise 

the trade about CBP-approved systems. 

CBP Response: Under this rule, an 

electronic in-bond application is 

required for in-bond merchandise 

transported by ocean, rail and truck. 

The methods available to submit an inbond application are the Automated 

Commercial Environment (ACE) or QP/ 

WP. QP/WP is an ABI hosted in-bond 

system that allows all parties, carriers 

and non-carriers, to submit electronic 

in-bond applications directly to CBP, as 

well as report their arrival and export. 

The ‘‘QP’’ half is the application 

function, the ‘‘WP’’ half is the arrival/ 

export function. ACE can be used to file 

the in-bond application in conjunction 

with advance or arriving manifest 

information. For in-bond merchandise 

transported by air, carriers can file the 

in-bond application also using ACE or 

QP/WP. 

For reference purposes, the table 

below lists the EDI systems used for 

filing in-bond applications for the 

various modes of transportation and 

provides links to the Web sites that 

contain the relevant filing instructions 

or implementation guides. CBP will 

promptly inform the public of new CBP 

approved systems via CBP’s Web site 

and regular communication systems. 

Mode of 

transportation CBP EDI system In-bond application procedures 

Ocean .................. ACE ................... The in-bond application for cargo arriving by vessel may be filed as part of the arriving ocean manifest 

or as a subsequent/supplemental filing. Filing instructions are available on the ACE Web site at: http://

www.cbp.gov/trade/ace/ocean-manifest. 

Rail ...................... ACE ................... The in-bond application for cargo arriving by rail may be filed as part of the arriving rail manifest or as a 

subsequent/supplemental filing. Filing instructions are available on the ACE Web site at: http://

www.cbp.gov/trade/ace/rail-manifest. 

Truck ................... ACE ................... The in-bond application for cargo arriving by truck may be filed as part of the arriving truck manifest. Filing instructions are available on the ACE Web site at: http://www.cbp.gov/trade/ace/truck-manifest/edi/ 

message/electronic-truck-manifest. 

Air ........................ ACE ................... The in-bond application for cargo arriving by air may be filed as part of the arriving air manifest or as a 

subsequent/supplemental filing. Filing instructions are available on the ACE Web site at: http://

www.cbp.gov/trade/ace/air-manifest. 

Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 45371 

Mode of 

transportation CBP EDI system In-bond application procedures 

Ocean, Rail, 

Truck, and Air.

Automated 

Broker Interface (ABI).

The automated broker interface (ABI) for in-bond entries, known as QP/WP, allows in-bond entries filed 

for a particular shipment to be associated with arriving manifests or subsequent/supplemental in-bond 

entries filed for merchandise arriving by any mode. In-bond entries are associated with the arriving 

manifest by using the Standard Carrier Alpha Code (SCAC) in addition to a unique number to identify 

the bill of lading. This process covers cargo arriving by ocean, rail, truck, and air, as well as bonded 

warehouse withdrawals, foreign trade zone movements, pipeline arrivals, etc. Data messages are 

found in the ACE implementation guides located at: http://www.cbp.gov/document/guidance/bond. 

Comment: CBP needs to explain the 

requirements and procedures for ACE as 

they may apply to the in-bond process 

from now until such time as all ACE 

modules are fully developed and 

implemented. 

CBP Response: Information regarding 

the requirements and procedures for 

ACE as they may apply to the in-bond 

process is available on the CBP Web site 

at the links listed in the table above. 

Additionally, CBP will issue additional 

guidance on the ACE requirements and 

procedures as ACE modules are 

developed and deployed. Additional 

information on messages (e.g. arrival, 

exportation, amendments and 

diversions) for in-bond entries using the 

appropriate data interfaces can be found 

in the following implementation guides: 

ACE: http://www.cbp.gov/trade/ace. 

Air: AMS http://www.cbp.gov/site-page/ 

camir-air-chapters. 

Comment: Will the ACE Secure Data 

Portal (‘‘Portal’’) be a viable option for 

those carriers that do not have EDI 

capabilities, elect to utilize the ACE 

Portal as opposed to EDI, or utilize both 

technologies depending on the 

situation? Will any function available to 

EDI users also be available to users of 

the ACE Secure Data Portal? Will the 

ACE Portal be available to use for 

diversion requests? 

CBP Response: The ACE Portal does 

not provide any in-bond functionality 

and there are no plans to use it for inbond transactions in the future. 

Comment: Bonded carriers will have 

to electronically report the arrival and 

exportation of in-bond merchandise in 

separate CBP-approved systems (Air 

AMS for air, ACE for ground, ocean and 

rail). CBP should design its systems so 

that the arrival and departure messages 

are communicated between the various 

systems that have to be used by carriers. 

This will provide greater visibility and 

reduce redundancy for in-bond 

shipments that are transported by air 

and other modes of transportation. CBP 

should automate the arrival and export 

of electronic in-bond shipments 

regardless of the system used to initiate 

the in-bond shipment. 

CBP Response: CBP agrees that 

messaging between the systems for inbond transactions would greatly 

facilitate the processing of in-bond 

transactions. This functionality is now 

available through Air ACE. 

Comment: CBP should expand the 

availability of the Document Imaging 

System to motor carriers in order to 

eliminate the use of paper. 

CBP Response: There is no need to 

use the Document Imaging System (DIS) 

for the processing of in-bond shipments 

by truck. CBP is discontinuing the use 

of the CBP Form 7512 for in-bond 

shipments transported by truck. 

Manifest information must be filed 

using an approved Electronic Data 

Interchange method. 

Comment: CBP should create a webbased technology to allow the broadest 

level of compliance by the trade. A webbased portal would allow CBP to receive 

real time in-bond information. CBP 

must consider the development of a 

web-based portal where the bonded 

carrier, FTZ operator or authorized 

agent can electronically request the 

status of the in-bond movement. This 

web-based tool should be used across all 

modes. A web-based portal would be 

ideal and would help to serve CBP’s 

objective to maximize the automation of 

in-bonds with minimum impact to the 

trade. 

CBP Response: CBP is using its 

current systems to implement the new 

in-bond requirements and is not 

creating web-based technology or using 

a web-based portal for the processing of 

in-bond transactions beyond what it has 

already developed within ACE, at this 

time. 

Comment: Current functionality does 

not allow for the filing of an electronic 

in-bond application without access to 

QP and QP requires ABI connectivity 

which carriers do not currently need to 

access during their normal business 

operations. 

CBP Response: Although the 

commenter is correct that in order to file 

an in-bond application using QP, the 

filer must have ABI connectivity, an inbond applicant can also use ACE when 

the in-bond application is filed as part 

of the advance or arriving manifest. 

When filing an in-bond application 

using QP, the in-bond application is 

filed as a stand-alone filing that will be 

reported on the manifest when all the 

data has been transmitted. 

Comment: Will there be a stand-alone 

in-bond system available within ACE 

that is not linked to the manifest record 

of the original importation? 

CBP Response: In order to facilitate 

processing of in-bond shipments and to 

reduce redundant filing requirements, 

CBP has designed the in-bond systems 

so that they are linked to the manifest 

record. There will not be a stand-alone 

in-bond system within ACE that is not 

linked to the manifest record of the 

original importation. 

Comment: How will responses to 

diversion requests be transmitted to the 

carrier? How long will it take for CBP 

to respond to the diversion request? 

CBP Response: The carrier will 

submit the diversion request using a 

ACE EDI or a QP/WP message. CBP’s 

response will be immediate. CBP’s 

disposition of the diversion request will 

be automated so that the carrier will 

receive authorization for, or denial of, 

the diversion immediately. The 

updating of the destination port code in 

the system will constitute approval of 

the diversion request. If the destination 

port code is rejected, that will constitute 

a denial of the diversion request. 

Comment: Will the in-bond 

application be fully paperless, meaning 

that there will be no requirement to file 

hard copies at the origination port for 

authorization? Some origination ports 

currently require that the in-bond 

documentation be validated through the 

use of perforation machines (e.g., Los 

Angeles). 

CBP Response: When this rule is 

effective, the in-bond process for inbond merchandise transported by ocean, 

rail, or truck, will be fully paperless. It 

is expected that air will eventually be 

fully paperless as well, but CBP would 

propose that through a separate 

rulemaking. 

Comment: With regard to an in-bond 

application consisting of a 

transportation entry and manifest, the 

manifest or its electronic equivalent 

should only be required at the 

origination port of entry when the 

merchandise is first imported into the 

45372 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 

United States. Subsequent in-bond 

applications for the same merchandise 

should require only a transportation 

entry. 

CBP Response: ACE links all phases of 

the in-bond movement. When a 

subsequent in-bond application is filed, 

the first movement is closed and the 

second is initiated. The system will 

require the previous in-bond number, 

and will then link the two in-bond 

movements. The manifest information 

will not have to be submitted a second 

time. 

2. Elimination of the CBP Form 7512 

Comment: Some commenters stated 

that they support eliminating the paper 

in-bond application (CBP Form 7512) 

and requiring carriers to file 

electronically. Carriers already file inbond entries electronically, so electronic 

filing will not impose new burdens. It 

will, however, provide CBP with real 

time information on goods in transit and 

allow for easy reconciliation of 

shipments as goods are arrived and 

entered at another U.S. port or exported. 

The Automated Commercial System 

(ACS) currently allows for electronic inbond filing now, but does not collect all 

the information CBP needs. These 

commenters support the proposal to 

utilize the increasingly functional ACE 

for this purpose. Because shippers are 

already familiar with ACE, this should 

not cause problems for them and it will 

increase efficiency. 

CBP Response: CBP appreciates the 

positive feedback and agrees that 

changing the in-bond process from a 

paper to an electronic process will 

increase efficiency, allow for easier 

reconciliation for carriers, and facilitate 

the collection of information by CBP 

without further burdening the trade. 

Comment: Some commenters, who 

agree that the in-bond application (the 

filing) should be electronically 

submitted to CBP, stated that the CBP 

Form 7512 should not be completely 

eliminated. The common trade practice 

is to maintain a hard-copy of the actual 

CBP Form 7512 which is used as an 

attachment to the bill of lading to 

properly identify the shipment as an inbond shipment. It accompanies the 

shipment as it moves from trucking 

terminal to trucking terminal. 

Eliminating the CBP Form 7512 form 

will require many carriers to redesign 

their internal systems at great expense. 

CBP Response: Many carriers are 

already filing in-bonds electronically 

and are not using a paper CBP Form 

7512. While there are some carriers that 

will have to revise their business 

practices as a result of CBP’s efforts to 

modernize the in-bond process, CBP 

does not plan to maintain a two tiered 

in-bond system with both electronic 

filing and paper filing in order to 

accommodate those carriers that 

currently use the CBP Form 7512 for 

tracking purposes. If, for their own use 

for internal tracking purposes, carriers 

prefer a hard-copy document to 

accompany the shipment, carriers can 

choose to create a form with the same 

information as the CBP Form 7512 or 

print a hard-copy of the electronic inbond application. 

Comment: Many bonded carriers are 

not automated and rely upon the CBP 

Form 7512 as their control document. 

Unless CBP is prepared to mandate that 

bonded carriers become AMS certified, 

the CBP Form 7512 will continue to be 

needed. 

CBP Response: CBP is requiring 

automated filing of in-bond entries. 

How bonded carriers manage their own 

internal controls is up to each bonded 

carrier. 

3. Information Required 

Comment: The current flow of 

commercial information is not 

structured in such a way that all of the 

new in-bond information requirements 

would be readily available. CBP should 

work with the various sectors of the 

trade community in identifying what 

information is truly necessary, and in 

developing a phased-in compliance 

schedule that would afford business the 

time to adjust its procedures to the new 

regime. CBP’s program for 

implementation of the ISF requirements 

is a good model for phased-in 

compliance. 

CBP Response: CBP worked closely 

with the various sectors of the trade 

community before publishing the NPRM 

regarding the general changes to the inbond system that were being 

considered. CBP received and took into 

account extensive feedback from the 

trade community in the formulation of 

the NPRM. Moreover, as a result of the 

comments CBP received in response to 

the NPRM regarding the required 

information on the in-bond application, 

CBP is making several changes 

regarding these requirements so that 

they are less burdensome but still 

provide CBP with the necessary 

information. The rule will have a 60-day 

delayed effective date to enable the 

trade to make required adjustments to 

comply with the rule. CBP is also 

providing a 90-day flexible enforcement 

period similar to that used for 

implementation of the ISF requirements 

that will start from the effective date of 

this rule. Additionally, CBP will work 

closely with the trade to resolve 

compliance issues that the trade might 

experience as a result of this rule. 

Comment: The list of proposed 

changes in the NPRM includes a 

statement that an in-bond application 

must be filed for each conveyance 

transporting the shipment. However, 

this requirement is absent from the 

proposed regulatory language. Further 

guidance should be given regarding the 

requirement to file an in-bond for each 

conveyance. 

CBP Response: The statement in the 

list of proposed changes of the NPRM 

that an in-bond application must be 

filed for each conveyance was incorrect. 

A separate in-bond will not be required 

for each conveyance. One in-bond 

application can cover merchandise that 

is transported by multiple conveyances. 

Comment: Some carriers move inbond merchandise via centralized hubs 

wherein in-bond merchandise is 

transported to a hub and consolidated in 

a new container before being 

transported to the port of exportation. If 

an in-bond shipment is moved in this 

manner, will one T&E application 

covering the entire movement of the inbond merchandise be acceptable? 

CBP Response: Only one T&E in-bond 

application is necessary to move an inbond shipment from the origination port 

to the port of exportation. In-bond 

merchandise can be moved from one 

container to another container in a 

centralized hub, if the sealing 

procedures in § 18.4 are followed. 

However, multiple in-bond shipments 

from different origination ports cannot 

be entered under a single T&E and 

consolidated in a centralized hub. 

4. Updating and Amending the In-Bond 

Record 

Comment: Will CBP allow all data 

elements to be amended within the inbond record or will there be 

restrictions? CBP must provide guidance 

with respect to which elements can be 

amended. 

CBP Response: Prior to departure 

from the originating port, all data 

elements related to the in-bond may be 

updated or amended. After departure 

(during transit), the in-bond data may 

not be updated or amended, except for 

the quantity, destination, and seal 

numbers. If the reported quantity is not 

correct or if it changes, the in-bond 

record must be updated. Updating the 

quantity does not relieve the initial 

bonded carrier from liability for any 

shortages based on the quantity 

originally reported in the in-bond 

application. If the seal number is not 

known when the in-bond application is 

filed, the in-bond record must be 

updated with the seal number within 

Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 45373 

two business days. It is also necessary 

to update the in-bond record with notice 

and proof of export and with 

information regarding divided 

shipments at the port of exportation. 

Comment: Will other parties be 

allowed to amend the in-bond record or 

does the amendment have to be made by 

the original in-bond filer? CBP needs to 

define what is considered ‘‘permission.’’ 

The filer is not the appropriate party to 

grant permission to amend the official 

record and this authorization should be 

obtained from the owner of the 

commercial information since that is the 

true party in interest. Guidance should 

be provided indicating the appropriate 

method of notification or permission to 

both CBP and other parties who are 

authorized to make changes. 

CBP Response: Any party that files an 

in-bond application as provided in 

proposed § 18.1(c) can amend the inbond record. This may be the carrier or 

agent that is authorized by the carrier to 

obligate the carrier’s bond and that 

brings the merchandise to the 

origination port; the carrier, or 

authorized agent of the carrier that 

accepts the merchandise under the 

carrier’s bond; or any person who has a 

sufficient interest in the merchandise as 

shown by the bill of lading, manifest or 

other document. To provide additional 

clarity, CBP is changing proposed 

§ 18.1(h) to eliminate the requirement 

that the party updating or amending the 

in-bond record receive ‘‘permission’’ 

from the ‘‘filer’’ and requiring instead 

that the party that is updating or 

amending the in-bond application 

obtain the ‘‘authorization’’ of the ‘‘party 

whose bond is obligated.’’ CBP is 

requiring ‘‘authorization’’ from the party 

whose bond is obligated, as opposed to 

the filer because the party whose bond 

is obligated bears the responsibility for 

ensuring the proper movement of the 

merchandise. 

Comment: CBP should explain how 

the amending and updating of the inbond record will work (process, time 

limits for amending, etc.). 

CBP Response: The in-bond record 

can be updated and amended by 

entering the new information in the CBP 

approved electronic system. The system 

will automatically update the in-bond 

record, barring any system edits in place 

prohibiting the update. CBP will 

provide additional procedures for 

amending and updating the in-bond 

record as necessary, using its normal 

trade outreach and by posting the 

information on the CBP Web site. CBP 

is also changing proposed § 18.1(h) in 

the final rule to specify a timeframe for 

amending the in-bond record. That 

timeframe is ‘‘within two business days 

of the event that requires amendment.’’ 

5. Who May File 

Comment: Proposed § 18.1(c)(3) 

stating that a transportation entry may 

be filed by ‘‘[a]ny person who has a 

sufficient interest in the merchandise as 

shown by the bill of lading or manifest, 

a certificate of the importing carrier, or 

by any other document satisfactory to 

CBP’’ is an overly broad grant of 

authority. CBP should limit the term 

‘‘sufficient interest’’ to those persons 

with a property right in the merchandise 

or those persons who have been 

properly authorized by the owner of the 

goods. The right to file an in-bond 

application should be further restricted 

to the originating bonded carrier or a 

licensed customs broker. CBP should 

identify examples of such ‘‘other 

documents’’ that will be acceptable to 

CBP to include a properly executed 

power of attorney, a letter of 

authorization, etc. Alternatively, the 

term ‘‘other documents’’ should be 

deleted because it is unnecessary. 

CBP Response: The quoted language 

in proposed § 18.1(c)(3) is not new. It is 

derived from § 18.11(b) of the existing 

regulations which similarly allows a 

person who has sufficient interest in the 

merchandise as shown by the bill of 

lading or manifest, a certificate of the 

importing carrier, or by any other 

document satisfactory to CBP to 

transport merchandise in-bond. CBP has 

not experienced problems with parties 

without sufficient interest transporting 

merchandise in-bond and prefers to 

maintain the existing standard to 

facilitate trade. With regard to the 

documents that are acceptable to 

demonstrate sufficient interest, CBP 

believes it should provide the trade with 

some flexibility to present 

documentation to demonstrate that a 

party has sufficient interest in the 

merchandise. 

Comment: As filing of the in-bond is 

often made by an authorized agent of a 

party with sufficient interest, the 

proposed language in § 18.1(c)(3) should 

be updated to read, ‘‘[a]ny person, or the 

authorized agent of any person with 

sufficient interest in the merchandise, as 

shown by the bill of lading or manifest, 

a certificate of the importing carrier, or 

by any other document satisfactory to 

CBP.’’ 

CBP Response: CBP agrees. CBP is 

modifying the regulatory text in 

§ 18.1(c)(3) to allow the authorized 

agent of any person who has a sufficient 

interest in the merchandise to file the 

in-bond application. 

Comment: Proposed § 18.1(c)(1) refers 

to a transportation entry made by ‘‘the 

carrier that brings the merchandise to 

the origination port.’’ CBP should 

modify this to read: ‘‘the carrier, or 

authorized agent of the carrier, that 

brings the merchandise to the 

origination port.’’ Proposed § 18.1(c)(2) 

refers to a transportation entry made by 

‘‘the carrier that is to accept the 

merchandise under its bond or a carnet 

for transportation to the port of 

destination or port of exportation;’’ CBP 

should modify this provision to read 

‘‘the carrier, or authorized agent of the 

carrier, that is to accept the merchandise 

under its bond or a carnet for 

transportation to the port of destination 

or port of exportation;’’ 

CBP Response: CBP agrees and is 

changing proposed §§ 18.1(c)(1) and 

(c)(2) to include the phrase ‘‘or 

authorized agent of the carrier.’’ 

Comment: The referenced ‘‘certificate 

of the importing carrier’’ is not defined. 

This reference is in addition to a person 

having an interest in the shipment as 

shown by the bill of lading or manifest, 

so it is vague and confusing to refer to 

an undefined ‘‘certificate.’’ CBP should 

delete this reference as it may be 

unnecessary, or define what may 

constitute an acceptable certificate. 

CBP Response: The provision 

allowing for the use of a ‘‘certificate 

from the importing carrier’’ in proposed 

§ 18.1(c)(3) is contained in the existing 

regulations in § 18.11(b). A power of 

attorney or letter of authorization would 

constitute an acceptable certificate. CBP 

will not establish a specific definition of 

what constitutes an acceptable 

certificate, but will accept a document 

or electronic request from the importing 

carrier that authorizes another party to 

file an in-bond application. 

Comment: CBP should require the 

party obligating the bond to provide all 

shipment information to the carrier 

when requested for investigation and 

audit purposes. 

CBP Response: CBP will not require 

third parties to provide shipment 

information to the carrier. This is a 

matter to be resolved contractually 

between carriers and those parties with 

whom they do business. However, as 

provided in 19 U.S.C. 1508(a)(1)(B) and 

19 CFR 163.2, persons who knowingly 

cause the transportation of merchandise 

carried or held under bond are 

responsible for maintaining the 

appropriate in-bond records, which 

must be supplied to CBP upon request. 

6. Licensed Customs Brokers 

Comment: Only a licensed customs 

broker should be able to file the in-bond 

application; bonded carriers should 

only be able to file in limited cases 

when they simply file data without 

45374 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 

exercising discretion. The classification 

of merchandise, even at the six-digit 

level, and determining the 

‘‘admissibility of merchandise’’ is 

customs business and should be done 

only by a licensed customs broker. 

Customs brokers have the knowledge 

and experience to identify prohibited 

and restricted merchandise and will 

more accurately identify whether 

merchandise is subject to a rule, 

regulation, law, standard or ban relating 

to health, safety or conservation. 

CBP Response: An entry for 

transportation in bond is an excepted 

activity pursuant to 19 CFR 

111.2(a)(2)(iv) for which a customs 

broker’s license is not required. See 19 

CFR 111.2(a)(2)(iv). Moreover, customs 

business does not involve the mere 

electronic transmission of data received 

for transmission to CBP, but does 

involve classification for entry 

purposes. See 19 CFR 111.1. The sixdigit HTSUS number required on the inbond application is necessary to ensure 

cargo safety and security and not to 

determine merchandise entry 

procedures that fall within the scope of 

customs business. This is in contrast to 

a 10-digit HTSUS number which does 

involve classification for entry 

purposes. Although the proposed rule 

does require more information to be 

provided than in the past, this 

information is generally available to the 

carrier and does not require the 

expertise of a customs broker and does 

not require making admissibility 

determinations. Moreover, as discussed 

in Section I.B.3., Description of the 

Merchandise, and Section II.C., New 

Information Requirements for In-Bond 

Shipments, CBP is requiring much less 

information about the in-bond 

merchandise on the in-bond application 

than was proposed. For example, CBP is 

eliminating the requirement in proposed 

§ 18.1(d)(1)(ii) for carriers to provide the 

rule, regulation, law, standard or ban 

relating to health, safety or conservation 

enforced by CBP or another government 

agency that is applicable to the in-bond 

merchandise. This, and other changes 

relating to the description of the 

merchandise, will lessen the burden on 

carriers and ensure that admissibility 

determinations are not required in order 

to file an in-bond application. 

Comment: The bonded carrier should 

only be allowed to file the in-bond 

application when it does not have to 

make decisions regarding the 

classification or whether merchandise is 

restricted, prohibited, or subject to a 

rule, regulation, law, standard or ban 

relating to health, safety or 

conservation. The bonded carrier should 

be allowed to file the in-bond 

application only when it has received 

written documentation from a party that 

(1) has the right to make a consumption 

entry, (2) has an active continuous 

customs importer bond, (3) is required 

to exercise reasonable care in 

ascertaining and proving all of the 

required data elements to the bonded 

carrier, and (4) is responsible for 

liquidated damages on its continuous 

customs bond and/or penalties under 19 

U.S.C. 1592 for false, inaccurate or 

incomplete information. 

CBP Response: CBP will not restrict 

who can file an in-bond application in 

the manner proposed in this comment. 

7. Unauthorized Use of a Bond 

Comment: Several commenters raised 

concerns related to a bonded party’s 

ability to restrict usage of its bond by 

other parties and to monitor the 

obligations made to its bond. These 

commenters said that the bonded party 

should be able to prohibit the obligation 

of its bond by third parties. In addition, 

these commenters indicated that the 

bonded party should be able to see, 

within the new proposed automated 

paperless environment, all in-bond 

movements that obligate its custodial 

bond. Without such functionality in the 

electronic in-bond system, the bonded 

party may be exposed to fraudulent 

activity and liquidated damages 

assessed by CBP when a carrier files an 

in-bond application without 

authorization from the bonded party. 

CBP Response: We agree that the 

bonded carrier should be able to look 

into the in-bond record and restrict 

usage of its bond by other parties. In 

ACE and QP/WP, bonded parties can 

prevent the unauthorized use of their 

bond by restricting use of their bond by 

other parties and by setting conditions 

on the use of their bond. These in-bond 

systems are designed to allow an 

approved bonded carrier that has a CBPapproved ACE account to allow 

restricted or unrestricted use of its 

bonds. If the bonded carrier’s account is 

unrestricted, any other party may open 

an in-bond application using the 

bonded carrier’s account number. If the 

bonded carrier restricts the usage of the 

bond account number, that carrier can 

log into its account and select the other 

parties that are authorized to obligate its 

bond. If the bonded carrier selects 

parties that are authorized, all other 

parties will be unauthorized and any 

attempt to use the bond by an 

unauthorized user will be rejected. In 

addition, the bonded party will receive 

notifications when the in-bond record is 

amended or updated if the in-bond filer 

designates the bonded party as a 

Secondary Notify Party (SNP) in ACE. 

A party who moves bonded 

merchandise without authorization, 

either as a non-bonded carrier holding 

itself out as a bonded carrier or as a nonbonded carrier using the identity/bond 

information of a bonded carrier without 

the latter’s authorization, may be subject 

to a penalty pursuant to 19 U.S.C. 

1595a(b) for violation of 19 U.S.C. 1551, 

19 CFR 18.1 and 19 CFR 112.12, or 19 

U.S.C. 1592. 

8. Procedures 

Comment: Under current electronic 

in-bond processing in AMS, it is 

possible for an ocean carrier’s taxpayer 

identification (IRS) number to be used 

by a third party to file an in-bond 

movement without the carrier’s 

knowledge. While the ACE M1 

functionality will allow ocean carriers 

to better control which parties are 

authorized to use the carrier’s IRS 

number to file an in-bond application, 

carriers need to be able to know when 

their bonds are used by a third party so 

that the carrier can close any in-bond 

applications filed against the carrier’s 

IRS number that the third party filer 

fails to close. 

To enable ocean carriers to monitor 

when their IRS numbers are used to file 

in-bonds, CBP should modify the EDI 

in-bond message set for M1 to include 

two additional pieces of information: (1) 

The SCAC of the bonded party, and (2) 

the SCAC or filer code of the party that 

filed the initial in-bond application. 

CBP should also develop a 

mechanism within ACE M1 that would 

allow an ocean carrier to electronically 

close an in-bond that the in-bond filer 

created in the Automated Broker 

Interface (ABI) using the ocean carrier’s 

IRS number but then never closed in 

ABI. This would enable ocean carriers, 

none of whom use ABI (a broker filing 

system) to use ACE M1 to close inbonds cut against the carrier’s IRS 

number. 

CBP Response: CBP agrees that more 

accurate information should be 

provided to bonded parties regarding 

the use of their bond and thanks the 

commenter for these suggestions. Now 

that the ACE eManifest Rail and Sea 

(M1) has been successfully deployed, 

enhancements such as this will be 

considered and prioritized based on the 

needs of the trade and CBP. M1 

currently allows any EDI filer (ABI or 

carrier) to provide updates on in-bond 

transactions including arrivals and 

exports. CBP encourages the party with 

the most accurate information to 

provide those updates. 

Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 45375 

9. Change of Foreign Destination 

Comment: CBP should clarify the 

difference between proposed § 18.23 

requiring the carrier to notify CBP of a 

change in foreign destination of an inbond shipment and the requirement in 

proposed § 18.5 that carriers obtain 

authorization from CBP for diversion of 

an in-bond shipment. 

CBP Response: Section 18.5 requires 

the filer of the in-bond application to 

submit a request to divert merchandise 

via a CBP-approved EDI system. A 

diversion occurs when the U.S. port for 

which the in-bond merchandise is 

destined is changed and the 

merchandise is shipped to a different 

port. Section 18.1(h) requires the carrier 

to update information included in the 

original in-bond application, such as the 

first foreign port, when there are 

changes. Section 18.23 concerns the 

requirement to update information in 

the in-bond application as it applies to 

TE and IT shipments. CBP is adding 

language to § 18.23 to make this clearer. 

New Information Requirements for InBond Shipments 

10. New Information Requirements 

Generally 

Comment: Many commenters 

expressed concern that the new 

information requirements of the in-bond 

application are too burdensome. 

CBP Response: The requirements 

proposed in the NPRM, when 

considered as a whole, potentially 

would require more information from 

carriers. Accordingly, CBP is making 

several changes to the proposed 

regulations in response to these 

comments. First, CBP is removing the 

requirement in proposed § 18.1(d)(1)(ii) 

that if the party submitting the in-bond 

application knows that the merchandise 

is subject to a rule, regulation, law, 

standard or ban relating to health, safety 

or conservation, the filer must provide 

the rule, regulation, law, standard or 

ban to which the merchandise is subject 

as well as the government agency 

responsible for enforcing the rule, 

regulation, law, standard, or ban. In its 

place, CBP is requiring that 

merchandise subject to detention or 

supervision by a U.S. government 

agency be described with sufficient 

accuracy to enable the agency 

concerned to determine the contents of 

the shipment. This is a requirement in 

existing § 18.11(e). Second, CBP is 

removing the requirement in proposed 

§ 18.1(d)(1)(iii) that the in-bond filer 

identify prohibited or restricted 

merchandise. Third, CBP is removing 

the requirement in proposed 

§ 18.1(d)(1)(iv) to provide additional 

information for all in-bond shipments of 

textiles and textile products. Fourth, 

CBP is making optional the requirement 

in proposed § 18.1(d)(1)(v) that the filer 

of the in-bond application must provide 

information regarding merchandise for 

which the U.S. Government, foreign 

government or other issuing authority 

has issued a visa, permit, license, or 

other similar number or identifying 

information. In lieu of the above 

requirements and to ensure that CBP is 

still able to assess security and health 

and safety threats, CBP is changing 

proposed § 18.1(l)(i) to require the sixdigit HTSUS number on the in-bond 

application in all instances. The sixdigit HTSUS number is one of the 

required data elements for all 

merchandise arriving by vessel on the 

Importer Security Filing (ISF). 

11. Special Classes of Merchandise 

Comment: Proposed § 18.20(a) 

prohibits the use of a transportation and 

exportation (T&E) entry, with no 

exceptions noted for several classes of 

merchandise as detailed at § 18.1(l), 

namely (1) health, safety, and 

conservation; (2) plants and plant 

products; (3) narcotics and other 

prohibited articles; (4) non-narcotics; (5) 

explosives; and (6) livestock. This 

conflicts with proposed § 18.1(l), which 

allows a T&E entry to be filed if 

approved by the appropriate 

governmental agency, e.g., explosives as 

regulated by ATF, DOT, and USCG. 

Additionally, if a T&E entry may not be 

utilized for these specified 

commodities, two separate in-bond 

movements would be required to move 

the shipment through the United States 

to its final destination, i.e., an 

Immediate Transportation (IT) to the 

port of exportation and a separate 

Immediate Exportation (IE) at the port of 

destination. This would create an 

unnecessary increase in work for both 

CBP and affected carriers and filers. 

CBP Response: Proposed § 18.20(a) 

does not prohibit the use of T&E entries 

for the named classes of merchandise in 

all cases. It specifically allows for T&E 

entries, subject to the provision of 

§ 18.1(l). There is no conflict between 

the two provisions. While proposed 

§ 18.1(l) imposes restrictions on the 

named classes of merchandise, it does 

not prohibit the use of T&E entries. It 

merely requires authorization from the 

appropriate government agency to ship 

these classes of merchandise under a 

T&E entry. Moreover, these are not new 

restrictions on T&E entries. Existing 

§ 18.21 provides for these same 

restrictions on T&E entries. This rule 

makes these restrictions applicable to all 

in-bond entries by moving them to 

§ 18.1(l). 

Comment: CBP should amend 

proposed § 12.11 to allow plant or plant 

product shipments subject to Animal 

and Plant Health Inspection Service/ 

Plant Protection and Quarantine 

Programs (APHIS/PPQ) permit 

conditions to be shipped from the port 

of first arrival to another port for proper 

inspection at an APHIS/PPQ facility, 

without an in-bond application if all 

CBP requirements have been met. 

CBP Response: CBP disagrees. Until 

such time as the plant or plant product 

has been inspected or treated by APHIS/ 

PPQ, the merchandise must remain 

under CBP bond, which insures 

compliance with APHIS/PPQ 

requirements. 

12. Quantity 

Comment: Proposed § 18.1(d)(1)(vi) 

states that ‘‘the quantity of the 

merchandise to be transported to the 

smallest piece count’’ must be provided. 

This is a confusing standard and 

clarification should be provided as to 

whether this means that the quantity 

will be reported at the smallest external 

packaging unit or something different, 

such as the smallest piece count. CBP 

should use the ‘‘smallest exterior 

packing unit’’ as the standard for 

providing the quantity of the 

merchandise. This is a workable 

standard and the data is readily 

available and verifiable to the carrier. 

‘‘The smallest piece count’’ standard 

would be burdensome as manifests and 

bills of lading normally do not contain 

this information and verification may be 

difficult. 

CBP Response: CBP concurs and is 

changing proposed § 18.1(d)(1)(vi) to 

require the reporting of the quantity 

using the ‘‘smallest exterior packing 

unit’’ standard. This will enable carriers 

to verify the quantity of the goods they 

are transporting and ensure that there is 

no shortage. 

Comment: CBP should modify 

proposed § 18.1(d)(1)(vi) to require that 

the quantity of merchandise to be 

transported be reported in the in-bond 

application as the quantity used in the 

bill of lading and or manifest. This will 

ensure consistency in reporting between 

the application filer and CBP as well as 

amongst all trading partners involved in 

the transportation movement of the inbond shipment. 

CBP Response: CBP disagrees. The 

quantity of merchandise used in the bill 

of lading or the manifest may not reflect 

the actual quantity, as required in 

§ 18.1(d)(1)(iv). CBP needs to ensure the 

entire shipment is accounted for at the 

destination port or port of exportation. 

45376 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 

Proposed § 18.1(d)(1)(vi) requires the 

quantity of merchandise to be 

transported in-bond to be reported and 

will specify how that quantity is to be 

reported. As discussed in the prior 

comment response, the required 

quantity standard will be the smallest 

exterior packing unit. 

Comment: CBP should remove 

proposed § 18.1(d)(4), which requires 

the initial bonded carrier to assert that 

there is no discrepancy between the 

quantity of the goods received from the 

importing carrier and the quantity of 

goods delivered to the in-bond carrier 

for transportation in-bond. Quantity 

information is already required under 

proposed § 18.1(d)(1)(vi) and the initial 

bonded carrier cannot make the 

assertion in good faith without 

independently verifying the quantities 

prior to importation which is 

impractical and costly. Alternatively, 

CBP should change proposed 

§ 18.1(d)(4) to provide that by 

submission of an in-bond application, 

the initial bonded carrier asserts that 

there is no ‘‘known discrepancy’’ 

between the quantity received from the 

initial carrier and quantity delivered to 

the in-bond carrier, unless the arriving 

carrier and the in-bond carrier are the 

same, in which case the provision does 

not apply. 

CBP Response: Proposed § 18.1(d)(4) 

does not impose new requirements on 

bonded carriers. Under § 18.8 of the 

current regulations, if an in-bond 

shipment arrives at the destination port 

and the quantity of goods that arrives is 

less than the quantity manifested, the 

bonded carrier is liable for the shortage. 

This rule does not change that 

requirement. However, CBP has 

concluded that proposed § 18.1(d)(4) is 

unnecessary as it is covered in § 18.8. 

Therefore, CBP is removing this 

provision. 

Comment: Bonded carriers need to be 

able to file manifest discrepancy reports 

after the in-bond shipment arrives at the 

port of destination. The discrepancy 

reports would reflect the quantity of 

good actually received by the in-bond 

carrier when the container is unloaded 

at the port of destination. 

CBP Response: CBP disagrees. CBP is 

not creating a new manifest discrepancy 

reporting system for in-bond shipments 

which would insulate carriers from 

liability for a shortage. Although carriers 

must use the procedure described in 

§ 18.1(h) to update the in-bond record to 

report any discrepancy in quantity of inbond merchandise, the carrier is 

responsible for the quantity of goods 

reported in the in-bond application. 

13. Location of the Merchandise 

Comment: Proposed § 18.1(j) requires 

the reporting of the ‘‘[p]hysical location 

of the merchandise within the port.’’ 

The term ‘‘physical location’’ should be 

defined and CBP should provide 

additional detail as to the level of 

specificity required; e.g., the Facilities 

Information and Resources Management 

System (FIRMS) code if known, or dock 

location, pier, street, address, city, etc. 

FIRMS codes need to be established for 

border crossing locations where carriers 

do not have a physical presence. 

CBP Response: CBP agrees that the 

proposed text is not clear and leaves 

room for error in providing the physical 

location of the merchandise. Therefore, 

CBP is changing proposed § 18.1(j) to 

require the reporting of the FIRMS code 

rather than a description of the physical 

location of the goods. FIRMS codes are 

used to identify a specific physical 

location. Locations, e.g., warehouses, 

with FIRMS codes that are used solely 

for the purposes of providing the 

location of in-bond merchandise are not 

required to be bonded facilities, unlike 

other locations with FIRMS codes. 

However, FIRMS code locations that are 

used solely for reporting the location of 

in-bond merchandise cannot be used for 

other purposes for which a bond is 

required, e.g., manipulation of the 

merchandise. If the merchandise is 

sitting on the dock, the FIRMS code of 

the terminal should be provided. 

Comment: Does the new rule allow 

truck carriers to use their terminal 

facilities as the arrival destination and 

use that location to report to CBP? 

CBP Response: Yes. However, if there 

is not an existing FIRMS code for the 

terminal facility the truck carrier 

company will need to obtain one. 

Comment: Will CBP be updating or 

changing the current FIRMS code 

process? CBP should centralize the 

process at headquarters, rather than 

have the ports responsible. 

CBP Response: CBP is not updating or 

changing the process for obtaining a 

FIRMS code. The current process is to 

obtain a FIRMS code at the local port. 

A member of the trade requests a FIRMS 

code via a letter to the port director on 

company letterhead. An Officer in the 

POE creates a FIRMS file in ACE for the 

requesting party and CBP mails the 

FIRMS code to the requesting party. 

However, CBP headquarters will 

continue to oversee the process. 

Comment: CBP should require the 

reporting of the FIRMS code of the 

bonded location ‘‘at which the in-bond 

merchandise is arrived’’ instead of the 

physical location of the in-bond 

merchandise within the port. For 

shipments that will be exported across 

a land border, CBP should accept an 

alternate location code if a FIRMS code 

does not exist for the location where the 

goods will be exported. 

CBP Response: CBP is requiring in 

§ 18.1(j) that the bonded carrier report 

the FIRMS code for the arrival of all inbond merchandise at the destination 

port and port of exportation. 

14. Destination 

Comment: The reporting of the 

‘‘ultimate destination’’ is a new 

requirement and CBP should explain 

what ‘‘ultimate destination’’ means. The 

carrier that files the electronic in-bond 

application has no way to know the 

‘‘ultimate destination’’ of a particular inbond shipment. The carrier can only 

provide CBP with information about the 

final destination of the cargo movement 

under the carrier’s contract of carriage 

with the shipper. The carrier does not 

know what the shipper does with the 

cargo after the carrier has delivered the 

cargo according to the contract of 

carriage. The proposed rule should be 

amended to clarify that for a carrier 

filing an in-bond application the final 

destination of the cargo movement 

under the carrier’s contract of carriage 

with the shipper is acceptable. 

CBP Response: To address the 

comment above and avoid inconsistency 

with other export control laws and 

regulations, CBP is no longer using the 

term ‘‘ultimate destination’’ in 

§ 18.1(d)(1)(vi). CBP is making changes 

to § 18.1(d)(1)(vi) to clarify that for IT 

shipments, the port of destination in the 

United States must be provided, and for 

T&E and IE shipments, the port of 

exportation and the first foreign port 

must be provided. 

Comment: Any requirements 

associated with the destination beyond 

the port code could significantly erode 

the confidentiality of sensitive customer 

information. 

CBP Response: CBP routinely 

considers commercial information on 

entry documents as confidential 

business information protected by the 

Trade Secrets Act, 18 U.S.C. 1905, and 

therefore subject to exemption 4 of the 

Freedom of Information Act (FOIA) 

protecting trade secrets and commercial 

or financial information. CBP does not 

require businesses to designate that 

information as confidential. See 19 CFR 

103.35. CBP would consider the 

destination of the in-bond merchandise 

to be confidential and privileged under 

exemption 4 of the FOIA and would not 

release this information. 

Comment: There is often a need to 

move in-bond jet fuel to airports that 

operate with international flights. 

Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 45377 

Current systems allow for the use of a 

multi-destination field. CBP should 

recognize the operational realities of the 

jet fuel and airline business and 

specifically address in the final rule that 

in-bond movements with multiple 

destinations may continue to be used. 

CBP Response: This rule will not 

specifically address multi-destination 

fields currently used in some situations 

to move jet fuel in-bond. This is an 

operational issue. However, CBP is not 

planning to limit or stop the use of this 

practice at this time. 

C. In-Transit Time 

1. In-Transit Time Generally 

Comment: The proposed 30-day 

transit time is sufficient to arrive at the 

destination port. It is more than 

sufficient time for carriers to enter and 

exit the United States with Canadian 

domestic goods. 

CBP Response: CBP agrees with these 

comments, except with respect to inbond shipments transported by barge, as 

addressed below. 

2. In-Bond Shipments Transported by 

Barge 

Comment: The current 60-day intransit time for in-bond shipments that 

travel by barge should be preserved. 

Barge delivery times frequently exceed 

30 days. Industry data indicates that 

average barge transit times between 26 

common origination and destination 

points for inland barge transportation 

routinely exceed the proposed 30-day 

in-transit time. In addition to average 

transit times that may exceed 30 days, 

barge in-transit times are also frequently 

impacted by other factors such as fog, 

icing, high water, low water, lock 

closure, maintenance, and congestion 

that further lengthen transit times 

beyond 30 days. 

CBP Response: Due to the special 

circumstances noted above pertaining to 

travel by barge, CBP agrees that the 

proposed 30-day in-transit time for inbond shipments transported by barge is 

not adequate and is changing proposed 

§ 18.1(i)(1) to allow for a 60-day intransit time for barge shipments. 

3. Extension of In-Transit Time 

Comment: Requests for an extension 

of the 30-day in-transit time should be 

considered approved unless CBP denies 

the request. The process should be 

automated and extensions should be 

granted in 30-day timeframes. The 

process for requesting an extension 

should be explained in more detail. 

CBP Response: CBP disagrees that 

extensions should be automatically 

approved. CBP will consider on a caseby-case basis whether to grant an 

extension of the in-transit time period 

and if so, the length of the extension. 

CBP is changing proposed § 18.1(i)(2) to 

clarify that the decision to extend the 

in-transit time period is within the 

discretion of CBP. CBP is also changing 

proposed § 18.1(i)(2) to provide factors 

that may be considered in its decision, 

which include extraordinary 

circumstances beyond the control of the 

parties. 

With regard to automation, the 

functionality does not currently exist to 

accept and approve extensions 

electronically via electronic EDI. 

Accordingly, all requests for an 

extension must be made to the port 

director of the port of destination or port 

of exportation, as appropriate. See 

§ 18.1(i)(2). 

Comment: CBP should issue the 

denial of an extension request within 24 

hours of the request and provide a 

reason for the denial. 

CBP Response: CBP will consider 

each extension request on a case-by-case 

basis and will endeavor to issue any 

denials within 24 hours of receiving the 

request. CBP will not provide the reason 

for denying an extension request since 

the request may be denied for law 

enforcement purposes. 

Comment: CBP should continue to 

take into account and provide 

extensions for rail cars that have been 

delayed due to rail cars being 

unavailable to transport in-bond 

merchandise or due to other transit 

issues. CBP should continue to provide 

reasonable relief from the 30-day limit. 

CBP Response: CBP will consider 

requests for extensions on a case-by-case 

basis. 

Comment: Can the request for an 

extension be made for all cargo covered 

on the bill of lading, or must the request 

for an extension be made for each 

individual in-bond entry? 

CBP Response: A request for an 

extension must be made for each 

individual in-bond entry. CBP will not 

grant a blanket extension for all 

shipments covered by a bill of lading. 

Comment: The proposed rule states 

CBP may extend the in-transit time if 

delays are caused due to the 

examination or inspection of the 

merchandise by CBP or another 

government agency. Because this issue 

can result in irregular deliveries due to 

no fault of the carrier, CBP should 

change ‘‘may extend’’ to ‘‘will extend.’’ 

The in-transit timeframe should be 

revised to account for the delay and 

recorded as part of the in-bond 

application record and communicated 

to the in-bond filer. 

CBP Response: CBP agrees that 

proposed § 18.1(i)(1) should be changed 

to address this issue. The new text will 

state that when the merchandise is 

subject to examination or inspection by 

CBP or another government agency, the 

time for which the merchandise is held 

due to the examination or inspection 

will not be considered part of the intransit time. Because of this change, it 

is unnecessary to change ‘‘may extend’’ 

to ‘‘will extend.’’ 

Comment: CBP should provide 

examples of circumstances in which 

CBP will grant an extension ‘‘for some 

other reason.’’ 

CBP Response: In order to clarify 

proposed § 18.1(i)(2), CBP is removing 

the phrase ‘‘for some other reason.’’ In 

its place, CBP is changing proposed 

§ 18.1(i)(2) to provide factors that may 

be considered in its decision to extend 

the in-transit time period. CBP will 

consider all requests for an extension on 

a case-by-case basis. 

Comment: Some in-bond shipments 

cannot be made within the mandatory 

in-transit time due to logistical issues 

that are beyond the control of the 

shipper. For example, a vessel shipment 

may contain 50 coils of steel, which 

would need to be divided into at least 

25 truckloads. Due to truck shortages 

and bad weather it is not uncommon for 

shipments to take longer than the intransit time for trucks of 30 days. 

CBP Response: CBP will take into 

account logistical issues such as the one 

described above when considering a 

request for an extension of the in-transit 

time. 

4. Shortening of In-Transit Time 

Comment: Proposed § 18.1(i)(3) 

provides that CBP may shorten the intransit time. CBP should clarify and 

explain why the in-transit time would 

ever need to be shortened once the 

application has been authorized and no 

holds have been placed on the 

shipment. CBP should provide more 

information and justification as to when 

this authority might be exercised so that 

the trade can more adequately comment. 

CBP Response: The in-transit time 

will only be shortened when required 

by another agency’s transit 

requirements. The primary reason why 

CBP would shorten the in-transit time 

would be to comply with U.S. 

Department of Agriculture (USDA) 

statutory requirements related to 

merchandise moving on a USDA permit. 

Other government agencies may also 

require shortened transit periods. 

Comment: Does the proposal that 

‘‘CBP will provide notice of a CBPshortened in-transit time with the 

movement authorization,’’ include 

45378 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 

notification by other government 

agencies of shortened in-transit times? 

CBP needs to ensure that there are 

procedural protections for the importer 

and the carrier to avoid arbitrary and 

costly restrictions. 

CBP Response: The in-transit time 

will only be shortened in order to 

comply with another agency’s transit 

requirements. CBP will provide notice 

to the carrier to facilitate compliance. 

To clarify this, CBP is changing 

proposed § 18.1(i)(3) to provide that 

‘‘CBP will provide notice of a 

government-shortened in-transit time 

with the movement authorization.’’ 

Comment: The ‘‘shortened in-transit 

time’’ information should be transmitted 

as a distinct data element or disposition 

code that is sent to filers. This code will 

ensure that the carrier will be aware of 

the restriction, and the carrier may then 

examine the text explanation of the 

shortened time for the details of the 

restriction. Instructions from CBP that 

require the trade to take any action must 

not be included as a remark to formal 

status messages because free form 

messages may be mistyped by the 

initiator, truncated by the system, or 

misinterpreted by the recipient. 

CBP Response: CBP will communicate 

to the carrier via EDI when the in-transit 

time has been shortened. CBP agrees 

that the creation of a disposition code is 

a good idea and will endeavor to create 

a new disposition code for this purpose. 

5. Start of In-Transit Time 

Comment: The current regulations 

begin the running of the 30-day intransit time at the time the forwarding 

carrier receives the merchandise. In 

many seaports, it is not uncommon for 

containers to be delayed within a port 

terminal for myriad reasons, two to four 

days on average, before they are 

delivered to the forwarding carrier. 

Beginning the in-transit time from the 

time of the filing of the in-bond 

application does not take these routine 

delays into account. The language of 

existing § 18.2(c)(2) that allows the 

forwarding carrier to report the date on 

which it received the merchandise at 

the port of arrival from the importing 

carrier should be retained. 

CBP Response: CBP has analyzed inbond movements including intermodal 

movements and determined that 

beginning the in-transit time at the time 

of filing the application would not 

seriously impinge on the 30-day (60-day 

for barges) in-transit time to deliver the 

cargo, even, taking into account a 2- to 

4-day delay at the port. Requiring the 

forwarding carrier to report when it 

receives the merchandise makes 

determining when the in-transit time 

begins more cumbersome, and makes 

the system dependent on a party whose 

bond may not be obligated. Extensions 

of the transit time can be requested in 

the event of a delay at the port. 

Comment: In the ocean environment, 

in-bond authorization may be provided 

up to 30 days prior to vessel arrival at 

the first U.S. seaport. Taking this into 

account, the 30-day transit time should 

not start until the conveyance has 

arrived at the first U.S. port and all 

government holds have been removed. 

CBP Response: CBP agrees. CBP is 

changing proposed § 18.1(i)(1) to 

provide that the in-transit time will not 

begin until vessel arrival or CBP 

movement authorization, whichever is 

later. 

Comment: In-bond merchandise 

traveling through the United States and 

destined for Mexico often requires 

several days at the port of exportation 

on the United States-Mexico border for 

various legitimate reasons before the 

merchandise can be imported into 

Mexico. Generally, the merchandise is 

transported to the port of exportation by 

the originating bonded carrier. Next, a 

new in-bond application is filed and the 

merchandise and bond liability is 

transferred to a local bonded carrier for 

exportation to Mexico. Taking 

commercial realities of importing goods 

into Mexico into consideration, if the 

originating bonded carrier arrives at the 

port of exportation without a sufficient 

number of days remaining before the 

expiration of the 30-day maximum time 

period, it will be difficult to find a 

succeeding bonded carrier to accept 

liability for the merchandise knowing 

that delays are anticipated and there is 

high risk of not being able to export the 

merchandise timely. This will likely 

cause in-bond merchandise to have to 

enter a foreign trade zone or customs 

bonded warehouse to avoid liquidated 

damages for irregular delivery. 

Alternatively, Mexican importers may 

divert this business outside of the 

United States for direct shipment to a 

Mexican sea port, which would be 

devastating for the local bonded carriers 

in Laredo, Texas. 

CBP Response: CBP recognizes that 

there are many circumstances in which 

it may not be practicable to export inbond merchandise within 15 days of 

arrival at the port of exportation. 

However, shippers will be responsible 

for ensuring that basic logistical issues 

are resolved. In the scenario presented, 

the originating bonded carrier will have 

30 days in which to deliver the 

merchandise to the port of exportation, 

at which point the arrival must be 

reported within two business days. The 

reporting of the arrival of the 

merchandise at the destination port 

completes the in-bond movement for 

purposes of meeting the in-transit time 

requirements. The merchandise must 

then be exported within 15 days. If the 

merchandise cannot be exported within 

15 days after arrival, the original bonded 

carrier can file an immediate 

exportation entry. This will provide an 

additional 15 days in which to export 

the merchandise. The carrier can also 

request permission to retain the goods 

within the port limits for an additional 

90 days pursuant to § 18.24 or admit the 

merchandise into a FTZ, before the 15- 

day limit expires. 

6. Procedures 

Comment: All parties involved in an 

in-bond shipment should be able to 

verify when the in-bond shipment was 

authorized for movement and whether 

they are delivering the merchandise 

within the required timeframe. 

CBP Response: Within ACE, the 

carrier filing the in-bond application has 

the ability to provide multiple 

Secondary Notify Parties (SNPs). SNPs 

receive the same status messages as the 

carrier. It is up to the parties involved 

in the transportation of the merchandise 

to ensure that the appropriate parties are 

designated as SNPs. 

Comment: Receipt of messages is a 

major issue for some non-vessel 

operating common carriers (NVOCCs). 

NVOCCs must be nominated by the 

vessel operating carrier (VOC) as a SNP 

in order to receive all status messages. 

Many VOCs have system constraints 

and can only accommodate one NVOCC 

per Master Bill of Lading even though 

AMS and ACE can accommodate more. 

An NVOCC automatically becomes a 

SNP when it creates an in-bond. 

However, it only receives status 

messages from the time it creates the inbond. 

CBP Response: SNPs receive the same 

status messages as the carrier. CBP 

already provides the ability to provide 

multiple SNPs within ACE. It is the 

responsibility of the parties involved in 

the transportation of the merchandise to 

ensure that the appropriate parties are 

designated as SNPs. 

7. Intermodal Transportation 

Comment: The reduction in in-transit 

times between ports from 60 days to 30 

days is insufficient for those shippers 

who are moving goods with a mix of 

intermodal transportation (rail, barge 

and truck) and it might be difficult to 

meet the new 30-day requirement in 

these situations. This is especially true 

for those using barge movements. CBP 

should consider either keeping the 

current 60-day requirement for barges or 

Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 45379 

providing an exemption similar to what 

has been granted for pipelines. 

CBP Response: As indicated in 

Section I.B.1., In-Transit Time for 

Shipments Transported by Barge, CBP is 

changing the proposed in-transit time 

for in-bond shipments transported by 

barge to 60 days. In this final rule, CBP 

is providing in § 18.1(i) that if any 

portion of the movement involves the 

movement of goods on a barge, the 60- 

day transit time will apply. 

Comment: Which time period applies 

when there is a movement of petroleum 

products that involves the use of truck 

and pipeline? For instance, jet fuel 

could be moved in-bond via pipeline 

then transferred to a truck destined for 

an international airport. This movement 

could take significantly longer than 30 

days. CBP should clarify whether the 

30-day transit time applies to the entire 

movement when part of the movement 

involves transportation via pipeline. 

CBP Response: The initial pipeline 

movement is an in-bond movement, but 

the duration of that transit time would 

not be included in the 30-day transit 

time limitation. To clarify this, CBP is 

adding a sentence to proposed 

§ 18.1(i)(1) that expressly excludes 

pipeline shipments from the provisions 

of that section. 

8. Report of Arrival 

Comment: CBP proposes to reduce the 

arrival notification timeframe for an inbond from two working days to 24 

hours. Due to the mandatory electronic 

submission of in-bonds and the ability 

for any party to generate an in-bond 

without proper notification to all 

parties, it will be nearly impossible for 

a manual data entry process to happen 

within 24 hours when many in-bond 

shipments arrive over the weekend and 

holidays. CBP should retain the current 

48-hour arrival timeframe or extend it to 

72 hours to accommodate the various 

business models in the trade and lessen 

the cost of complying with the proposed 

rule. 

CBP Response: CBP agrees that the 24- 

hour notification timeframe is too short. 

CBP is changing proposed § 8.1(j) to 

require the report of arrival to be filed 

within two business days after arrival at 

the destination port. 

Comment: If CBP approval is required 

prior to removing the seal, this may 

impact the carrier’s ability to timely 

report the arrival of the in-bond cargo. 

CBP Response: Except as provided for 

in § 18.4, a sealed container cannot be 

opened prior to the reporting of the 

arrival. Pursuant to § 18.4(c), if it 

becomes necessary to remove seals for 

good reason, a responsible agent of the 

carrier may remove the seals, supervise 

the transfer or handling of the 

merchandise and seal the conveyance, 

compartment, or container. CBP 

approval is not required. Once the 

arrival has been reported, the container 

can be opened and the in-bond 

merchandise removed. 

Comment: For rail movements there 

are several check points within the port 

of destination area and it can take up to 

three to four days before the shipment 

finally reaches the point of unloading 

for vessel exports. What will be the 

point at which the arrival must be 

transmitted? 

CBP Response: The arrival must be 

reported at the first point of arrival 

within the destination port. 

Comment: The impact of the arrival 

on the transit and general order clock is 

significant to zone operations. It is 

imperative for CBP to explain the 

ramifications of arrival on both the 

transit clock and the transfer of bond 

liability. 

CBP Response: The reporting of the 

arrival of the merchandise at the 

destination port completes the in-bond 

movement for purposes of meeting the 

in-transit time requirements. The arrival 

of the in-bond merchandise, however, 

does not transfer bond liability. The 

party whose bond is obligated is liable 

until the in-bond is closed out by the inbond merchandise being exported, 

entered for consumption, admitted into 

an FTZ, or entered through the filing of 

some other type of entry. 

Comment: Under the proposed rule, 

will the in-transit clock stop for an 

entire in-bond shipment when the first 

portion of an in-bond shipment arrives 

at the port of exportation or destination 

port? 

CBP Response: The arrival of a 

portion of shipment at the destination 

port will not stop the transit period for 

the remainder of the shipment that has 

not yet arrived at the port. For multiple 

container movements, the arrival will be 

performed at the equipment/container 

level. This means that each equipment/ 

container must arrive within 30 days 

and each equipment/container must be 

reported as arrived within two business 

days after its arrival. 

9. General Order Merchandise 

Comment: Does the reporting of 

arrival pursuant to proposed § 18.1(j) 

stop the in-transit clock and begin the 

general order clock of 15 days as 

provided in proposed § 18.1(k)? 

CBP Response: No. Subsection 18.1(j) 

requires the report of arrival of any 

portion of a shipment after it arrives at 

the port. Only the arrival of the full 

shipment of in-bond merchandise at the 

destination port or the port of 

exportation, not the reporting of arrival, 

stops the in-transit time and begins the 

15-day general order period. 

Comment: Reporting the arrival of the 

in-bond shipment at the destination port 

when the first portion of the shipment 

arrives and remaining portions have not 

arrived, creates a significant issue with 

the management of the general order 

clock. Allowing the clock to run on 

goods that may not have physically 

arrived creates a potential gap in the 

control of in-bond merchandise because 

merchandise that has ‘‘arrived’’ may not 

be physically present. 

CBP Response: CBP agrees that the 

general order clock should begin when 

the last portion of the in-bond shipment 

arrives. Therefore, CBP is changing 

proposed § 18.1(k) to provide that the 

15-day period for general order 

merchandise begins on the date of 

arrival ‘‘of the entire in-bond shipment’’ 

at the port of destination or port of 

exportation. When only a portion of a 

shipment arrives at the port of 

destination or port of exportation, the 

general order clock will generally not 

begin until the last portion of the 

shipment arrives. However, if part of a 

shipment does not arrive within the 

timeframe for completing the in-bond 

movement (30 days in most cases), the 

general order clock for the merchandise 

that has already arrived will start to run 

at the end of the applicable timeframe 

for completing the in-bond movement. 

Comment: CBP should clarify that the 

total proposed in-bond transit time from 

the time of in-bond application 

authorization to the time of entry at the 

port of destination or export at port of 

exportation is a total of 45 days unless 

an extension has been granted. 

CBP Response: The maximum intransit time from the time of 

authorization of the in-bond application 

to arrival at the destination port is 30 

days or 60 days for barges. Once the 

merchandise has arrived, the 

merchandise must either be entered or 

exported within 15 days of arrival or it 

will be subject to General Order and 

required notifications must be provided. 

It is incorrect to think that CBP will 

combine the two periods. 

Comment: Reference to FTZ 

admission is omitted from the language 

regarding potential events that prevent 

goods from being sent to General Order. 

The language in proposed § 18.1(k) 

should be revised to include FTZ 

admission, such as: ‘‘Any merchandise 

covered by an in-bond shipment 

(including carnets) that has arrived at 

the port of destination or the port of 

exportation must be entered, exported 

or admitted to a foreign-trade zone 

pursuant to this part within 15 days 

45380 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 

from the date of arrival at the port of 

destination or port of exportation, or in 

the case of goods authorized for direct 

delivery destined to a foreign-trade 

zone, within 15 days of the arrival at the 

zone or subzone pursuant to 

§ 146.40(c)(3).’’ 

CBP Response: CBP concurs that 

admission into an FTZ should be 

included as a means to prevent 

merchandise from going into General 

Order and is changing proposed 

§ 18.1(k) accordingly. It is not necessary 

to include language regarding direct 

delivery pursuant to § 146.40 because 

the general reference to admission into 

an FTZ encompasses the procedures 

provided for in part 146. 

Comment: It is unclear how limiting 

the time to 15 days will help CBP verify 

that the in-bond merchandise was, in 

fact, exported or entered. 

CBP Response: The requirement to 

enter or export merchandise within 15 

days of arrival at the destination port is 

consistent with existing regulations and 

is generally the current practice. See 

§§ 4.37, 18.12(d), 122.50, and 123.10. 

The changes in proposed §§ 18.1(k), 

18.7, 18.12, 18.20, 18.25 and 18.26 are 

to ensure that there is uniformity within 

the customs regulations on this point. 

Comment: The 15-day requirement to 

export or enter in-bond merchandise 

under proposed § 18.1(k) or to export 

merchandise pursuant to proposed 

§§ 18.7(a)(2), 18.20(f), 18.25(c) and 

18.26(d) is not reasonable in many cases 

for goods intended to be exported by 

ocean carrier and for some petroleum 

shipments. Shippers sometimes need to 

hold in-bond merchandise after it has 

arrived in order to consolidate 

shipments from various vendors, which 

can take longer than 15 days. 

Merchandise to be exported by ocean 

carrier can only be exported according 

to the schedule of the vessel bound for 

the foreign destination of the goods. 

Ocean carriers do not call at each port 

of exportation every 15 days for every 

foreign destination. In many cases goods 

are required to remain at the port of 

exportation after arrival for periods 

longer than the proposed 15-day limit. 

Similarly, many petroleum products 

that move in-bond cannot be exported 

within 15 days of arrival due to 

infrastructure limitations. CBP should 

revisit this provision to either extend 

the 15-day time period to a minimum of 

30 days or clarify that standing 

exceptions to the 15-day requirement to 

export product will be provided by CBP 

based on the operational realities that 

exist for these type of product in-bond 

movements. 

CBP Response: The 15-day 

requirement to export or enter the inbond merchandise is an existing 

requirement and is not a change to the 

GO requirements. CBP will not extend 

the timeframe to 30 days as this would 

be inconsistent with other regulations 

governing General Order merchandise. 

However, § 18.24(a) (Retention of goods 

within port limits) authorizes the port 

director to allow in-transit merchandise 

to remain within the port limits for up 

to 90 days. Additional 90-day 

extensions may be granted for up to one 

year from the date of arrival. Carriers 

can request an extension when they 

cannot export within 15 days of arrival 

due to scheduling or other issues. 

D. Transfers 

Comment: CBP received several 

comments regarding the transshipment 

provision in proposed § 18.3, which 

provides the procedures to be followed 

when in-bond merchandise is 

transferred from one conveyance to 

another. The main concern was with the 

requirement to report to CBP each time 

the merchandise was transferred from 

one conveyance to another. Because inbond merchandise may be transferred 

several times during the course of its 

journey, this reporting requirement 

places a substantial burden on the 

bonded carrier liable under the bond. 

CBP Response: CBP has taken these 

concerns into consideration and agrees 

that CBP does not need to be notified 

when in-bond merchandise is 

transferred from one conveyance to 

another. Accordingly, CBP is changing 

proposed § 18.3 by removing the 

requirement to notify CBP when 

merchandise is transferred from one 

conveyance to another and by clarifying 

when in-bond merchandise is 

transferred to a subsequent bonded 

carrier that assumes liability for the 

merchandise, a report of arrival must be 

filed for the in-bond shipment and the 

subsequent carrier must submit a new 

in-bond application pursuant to § 18.1. 

Comment: A new in-bond application 

should be required when another bond 

is obligated. Since the notification of 

transshipment must include the name of 

the bonded carrier receiving the 

merchandise for shipment to the port of 

destination or port of exportation, it is 

implied that there could be a change of 

carriers. Is liability for the merchandise 

transferred to the new carrier’s bond or 

is a new in-bond application required to 

transfer the liability? 

CBP Response: CBP agrees that a new 

in-bond application is necessary when a 

different bond is obligated. Therefore, 

CBP is changing proposed § 18.3 in the 

final rule to require that when 

merchandise is transferred to a bonded 

carrier that assumes the liability of the 

in-bond shipment, a report of arrival 

must be filed for the in-bond shipment 

and the subsequent carrier must submit 

a new in-bond application pursuant to 

§ 18.1 for the merchandise to be 

transported in-bond. 

Comment: Proposed § 18.3(a) requires 

that the notification to CBP via EDI be 

done before the merchandise can be 

transshipped, but proposed § 18.3(b) 

includes no such stipulation. CBP 

should make the requirements 

consistent for transshipment to a single 

conveyance (18.3(a)) and transshipment 

to multiple conveyances (18.3(b)). 

CBP Response: The change that CBP 

is making to proposed § 18.3, i.e., 

removing the requirement to notify CBP 

when merchandise is transferred from 

one conveyance to another, addresses 

the concerns expressed in this 

comment. 

Comment: The carrier’s difficulties in 

verifying the quantity of the 

merchandise to the piece count level is 

exacerbated when multiple carriers are 

involved. Because the transfer to 

multiple conveyances adds an 

additional level of complexity as 

compared to a transfer to a single 

conveyance, the potential for 

irregularities in the reporting and 

exchange of data in these situations is 

more prevalent. 

CBP Response: The change that CBP 

is making to proposed § 18.3, i.e., 

removing the requirement to notify CBP 

when merchandise is transshipped from 

one conveyance to another, reduces the 

likelihood of irregularities that may 

result in reporting and exchanging of 

data. 

Comment: How will the trade identify 

the bonded carrier? It is assumed the 

bonded carrier can be identified by their 

SCAC code and/or EIN number where 

available. Please clarify in the final rule. 

CBP Response: The bonded carrier 

will be identified by the carrier’s SCAC 

or tax identification number (EIN), or, 

for air carriers, the International Air 

Transport Association (IATA) number. 

Comment: The proposal to require the 

in-bond carrier to report, via EDI, the 

transfer of in-bond merchandise from 

one conveyance to another, presents a 

number of problems and questions. An 

ocean carrier that files an in-bond 

application, and on whose bond the 

shipment is authorized, often will 

assume the transportation responsibility 

for arranging the delivery of the goods 

to the in-bond destination, and this 

frequently involves numerous 

intermodal transshipments. Proposed 

§ 18.3(b) and (c) would require the 

bonded carrier to provide multiple EDI 

notifications to CBP. This would make 

Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 45381 

the continued efficient transportation of 

such cargo impossible. 

CBP Response: The change that CBP 

is making to proposed § 18.3, i.e., 

removing the requirement to notify CBP 

when merchandise is transferred from 

one conveyance to another, addresses 

the concerns in this comment. 

E. Sealing of Conveyances and 

Reporting of Seal Numbers 

Comment: CBP should clarify or 

define the term ‘‘container’’ as used in 

this rule. Does the requirement to seal 

containers only apply to ‘‘containers’’ as 

defined by the Customs Convention on 

Containers or does it include all road 

(trucks and truck trailers) and rail (rail 

cars and truck trailers on rail cars) 

conveyances? 

CBP Response: The § 18.4 seal 

requirements apply to containers that 

can be sealed. This includes truck and 

rail conveyances. For further 

information about what are considered 

containers for CBP purposes see part 

115 of the CBP regulations governing 

containers. The seal requirements for air 

cargo are specified in § 122.92 and are 

discussed in section G below. 

Comment: The seal and container 

numbers should not be mandatory data 

elements. CBP would have the ability to 

verify the application of seals prior to 

movement and upon arrival. Seal 

numbers are not always available at the 

time of the in-bond transmission, 

especially if the in-bond request is made 

by an authorized party other than the 

carrier that loads the cargo. Providing 

the seal and container number with the 

in-bond request will only add minimum 

assurance that the goods have been 

properly controlled. Most carrier 

manifest systems currently do not 

capture the seal or container number. 

However, they do have elaborate 

scanning systems to track the progress 

of packages as they are sorted and 

loaded during transportation and 

movement, which allows for quick 

identification and location of a 

shipment in the event CBP chooses to 

inspect an in-bond shipment at any 

point in the supply chain. A provision 

to add the seal number after the initial 

in-bond request is made should be 

included. 

CBP Response: CBP does not agree 

that the seal and container numbers 

should be optional information. 

Requiring carriers to provide the seal 

number and container number as part of 

the in-bond application facilitates CBP’s 

ability to ensure the safety and security 

of in-bond merchandise. To address the 

issue of carriers not knowing seal 

numbers at the time the in-bond 

application is filed, CBP is changing 

proposed § 18.1(d)(1)(v) to provide that 

‘‘[i]f, at the time of the filing of the inbond application, the seal number is not 

known, the in-bond application must be 

updated with the seal number within 

two business days of the date the 

bonded carrier obtains a seal number. 

CBP is also changing proposed § 18.4(c) 

so that in the event that it becomes 

necessary to remove and replace seals 

from a conveyance, compartment, or 

container containing bonded 

merchandise, updated seal numbers 

must be transmitted to CBP. The 

requirements to keep in-bond 

merchandise sealed, and to re-seal 

unsealed merchandise, throughout the 

in-bond movement remains, and the 

party whose bond is obligated will be 

liable for liquidated damages for any 

loss, theft, or irregular delivery. 

Comment: CBP should clarify that the 

container and seal numbers do not need 

to be filed as part of the in-bond 

application because they have already 

been reported to CBP as part of the 

advance electronic manifest. 

CBP Response: The container and seal 

number information on the advance 

manifest will be automatically 

associated with the in-bond application. 

Therefore, if the container and seal 

number have already been provided on 

the advance manifest, the filer of the inbond application will not have to 

resubmit the container and seal number 

as part of the in-bond application. 

Comment: Proposed § 18.3(d)(1) 

specifically permits the breaking of CBP 

seals in emergency situations. CBP 

should specify that any responsible 

agent of the carrier may remove and 

replace seals at any time for any good 

reason. The requirement in proposed 

§§ 18.3(d) and 18.4(c) to obtain CBP 

permission to break and replace a seal, 

and to update the in-bond record would 

place a significant burden on the carrier. 

CBP Response: To address this 

comment and for clarity, CBP is making 

the following changes to the proposed 

sections regarding seals. First, CBP is 

moving some language about seal 

removal from proposed § 18.3 and is 

addressing the circumstances for 

removing seals in § 18.4. Proposed 

§ 18.3(d)(1), which covers the transfer 

(transshipment) of in-bond merchandise 

from one conveyance to another, allows 

for the breaking of seals in case of an 

emergency or for some other reason. 

CBP has concluded that the rules about 

when seals can be removed would fit 

better within § 18.4 which applies to the 

sealing of conveyances. 

Second, CBP is changing proposed 

§ 18.4 in the final rule to make it less 

restrictive. CBP agrees that a responsible 

agent of the carrier should be able to 

remove and replace seals for good 

reason and not just in emergencies. In 

response to concerns that the 

requirement to obtain CBP permission 

to break and replace a seal and to 

update the in-bond record with the new 

seal information would place a 

significant burden on in-bond carriers 

and to facilitate processing of in-bond 

shipments, CBP is removing these 

requirements and allowing a responsible 

agent of the carrier to remove the seals 

and reseal the merchandise. 

Specifically, CBP is changing proposed 

§ 18.4 in the final rule to provide that 

seals may be removed for the purpose of 

transferring in-bond merchandise to 

another conveyance, compartment or 

container, or to gain access to the 

shipment because of casualty or for 

other good reason, such as when 

required by law enforcement or another 

government agency. 

Comment: C–TPAT partners should 

be exempt from the requirement to 

provide seal numbers. Encouraging 

carriers to join programs such as 

C–TPAT will offer the additional 

assurance and controls CBP expects. 

CBP Response: CBP disagrees. 

Compliance with the in-bond 

regulations, including those pertaining 

to the sealing requirements, 

complements supply chain security and 

efficiency procedures being 

implemented by C–TPAT partners. 

However, C–TPAT membership will 

continue to be a relevant factor for 

targeting purposes. 

Comment: Proposed § 18.4(b)(1) states 

that merchandise that is not covered by 

a bond may only be transported in a 

sealed conveyance or compartment that 

contains bonded merchandise if the 

merchandise is destined for the same or 

subsequent port as the bonded 

merchandise. CBP should recognize that 

less than carload or container load (LTL) 

in-bond shipments may move in 

conveyances, commingled with nonbonded merchandise, that are not 

sealed. This is a normal operating 

practice in domestic truck operations 

where numerous shipments are 

commingled on trailers and transferred, 

sometimes multiple times, during the 

life cycle of the shipment. CBP should 

allow flexibility for this requirement for 

LTL carriers, allowing them to 

commingle freight. 

CBP Response: CBP agrees that the 

proposed limitations on transporting inbond merchandise with non-bonded 

merchandise could hamper the 

transportation of in-bond merchandise, 

especially for LTL shipments. 

Accordingly, CBP is changing the 

sealing requirements in proposed § 18.4 

by adding new paragraph (b)(2) allowing 

45382 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 

for the transportation of in-bond 

merchandise with non-bonded 

merchandise in a container or 

compartment that is not sealed, if the inbond merchandise is corded and sealed, 

or labeled as in-bond merchandise. This 

will allow in-bond merchandise to be 

transported with non-bonded 

merchandise in a container that is not 

sealed and will facilitate the use of less 

than container load shipments. 

Comment: How would a filer/carrier 

apply for the waiver of seal 

requirements as mentioned in proposed 

§ 18.4(a)(2)? 

CBP Response: A request for a waiver 

of the sealing requirement can 

submitted by indicating that there is ‘‘no 

seal’’ when filing the in-bond 

application. If CBP has concerns 

regarding the lack of a seal, CBP may 

require additional information or reject 

the in-bond application. 

Comment: The regulatory text 

regarding the removal and breaking of 

seals should be changed so that seals 

must remain intact at all times except 

for transfer operations covered under 

§§ 18.3(b), 18.3(c), 18.3(d) and bonded 

warehouse operations covered under 

§ 19.6(e), in which case the breaking and 

affixing of new seals by the responsible 

party per 18.1(c) is authorized. Failure 

to keep the seals intact and/or remove 

the seals without CBP permission 

should result in the assessment of 

liquidated damages. This will act as a 

deterrent to theft and substitution. 

Furthermore, the unauthorized breaking 

of seal acts as a notification to the 

bonded carrier that something may be 

amiss. 

CBP Response: The proposed 

suggestions regarding the removal and 

breaking of seals is too restrictive and is 

not necessary for security purposes. The 

requirements in § 18.4 of this rule 

adequately address these security issues 

without impeding the movement of the 

goods. By allowing for the removal of 

seals and requiring that new seals be 

affixed by a responsible agent of the 

carrier, CBP is providing flexibility so 

that the transport of the in-bond 

merchandise can be completed while 

still maintaining the integrity of the 

shipment. 

Comment: CBP should change the 

requirements in proposed § 18.3 so that 

CBP authorization is not required in 

order to remove seals in order to transfer 

in-bond merchandise from one 

conveyance to another. 

CBP Response: With the change that 

CBP is making to proposed § 18.3, i.e., 

removing the requirement to notify CBP 

when merchandise is transferred from 

one conveyance to another, the concerns 

in this comment have been addressed. 

Comment: How will CBP handle 

trucks that are stopped for a potential 

road violation where the driver is 

required to open the truck by the 

highway patrol or other governmental 

agency resulting in the seal that was 

used for the movement of in-bond 

merchandise being broken? 

CBP Response: CBP is changing 

proposed § 18.4(c) in the final rule to 

allow for the removal of seals for good 

reason and, as discussed in a prior 

response, require new seals to be affixed 

by a responsible agent of the carrier. 

Accordingly, if the responsible agent of 

a carrier, e.g., the driver, is required to 

open a sealed container by local law 

enforcement or other governmental 

agency, the agent can replace the broken 

seal with a new seal. 

Comment: As unforeseen 

circumstances not contemplated by 

proposed § 18.3(d) could arise, we 

suggest that the language be updated to 

read ‘‘removal of seals without CBP 

permission may result in the assessment 

of liquidated damages.’’ 

CBP Response: As discussed in a prior 

response, CBP permission will not be 

needed to remove seals. However, the 

party whose bond is obligated will be 

liable for liquidated damages for any 

loss, theft, or irregular delivery of the inbond merchandise. 

Comment: Proposed § 18.4(a)(1) 

states, ‘‘The seals to be used and the 

method for sealing conveyances, 

compartments, or packages must meet 

the requirements of §§ 24.13 and 24.13a 

of this chapter [19 CFR].’’ Can CBP 

confirm that containerized ocean cargo 

shipments being transported in-bond 

that are secured with a high security 

seal meeting applicable ISO standards 

meet the requirements of these sections? 

CBP Response: The proposed 

regulations do not change any of the 

existing requirements regarding how 

containers are sealed and what types of 

seals are to be used. Containerized 

ocean cargo shipments being 

transported in-bond may be secured 

with a high security seal meeting 

applicable ISO standards, which meets 

CBP’s requirements to seal containers 

transporting in-bond merchandise. 

Comment: CBP should require that 

trailers be sealed with ISO compliant 

high security seals when goods are 

being shipped in-transit through the 

United States or Canada. 

CBP Response: Proposed § 18.4 

requires that in-bond merchandise be 

sealed in accordance with CBP 

regulations, specifically §§ 24.13 and 

24.13a. However, it should be noted that 

C–TPAT members are required to use 

International Organization for 

Standardization (ISO) compliant seals 

by virtue of their participation in 

C–TPAT. As a result, many in-bond 

carriers use ISO compliant seals. 

F. Air Cargo 

Comment: CBP needs to clarify the 

scope of this NPRM, which is confusing 

in respect to existing CBP air commerce 

regulations. It is not clear if air carriers 

would be subject to the new process 

supplemented by any specific 

provisions in part 122 (air commerce 

regulations), or if air carriers would not 

be affected and would be able to simply 

continue handling in bonds under only 

the provisions of part 122. 

CBP Response: The existing air 

commerce regulations in part 122 will 

continue to govern the movement of inbond shipments by air, except for the 

maximum in-transit time. Under the 

existing regulations, the maximum intransit time for air cargo transported inbond is 15 days. Under proposed 

§§ 122.119 and 122.120 the maximum 

in-transit time for air cargo transported 

to another U.S. port is increased to 30 

days. Proposed § 18.0 (Scope; 

definitions), provides that except as 

provided in parts 122 and 123, part 18 

sets forth the requirements and 

procedures pertaining to the 

transportation of merchandise in-bond. 

Parts 122 (Air Commerce) and 123 

(Customs Relations with Canada and 

Mexico) govern the rules and 

procedures for the transportation of inbond merchandise, respectively, in the 

air environment and in-transit 

merchandise traveling through the 

United States, Canada or Mexico by 

truck and train. The provisions of part 

18 are applicable to the in-bond 

procedures not specifically addressed in 

parts 122 and 123. For example, 

proposed § 18.8 governing the liability 

of in-bond carriers is applicable to all 

in-bond movements, regardless of the 

mode of transportation. Conversely, the 

provision of proposed § 18.4(a)(1) 

requiring the sealing of containers does 

not apply to in-bond merchandise 

traveling by air, because § 122.92(f) 

specifically provides that the sealing of 

aircraft, aircraft compartments carrying 

bonded merchandise, or the cording and 

sealing of bonded packages carried by 

the aircraft, is not required. 

Comment: With regard to the in-bond 

application process, air carriers are 

aware that ACE provides additional 

functionality to allow better visibility to 

and control of who obligates a carrier’s 

bond. With the elimination of the 7512 

paper form, air carriers will have no 

visibility to or ability to control who is 

obligating their bonds. Until such time 

as air is fully transitioned into ACE, 

CBP must provide air carriers with the 

Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 45383 

capability to view electronic in-bonds 

opened on their behalf and control who 

has the ability to obligate their bonds. 

One suggestion is to provide air carriers 

with the ability to open an ACE account 

to allow them the same access to inbond reports and control tools that are 

available to ocean and rail carriers. 

CBP Response: When the notice of 

proposed rulemaking was issued, the 

functionality for filing electronic air inbond applications for air shipments in 

ACE did not exist. However, this 

functionality was delivered through Air 

ACE (M2.1) on June 7, 2015. Currently, 

Air ACE permits an air carrier to view 

in-bond reports to see who is obligating 

its bonds. Although CBP intends to fully 

automate the in-bond process, including 

in-bond movements by air, changes to 

the regulations pertaining to in-bond 

movements by air will be handled under 

a separate rulemaking. Until such time, 

the 7512 paper form may still be used 

in the air environment. 

Comment: The proposed changes will 

force bonded carriers to operate in 

multiple CBP-approved electronic 

systems (ACE, Air AMS, and ABI QP/ 

WP) when the mode of transportation 

changes as shipments are transported. 

This is a problem for express carriers 

that currently use Air AMS to process 

in-bond shipments. For example, it is 

common to have transit shipments 

arrive into the United States via truck 

and the electronic in-bond request 

submitted at the land border via ACE. 

The shipment subsequently departs the 

United States via air. CBP should 

provide status messages between ACE 

and Air AMS, allowing for the 

electronic arrival and exportation of 

these bonded shipments via AMS for 

the proper closure in CBP systems. 

Without this electronic interface, the 

bonded carrier would have no choice 

but to provide paper in-bonds to CBP for 

proper exportation. If CBP does not 

provide status updates between EDI 

systems, the bonded entity will have a 

tremendous administrative burden to 

track all in-bond shipments opened in 

ACE, which would require ‘‘manual’’ 

posting in ACE (arrival/exportation). 

This issue is further compounded when 

transportation services are shared 

between multiple business units within 

the same entity. 

CBP Response: CBP tracks the in-bond 

merchandise based on the mode in 

which the in-bond application was 

filed, regardless of what other modes of 

transportation are used to transport the 

in-bond merchandise. Accordingly, if 

the in-bond movement starts out in air, 

it remains an air in-bond entry for 

tracking purposes until the in-bond 

merchandise arrives at the destination 

port, port of exportation, or the in-bond 

is closed and a new in-bond is initiated 

in another mode of transportation. The 

movement will be tracked according to 

the new mode of transportation when a 

new in-bond number is created as the 

result of a new in-bond application. 

CBP has established multi-modal 

electronic procedures within ABI (QP/ 

WP) that will allow any authorized 

party to file an in-bond application 

electronically regardless of the mode of 

transportation. QP is used to initiate the 

in-bond application and WP is used to 

arrive/export the in-bond shipment. As 

of June 7, 2015, QP/WP can be used for 

all in-bond transactions, regardless of 

mode. This provides tracking of in-bond 

transactions between various modes and 

tracking history within ACE. 

Comment: Air carriers request that 

CBP clearly define the requirements and 

procedures for intermodal in-bond 

transfers prior to any implementation of 

this rule. Currently, other transport 

modes provide a CBP Form 7512 with 

shipments that are moving to an air 

carrier, and the air carrier delivers the 

CBP Form 7512 to CBP at the port of 

exportation or destination to close the 

in-bond. The air carrier regulations at 

§§ 122.92 and 122.93 specifically state 

that form 7512 or ‘‘other Customs 

approved document’’ shall be delivered 

to the carrier at the in-bond origin, and 

the carrier shall deliver that to the port 

director at the in-bond destination port. 

What will be the process for reconciling 

‘‘intermodal-to-air’’ in-bonds in the 

absence of a 7512 paper form? 

CBP Response: QP/WP now can be 

used for all in-bond transactions, 

regardless of mode, and provides 

tracking of in-bond transactions 

between various modes and tracking 

history within ACE. Whether the initial 

in-bond is filed in ocean, rail, truck or 

air, the in-bond movement will be 

tracked by CBP in the mode in which 

it was opened. In such case, the in-bond 

can be closed with an electronic filing 

upon arrival at the destination port. 

Comment: Air carriers utilize ‘‘unit 

load devices’’ (ULDs) which are totally 

dissimilar in structural integrity from an 

ocean container. Aircraft also have 

multiple areas used for transport of 

cargo, whether loaded in ULDs or loose. 

Does CBP consider ULDs and these 

areas ‘‘compartments’’ that might be 

subject to sealing under the proposed 

rule? 

CBP Response: The sealing and 

labeling requirements for in-bond 

merchandise transported by air are 

specified in §§ 122.92(f) and 122.92(g), 

respectively. Section 122.92(f) does not 

require the sealing of aircraft 

compartments carrying in-bond 

merchandise, or the cording and sealing 

of bonded packages. However, 

§ 122.92(g) requires bonded packages to 

be affixed with the label provided for in 

proposed § 18.4(b)(3). Therefore, 

pursuant to § 122.92(f), ULDs used in 

aircraft do not have to be sealed. 

However, in-bond merchandise inside 

of ULDs must be labeled pursuant to 

§ 122.92(g), which requires the affixing 

of labels as provided for in proposed 

§ 18.4(b)(3). 

Comment: Do the timeframes for 

notifying CBP of arrival contained in 

proposed §§ 18.1(j) (Report of Arrival), 

18.7(a)(1) (Lading for Exportation, 

Notice), and 18.20(c) (Entry Procedures), 

apply to air cargo moving in-bond via 

truck to the port of destination, since 

there are no arrival timelines provided 

in § 122.93? 

CBP Response: If the movement is an 

air in-bond movement initiated under 

part 122, the notice of arrival 

procedures contained in § 122.93 are 

applicable. As of June 7, 2015, air 

carriers can submit the notice of arrival 

electronically in ACE. 

Comment: Considering the existence 

of § 122.94 which places no restrictions 

on divided shipments, what is the exact 

application of the proposed § 18.24(b) 

language to air with regard to the 

submission of new in-bond applications 

and time limits for initiation of divided 

shipment movements? 

CBP Response: Proposed § 18.24(b) 

does not apply to air shipments of inbond merchandise. Sections 122.93 and 

122.94 specify the procedures for 

exporting air in-bond merchandise, 

including the handling of divided 

shipments at the port of exportation for 

in-bond merchandise transported by air. 

Comment: CBP should revise existing 

§ 122.92 which allows for three copies 

of an air waybill for T&E, because CBP 

has indicated that the core intent is to 

automate the in-bond process. 

CBP Response: Although CBP intends 

to fully automate the in-bond process, 

including in-bond movements by air, 

changes to the regulations pertaining to 

in-bond movements by air will be 

handled under a separate rulemaking. 

Until that rulemaking process is 

completed, § 122.92 applies to in-bond 

movements by air. 

G. Liability of the Parties 

Comment: The transfer of bond 

liability is currently based on signed 

paper documents, but it is unclear in a 

completely automated environment 

what ‘‘electronic’’ event triggers the 

transfer of liability and the obligation of 

a different bond. 

CBP Response: The transfer of 

liability to a new bonded party will be 

45384 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 

accomplished by the filing and 

acceptance of a new in-bond application 

for the merchandise to be transported 

in-bond. CBP is changing proposed 

§ 18.3 in the final rule to make this 

clear. 

Comment: Throughout the proposed 

regulations there are references to ‘‘the 

bonded carrier’’ but it is often unclear 

which bonded carrier has the liability 

for the cargo. As there may be more than 

one bonded entity involved in an inbond movement (e.g., arriving carrier, 

delivering carrier, export carrier, FTZ 

operator), a clear understanding is 

required of the events and evidence that 

would shift legal liability from one 

bonded party to another, particularly in 

an electronic environment. 

CBP Response: For further 

clarification, CBP is adding a definition 

to proposed § 18.0(b) for ‘‘bonded 

carrier.’’ This term is defined as the 

carrier whose bond is obligated for the 

in-bond movement of the merchandise 

as shown in the in-bond record. This 

party is liable for failure to meet the 

requirements of Part 18, Part 122 or Part 

123 (as applicable) or any of the other 

conditions specified in the bond. CBP is 

also changing proposed § 18.3 in the 

final rule to clarify that in order to 

transfer liability from one carrier to 

another, a report of arrival must be filed 

for the in-bond merchandise and the 

subsequent carrier must submit a new 

in-bond application pursuant to § 18.1. 

Comment: Holding the bonded carrier 

liable for liquidated damages for failing 

to comply with any of the requirements 

found at Part 18 or any of the conditions 

specified in the bond is too broad. This 

affords CBP a general license to impose 

liquidated damages against bonded 

carriers for even minor and technical 

infractions such as unintended data 

transmission errors. CBP should assess 

liquidated damages only for egregious 

violations and other violations 

specifically listed, such as for irregular 

delivery. 

CBP Response: Liquidated damages 

are assessed when the conditions of the 

bond are violated. One of the conditions 

is to comply with CBP regulations 

relating to the handling of bonded 

merchandise. See § 113.63(b)(3). CBP 

primarily ensures compliance with inbond requirements, including those that 

the commenters have categorized as 

‘‘minor and technical infractions,’’ 

through the assessment of liquidated 

damages. CBP disagrees that it should 

take action only with respect to 

egregious violations. The obligations 

established by regulation regarding the 

processing of in-bond entries and 

safekeeping of in-bond merchandise are 

necessary requirements. A breach of any 

of the obligations may result in the 

assessment of liquidated damages. The 

decision to assess any claim is one of 

administrative discretion, so CBP may 

always refrain from issuing a claim if 

deemed advisable. CBP may also choose 

to cancel liquidated damages claims 

upon payment of a lesser amount 

pursuant to 19 U.S.C. 1623(c) and has 

published guidelines when CBP deems 

that such action is appropriate. 

Comment: The bonded carrier should 

not be held liable for the submission of 

data elements for which it has no true 

knowledge of their accuracy. 

CBP Response: The carrier whose 

bond is obligated is responsible for the 

information submitted in conjunction 

with the in-bond application and 

subsequent updates to the in-bond 

record and is subject to the assessment 

of liquidated damages for not complying 

with the terms of the bond, which 

includes adherence to the in-bond 

regulations. However, when issuing 

claims and considering their mitigation, 

CBP will consider whether a party 

reasonably relied on information 

submitted to it from a third party. 

Comment: The language in proposed 

§ 18.2 should be revised so that when 

merchandise is delivered to a bonded 

common carrier, contract carrier, freight 

forwarder or private carrier, the 

merchandise may be transported with 

the use of facilities of other bonded or 

non-bonded carriers; however, the 

responsibility for the merchandise will 

remain with the common carrier, 

contract carrier, freight forwarder or 

private carrier whose bond is obligated. 

CBP Response: Under proposed 

§ 18.2, merchandise may be transported 

with the use of facilities of other bonded 

or non-bonded carriers. However, the 

responsibility for transporting in-bond 

merchandise will remain with the party 

whose bond is obligated. 

H. Export of Merchandise 

1. Reporting Arrival at Port of 

Exportation 

Comment: The proposed changes to 

the in-bond process mandate that the 

delivering carrier report, via a CBPapproved EDI system, the arrival of any 

portion of an in-bond shipment within 

24 hours of arrival at the port of 

exportation. This represents a 

substantial change from the current 

regulations. Currently, the carrier has ‘‘2 

working days after arrival’’ to report. 

The reduction to 24 hours places a 

substantial new reporting burden on the 

carrier, zone operators, and other 

parties, that will require additional staff 

to work weekends and holidays. The 

proposed 24-hour requirement should 

be changed to two business days. 

CBP Response: CBP agrees. As 

discussed in Section I.B.2. above, CBP is 

changing proposed § 18.20 to require the 

report of arrival be filed within two 

business days after arrival. In addition, 

CBP is moving the provision setting 

forth this time limit from § 18.20(c) to 

§ 18.20(g), as it fits better in the context 

of paragraph (g). 

Comment: How will CBP respond to 

system down time if ACE is not 

available to report the arrival of the inbond merchandise within 24 hours? 

CBP Response: CBP is changing 

proposed §§ 18.1(j), 18.7(a)(1), and 18.20 

to provide that the notice of arrival must 

be submitted within two business days 

after arrival. This should generally 

provide adequate time in the event of a 

system outage. In case there is an outage 

that prevents compliance with the 

notice requirements, carriers will need 

to contact the port at which the in-bond 

merchandise has arrived for instructions 

on how to submit the required 

information. Each outage presents 

unique circumstances that will be dealt 

with on a case-by-case basis according 

to the port’s instructions. 

Comment: Proposed §§ 18.7(a)(3), 

18.20(g), 18.25(f) and 18.26(e) require 

the bonded carrier to update the in-bond 

record when the in-bond merchandise is 

exported. The proposed language is 

unclear as to which bonded carrier must 

complete this notification. Because 

there can be multiple bonded carriers 

involved in the transport of 

merchandise for a single shipment, CBP 

should clarify the language regarding 

the specific bonded carrier that is 

responsible for this notification. 

CBP Response: After further 

consideration, CBP is of the view that 

for consistency, any of the parties who 

can amend the in-bond record as 

described in proposed § 18.1(h) should 

be able to update the in-bond record to 

reflect that the merchandise has been 

exported. These parties include the filer 

of the in-bond application or any other 

party identified in § 18.1(c). Therefore, 

CBP is changing proposed §§ 18.7(a)(3), 

18.20(g), 18.25(f) and 18.26(e) in the 

final rule to remove the requirement 

that the bonded carrier must update the 

record and to simply provide that the 

in-bond record must be updated by any 

of the parties identified in 18.1(c) or 

their agent. However, the party whose 

bond is obligated is the party that is 

responsible for ensuring the in-bond 

record is up to date. 

2. Proof of Exportation 

Comment: For consistency, CBP 

should provide a detailed list of all 

Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 45385 

acceptable forms of proof of exportation. 

The current CBP practice on the 

southern border with Mexico is to 

require a supervised export and for CBP 

to provide the driver with a perforated 

copy of the CBP Form 7512. This 

document serves as the proof of 

exportation. Will CBP create a new form 

that can serve as proof of export? 

CBP Response: Section 113.55 covers 

the procedures for cancelling export 

bonds and lists the documents that may 

be used as proof of export for such 

purpose. These documents would also 

be acceptable proof that in-bond 

merchandise has been exported. The 

documents, or their electronic 

equivalent, included in § 113.55 are the 

listing of the merchandise on the 

outward manifest or outward bill of 

lading, the inspector’s certificate of 

lading, the record of clearance of the 

vessel or of the departure of the vehicle, 

and a foreign landing certificate if the 

certificate is required by the port 

director. CBP will not create a new form 

of the perforated CBP Form 7512. These 

paper documents would be used in an 

audit scenario to demonstrate 

exportation of the in-bond merchandise. 

Comment: Proposed §§ 18.7(a)(3), 

18.20(g), 18.25(f) and 18.26(e) provide 

that the principal on any bond filed to 

guarantee exportation may be required 

by the port director to provide evidence 

of exportation. However, the language is 

unclear as to which bond is obligated 

especially when there are multiple 

carriers. Clarification as to which 

principal is required to complete this 

notification, especially in the 

circumstance of multiple carriers for a 

single in-bond move, should be 

provided. 

CBP Response: The requirement to 

provide proof of exportation at the 

request of the port director resides with 

the party whose bond was obligated to 

complete the in-bond transaction. 

Comment: CBP should clarify the 

meaning and intent of proposed 

§ 18.26(c) (Transfer at selected port of 

exportation). It specifies that if in-bond 

merchandise is to be transferred to 

another conveyance after it has arrived 

at the port of exportation, the 

procedures prescribed in proposed 

§ 18.3(d) will be followed. However, 

proposed § 18.3(d) pertains to the 

‘‘Transshipment of merchandise in 

emergency situations.’’ The transfer to 

another conveyance under normal 

course of business is not an ‘‘emergency 

situation.’’ 

CBP Response: For clarity, CBP is 

moving the provision covering the 

removal of seals from proposed § 18.3(d) 

(transshipment of merchandise in 

emergency situations) to § 18.4(c) 

(removal and replacement of seals). The 

language in proposed § 18.26(c) is being 

changed accordingly to reference the 

procedures for the removal of seals in 

§ 18.4(c) in this final rule. Regarding the 

concerns of the commenter, the 

placement of the procedures for the 

removal of seals under its new heading 

in § 18.4(c) makes clear that the 

procedures do not merely apply in an 

‘‘emergency situation.’’ 

Comment: Proposed § 18.23 provides 

that T&Es may be entered for 

consumption, warehouse, FTZ or any 

other form of entry, and are subject to 

all the conditions pertaining to 

merchandise entered at a port of first 

arrival. The options provided are viable 

for in-bond shipments, whether or not 

there is a change of foreign destination 

or change of entry. Therefore, this 

language should apply to all types of 

entries, not just T&Es and should be 

included in proposed § 18.20 (General 

Rules), rather than in § 18.23 regarding 

change of foreign destination. 

CBP Response: Although the 

commenter’s suggestion has some merit, 

for consistency and clarity CBP has tried 

to mirror the format of the existing 

regulations when possible and to 

include substantive provisions under 

detailed headings. In this case, the 

current regulation that addresses the 

change of entry for T&Es is § 18.23 

(Change of destination; change of entry) 

and the current regulation that 

addresses the change of entry for ITs is 

§ 18.12 (Entry at port of destination). We 

are amending § 18.12(a) to specifically 

state that merchandise received under 

an immediate transportation entry at the 

port of destination may be entered for 

consumption, transportation and 

exportation, immediate exportation, or 

for immediate transportation, or under 

an FTZ admission. Current § 18.23 also 

specifies what happens when T&E 

merchandise is subject on importation 

to quarantine or other restrictions. The 

proposed regulations maintain this same 

format and headings. The statement that 

T&Es are subject to all the conditions 

pertaining to merchandise entered at a 

port of first arrival is intended to 

incorporate and expand on the concept 

in the current regulation about 

merchandise that is subject on 

importation to quarantine or other 

restrictions. 

I. Diversion of Merchandise 

Comment: Proposed § 18.5(a) requires 

the party that submitted the in-bond 

application to submit a request to divert 

merchandise via a CBP-approved EDI 

system. It further provides that 

authorization for the diversion and 

movement of merchandise will be 

transmitted via a CBP-approved EDI 

system. Approval should be automatic. 

When the diversion request is denied, 

CBP should provide a detailed reason 

for the denial within 24 hours of the 

denial notification. 

CBP Response: CBP will notify the 

filer of the approval immediately by the 

updating of the port code in the in-bond 

record. If the update of the port code is 

rejected, that will constitute the denial 

of the diversion request. The in-bond 

record will be updated quickly upon the 

denial of the diversion request. 

Although the filer will not be notified of 

the reason for the denial, the filer may 

contact the port for such information. 

Comment: If a diversion is prohibited, 

for example, by law or for a specific 

control of a commodity or shipment, 

this could be noted systemically by CBP 

at the time of original processing and 

approval of the in-bond application. A 

statement such as ‘‘Diversion Not 

Authorized’’ could be added to the inbond record for simple reference by CBP 

and the in-bond carrier. 

CBP Response: CBP will take this 

comment under advisement for future 

updates to the CBP-approved EDI. 

Comment: Express carriers use 

multiple ports from which to export inbond shipments from the United States. 

Packages shipped in-bond may be rerouted and diverted to different ports of 

exportation several times prior to the 

actual exportation of the merchandise. 

As a result, CBP may receive several 

diversion requests for one in-bond 

shipment prior to exportation. This 

could place a substantial burden on the 

carrier and on CBP’s systems. Moreover, 

due to the large volume and short 

timeframes involved, it may not be 

possible to verify the accuracy of the 

requests until the in-bond shipment is 

physically exported. Therefore, CBP 

should accept diversion updates post 

departure when the data is most 

accurate. This would minimize the 

number of diversion messages reported 

to CBP and increase data accuracy. 

CBP Response: CBP is requiring 

authorization to divert in-bond 

merchandise because the existing 

diversion procedures make it 

challenging for CBP to identify the 

destination port of a diverted shipment 

and to determine whether the 

merchandise reaches that destination. 

This situation presents a security risk, a 

risk of circumvention of other agencies’ 

admissibility requirements, and a risk 

that proper duties will not be collected. 

Acceptance of post-departure diversion 

requests would undermine the 

objectives of the proposed rule. 

Diversion requests and updates can be 

submitted at any time and are not 

45386 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 

limited in number. If the port of 

exportation for in-transit shipments 

changes multiple times, the requests 

should be submitted for each change as 

the change occurs. 

Comment: The requirement in 

proposed § 18.5(a) to obtain 

authorization prior to the diversion of 

in-bond merchandise will reduce the 

ability of carriers to arrive merchandise 

at the destination port or port of 

exportation within 30 days. This is 

especially true if the diversion request 

is denied and the carrier has to re-route 

the in-bond merchandise. 

CBP Response: Approval and denial 

of diversion requests will be 

communicated immediately and should 

not result in delays long enough to 

impede the completion of the in-bond 

movement within the required in-transit 

time. However, an extension of the intransit time may be requested when 

necessary. 

Comment: In order to provide 

guidance to the trade community and to 

help CBP review diversion requests, 

CBP should establish criteria for 

granting or denying a diversion request. 

Some factors CBP should consider are 

the carrier’s associated costs if the 

diversion request is denied, the time 

constraints associated with denying 

diversion requests, and any other 

constraints associated with the original 

port of destination or port of 

exportation. 

CBP Response: Although CBP has the 

discretion to deny a request for 

diversion, CBP will generally grant a 

reasonable diversion requests. For 

example, CBP will deny a request for a 

diversion when another government 

agency mandates delivery of the 

merchandise to the destination 

identified in the original filing. CBP is 

revising § 18.5 to incorporate this 

example. 

J. Immediate Transportation 

Comment: With respect to the filing of 

an IT in-bond application, proposed 

§ 18.11(a)(2) requires the importer to 

stipulate in the in-bond application that 

within 24 hours after the arrival of any 

part of the merchandise or baggage to a 

place outside the port of entry, the 

importer will file an entry for the 

shipment and will comply with the 

provisions of § 151.9 of this chapter, 

before permission will be granted by 

CBP to transport the merchandise inbond. There is concern about having the 

bonded carrier stipulate that the 

importer will timely file an entry and 

comply with other regulations since this 

is outside of the bonded carrier’s 

control. It is also unclear how a 

stipulation to file entry is to be included 

on the in-bond application upon 

submission to CBP. In an effort to 

continue to transition to an electronic 

environment, if an actual stipulation is 

required, provisions for including this 

declaration in the electronic in-bond 

application should be available. 

CBP Response: To address these 

concerns, CBP is removing § 18.11(a)(2) 

from the final rule and adding the 

requirement that the in-bond 

merchandise be transported to a place 

outside the port of entry in accordance 

with the provisions of §§ 151.7 and 

151.9 of this Chapter. 

K. Divided Shipments and Retention of 

Goods Within Port Limits 

1. Divided Shipments 

Comment: Is CBP requiring the 

bonded carrier to request authorization 

for a split shipment in advance of the 

shipment movement? If so, when must 

the request be submitted? In most cases, 

the bonded carrier will not be aware of 

a split movement until the initial 

conveyance has departed. The split 

movement will not be known until a 

portion of the shipment has in fact been 

exported, departed the port of unlading 

or has arrived at the destination port. 

CBP Response: Proposed § 18.5(c) 

only covers situations where a carrier 

diverts an in-bond shipment to more 

than one port, or where a portion of an 

in-bond shipment is approved for a 

consumption or warehouse entry. In 

such cases, a diversion request is 

necessary. If granted, a new in-bond 

application must be submitted for each 

portion of the original shipment to be 

transported in-bond. CBP is changing 

proposed § 18.3 in the final rule 

regarding transfer to eliminate the 

requirement to obtain CBP authorization 

when in-bond merchandise is 

transported on more than one 

conveyance, but arrives at the same 

destination port or port of exportation. 

Also, for clarity, CBP will use the term 

‘‘divided shipment’’ in this final rule 

instead of ‘‘split shipment’’ to refer to 

the situation where a carrier diverts an 

in-bond shipment to more than one port 

or to a consumption or warehouse entry. 

CBP used the term ‘‘split shipment’’ in 

the proposed rule to refer to the division 

of an in-bond shipment. However, the 

term ‘‘split shipments’’ refers 

specifically to the treatment of multiple 

entries of merchandise as a single 

transaction pursuant to 19 U.S.C. 1484(j) 

and 19 CFR 141.57 and 141.58. 

Comment: The requirement in 

proposed § 18.5(c) to initiate a new inbond for each [divided] shipment will 

be difficult for express carriers to 

comply with because of the large 

number of in-bond shipments that they 

move through the United States. CBP 

should consider allowing the carrier or 

agent to submit the [divided] shipment 

information after departure, when the 

information is most accurate. This 

process will provide CBP the most 

accurate up to date export or arrival 

information which will assist CBP with 

the electronic reconciliation of the inbond record. 

CBP Response: CBP is requiring the 

filing of a new in-bond application for 

in-bond shipments that will be diverted 

to more than one port to enable CBP to 

identify in advance the destination of a 

diverted shipment and to determine 

whether the merchandise reaches that 

destination. This procedure will also 

ensure that other agencies’ admissibility 

requirements are not circumvented and 

that proper duties are collected. CBP 

appreciates that this process may 

impose a burden on express carriers and 

CBP will seek ways to mitigate this 

burden. 

Comment: CBP should automate the 

ASN3 (in-bond arrival message set for 

Air AMS) and ASN7 (in-bond export 

message set for Air AMS) messages to 

allow for piece count and export port 

identifier to properly track the [divided] 

shipment. This will provide CBP 

updated movement information, 

including ports of departure. 

CBP Response: CBP has incorporated 

these automation features in Air ACE, 

which has replaced Air AMS and is now 

operational. 

Comment: CBP’s requirement in 

proposed § 18.24(b) that all movements 

of a [divided] shipment be initiated 

within two days after the [division] has 

been authorized is not feasible for 

various reasons. First, the conveyance 

must be secured and loaded and normal 

delivery hours and schedules at the port 

can limit the amount of loading that can 

be accomplished in a two-day period. 

Second, in many cases, a bonded carrier 

may have limited conveyances for 

specific export destinations or ports. 

Third, it may be impossible to close a 

[divided] shipment within two days 

when multiple modes are utilized 

(combination of truck and air). Finally, 

some shipments are more time 

consuming and require special 

handling. 

CBP Response: CBP agrees that it may 

not be feasible to initiate movement of 

divided shipments within two days of 

the day CBP authorized the divided 

shipment. CBP is removing this 

requirement in the final rule. 

2. Retention of Goods Within Port Limits 

Comment: Proposed § 18.24(a), which 

allows for the retention of goods within 

Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 45387 

the port limits for up to 90 days with 

CBP approval, should be clarified as 

follows: (1) To indicate that retention as 

described is at the port of exportation 

and (2) to specify how the application 

to retain the goods at the port of 

exportation for up to 90 days should be 

made. Is the purpose of requiring the 

filing of an Immediate Exportation (IE) 

entry to close the original 

Transportation and Exportation (T&E) 

entry to shift liability for the in-bond 

cargo? 

CBP Response: CBP is changing 

proposed § 18.24(a) in the final rule to 

clarify that the retention of goods 

applies to the port of exportation. The 

application to retain the merchandise at 

the port of exportation must be made, 

and approval will be given, via a CBP 

approved EDI. The purpose of filing an 

IE is to close out the original T&E. The 

party whose bond is obligated on the IE 

will be the party who is responsible for 

the export of the merchandise. However, 

the party obligated on the original T&E 

remains obligated for the shipment 

unless and until an IE is filed. 

M. Potential Impact 

Comment: One commenter estimated 

that the new data, reporting, and 

monitoring requirements of the 

proposed rule will increase costs for inbond carriers in a number of ways. The 

commenter claims that requiring 

carriers to report the HTSUS number 

and changing the requirement from 

having to file the final foreign 

destination to having to file the ultimate 

destination will increase costs by an 

estimated 5 percent and 1 percent, 

respectively, and requiring carriers to 

notify CBP of a change in the final 

foreign destination will increase costs 

by an additional 5 percent. The 

commenter further states that carriers 

will see significant cost increases due to 

the shortened transit time, the 

requirement to request extensions when 

in-bond cargo cannot reach the ultimate 

destination within the required time, 

and the ability of government agencies 

to shorten, with notice, the required 

transit time. Lastly, the commenter 

notes that the requirement to receive 

authorization to transport and/or divert 

restricted merchandise from the 

government agencies responsible for 

regulating the restricted merchandise 

will also increase costs significantly. 

CBP Response: CBP has taken these 

cost estimates submitted by the 

commenter under advisement when 

finalizing this rule. However, because 

CBP received comments on the cost 

impacts of this rule from only one party 

and this commenter does not provide 

specific data concerning the nature of 

the cost impacts, we are unable to 

extrapolate the estimates to the entire 

universe of carriers. CBP believes that 

the above changes to the in-bond 

requirements are necessary for the 

security of the United States, for 

protection of the revenue and to ensure 

that merchandise admissibility is not 

compromised. However, whenever 

possible, CBP has made changes to 

lessen the burden and costs to the 

public in response to various comments. 

For example, in response to concerns 

that in-bond shipments transported by 

barge may not be able to arrive at the 

destination port or port of exportation 

within 30 days, CBP changed proposed 

§ 18.1(i)(1) to allow 60 days for the 

arrival of in-bond merchandise 

transported by barge. For a full 

discussion of the costs and benefits of 

this regulation, see Section IV., 

Regulatory Analysis. 

N. Miscellaneous Items 

1. Impact on Inland Ports 

Comment: Has CBP taken into 

consideration the impact the changes 

this rule will have on inland ports of 

entry and the clearance process? As 

shippers examine the impact of the 

proposed changes on their business and 

determine that the in-bond process has 

become too onerous and burdensome, 

they may look to change their business 

practices and stop transporting 

merchandise in-bond. This could 

impact staffing levels at inland ports 

that were once needed to process 

consumption entries for in-bond 

merchandise. 

CBP Response: The new electronic inbond processing should facilitate the 

use of in-bond procedures. Although 

concerns have been raised about some 

of the requirements contained within 

the proposal (many of which CBP is 

addressing by not adopting various 

proposed provisions in this final rule), 

CBP has received no other comments 

indicating that shippers will stop using 

the in-bond program. 

2. Supervision of Rail Shipments 

Comment: To maximize space and 

weight used on a rail car, importers may 

preload a railcar and provide the carrier 

the load sheet details. The carrier then 

transmits the exact load per rail car to 

CBP. Once the in-bond submission is 

accepted by CBP the rail car dispatches. 

Will CBP advise the carrier prior to 

loading and in-bond transmission if 

supervision is required? 

CBP Response: If supervision is 

required, CBP will notify the carrier 

prior to acceptance of the in-bond 

application. 

3. Textiles 

Comment: The textile provision in 

proposed § 18.1(d)(1)(iv) goes far 

beyond the requirements of a carrier 

moving commodities from origin to 

destination, regardless of crossing 

borders. This provision, which is 

specific to legislation dating back over 

60 years, pertains to admissibility and 

not transport. More fundamentally, 

reference to the Agricultural Act of 1954 

is in essence reference to quantitative 

restrictions, i.e. quotas, which are now 

eliminated for textile and apparel items 

from most origin countries. 

Consequently, this requirement is 

applicable for only a small minority of 

imported textile and apparel items, and 

therefore unduly burdensome. 

Moreover, this provision requires 

information that is not readily available 

to carriers and in such detail that 

carriers cannot comply with the 

provision without the assistance of a 

customs broker. 

CBP Response: The proposed 

requirements mandating the in-bond 

filer to provide sufficient detail for 

certain textile items so that the port 

director can determine the duties and 

taxes are in the existing regulations at 

§ 18.11(e), pertaining to IT shipments. 

These requirements have not posed 

problems for carriers in the past. The 

proposed regulations did expand the 

application of these requirements by 

making them also applicable to IE and 

T&E shipments. In order to minimize 

the burden on the trade and to make it 

consistent with the existing regulations, 

CBP is removing this requirement from 

proposed § 18.1(d)(1)(iv) and moving it 

to § 18.11(d) so that it is only applicable 

to IT in-bond shipments as is currently 

the case. 

4. Cartmen 

Comment: Proposed § 18.1(d)(3) 

provides that the in-bond application 

can be filed at any time prior to the 

merchandise departing the in-bond 

origination port. In the past, CBP 

required authorization for the 

movement of the cargo from the 

importing carrier/terminal to the 

bonded carrier by bonded cartmen 

within the port limits and, indeed, the 

CBP Form 7512 document was integral 

to this process. CBP should clarify (1) 

whether bonded cartmen will be subject 

to this new requirement, and (2) CBP’s 

plans and programming changes for 

bonded cartmen reporting requirements 

relating to such delivery from the 

importing to bonded carrier within the 

origination port limits. 

CBP Response: A permit to transfer is 

still required in order to move the 

45388 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 

2 ‘‘TECRO/AIT carnet’’ means the document 

issued pursuant to the Bilateral Agreement between 

the Taipei Economic and Cultural Representative 

Office (TECRO) and the American Institute in 

Taiwan (AIT) to cover the temporary admission of 

goods. 19 CFR 114.1(g). 

merchandise from the importing carrier 

or terminal to the bonded carrier 

moving the merchandise in-bond. This 

rule does not change that requirement or 

the timing of such requirement. CBP is 

making programming changes to 

facilitate the reporting requirements for 

bonded cartmen. Appropriate regulatory 

changes will be made in the future. 

5. Carnets 

Comment: CBP should clarify the 

numerous references to carnets 

throughout CBP’s proposed changes to 

the in-bond process. This NPRM is not 

intended to include the ATA 

(Admission Temporaire—Temporary 

Admission) and Tecro/AIT2 carnet as 

they are not considered ‘‘in-bond’’ 

entries. Accordingly, CBP should 

remove any reference to ATA and 

Tecro/AIT carnets, as well as any 

generic references to carnets. At present, 

the ATA and Tecro/AIT entries are 

handled by entering the data manually 

and CBP should work with the trade to 

ensure that ACE and/or ACS can 

accommodate the tens of thousands of 

ATA and Tecro/AIT entries per year. 

CBP Response: This rule does not 

change the regulations as they relate to 

ATA and Tecro/AIT carnets either 

substantively or where they are 

codified. 

6. Sharing of Information and 

Confidentiality 

Comment: The proposed rule does not 

promote or maintain the confidentiality 

of the shipper’s or importer’s 

commercial information. While it is true 

that entry information transmitted to 

CBP by a customs broker is exempt from 

disclosure, it is equally true that 

manifest information filed by carriers is 

routinely accessed under the Freedom 

of Information Act by various 

commercial enterprises. Unless CBP 

recognizes in-bond entries as ‘‘customs 

business’’ and restricts the transmission 

of this information to licensed customs 

brokers, it must be anticipated that 

carriers and transportation 

intermediaries will seek to streamline 

their processes and require that this 

information be included on the existing 

shipping documentation which their 

staffs are accustomed to handling. This 

will further expose shipper’s or 

importer’s confidential business 

information to dissemination within the 

supply chain without a concurrent trade 

benefit. CBP needs to develop a 

mechanism to keep this sensitive 

commercial information private or 

restrict its transmission to those parties 

who are required by statute to safeguard 

their client’s commercial information, 

i.e., customs brokers. 

CBP Response: The filing of an inbond application does not constitute 

customs business requiring a licensed 

broker and CBP does not believe that 

CBP needs to mandate the use of 

customs brokers in order to safeguard 

sensitive commercial information. CBP 

has modified the proposed regulations 

to require less detailed information in 

the in-bond application (e.g., removing 

proposed § 18.1(d)(1)(v) requiring other 

identifying information and removing 

the requirement to provide the rule, 

regulation, law, standard or ban relating 

to health, safety or conservation in 

proposed § 18.1(d)(1)(ii)). As a result, 

carriers will not have to include entry 

information on shipping 

documentation. Existing protections of 

confidential business information under 

§ 103.35 would apply to any covered 

confidential information on the in-bond 

application. The release of manifest 

information is covered by § 103.31. It 

provides the procedures for protecting 

manifest information from release and 

allows importers, consignees and 

shippers to claim confidential treatment 

for this information. 

Comment: Clarification should be 

provided regarding the utilization of the 

information required in the in-bond 

application, as well as CBPs proposed 

methodology to validate, store, 

maintain, and disseminate, this 

information. 

CBP Response: The information 

provided on the in-bond application 

will be used for targeting and 

enforcement purposes, to prevent 

smuggling and fraud, and for security 

purposes. The information will also be 

used to track and close the in-bond 

shipment. For information on the 

maintenance and dissemination of this 

information see the following Systems 

of Records Notices (SORNs). The SORN 

for ACE is available at: http://

www.gpo.gov/fdsys/pkg/FR-2006-01-19/ 

html/E6-511.htm and was published in 

the Federal Register on January 19, 

2006 (71 FR 3109). ABI is covered by 

the ACS SORN, which is available at: 

http://www.gpo.gov/fdsys/pkg/FR-2008- 

12-19/html/E8-29801.htm and was 

published in the Federal Register on 

December 19, 2008 (73 FR 77759). 

Comment: Electronic in-bond filing 

and tracking of shipments, combined 

with the additional data CBP will 

collect on these shipments, will provide 

an effective and business-friendly 

means to combat the problem of 

fraudulent paperwork to claim NAFTA 

benefits so long as the in-bond 

information can be shared with Mexico 

when the goods are shipped from the 

United States. 

CBP Response: This rule does not 

affect information sharing with Mexico. 

CBP will continue its current 

procedures and policies for sharing 

information with Mexico pursuant to 

existing agreements. 

7. Definitions 

Comment: Terms commonly used in 

the proposed regulations, such as 

conveyance, containerized shipments, 

compartments, carloads, cartman, 

delivering carrier, lighterman, port 

cluster, import carrier, export carrier, 

transshipment and ultimate destination, 

should be defined to establish 

uniformity in application and meaning 

within the regulations. 

CBP Response: CBP does not believe 

it is necessary to define all the terms 

used in the proposed regulations. CBP 

has defined the terms which are 

essential to the proper and uniform 

application of the in-bond regulations. 

These include Common carrier, 

Origination port, Port of destination, 

Port of diversion, and Port of 

exportation as set forth in proposed 

§ 18.0, and Bonded carrier, which CBP 

is adding. 

Comment: The proposed regulations 

define port of destination as the U.S. 

port at which merchandise is entered 

after being shipped in-bond from the 

origination port where it was entered as 

an immediate transportation entry. We 

believe the text should be revised to 

include other possibilities, such as 

admission to a foreign-trade zone and 

more than one movement under more 

than one bond. 

CBP Response: CBP agrees that 

various provisions of the proposed inbond regulations should apply to goods 

admitted to a foreign-trade zone and is 

changing various sections in Part 18 in 

the final rule (§§ 18.20(e), 18.23(b), and 

18.25(b)) to add a reference to admission 

into a foreign trade zone. In view of 

these changes, there is no need to revise 

the definition of ‘‘port of destination.’’ 

This approach provides CBP with 

flexibility and allows CBP to accurately 

describe the requirements and 

procedures under specific provisions. 

8. Restriction of IE by Truck 

Comment: Does proposed § 18.25(b) 

provide the port director with the 

discretion to allow the filing of the IE 

entry? If the port director does not have 

this discretion, this proposal would 

pose a hardship for some Canadian 

business located on the Canadian border 

Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 45389 

and on importers who participate in 

maquiladora operations in Mexico. 

CBP Response: CBP recognizes that 

there may be legitimate purposes for the 

filing of an IE entry and is changing 

proposed § 18.25(b) to state that trucks 

‘‘may’’ be denied a permit to proceed. 

This will provide the port director with 

discretion regarding whether to allow 

this process. The port director will make 

his or her determination on a case-bycase basis. 

9. Express Shipments 

Comment: Proposed § 18.22 is 

confusing. Although the heading refers 

to ‘‘Transfer and express shipment 

procedures at port of exportation,’’ 

paragraph (a) does not appear to cover 

express shipment procedures. Also, 

paragraph (a) states that if in-bond 

merchandise must be transferred to 

another conveyance, the procedure will 

be as prescribed in proposed § 18.3(d); 

however, proposed § 18.3(d) covers the 

transshipment of merchandise in 

emergency situations. CBP must define 

‘‘express shipment’’ and clarify the 

meaning and intent of § 18.3. 

CBP Response: CBP agrees that these 

provisions are confusing and is making 

various changes to address this issue. 

First, CBP is incorporating the title of 

§ 18.22 in the existing regulations, 

‘‘[p]rocedures at port of exportation,’’ 

and using the term ‘‘exportation’’ 

instead of ‘‘exit.’’ Second, CBP is 

changing proposed § 18.3(d) in the final 

rule by removing the provision for the 

removal of seals in emergency situations 

and changing proposed § 18.4(c) to 

cover the removal of seals in all 

situations. Concurrent with these 

changes, CBP is changing proposed 

§ 18.22(a) in the final rule to refer to 

§§ 18.3 and 18.4(c) for the procedures to 

be followed when bonded merchandise 

is transferred to another conveyance. 

Finally, in order to clarify what is meant 

by ‘‘express carrier,’’ CBP is changing 

proposed § 18.22(b) by removing the 

term ‘‘express company’’ and replacing 

it with the term ‘‘express consignment 

carrier,’’ which is defined in § 128.1(a) 

of the current regulations. 

10. Automated Broker Interface (ABI) 

Comment: Proposed § 143.1 specifies 

that upon approval by CBP, any party 

may participate in ABI for other 

purposes, including transmission of 

protests, and applications for FTZ 

admission (CBP Form 214). We note that 

the application for a transfer of an inbond movement, which is currently 

included, has been omitted from this 

section. However, our interpretation is 

that this is the language authorizing the 

utilization of ABI by any party outside 

of the designation of customs broker, 

importer, or service bureau. CBP should 

preserve the current language so that it 

includes the filing of the in-bond 

application via ABI. 

CBP Response: CBP agrees and is 

changing proposed § 143.1 to include 

the ‘‘filing of an in-bond application’’ as 

one of the purposes for which parties 

may use ABI. 

11. Foreign-Trade Zones (FTZs) 

Comment: CBP received many 

comments regarding the processing and 

handling of FTZ merchandise pursuant 

to part 146. These comments addressed 

many substantive issues pertaining to 

FTZs and the procedures for the 

admission into and processing of 

merchandise in FTZs. 

CBP Response: CBP only proposed 

amending part 146 to make conforming 

changes to the proposed in-bond 

regulations and not to substantively 

alter the general procedures that apply 

for the admission into FTZs and the 

processing of FTZ merchandise. 

Specifically, CBP removed the 

references to the ‘‘CBP Form 7512’’ and 

replaced it with ‘‘in-bond application.’’ 

Therefore, comments recommending 

substantive changes to the CBP 

regulations on FTZ processing are 

outside the scope of this rulemaking and 

will not be addressed. 

Comment: It is unclear in the 

proposed regulations what event triggers 

the relief or transfer of liability from the 

bond of the carrier. In a FTZ direct 

delivery authorized environment, filing 

of an admission is not required prior to 

delivery of the goods. 

CBP Response: The actual admission 

of the merchandise into the FTZ 

satisfies the carrier’s in-bond obligation. 

Comment: CBP should preserve the 

use of the CBP Form 7512 for FTZ 

admissions until an automated solution 

can be developed. 

CBP Response: The processes for 

admitting and withdrawing 

merchandise from FTZs for purposes of 

filing in-bond movements is fully 

automated using QP/WP. 

Comment: Proposed § 146.67 provides 

for the transfer of merchandise from a 

FTZ for exportation. Paragraph (b) states 

that ‘‘each transfer of merchandise to 

the customs territory for exportation at 

the port where the zone is located will 

be made under an entry for immediate 

exportation filed in an in-bond 

application pursuant to part 18 . . .’’ 

This section should state that only the 

owner/operator acting for their own 

account or a licensed customs broker is 

eligible to file such an entry with CBP. 

CBP Response: CBP disagrees. The 

parties authorized to file the in-bond 

application should be the same, 

regardless of whether the merchandize 

is in a FTZ. 

12. Importer Security Filing (ISF) 

Comment: The six-digit HTSUS code 

is required to be provided, if available, 

pursuant to proposed § 18.1(d)(1)(i), and 

is also required to be transmitted to CBP 

24 hours prior to lading in order to 

satisfy importer security filing (ISF) 

requirements. CBP should eliminate the 

requirement to re-transmit this data 

element as part of the in-bond 

application since it is already resident 

within CBP’s system. 

CBP Response: One of the purposes of 

the in-bond regulations is to ensure that 

in-bond merchandise is properly 

transported in-bond before being 

entered or exported. The information 

CBP receives on the ISF is not sufficient 

for proper tracking and enforcement of 

in-bond requirements. First, ISF data is 

required only for merchandise arriving 

in the United States by vessel and not 

for merchandise arriving in the United 

States by rail or truck, which are also 

covered by this rule. Second, pursuant 

to § 343(a)(3)(F) of the Trade Act of 

2002, as amended (19 U.S.C. 2071 note), 

CBP can only use ISF data for limited 

purposes, i.e., for ensuring cargo safety 

and security, preventing smuggling, and 

commercial risk assessment targeting. 

Accordingly, CBP requires the six-digit 

HTSUS number as part of the in-bond 

application. 

Comment: CBP should restrict the inbond information requirements to those 

additional data elements that are not 

already required to be submitted as part 

of the advance manifest. Duplicative 

transmission of data elements will only 

add to the cost of importing without 

yielding any security or commercial 

benefits. 

CBP Response: If the carrier 

electronically files both the advance 

manifest information and the in-bond 

application, the carrier would not need 

to provide duplicative information. 

Only those few additional data elements 

that were not provided with the advance 

manifest information would need to be 

submitted to satisfy the in-bond 

application requirements. Only in the 

instance where the manifest is filed by 

the carrier and the broker (or other 

party) files a QP movement on behalf of 

the carrier would there be duplicative 

information. Carriers will not have to 

file duplicative data elements, if they 

have already filed advance manifest 

information. 

Comment: CBP should clarify 

procedures in case of over-carried 

merchandise (i.e., merchandise that was 

shipped, but not included on the 

45390 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 

manifest or bill of lading) for which no 

advance manifest and ISF were filed. If 

over-carried cargo is to be re-exported, 

will CBP authorize an in-bond without 

an advance manifest and ISF? 

CBP Response: CBP will authorize an 

in-bond transaction to re-export 

overcarried merchandise for which no 

advance manifest and ISF were filed. 

Before filing the in-bond application, a 

bill of lading would have to be created 

in ACE to create the in-bond record. 

However, any applicable penalties for 

the overcarried merchandise would 

apply. 

13. Redelivery 

Comment: The requirement in 

proposed § 18.6(c) that CBP must 

demand return of the merchandise to 

CBP custody (no later than 30 days after 

the shortage, delivery, or nondelivery is 

discovered by CBP) is not realistic. Lean 

manufacturing and distribution 

principles incorporated in the 

mainstream activities for companies in 

today’s just-in-time environment can 

drive the necessity for immediate 

response and action for merchandise 

being received at facilities daily. Often 

merchandise received at facilities before 

noon is introduced into manufacturing 

processes or distribution activities 

before close of business on the same 

day. This rapid movement and 

processing of cargo results in the 

inability to redeliver cargo, intact or 

otherwise, within 30 days from date of 

mailing, date of delivery, or demand for 

redelivery by CBP. 

CBP Response: The proposed rule is 

consistent with existing requirements 

regarding the redelivery of merchandise 

in § 113.63(d) and current § 18.6(b). The 

30-day timeframe for CBP to demand 

redelivery is necessary in order to allow 

CBP to verify the violation leading to 

the demand for redelivery and to allow 

sufficient time to process the demand 

for redelivery. CBP is aware that 

merchandise may enter the stream of 

commerce and will strive to process 

demands for redelivery as quickly as 

possible. 

Comment: CBP should accept proof of 

the final disposition of the in-bond 

entry as full satisfaction of a demand for 

redelivery when a redelivery is 

requested after the in-bond transaction 

has completed. For example, if 

merchandise was exported prior to a 

demand for redelivery, then proof of 

export should satisfy the demand for 

redelivery without any penalty or 

liquidated damages for failure to 

redeliver. Similarly, if merchandise is 

entered for consumption prior to the 

request for redelivery then the 

consumption entry should satisfy the 

demand for redelivery without any 

penalty or liquidated damages for 

failure to redeliver. The bonded carrier 

is still responsible for the initial 

violation of the irregular delivery and 

liquidated damages is the appropriate 

way to penalize the bonded carrier 

instead of requiring redelivery of 

merchandise that has already been 

exported. In addition, language should 

be included allowing the acceptance of 

a foreign-trade zone admission for the 

full manifested quantity, unless a lesser 

amount is reported. Admission and 

validation by a FTZ Operator should 

satisfy the demand for redelivery of 

merchandise for shipments in which a 

shortage has been noted. 

CBP Response: The fact that 

merchandise was exported or entered 

for consumption prior to receipt of a 

demand for redelivery does not 

necessarily mean that liquidated 

damages are inappropriate. CBP 

considers whether the information 

provided satisfies a demand for 

redelivery and whether the assessment 

of liquidated damages is appropriate 

taking into account the facts and 

circumstance of each individual case. 

Comment: Will the redelivery be 

limited to the quantity of a shortage, i.e., 

the quantity not delivered, or will CBP 

have the authority to demand redelivery 

of all merchandise covered under that 

in-bond entry? The demand for 

redelivery should be limited to the 

merchandise involved in the violation. 

Once the merchandise is exported, the 

bonded carrier will have little, if any, 

ability to ensure that the merchandise is 

redelivered. 

CBP Response: CBP has authority to 

demand redelivery of all the 

merchandise covered by an in-bond 

entry. However, CBP will determine 

which merchandise to include in a 

demand for redelivery on a case-by-case 

basis, taking into account the factors 

warranting the demand. 

Comment: In case of a shortage, will 

the importer or broker be able to add the 

in-bond number covering the short 

shipped pieces to the same CBP Form 

3461 or will a new entry have to be 

filed? 

CBP Response: The importer/broker 

can note the change on the CBP Form 

3461 (Entry/Immediate Delivery) or the 

CBP Form 7501 (Entry Summary), or via 

a post summary correction if the entry 

summary has already been filed. 

Comment: It is not clear what CBP 

means by a ‘‘short shipment’’ in 

proposed § 18.6(a). Does it mean that a 

portion of the shipment covered by the 

original in-bond application did not 

arrive with the rest of the shipment? If 

so, short shipments would occur for 

routine multiple container in-bond 

shipments that cannot be shipped on a 

single truck or rail car. 

CBP Response: A short shipment 

means that a portion of the shipment 

covered by the in-bond application did 

not arrive at the port of destination or 

port of exportation. If the merchandise 

is transported in multiple conveyances, 

then the shipment can arrive at separate 

times without resulting in a short 

shipment. Typically, a short shipment 

would occur when a portion of an inbond movement fails to arrive at the inbond destination within the in-transit 

period. 

14. Pipelines 

Comment: Currently many in-bond 

pipeline movements are filed via the 

QP/WP electronic filing system. Will 

electronic reporting for pipelines still be 

allowed? Will the weekly in-bond 

processes that are currently utilized for 

pipeline in-bond still be allowed under 

the new rules? Do the various 

compliance requirements contained in 

the NPRM as part of the move to 

electronic processing of in-bond 

movements apply to pipeline 

movements even though in-bond 

applications for pipeline shipments are 

not required to be submitted 

electronically? 

CBP Response: The amendments to 

the in-bond regulations will not affect 

the current procedures for in-bond 

shipments moving via pipeline. Nothing 

in this rule changes the current 

procedures and systems that are utilized 

for in-bond pipeline movements. For 

example, the in-transit time limits in 

this rule do not apply to in-bond 

pipeline movements; CBP is adding a 

sentence to proposed § 18.1(i)(1) to 

clarify this. Although the requirements 

that are related to the electronic filing of 

an in-bond application do not apply to 

pipeline movement, carriers can choose 

to submit electronic in-bond 

applications and subsequent updates for 

pipeline in-bond movements using QP. 

III. Adoption of Proposal 

In view of the foregoing, and 

following careful consideration of the 

comments received and further review 

of the matter, CBP has concluded that 

the proposed regulations with the 

modifications discussed above should 

be adopted as a final rule. 

IV. Regulatory Analyses 

A. Executive Order 12866—Regulatory 

Planning and Review 

Executive Order 12866 (Regulatory 

Planning and Review; September 30, 

1993) requires Federal agencies to 

Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 45391 

3Regulatory Flexibility Act as amended by the 

Small Business Regulatory Enforcement Fairness 

Act, 5 U.S.C. 601 et seq. 

4U.S. SBA, Office of Advocacy, ‘‘A Guide for 

Government Agencies: How to Comply with the 

Regulatory Flexibility Act, Implementing the 

President’s Small Business Agenda and Executive 

Order 13272,’’ May 2003. 

5The complete ‘‘Regulatory Flexibility Analysis 

and RFA’’ can be found in the docket for this 

rulemaking: http://www.regulations.gov. 

conduct economic analyses of 

significant regulatory actions as a means 

to improve regulatory decision-making. 

Significant regulatory actions include 

those that may ‘‘(1) [h]ave an annual 

effect on the economy of $100 million 

or more or adversely affect in a material 

way the economy, a sector of the 

economy, productivity, competition, 

jobs, the environment, public health or 

safety, or State, local or tribal 

governments or communities; (2) 

[c]reate a serious inconsistency or 

otherwise interfere with an action taken 

or planned by another agency; (3) 

[m]aterially alter the budgetary impact 

of entitlements, grants, user fees, or loan 

programs or the rights and obligations of 

recipients thereof; or (4) [r]aise novel 

legal or policy issues arising out of legal 

mandates, the President’s priorities, or 

the principles set forth in this Executive 

Order.’’ It has been determined that this 

rule is not a significant regulatory 

action. 

B. Regulatory Flexibility Act 

Under the requirements of the 

Regulatory Flexibility Act of 1980 as 

amended by the Small Business 

Regulatory Enforcement Fairness Act of 

1996 (RFA/SBREFA) and EO 13272, 

titled ‘‘Proper Consideration of Small 

Entities in Agency Rulemaking,’’ 

agencies must consider the potential 

impact of regulations on small 

businesses, small governmental 

jurisdictions, and small organizations 

during the development of their rules. 

CBP is required to prepare a regulatory 

flexibility analysis and take other steps 

to assist small entities, unless the 

Agency certifies that a rule will not have 

a ‘‘significant economic impact on a 

substantial number of small entities.’’ 3

The U.S. Small Business Administration 

(SBA) provides guidelines on the 

analytical process to assess the impact 

of a particular rulemaking.4 The 

following summary presents the impact 

of this rule on small entities.5

The types of entities subject to the 

rule’s requirements include originating 

or bonded carriers, brokers, and other 

supply chain entities (e.g., exporters, 

manufacturers and suppliers, cargo 

consolidators, freight forwarders, thirdparty logistics providers, (3PLs), and 

container freight stations (CFSs)) 

involved in the transaction filing, 

conveyance, and arrivals reporting of inbond goods. When finalizing a rule, if 

CBP is still unable to certify that a rule 

will not have a significant impact on a 

substantial number of small entities, 

after conducting an initial screening 

analysis and an Initial Regulatory 

Flexibility Analysis (IRFA), CBP is 

required to conduct a Final Regulatory 

Flexibility Analysis (FRFA). 

Based on FY2007 in-bond shipment 

data, we estimate at least 6,230 trade 

entities could be affected by the rule, 

including 5,081 non-air carriers (sea 

vessel, rail, and truck carriers), between 

212 and 221 air carriers, and possibly at 

least 870 other entities (e.g., freight 

forwarders, cargo consolidators, 3PLs, 

brokers, and CFS). The specific 

requirements of the rule (file in-bond 

transactions electronically, report inbond arrivals electronically, provide 

additional data elements, request 

diversions, and meet allowable in-bond 

transit times) will affect all of these 

entities in some way. CBP lacks the data 

necessary to quantify the incremental 

cost of the rule or differentiate these 

costs by entity type, including size and 

nationality (many of the entities affected 

are likely foreign). Instead, we discuss 

these costs qualitatively. The following 

exhibit lists various alternatives CBP 

considered in developing this rule and 

characterizes their costs. 

EXHIBIT 1—RELATIVE COSTS OF REGULATORY ALTERNATIVES

Regulatory alternative Requirements Relative cost 

1 (Chosen alternative) All of these five requirements are implemented: 

1. File all in-bond application forms electronically. 

2. Additional in-bond shipment data and information 

required.

3. Maximum in-bond transit time of 30 days. 

4. Request and receive permission electronically prior 

to diverting in-bond cargo. 

5. Report in-bond arrivals and arrival locations electronically. 

Highest: 

Reason for high cost: Entities filing in-bond forms 

and/or reporting in-bond arrivals by paper only (582 

non-air carriers plus an unknown number of other 

filers) would have to obtain electronic access to 

CBP or retain a third party agent or service provider. All entities (5,081 non-air carriers plus an unknown number of other filers) would have to obtain 

and provide additional in-bond shipment data to 

CBP by reprogramming their existing business and 

information systems and processes, using a thirdparty service provider, or relying on their trade partners. Those entities reporting arrivals (4,388 non-air 

carriers plus an unknown number of other filers) 

would have to reprogram their existing business 

and information systems and processes or use a 

third party service provider to electronically report 

arrival locations. 

2 .................................. Only the following four requirements are implemented: 

1. File all in-bond application forms electronically. 

2. Maximum in-bond transit time of 30 days. 

3. Request and receive permission electronically prior 

to diverting in-bond cargo. 

4. Report in-bond arrivals and arrival locations electronically. 

Lower: 

Costs are lower than Alternative #1 because the 

costs associated with obtaining and providing the 

additional in-bond shipment data and information 

would not be incurred, which could be significant 

for the most frequent filers. However, overall costs 

could still be significant to comply with the requirement of reporting arrival locations. 

45392 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 

6U.S. SBA, Summary of Size Standards by 

Industry, as viewed at http://www.sba.gov/ 

contractingopportunities/officials/size/summary

ofssi/index.html on January 14, 2013. http://

www.sba.gov/contractingopportunities/officials/ 

size/summaryofssi/index.html on July 28, 2010. 

7We only have limited data on 5,081 unique nonair carriers, which comprise at most about 82 

percent of all affected entities. 

8The complete IRFA can be found by searching 

www.regulations.gov for the docket number USCBP2012-0002-0052. 

9The complete FRFA Final Regulatory Flexibility 

Act analysis can be found in the docket for this 

rulemaking: http://www.regulations.gov. 

10As discussed in the complete FRFA, not all 

costs could be quantified. As such, CBP is unable 

to quantify the cost savings due to the changes 

made from the proposed rule. 

EXHIBIT 1—RELATIVE COSTS OF REGULATORY ALTERNATIVES—Continued 

Regulatory alternative Requirements Relative cost 

3 .................................. Only the following three requirements are implemented: 

1. File all in-bond application forms electronically. 

2. Maximum in-bond transit time of 30 days. 

3. Request and receive permission electronically prior 

to diverting in-bond cargo. 

Lowest: 

Costs are lowest of the three regulatory alternatives 

because only a relatively small number of entities 

that currently file in-bond forms by paper only (537 

non-air carriers plus an unknown number of other 

filers) would be affected. These entities must obtain 

electronic access to CBP or retain a third party 

agent or service provider. 

To determine whether a substantial 

number of small entities would be 

affected by the rule, we ideally would 

have employment and revenue 

information and data for all affected 

entities. The SBA defines entities as 

‘‘small’’ if they fall below certain size 

standards in their industry (as defined 

by a North American Industry 

Classification System (NAICS) Code), 

such as the number of employees or 

average annual receipts.6 However, we 

do not have this information, as well as 

information identifying all of the 

entities that may be affected.7 Other 

available descriptive data, such as inbond shipment or transaction volume, 

transaction type, and whether an entity 

files in-bond transactions or report inbond arrivals, are unreliable since they 

may not necessarily be related to entity 

size. As a result, we use national data 

on entities in the affected industries 

from the SBA to determine whether a 

substantial number of small entities are 

likely to be affected by the rule. Use of 

these data is imperfect because not all 

entities included in the SBA data set 

participate in the processing and 

movement of in-bond goods. Based on 

these data, nearly all of the entities in 

all industry groups likely to be affected 

by the final rule are small. CBP 

concludes, therefore, that a substantial 

number of small entities are likely to be 

affected by the final rule. CBP has 

characterized but cannot estimate the 

potential costs to entities of complying 

with the final rule. As a result, we 

cannot quantify the impact on small 

entities. We, therefore, conclude that the 

rule may significantly affect a 

substantial number of small entities. 

Following the initial screening 

analysis, CBP published an IRFA, in 

accordance to Section 603 of the RFA/ 

SBREFA, for the proposed rule on July 

11, 2012.8 For the final rule, in 

accordance to Section 604 of the RFA/ 

SBREFA, CBP has conducted a FRFA 

that is being published concurrently 

with the final rule and is available in the 

docket of this rulemaking.9 The 

following summary of the FRFA 

presents the impact of this rule on small 

entities. 

The objective of the rule is to improve 

CBP’s ability to regulate, track, and 

control in-bond cargo and to ensure that 

proper duties are paid or that the inbond merchandise is exported. 

Although CBP did not receive any 

public comments specifically 

addressing the IRFA or the impacts to 

small entities, one commenter estimated 

that the new data, reporting, and 

monitoring requirements of the 

proposed rule will increase costs for inbond carriers in a number of ways. In 

finalizing the proposed rule, CBP took 

these cost estimates under advisement 

and has made changes to the rule to 

lessen the burden and costs to the 

public in response to various comments. 

See Section II.M., Potential Impact, of 

this document and in the complete 

FRFA for more information about this 

comment and CBP’s response. 

The Chief Counsel for the Advocacy 

of the Small Business Administration 

did not provide any comments on the 

IRFA for the proposed rule. 

The types of entities subject to the 

rule’s requirements include originating 

or bonded carriers, brokers, and other 

supply chain entities (e.g., exporters, 

manufacturers and suppliers, cargo 

consolidators, freight forwarders, 3PLs, 

and CFS) involved in the transaction 

filing, conveyance, and arrivals 

reporting of in-bond goods. Based on 

FY2007 in-bond shipment data, we 

estimate at least 6,230 trade entities 

could be affected by the rule, including 

5,081 non-air carriers (sea vessel, rail, 

and truck carriers), between 212 and 

221 air carriers, and possibly at least 

940 other entities (e.g., freight 

forwarders, cargo consolidators, 3PLs, 

brokers, and CFS). The reporting and 

recordkeeping skills needed are 

professional skills necessary for 

preparation of electronic in-bond 

transactions, arrivals notifications, and 

diversion requests. These include basic 

administrative, recordkeeping, and 

information technology skills used to 

manage data transaction, shipment, 

manifest, security, and other data used 

in the commercial supply chain 

environment, along with a working 

knowledge of import shipment 

arrangements, brokerage, conveyance/ 

shipping, consolidation, and customs 

procedures and regulation. 

Exhibit 1 above lists the regulatory 

alternatives CBP analyzed in the IRFA; 

including those that minimized the 

incremental cost burden to carriers, 

brokers, and agents, including small 

entities. CBP was not, however, able to 

identify any significant regulatory 

alternatives to the rule that specifically 

address small entities while also 

meeting the rule’s objective, which is to 

improve CBP’s ability to regulate, track, 

and control in-bond cargo and to ensure 

that proper duties are paid or that the 

in-bond merchandise is exported. 

However, in finalizing this rule, as 

detailed above and in the complete 

FRFA contained in the docket, CBP has 

made changes to the proposed rule, 

based on public comments that lower 

costs for entities affected by this rule, 

including small entities.10

C. Unfunded Mandates Reform Act of 

1995 

Title II of the Unfunded Mandate 

Reform Act of 1995 (UMRA) requires 

agencies to assess the effects of their 

regulatory actions on State, local, and 

tribal governments and the private 

sector. This rule is necessary for 

national security and is exempt from 

these requirements under 2 U.S.C. 1503 

Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 45393 

11 ‘‘Unfunded Mandates Reform Act of 1995 

(UMRA),’’ 2 U.S.C. 1503. 

(Exclusions), which states that UMRA 

‘‘shall not apply to any provision in a 

bill, joint resolution, amendment, 

motion, or conference report before 

Congress and any provision in a 

proposed or final Federal regulation that 

is necessary for the national security or 

the ratification or implementation of 

international treaty obligations.’’ 11

D. Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act of 1995 (Pub. L.104–13, 

44 U.S.C. 3507) the collections of 

information for this final rule are 

included in an existing collection for 

CBP Form 7512 (Office of Management 

and Budget (OMB) control number 

1651–0003). An agency may not 

conduct or sponsor, and a person is not 

required to respond to, a collection of 

information unless the collection of 

information displays a valid control 

number assigned by OMB. 

The estimated burden hours related to 

CBP Form 7512 and 7512A for OMB 

Control number 1651–0003 are as 

follows: 

Estimated Number of Respondents: 

6,200. 

Estimated Number of Responses: 

5,400,000 

Estimated Time per Response: 10 

minutes (0.166 hours). 

Estimated Total Annual Burden 

Hours: 896,400. 

The burden hours in this collection 

have been updated to reflect revised and 

updated estimates of filers of CBP Form 

7512. These most recent data available 

are also used in the regulatory flexibility 

analysis above. 

V. Signing Authority 

This regulation is being issued in 

accordance with 19 CFR 0.1(a)(1) 

pertaining to the Secretary of the 

Treasury’s authority (or that of his 

delegate) to approve regulations related 

to certain customs revenue functions. 

VI. Regulatory Amendments 

List of Subjects 

19 CFR Part 4 

Customs duties and inspection, 

Exports, Freight, Harbors, Maritime 

carriers, Oil pollution, Reporting and 

recordkeeping requirements, Vessels. 

19 CFR Part 10 

Caribbean Basin initiative, Customs 

duties and inspection, Exports, 

Reporting and recordkeeping 

requirements. 

19 CFR Part 12 

Customs duties and inspection, 

Reporting and recordkeeping 

requirements. 

19 CFR Part 18 

Common carriers, Customs duties and 

inspection, Exports, Freight, Penalties, 

Reporting and recordkeeping 

requirements, and Surety bonds. 

19 CFR Part 19 

Customs duties and inspection, 

Exports, Freight, Reporting and 

recordkeeping requirements, Surety 

bonds, Warehouses, Wheat. 

19 CFR Part 113 

Common carriers, Customs duties and 

inspection, Exports, Freight, 

Laboratories, Reporting and 

recordkeeping requirements, Surety 

bonds. 

19 CFR Part 122 

Common carriers, Customs duties and 

inspection, Exports, Freight, Penalties, 

Reporting and recordkeeping 

requirements, and Security measures. 

19 CFR Part 123 

Canada, Customs duties and 

inspection, Freight, International 

boundaries, Mexico, Motor carriers, 

Railroads, Reporting and recordkeeping 

requirements, Vessels. 

19 CFR Part 141 

Customs duties and inspection, 

Reporting and recordkeeping 

requirements. 

19 CFR Part 142 

Canada, Customs duties and 

inspection, Mexico, Reporting and 

recordkeeping requirements. 

19 CFR Part 143 

Customs duties and inspection, 

Reporting and recordkeeping 

requirements. 

19 CFR Part 144 

Customs duties and inspection, 

Reporting and recordkeeping 

requirements, Warehouses. 

19 CFR Part 146 

Administrative practice and 

procedure, Customs duties and 

inspection, Exports, Foreign trade 

zones, Penalties, Petroleum, Reporting 

and recordkeeping requirements. 

19 CFR Part 151 

Cigars and cigarettes, Cotton, Customs 

duties and inspection, Fruit juices, 

Laboratories, Metals, Oil imports, 

Reporting and recordkeeping 

requirements, Sugar. 

19 CFR Part 181 

Administrative practice and 

procedure, Canada, Customs duties and 

inspection, Exports, Imports, Mexico, 

Reporting and recordkeeping 

requirements, Trade agreements. 

Amendments to the Regulation 

For the reasons set forth in the 

preamble, this document amends parts 

4, 10, 18, 19, 113, 122, 123, 141, 142, 

143, 144, 146, 151, and 181 of title 19 

of the Code of Federal Regulations as set 

forth below. 

PART 4—VESSELS IN FOREIGN AND 

DOMESTIC TRADES 

■ 1. The general authority citation for 

part 4 continues to read as follows: 

Authority: 5 U.S.C. 301; 19 U.S.C. 66, 

1431, 1433, 1434, 1624, 2071 note; 46 U.S.C. 

501, 60105. 

* * * * * 

■ 2. In § 4.82, revise paragraph (b) to 

read as follows: 

§ 4.82 Touching at foreign port while in 

coastwise trade. 

* * * * * 

(b) The master must also present to 

the port director a coastwise Cargo 

Declaration in triplicate of the 

merchandise to be transported via the 

foreign port or ports to the subsequent 

ports in the United States. It must 

describe the merchandise and show the 

marks and numbers of the packages, the 

names of the shippers and consignees, 

and the destinations. The port director 

will certify the two copies and return 

them to the master. Merchandise carried 

by the vessel in bond under a 

transportation entry pursuant to part 18 

of this chapter is not to be shown on the 

coastwise Cargo Declaration. 

* * * * * 

PART 10—ARTICLES CONDITIONALLY 

FREE, SUBJECT TO A REDUCED 

RATE, ETC. 

■ 3. The general authority citation for 

part 10 continues to read as follows: 

Authority: 19 U.S.C. 66, 1202 (General 

Note 3(i), Harmonized Tariff Schedule of the 

United States (HTSUS)), 1321, 1481, 1484, 

1498, 1508, 1623, 1624, 3314. 

■ 4. In § 10.60, revise paragraphs (a), (d), 

and (f) to read as follows: 

§ 10.60 Forms of withdrawals; bond. 

(a) Withdrawals from warehouse shall 

be made on CBP Form 7501. Each 

withdrawal must contain the statement 

prescribed for withdrawals in § 144.32 

of this chapter and all of the statistical 

information as provided in § 141.61(e) 

of this chapter. Withdrawals from 

45394 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 

continuous CBP custody elsewhere than 

in a bonded warehouse must be made 

by filing an in-bond application 

pursuant to part 18 of this chapter, 

except as provided for by paragraph (h) 

of this section. When a withdrawal of 

supplies or other articles is made which 

may be used on a vessel while it is 

proceeding in ballast to another port as 

provided for by § 10.59(a)(3), a notation 

of this fact shall be made on the 

withdrawal and the name of the other 

port given if known. 

* * * * * 

(d) Except as otherwise provided in 

§ 10.62b, relating to withdrawals from 

warehouse of aircraft turbine fuel to be 

used within 30 days of such withdrawal 

as supplies on aircraft under section 

309, Tariff Act of 1930, as amended, 

when the supplies are to be laden at a 

port other than the port of withdrawal 

from warehouse, they shall be 

withdrawn for transportation in bond to 

the port of lading by filing an in-bond 

application pursuant to part 18 of this 

chapter. The procedure shall be the 

same as that prescribed in 144.37 of this 

chapter. 

* * * * * 

(f) Unless transfer is permitted under 

the provisions of paragraph (h) of this 

section, when articles are withdrawn 

from continuous Customs custody 

elsewhere than in a bonded warehouse 

for lading at the port of withdrawal, the 

procedure provided for in § 18.25 of this 

chapter shall be followed. Unless 

transfer is permitted under the 

provisions of paragraph (h) of this 

section, when articles are withdrawn 

from continuous Customs custody 

elsewhere than in a bonded warehouse 

for lading at another port, the procedure 

set forth in § 18.26 of this chapter shall 

be followed. There shall be such 

examination of the articles as may be 

necessary to satisfy the port director that 

they are subject to the privileges of 

section 309, Tariff Act of 1930, as 

amended, and that the value and 

quantity declared for them are correct. 

* * * * * 

■ 5. Revise § 10.61 to read as follows: 

§ 10.61 Withdrawal permit. 

Upon the filing of the withdrawal and 

the execution of the bond, when 

required, the port director shall issue a 

permit on CBP Form 7501 or in-bond 

application. 

PART 12—SPECIAL CLASSES OF 

MERCHANDISE 

■ 6. The general authority citation for 

part 12 continues to read as follows: 

Authority: 5 U.S.C. 301; 19 U.S.C. 66, 

1202 (General Note 3(i), Harmonized Tariff 

Schedule of the United States (HTSUS)), 

1624. 

■ 7. Revise § 12.5 to read as follows: 

§ 12.5 Shipment to other ports. 

When imported merchandise, the 

subject of § 12.1, is shipped to another 

port for reconditioning or exportation, 

such shipment must be made in the 

same manner as shipments in bond in 

accordance with the requirements of 

part 18 of this chapter. 

■ 8. In § 12.11, revise paragraph (b) to 

read as follows: 

§ 12.11 Requirements for entry and 

release. 

* * * * * 

(b) Where plant or plant products are 

shipped from the port of first arrival to 

another port or place for inspection or 

other treatment by a representative of 

the Animal and Plant Health Inspection 

Service, Plant Protection and 

Quarantine Programs and all CBP 

requirements for the release of the 

merchandise have been met, the 

merchandise must be forwarded as an 

in-bond shipment pursuant to part 18 of 

this chapter to the representative of the 

Animal and Plant Health Inspection 

Service, Plant Protection and 

Quarantine Programs at the place at 

which the inspection or other treatment 

is to take place. No further release by 

the port director will be required. 

■ 9. Revise part 18 to read as follows: 

PART 18—TRANSPORTATION IN 

BOND AND MERCHANDISE IN 

TRANSIT 

Subpart A—General Provisions 

Sec. 

18.0 Scope; definitions. 

18.1 In-bond application and entry; general 

rules. 

18.2 Carriers, cartmen, and lightermen. 

18.3 Transfers. 

18.4 Sealing conveyances, compartments, 

and containers. 

18.5 Diversion. 

18.6 Short shipments; shortages; entry and 

allowance. 

18.7 Lading for exportation; notice and 

proof of exportation; verification. 

18.8 Liability for not meeting in-bond 

requirements; liquidated damages; 

payment of taxes, duties, fees, and 

charges. 

18.9 New in-bond movement for forwarded 

or returned merchandise. 

18.10 Special manifest. 

Subpart B—Immediate Transportation 

Without Appraisement 

18.11 General rules. 

18.12 Entry at port of destination. 

Subpart C—Shipment of Baggage In-Bond 

18.13 Procedure; manifest. 

18.14 Shipment of baggage in transit to 

foreign countries. 

Subpart D—Transportation and Exportation 

18.20 General rules. 

18.21 [Reserved]. 

18.22 Procedure at port of exportation. 

18.23 Change of port of exportation or first 

foreign port; change of entry. 

18.24 Retention of goods within port limits; 

dividing of shipments. 

Subpart E—Immediate Exportation 

18.25 Direct exportation. 

18.26 Indirect exportation. 

18.27 Port marks. 

Subpart F—Merchandise Transported by 

Pipeline 

18.31 Pipeline transportation of bonded 

merchandise. 

Subpart G—Merchandise Not Otherwise 

Subject to CBP Control Exported Under 

Cover of a TIR Carnet 

18.41 Applicability. 

18.42 Direct exportation. 

18.43 Indirect exportation. 

18.44 Abandonment of exportation. 

18.45 Supervision of exportation. 

Subpart H—Importer Security Filings 

18.46 Changes to Importer Security Filing 

information. 

Authority: 5 U.S.C. 301; 19 U.S.C. 66, 

1202 (General Note 3(i), Harmonized Tariff 

Schedule of the United States), 1551, 1552, 

1553, 1623, 1624; Section 18.1 also issued 

under 19 U.S.C. 1484, 1557, 1490; Section 

18.2 also issued under 19 U.S.C. 1551a; 

Section 18.3 also issued under 19 U.S.C. 

1565; Section 18.4 also issued under 19 

U.S.C. 1322, 1323; Section 18.7 also issued 

under 19 U.S.C. 1490, 1557; 1646a; Section 

18.11 also issued under 19 U.S.C. 1484; 

Section 18.12 also issued under 19 U.S.C. 

1448, 1484, 1490; Section 18.13 also issued 

under 19 U.S.C. 1498(a); Section 18.14 also 

issued under 19 U.S.C. 1498. Section 18.25 

also issued under 19 U.S.C. 1490. Section 

18.26 also issued under 19 U.S.C. 1490. 

Section 18.31 also issued under 19 U.S.C. 

1553a. 

Subpart A—General Provisions 

§ 18.0 Scope; definitions. 

(a) Scope. Except as provided in parts 

122 (Air commerce) and 123 (CBP 

relations with Canada and Mexico) of 

this chapter, this part sets forth the 

requirements and procedures pertaining 

to the transportation of merchandise inbond, as authorized by §§ 551, 552, and 

553 of the Tariff Act of 1930, as 

amended (19 U.S.C 1551, 1552, and 

1553). 

(b) Definitions. As used in this part, 

the following terms will have the 

meanings indicated unless either the 

context in which they are used requires 

a different meaning or a different 

Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 45395 

definition is prescribed for a particular 

part or portion thereof: 

Bonded carrier. ‘‘Bonded carrier’’ 

means a carrier of merchandise whose 

bond under § 113.63 of this chapter is 

obligated for the transportation and 

delivery of merchandise. 

Common carrier. ‘‘Common carrier’’ 

means a common carrier of merchandise 

owning or operating a railroad, 

steamship, pipeline, truck line, or other 

transportation line or route. 

Origination port. ‘‘Origination port’’ is 

the U.S. port at which the transportation 

of merchandise in-bond commences. 

Port of destination. ‘‘Port of 

destination’’ is the U.S. port at which 

merchandise is delivered after being 

shipped in-bond from the origination 

port where it was entered as an 

immediate transportation entry. 

Port of diversion. ‘‘Port of diversion’’ 

is the U.S. port to which merchandise 

is diverted while in transit from the 

origination port to the port of 

destination or the port of exportation. 

Port of exportation. ‘‘Port of 

exportation’’ is the U.S. port at which 

in-bond merchandise entered for 

transportation and exportation or for 

immediate exportation is delivered for 

exportation from the United States. 

§ 18.1 In-bond application and entry; 

general rules. 

(a) General requirement. In order to 

transport merchandise in-bond 

(transport imported merchandise, 

secured by a bond, from one port to 

another prior to the appraisement of the 

merchandise and without the payment 

of duties), an in-bond application as 

described in paragraph (d) of this 

section is required. An in-bond 

application consists of a transportation 

entry and a manifest. A transportation 

entry as described in paragraph (b) of 

this section may be made for any 

imported merchandise upon its arrival 

at a port of entry, subject to the 

prohibitions and restrictions provided 

in this part. 

(b) Types of transportation entries 

and withdrawals. The following types of 

transportation entries and withdrawals 

may be made for merchandise to be 

transported in-bond: 

(1) Entry for immediate transportation 

(IT). 

(2) Warehouse withdrawal for 

immediate transportation. 

(3) Warehouse withdrawal for 

immediate exportation or for 

transportation and exportation. 

(4) Entry for transportation and 

exportation (T&E). 

(5) Entry for immediate exportation 

(IE). 

(6) Entry of vessel and aircraft 

supplies for immediate exportation (IE). 

(7) Entry of vessel and aircraft 

supplies for transportation and 

exportation (T&E). 

(c) Who may file. A transportation 

entry may be filed by: 

(1) The carrier, or authorized agent of 

the carrier, that brings the merchandise 

to the origination port; 

(2) The carrier, or authorized agent of 

the carrier, that is to accept the 

merchandise under its bond or a carnet 

for transportation to the port of 

destination or the port of exportation; or 

(3) Any person or the authorized 

agent of any person, who has a 

sufficient interest in the merchandise as 

shown by the bill of lading or manifest, 

a certificate of the importing carrier 

(such as a power of attorney or letter of 

authorization), or by any other 

document. CBP may request evidence to 

demonstrate sufficient interest. 

(d) In-bond application. An in-bond 

application consisting of a 

transportation entry and manifest must 

be transmitted to CBP via a CBPapproved EDI system as specified in 

paragraph (d)(2) of this section in order 

to transport merchandise in-bond. 

(1) Contents. Except for the other 

identifying information described in 

paragraph (d)(1)(iii) of this section 

which is optional, the in-bond 

application must contain the following 

information: 

(i) Commodity HTSUS number. The 

six-digit Harmonized Tariff Schedule of 

the United States (HTSUS) number of 

the merchandise must be provided. 

(ii) Description of merchandise 

subject to regulation by another 

government agency. Merchandise 

subject to regulation by a U.S. 

government agency other than CBP must 

contain a sufficient description of the 

merchandise to enable the agency 

concerned to determine the contents of 

the shipment. 

(iii) Other identifying information. If a 

visa, permit, license, entry number, or 

other similar number or identifying 

information has been issued by the U.S. 

Government, foreign government or 

other issuing authority, relating to the 

merchandise, the visa, permit, license, 

entry number, or other similar number 

or identifying information may be 

provided. 

(iv) Quantity. The quantity of the 

cargo laden aboard the conveyance must 

be provided. This means the quantity of 

the smallest external packing unit. 

Containers and pallets do not constitute 

acceptable information. For example, a 

container holding 10 pallets with 200 

cartons should be described as 200 

cartons. If the reported quantity is not 

correct or if it changes, the in-bond 

record must be updated or amended in 

accordance with paragraph (h) of this 

section. The updating of the quantity of 

the merchandise does not relieve the 

carrier whose bond is obligated from 

liquidated damages for any shortage. 

(v) Container number and seals. The 

container number of the container in 

which the merchandise is being 

transported and the seal number of the 

seal that seals the container (see § 18.4) 

must be provided. If the seal number is 

not known when the in-bond 

application is filed, the in-bond 

application must be updated with the 

seal number within two business days 

from the date the initial carrier takes 

possession of the sealed merchandise. 

(vi) Destination. For IT shipments, the 

port of destination in the United States 

must be provided. For T&E and IE 

shipments, the port of exportation and 

the first foreign port must be provided. 

If any of this information changes, the 

in-bond record must be updated or 

amended in accordance with paragraph 

(h) of this section. 

(2) Method of submission. The inbond application must be electronically 

transmitted to CBP via a CBP-approved 

EDI system, except as described in 

§ 18.31 relating to the in-bond 

transportation of merchandise by 

pipeline, or air (see 19 CFR part 122) or 

under a TIR carnet (see 19 CFR part 

115). In the event that EDI functionality 

is unavailable for filing an in-bond 

application, or any related in-bond 

filing, the Commissioner or his designee 

may authorize an alternative method. 

(3) Timing. The in-bond application 

may be submitted at any time prior to 

the merchandise departing the 

origination port. 

(e) Bond required. A custodial bond 

on CBP Form 301, containing the bond 

conditions set forth in § 113.63 of this 

chapter, is required in order to transport 

merchandise in-bond under the 

provisions of this part. 

(f) Movement authorization required. 

Authorization from CBP is required 

before merchandise can be transported 

in-bond. Authorization for the 

movement of merchandise will be 

transmitted by CBP via a CBP-approved 

EDI system. 

(g) Supervision—(1) Generally. When 

merchandise is delivered to a bonded 

carrier for transportation in-bond, CBP 

may, in its discretion, require that the 

merchandise be laden on the 

conveyance only under CBP 

supervision. 

(2) Merchandise delivered from 

warehouse. When merchandise is 

delivered from a warehouse to a bonded 

carrier for transportation in-bond, 

supervision of lading will be 

accomplished in accordance with the 

45396 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 

procedure set forth in § 19.6(b) of this 

chapter. 

(3) Merchandise delivered from 

foreign trade zone. When merchandise 

is delivered from a foreign trade zone to 

a bonded carrier for transportation inbond, supervision of lading will be 

accomplished in accordance with the 

procedure set forth in § 146.71(a) of this 

chapter. 

(h) Updating and amending the inbond record. The filer of the in-bond 

application or any other party named in 

paragraph (c) of this section, with 

authorization of the party whose bond is 

obligated, must update and/or amend 

the in-bond record as required under the 

provisions of this part via a CBPapproved EDI system. The in-bond 

record must be updated or amended 

within two business days of the event 

that requires updating and/or amending 

of the in-bond record. 

(i) In-transit time—(1) Maximum intransit time. Except for merchandise to 

be transported via barge, merchandise to 

be transported in-bond must be 

delivered to CBP at the port of 

destination or port of exportation within 

30 days from the date of conveyance 

arrival at the origination port (if the inbond application has been received and 

approved prior to conveyance arrival), 

or the date CBP provides movement 

authorization to the in-bond applicant, 

whichever is later. Merchandise to be 

transported via barge for all or part of 

the in-bond movement, must be 

delivered to CBP at the port of 

destination or port of exportation within 

60 days from the date of conveyance 

arrival at the origination port (if the inbond application has been received and 

approved prior to conveyance arrival), 

or the date CBP provides movement 

authorization to the in-bond applicant, 

whichever is later. If the merchandise is 

subject to examination or inspection by 

CBP or another government agency, the 

time that the merchandise is held due 

to the examination or inspection will 

not be considered part of the 30-day or 

60-day in-transit time. Neither the 

diversion to another port nor the filing 

of a new in-bond application extends 

the maximum in-transit time. Failure to 

deliver the merchandise within the 

prescribed period constitutes an 

irregular delivery. In-bond merchandise 

transported by pipeline is not subject to 

the time limits in this section. 

(2) Extension of in-transit time. The 

in-transit requirement may be extended 

by CBP upon a written request to the 

port director of the port of destination 

or port of exportation. The decision to 

extend the in-transit time period is 

within the discretion of CBP. Factors 

that may be considered, among any 

others deemed applicable by CBP, 

include extraordinary circumstances 

such as major transportation network 

disruptions, natural disasters, and other 

emergencies beyond the control of the 

party requesting the extension. 

(3) Restriction of in-transit time. CBP 

or any other government agency with 

jurisdiction over the merchandise may 

shorten the in-transit time to less than 

30 or 60 days. CBP will provide notice 

of a government-shortened in-transit 

time with the movement authorization. 

(j) Report of arrival. Within two 

business days after the arrival of any 

portion of an in-bond shipment at the 

port of destination or the port of 

exportation, CBP must be notified via a 

CBP-approved EDI system that the 

merchandise has arrived. The 

notification must include the Facilities 

Information and Resources Management 

System (FIRMS) code of the location of 

the merchandise within the port. Failure 

to report the arrival or the FIRMS code 

for the physical location of the 

merchandise transported in-bond within 

the prescribed period constitutes an 

irregular delivery. 

(k) General order merchandise; 

exportation. Any merchandise covered 

by an in-bond shipment that has arrived 

at the port of destination or the port of 

exportation must be entered, exported, 

or admitted to a foreign-trade zone 

pursuant to this part within 15 calendar 

days from the date of arrival of the 

entire in-bond shipment at the port of 

destination or port of exportation. 

Sixteen days after in-bond merchandise 

arrives in the port of destination or port 

of exportation, the merchandise will 

become subject to general order 

requirements pursuant to § 4.37, 

§ 122.50, or § 123.10 of this chapter, as 

applicable. 

(l) Special classes of merchandise— 

(1) Health, safety and conservation. CBP 

may determine that merchandise not in 

compliance with an applicable rule, 

regulation, law, standard or ban, relating 

to health, safety or conservation, will 

not be released for transportation inbond without the authorization of the 

governmental agency administering 

such rule, regulation, law, standard or 

ban. 

(2) Plants and plant products. 

Merchandise subject upon importation 

to examination, disinfection, or further 

treatment under the USDA Animal and 

Plant Health Inspection Service 

(APHIS), Plant Protection and 

Quarantine program, will only be 

released for transportation in-bond with 

the authorization of APHIS under 

regulations issued by that program. (See 

§§ 12.10 to 12.15 of this chapter). 

(3) Prohibited articles. Articles 

prohibited admission into the commerce 

of the United States may not be entered 

for transportation in-bond. Any such 

merchandise offered for entry for that 

purpose may either be denied entry or 

be seized. However, CBP may permit 

exportation or transportation and 

exportation either with authorization 

from the governmental agency having 

regulatory authority over the prohibited 

articles or in compliance with the 

regulations of such agency. 

(4) Narcotics and other drugs, 

medicines, or chemicals—(i) Narcotics. 

Narcotics prohibited admission into the 

commerce of the United States may not 

be entered for transportation in-bond 

and any such merchandise offered for 

entry for that purpose will be seized, 

except that exportation or transportation 

and exportation may be permitted with 

authorization from the Drug 

Enforcement Agency (DEA) and/or 

compliance with the regulations of the 

DEA. 

(ii) Other drugs, medicines, or 

chemicals. Articles entered for 

transportation in-bond that are 

manifested merely as drugs, medicines, 

or chemicals, without evidence to 

satisfy the port director that they are 

non-narcotic, will be detained and 

subjected, at the carrier’s risk and 

expense, to such examination as may be 

necessary to satisfy the port director that 

they are not of a narcotic character. A 

properly verified certificate of the 

shipper, specifying the items in the 

shipment and stating that they are not 

narcotic, may be accepted by the port 

director to establish the character of 

such a shipment. 

(5) Explosives. Explosives may not be 

transported in-bond unless the importer 

has first obtained a license or permit 

from the proper governmental agency. 

In such case the explosives may be 

entered for immediate transportation, 

for transportation and exportation, or for 

immediate exportation as specified by 

the approving government agency. 

Governmental agencies with regulatory 

authority over explosives include the 

Bureau of Alcohol, Tobacco, Firearms 

and Explosives (ATF), the Department 

of Transportation (DOT), and the U.S. 

Coast Guard (USCG). 

(6) Livestock. Carload shipments of 

livestock will not be entered for in-bond 

transportation unless they will arrive at 

the port of destination named in the inbond application before it becomes 

necessary to remove the seals for the 

purpose of watering and feeding the 

animals, or unless the route is such that 

the removal of the seals and the 

watering, feeding, and reloading of the 

Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 45397 

stock may be done under CBP 

supervision. 

(m) Divided shipments. After reaching 

the destination port, the port to which 

the merchandise has been diverted 

under § 18.5(a), in-bond merchandise 

may be divided into multiple shipments 

with a portion of the initial in-bond 

shipment being entered for 

consumption or warehouse, and the 

remainder shipped under a new in-bond 

application. The carrier or any of the 

parties named in paragraph (c) of this 

section must, in accordance with the 

filing requirements of this section, 

submit a new in-bond application for 

each portion of the original shipment to 

be transported in-bond. Divided 

shipments for merchandise being 

transported under cover of a carnet are 

prohibited. 

§ 18.2 Carriers, cartmen, and lightermen. 

(a) Transportation of merchandise inbond by bonded carriers—(1) Generally. 

Except as provided for in paragraph (b) 

of this section, merchandise to be 

transported from one port to another in 

the United States in-bond must be 

delivered to a common carrier, contract 

carrier, freight forwarder, or private 

carrier, each of which must be bonded 

for that purpose. Such merchandise 

delivered to a bonded common carrier, 

contract carrier, or freight forwarder 

may be transported with the use of 

facilities of other bonded or non-bonded 

carriers; however, the responsibility for 

the merchandise will remain with the 

common carrier, contract carrier, or 

freight forwarder that obligated its bond 

for that purpose. Only vessels entitled to 

engage in the coastwise trade (see § 4.80 

of this chapter) will be entitled to 

transport merchandise under this 

section. 

(2) Merchandise transported under a 

TIR carnet. Merchandise to be 

transported from one port to another in 

the United States under cover of a TIR 

carnet (see part 114 of this chapter), 

except merchandise not otherwise 

subject to CBP control, as provided in 

§§ 18.41 through 18.45, must be 

delivered to a common carrier or 

contract carrier bonded for that purpose, 

but the merchandise thereafter may be 

transported with the use of other 

bonded or non-bonded common or 

contract carriers. The TIR carnet will be 

responsible for liability incurred in the 

carriage of merchandise under the 

carnet, and the carrier’s bond will be 

responsible as provided in § 114.22(c) of 

this chapter. 

(3) Merchandise transported under an 

A.T.A. or a TECRO/AIT carnet. 

Merchandise to be transported from one 

port to another in the United States 

under cover of an A.T.A. or TECRO/AIT 

carnet (see part 114 of this chapter) 

must be delivered to a common carrier 

or contract carrier bonded for that 

purpose, but the merchandise thereafter 

may be transported with the use of other 

bonded or non-bonded common or 

contract carriers. The A.T.A. or TECRO/ 

AIT carnet will be responsible for 

liability incurred in the carriage of 

merchandise under the carnet, and the 

carrier’s bond will be responsible as 

provided in § 114.22(d) of this chapter. 

(b) Transportation of merchandise inbond between certain ports by bonded 

cartmen or lighterman. Pursuant to 

Public Resolution 108, of June 19, 1936, 

(19 U.S.C. 1551, 1551a) and subject to 

compliance with all other applicable 

provisions of this part, CBP, upon the 

request of a party named in § 18.1(c), 

may permit merchandise that has been 

entered and subject to CBP examination 

to be transported in-bond between the 

ports of New York, Newark, and Perth 

Amboy, by bonded cartmen or 

lightermen duly qualified in accordance 

with the provisions of part 112 of this 

chapter, if CBP is satisfied that the 

transportation of such merchandise in 

this manner will not endanger the 

revenue and does not pose a risk to 

health, safety or security. 

§ 18.3 Transfers. 

(a) Transfer to another conveyance. 

Merchandise being transported in-bond 

may be transferred to another 

conveyance at any time. CBP 

notification is not required. The transfer 

to one or more conveyances will not 

extend the maximum in-transit time set 

forth in § 18.1(i). 

(b) Transfer to another bonded 

carrier. Except as provided in 

§ 18.31(d)(3), when merchandise is 

transferred to a bonded carrier that 

assumes the liability for the in-bond 

shipment, a report of arrival for the 

merchandise must be filed by the 

original bonded carrier and a new inbond application must be filed by the 

subsequent bonded carrier pursuant to 

§ 18.1. 

(c) Transfer of merchandise covered 

by a TIR Carnet generally prohibited. 

Merchandise covered by a TIR carnet 

may not be transferred except in cases 

in which the unlading of the 

merchandise from a container or road 

vehicle is necessitated by casualty en 

route. In the event of transfer, a TIR 

approved container or road vehicle must 

be used if available. If the transfer takes 

place under CBP supervision, the CBP 

officer must execute a certificate of 

transfer on the appropriate TIR carnet 

voucher. 

(d) Transfer by bonded cartmen. All 

transfers to or from the conveyance or 

warehouse of merchandise being 

transported in-bond must be made 

under the provisions of part 125 of this 

chapter and at the expense of the parties 

in interest, unless the bond of the carrier 

on CBP Form 301, containing the bond 

conditions set forth in § 113.63 of this 

chapter or a TIR carnet, is liable for the 

safekeeping and delivery of the 

merchandise while it is being 

transferred. 

§ 18.4 Sealing conveyances, 

compartments, and containers. 

(a) Requirements, waiver, and TIR 

carnets—(1) Seals required. 

Conveyance, compartments, or 

containers transporting in-bond 

merchandise must be sealed and the 

seals must remain intact until the 

merchandise arrives at the port of 

destination or the port of exportation. 

The seals to be used and the method for 

sealing conveyances, compartments, or 

containers must meet the requirements 

of §§ 24.13 and 24.13a of this chapter. 

(2) Waiver. (i) CBP may waive the 

sealing of a conveyance, compartment, 

or container in which bonded 

merchandise is transported if CBP 

determines that the sealing of the 

conveyance, compartment, or container 

is unnecessary to protect the revenue or 

to prevent violations of the customs 

laws and regulations. 

(ii) Examples of situations where CBP 

may waive the waiver of the sealing 

requirement are when the conveyance, 

compartment, or container cannot be 

effectively sealed, as in the case of 

merchandise shipped in open cars or 

barges or on the decks of vessels, when 

it is known that any seals would 

necessarily be removed outside the 

jurisdiction of the United States for the 

purpose of discharging or taking on 

cargo, or when it is known that the 

breaking of the seals will be necessary 

to ventilate the hatches. 

(3) TIR carnets. The port director will 

cause a CBP seal to be affixed to a 

container or road vehicle that is being 

used to transport merchandise under 

cover of a TIR carnet unless the 

container or road vehicle bears a 

customs seal (domestic or foreign). The 

port director will likewise cause a CBP 

seal or label to be affixed to heavy or 

bulky goods being so transported. If, 

however, the port director has reason to 

believe that there is a discrepancy 

between the merchandise listed on the 

Goods Manifest of the carnet and the 

merchandise that is to be transported, 

the port director may cause a CBP seal 

or label to be affixed only when the 

45398 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 

listing of the merchandise in the carnet 

and a physical inventory agree. 

(b) Commingled merchandise—(1) 

Transported in a sealed conveyance, 

compartment, or container. 

Merchandise that is not covered by a 

bond may be transported in a sealed 

conveyance, compartment, or container 

that contains bonded merchandise if the 

merchandise is destined for the same or 

subsequent port as the bonded 

merchandise. 

(2) Transported in a conveyance, 

compartment, or container that is not 

sealed. Merchandise that is not covered 

by a bond may be transported with 

bonded merchandise in a conveyance, 

compartment, or container that is not 

sealed, if the in-bond merchandise is 

corded and sealed, or affixed with a 

warning label or tag as described in 

paragraph (b)(3) of this section. 

(3) Warning label or tag—(i) Warning 

label. The required warning label for inbond merchandise described in 

paragraph (b)(2) of this section, must be 

on bright red paper, not less than 5 by 

8 inches in size, unless the size of the 

package renders the use of a 5 by 8 inch 

warning label impracticable because of 

lack of space; then a 3 by 5 inch label 

may be used. Alternatively, a high 

visibility, permanently affixed warning 

label, whether as a continuous series in 

tape form or otherwise, but not less than 

11⁄2 by 3 inches, and not to be removed 

until the in-bond movement is 

completed, may be used on any size 

package. The warning label must 

contain the following words in black or 

white lettering of a conspicuous size: 

U.S. Customs and Border Protection 

This package is under bond and must be 

delivered intact to the CBP officer in charge 

at the port of destination or to such other 

place as authorized by CBP. 

Warning. Two years’ imprisonment, a fine, 

or both, is the penalty for unlawful removal 

of this package or any of its contents. 

(ii) Tag. When it is impossible to 

attach the warning label by pasting, a 

bright red shipping tag of convenient 

size, large enough to be conspicuous 

and containing the same legend as the 

label, shall be used in lieu of a label. 

Such tag shall be wired or otherwise 

securely fastened to the packages in 

such manner as not to damage the 

merchandise. 

(4) Merchandise transported under 

carnet. Merchandise moving under 

cover of a carnet may not be 

consolidated with other merchandise. 

(c) Removal and replacement of seals. 

If it becomes necessary at any point in 

transit to remove seals from a 

conveyance, compartment, or container 

containing bonded merchandise for the 

purpose of transferring its contents to 

another conveyance, compartment, or 

container, or to gain access to the 

shipment because of casualty or for 

other good reason, such as when 

required by law enforcement or another 

government agency, a responsible agent 

of the carrier may remove the seals, 

supervise the transfer or handling of the 

merchandise, and seal the conveyance, 

compartment, or container in which the 

shipment goes forward. Updated seal 

numbers must be transmitted to CBP 

pursuant to § 18.1(h) and general 

recordkeeping requirements under 19 

CFR part 163 apply. 

(d) Containers or road vehicles 

accepted for transport under customs 

seal; requirements. (1)(i) Containers 

covered by the Customs Convention on 

Containers. Containers covered by the 

Customs Convention on Containers will 

be accepted for transport under customs 

seal if: 

(A) Durably marked with the name 

and address of the owner, particulars of 

tare, and identification marks and 

numbers, and 

(B) Constructed and equipped as 

outlined in Annex 1 to the Customs 

Convention on Containers, as evidenced 

by an accompanying unexpired 

certificate of approval in the form 

prescribed by Annex 2 to that 

Convention or by a metal plate showing 

design type approval by a competent 

authority. 

(ii) Containers carrying merchandise 

covered by a TIR carnet. Containers 

carrying merchandise covered by a TIR 

carnet will be accepted for transport 

under customs seal if: 

(A) Durably marked with the name 

and address of the owner, particulars of 

tare, and identification marks and 

numbers, 

(B) Constructed and equipped as 

outlined in Annex 6 to the TIR 

Convention, as evidenced by an 

accompanying unexpired certificate of 

approval in the form prescribed by 

Annex 8 to that Convention, or by a 

metal plate showing design type 

approval by a competent authority, and 

(C) If the container or road vehicle 

hauling the container has affixed to it a 

rectangular plate bearing the letters 

‘‘TIR’’ in accordance with Article 31 of 

the TIR Convention. 

(2) Road vehicles carrying 

merchandise covered by a TIR carnet. 

Road vehicles carrying merchandise 

covered by a TIR carnet will be accepted 

for transport under customs seal if: 

(i) Durably marked with the name and 

address of the owner, particulars of tare, 

and identification marks and numbers, 

(ii) Constructed and equipped as 

outlined in Annex 3 to the TIR 

Convention, as evidenced by an 

accompanying unexpired certificate of 

approval in the form prescribed by 

Annex 5 to that Convention, or by a 

metal plate showing design type 

approval by a competent authority, and 

(iii) If the road vehicle has affixed to 

it a rectangular plate bearing the letters 

‘‘TIR’’ in accordance with Article 31 of 

the TIR Convention. 

(3) CBP refusal. The port director may 

refuse to accept for transport under 

customs seal a container or road vehicle 

bearing evidence of approval if, in the 

port director’s opinion, the container or 

road vehicle no longer meets the 

requirements of the applicable 

Convention. 

(4) CBP acceptance for transport. 

Containers or road vehicles that are not 

approved under the provisions of a 

Customs Convention may be accepted 

for transport under customs seal only if 

the port director at the origination port 

is satisfied that the container or road 

vehicle can be effectively sealed and no 

goods can be removed from or 

introduced into the container or road 

vehicle without obvious damage to it or 

without breaking the seal. A container 

or road vehicle so accepted shall not 

carry merchandise covered by a TIR 

carnet. 

§ 18.5 Diversion. 

(a) Procedure. In order to change the 

port of destination or the port of 

exportation of an in-bond movement, 

the filer of the in-bond application must 

submit a request to divert merchandise 

via a CBP-approved EDI system. 

Permission for the diversion and 

movement of merchandise will be 

transmitted via a CBP-approved EDI 

system. If the request to divert 

merchandise is denied, such 

merchandise must be delivered to the 

original port of destination or port of 

exportation that was named in the inbond application. The decision to grant 

or deny permission to divert 

merchandise is within the discretion of 

CBP. Denials may result from, for 

example, restrictions placed upon the 

movement of goods by government 

agencies. 

(b) In-transit time. The approval of a 

request to divert merchandise for 

transportation in-bond does not extend 

the in-transit time specified in 

§ 18.1(i)(1) of this part. The diverted 

merchandise must be delivered to the 

port of diversion within the in-transit 

time specified in § 18.1(i)(1) from the 

date CBP first authorized the in-bond 

movement, unless an extension is 

granted pursuant to § 18.1(i)(2). 

(c) Diversion of cargo subject to 

restriction, prohibition or regulation by 

Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 45399 

other federal agency or authority. 

Merchandise subject to a law, 

regulation, rule, standard or ban that 

requires permission or authorization by 

another federal agency or authority 

before importation may be restricted 

from being diverted on behalf of the 

authorizing agency. 

§ 18.6 Short shipments; shortages; entry 

and allowance. 

(a) Notification of short shipment. 

When an in-bond shipment arrives at 

the port of destination or the port of 

exportation and the cargo covered by 

the original in-bond application is short, 

the arriving carrier must notify CBP of 

the shortage when submitting the notice 

of arrival via a CBP-approved EDI 

system. 

(b) New in-bond application required. 

The carrier or any of the parties named 

in § 18.1(c) must, in accordance with the 

filing requirements of § 18.1, submit a 

new in-bond application to transport 

short shipped packages that have been 

located or recovered to the port of 

destination or port of exportation 

provided in the in-bond application. 

Reference must be made in the new inbond application to the original 

transportation entry. 

(c) Demand for redelivery; entry. 

When a shipment or a portion of a 

shipment is not delivered, or when 

delivery is to an unauthorized location 

or is delivered to the consignee without 

the permission of CBP, CBP may 

demand return (redelivery) of the 

merchandise to CBP custody. The 

demand must be made no later than 30 

days after the shortage, delivery, or 

failure to deliver is discovered by CBP. 

The demand for the redelivery of the 

merchandise to CBP custody must be 

made to the bonded carrier, cartman, or 

lighterman identified in the in-bond 

application. The demand for the 

redelivery of the merchandise will be 

made on CBP Form 4647, Notice of 

Redelivery, other appropriate form or 

letter, or by an electronic equivalent 

thereof. A copy of the demand or 

electronic equivalent thereof, with the 

date of mailing or delivery noted 

thereon, must be retained by the port 

director and made part of the in-bond 

entry record. Entry of the merchandise 

may be accepted if the merchandise can 

be recovered intact without any of the 

packages having been opened. In such 

cases, any shortage from the invoice 

quantity will be presumed to have 

occurred while the merchandise was in 

the possession of the bonded carrier. 

(d) Failure to redeliver; entry. If the 

merchandise cannot be recovered intact, 

entry will be accepted in accordance 

with § 141.4 of this chapter for the full 

manifested quantity, unless a lesser 

amount is otherwise permitted in 

accordance with subpart A of part 158. 

Except as provided in paragraph (e) of 

this section, if the merchandise is not 

returned to CBP custody within 30 days 

of the date of mailing of the demand for 

redelivery, if mailed, or within 30 days 

of the date of transmission, if 

transmitted by a method other than by 

mail, there shall be sent to the party 

whose bond is obligated on the 

transportation entry a demand for 

liquidated damages on CBP Form 5955– 

A. CBP will also seek the payment of 

duties, taxes, and fees, where 

appropriate, pursuant to § 18.8(c). 

(e) Failure to redeliver merchandise 

covered by a carnet. If merchandise 

covered by a carnet cannot be recovered 

intact as specified in paragraph (c) of 

this section, entry will not be accepted; 

there will be sent to the appropriate 

guaranteeing association a demand for 

liquidated damages, duties, and taxes as 

prescribed in § 18.8(d); and, if 

appropriate, there will also be sent to 

the initial bonded carrier a demand for 

any excess, as provided in § 114.22(e) of 

this chapter. Demands must be made on 

the forms specified in paragraph (d) of 

this section. 

(f) Allowance. An allowance in duty 

on merchandise reported short at 

destination, including merchandise 

found by the appraising officer to be 

damaged and worthless, and animals 

and birds found by the discharging 

officer to be dead on arrival at 

destination, must be made in in 

accordance with law. 

(g) Rail and seatrain. In the case of 

shipments arriving in the United States 

by rail or seatrain, which are forwarded 

under CBP in-bond seals under the 

provisions of subpart D of part 123 of 

this chapter, and § 18.11, or § 18.20, a 

notation must be made by the carrier or 

shipper in the in-bond application, to 

show whether the shipment was 

transferred to the car designated in the 

manifest and whether it was laden in 

the car in the foreign country. If laden 

on the car in a foreign country, the 

country must be identified in the 

notation. 

§ 18.7 Lading for exportation; notice and 

proof of exportation; verification. 

(a) Exportation—(1) Notice. Within 

two business days after the arrival at the 

port of exportation of any portion of an 

in-bond shipment, CBP must be notified 

via a CBP approved EDI of the arrival of 

the merchandise pursuant to § 18.1(j). 

Failure to report the arrival of bonded 

merchandise within the prescribed 

period will constitute an irregular 

delivery. 

(2) Time to export. Within 15 calendar 

days after arrival of the last portion of 

a shipment arriving at the port of 

exportation under a transportation and 

exportation entry, the entire shipment of 

merchandise must be exported. On the 

16th day the merchandise will become 

subject to general order requirements 

under § 4.37, § 122.50, or § 123.10 of 

this chapter, as applicable. 

(3) Notice and proof of exportation. 

Within two business days after 

exportation, the in-bond record must be 

updated via a CBP approved EDI system 

to reflect that the merchandise has been 

exported. The principal on any bond 

filed to guarantee exportation may be 

required by the port director to provide 

evidence of exportation in accordance 

with § 113.55 of this chapter. 

(b) Supervision. The port director will 

require such supervision of the lading 

for exportation of merchandise covered 

by an entry or withdrawal for 

exportation or for transportation and 

exportation only as is reasonably 

necessary to satisfy the port director that 

the merchandise has been laden on the 

exporting conveyance. 

(c) Verification. CBP may verify 

export entries and withdrawals against 

the records of the exporting carriers. 

Such verification may include an 

examination of the carrier’s records of 

claims and settlement of export freight 

charges and any other records that may 

relate to the transaction. The exporting 

carrier must maintain these records for 

five years from the date of exportation 

of the merchandise. 

§ 18.8 Liability for not meeting in-bond 

requirements; liquidated damages; payment 

of taxes, duties, fees, and charges. 

(a) Liability. The party whose bond is 

obligated on the transportation entry 

will be liable for breach of any of the 

requirements found in this part, any 

other regulations governing the 

movement of merchandise in bond, and 

any of the other conditions specified in 

the bond. This includes, but is not 

limited to shortages, irregular delivery, 

or non-delivery, at the port of 

destination or port of exportation of the 

merchandise transported in-bond; the 

failure to export merchandise 

transported in bond pursuant to a 

transportation and exportation or 

immediate exportation entry; and, the 

failure to maintain intact seals or the 

unauthorized removal of seals. 

Appropriate commercial or government 

documentation may be provided to CBP 

as proof of delivery and/or exportation. 

Any loss found to exist at the port of 

destination or port of exportation will 

be presumed to have occurred while the 

merchandise was in the possession of 

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the party whose bond was obligated 

under the transportation entry, unless 

conclusive evidence to the contrary is 

produced. 

(b) Liquidated damages. (1) The party 

whose bond is obligated on the 

transportation entry is liable for 

payment of liquidated damages if there 

is a failure to comply with any of the 

requirements found in this part, any 

other regulations governing the 

movement of merchandise in bond, and 

any of the other conditions specified in 

the bond. 

(2) Petition for relief. In any case in 

which liquidated damages are imposed 

in accordance with this section and CBP 

is satisfied by the evidence submitted 

with a petition for relief filed in 

accordance with the provisions of part 

172 of this chapter that any violation of 

the terms and conditions of the bond 

occurred without any intent to evade 

any law or regulation, CBP may cancel 

such claim upon the payment of any 

lesser amount or without the payment of 

any amount as may be deemed 

appropriate under the law and in view 

of the circumstances. 

(c) Taxes, duties, fees, and charges. In 

addition to the liquidated damages 

described in paragraph (b) of this 

section, the party whose bond is 

obligated on the transportation entry 

will be liable for any duties, taxes, and 

fees accruing to the United States on the 

missing merchandise, together with all 

costs, charges, and expenses, caused by 

the failure to make the required 

transportation, report, delivery, entry 

and/or exportation. The amount of 

duties, taxes, fees, and charges owed to 

the United States under this paragraph 

is not limited to the amount of the bond 

obligated on the transportation entry. 

(d) Carnets—(1) TIR carnets. (i) The 

domestic guaranteeing association will 

be jointly and severally liable with the 

initial bonded carrier for duties, taxes, 

and fees accruing to the U.S., and any 

other charges imposed, in lieu thereof, 

as the result of any shortage, irregular 

delivery, or nondelivery at the port of 

destination or port of exportation of 

merchandise covered by a TIR carnet. 

The liability of the domestic 

guaranteeing association is limited to 

$50,000 per TIR carnet for duties, taxes, 

and sums collected in lieu thereof. 

Penalties imposed as liquidated 

damages against the initial bonded 

carrier, and sums assessed against the 

guaranteeing association in lieu of 

duties and taxes for any shortage, 

irregular delivery, or nondelivery will 

be in accordance with this section. If a 

TIR carnet has not been discharged or 

has been discharged subject to a 

reservation, the guaranteeing association 

will be notified within one year of the 

date upon which the carnet is taken on 

charge, including time for receipt of the 

notification, except that if the discharge 

was obtained improperly or 

fraudulently the period will be two 

years. However, in cases that become 

the subject of legal proceedings during 

the above-mentioned period, no claim 

for payment will be made more than one 

year after the date when the decision of 

the court becomes enforceable. 

(ii) Within three months from the date 

demand for payment is made by the port 

director as provided by § 18.6(e), the 

guaranteeing association must pay the 

amount claimed, except that if the 

amount claimed exceeds the liability of 

the guaranteeing association under the 

carnet (see § 114.22(d) of this chapter), 

the carrier must pay the excess. The 

amount paid will be refunded if, within 

a period of one year from the date on 

which the claim for payment was made, 

it is established to the satisfaction of the 

Commissioner of CBP that no 

irregularity occurred. CBP may cancel 

liquidated damages assessed against the 

guaranteeing association to the extent 

authorized by paragraph (b) of this 

section. 

(2) A.T.A. or TECRO/AIT carnets. The 

domestic guaranteeing association is 

jointly and severally liable with the 

initial bonded carrier for pecuniary 

penalties, liquidated damages, duties, 

fees, and taxes accruing to the United 

States and any other charges imposed as 

the result of any shortage, irregular 

delivery, failure to comply with sealing 

requirements in this part, and any nondelivery at the port of destination or 

port of exportation of merchandise 

covered by an A.T.A. or TECRO/AIT 

carnet. However, the liability of the 

guaranteeing association must not 

exceed the amount of the import duties 

by more than 10 percent. If an A.T.A. or 

TECRO/AIT carnet is unconditionally 

discharged with respect to certain 

goods, the guaranteeing association will 

no longer be liable on the carnet with 

respect to those goods unless it is 

subsequently discovered that the 

discharge of the carnet was obtained 

fraudulently or improperly or that there 

has been a breach of the conditions of 

temporary admission or of transit. No 

claim for payment will be made more 

than one year following the date of 

expiration of the validity of the carnet. 

The guaranteeing association will be 

allowed a period of six months from the 

date of any claim by the port director in 

which to furnish proof of the 

reexportation of the goods or of any 

other proper discharge of the A.T.A. or 

TECRO/AIT carnet. If such proof is not 

furnished within the time specified, the 

guaranteeing association must either 

deposit or provisionally pay the sums. 

The deposit or payment will become 

final three months after the date of the 

deposit or payment, during which time 

the guaranteeing association may still 

furnish proof of the reexportation of the 

goods to recover the sums deposited or 

paid. 

§ 18.9 New in-bond movement for 

forwarded or returned merchandise. 

The carrier or any of the parties 

named in § 18.1(c) must, in accordance 

with the filing requirements of § 18.1, 

submit a new in-bond application in 

order to forward or return merchandise 

from the port of destination or port of 

exportation named in the original inbond application, or from the port of 

diversion, to any another port. If the 

merchandise is moving under cover of 

a carnet, the carnet may be accepted as 

a transportation entry. 

§ 18.10 Special manifest. 

(a) General. Merchandise for which 

no other type of bonded movement is 

appropriate (e.g., prematurely 

discharged or overcarried merchandise 

and other such types of movements 

whereby the normal transportation-inbond procedures are not applicable) 

may be shipped in-bond from the port 

of unlading to the port of destination, 

port of exportation or port of diversion 

where applicable, upon approval by 

CBP. 

(b) Filing requirements. The carrier or 

any of the parties named in § 18.1(c) 

may, in accordance with the filing 

requirements of § 18.1, submit an inbond application, requesting permission 

to transport merchandise described in 

paragraph (a) of this section in-bond as 

a special manifest. Authorization for the 

movement of merchandise will be 

transmitted via a CBP-approved EDI 

system. The party submitting the inbond application must identify the 

relevant merchandise and also identify 

the date and entry number of any entry 

made at the port of destination covering 

the merchandise to be returned, if 

known. For diversion of cargo, see 

§§ 4.33, 4.34, and 18.5 of this chapter. 

When no entry is identified, the port 

director may approve the shipment 

pursuant to this section. 

Subpart B—Immediate Transportation 

Without Appraisement 

§ 18.11 General rules. 

(a) Delivery outside port limits. 

Merchandise covered by an entry for 

immediate transportation, including a 

TIR carnet, or a manifest of baggage 

shipped in-bond (other than baggage to 

be forwarded in-bond to a CBP station— 

Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 45401 

see § 18.13(a)), may be delivered to a 

place outside a port of entry for 

examination and release as 

contemplated by 19 U.S.C. 1484(c), and 

in accordance with the provisions of 

§ 151.9 of this chapter. 

(b) Divided shipments. One or more 

entire packages of merchandise covered 

by an invoice from one consignor to one 

consignee may be entered for 

consumption or warehouse at the port of 

first arrival, and the remainder entered 

for immediate transportation, provided 

that all of the merchandise covered by 

the invoice is entered and a TIR carnet 

which may cover such merchandise is 

discharged as to that merchandise. 

(c) Consolidated loads and combined 

shipments. Several importations may be 

consolidated into one immediate 

transportation entry when bills of lading 

or carrier’s certificates name only one 

consignee at the port of first arrival. 

However, merchandise moving under 

cover of a TIR carnet may not be 

consolidated with other merchandise. 

(d) Textiles. Textiles and textile 

products subject to § 204, Agricultural 

Act of 1956, as amended (7 U.S.C. 1854) 

must be described in such detail as to 

enable the port director to estimate the 

duties and taxes, if any, due. The port 

director may require evidence to satisfy 

him or her of the approximate 

correctness of the value and quantity 

stated in the entry (e.g., detailed 

quantity description: 14 cartons, 2 

dozen per carton); detailed description 

of the textiles or textile products 

including type of commodity and chief 

fiber content (e.g., men’s cotton jeans or 

women’s wool sweaters); net weight of 

the textiles or textile products 

(including immediate packing but 

excluding pallet); total value of the 

textiles or textile products; 

manufacturer or supplier; country of 

origin; and name(s) and address(es) of 

the person(s) to whom the textiles and 

textile products are consigned. 

§ 18.12 Entry at port of destination. 

(a) Arrival procedures. Merchandise 

received under an immediate 

transportation entry at the port of 

destination may be admitted to a FTZ, 

entered into a bonded warehouse, 

entered for consumption, transportation 

and exportation, immediate exportation, 

immediate transportation, or any other 

form of entry, within 15 calendar days 

from the date of arrival at the port of 

destination and is subject to all the 

conditions pertaining to merchandise 

entered at a port of first arrival. 

(b) Entry. The right to make entry at 

the port of destination will be 

determined in accordance with the 

provisions of 19 U.S.C. 1484 and the 

regulations promulgated thereunder. 

(c) Entry at subsequent ports. When a 

portion of a shipment is entered at the 

port of first arrival and the remainder of 

the shipment is entered for 

consumption or warehouse at one or 

more subsequent ports, the entry at each 

subsequent port may be made on an 

extract of the invoice as provided for in 

§ 141.84 of this chapter. 

(d) General order merchandise. All 

merchandise included in an immediate 

transportation entry not entered 

pursuant to § 18.12(a) within 15 

calendar days from the date of arrival at 

the port of destination will become 

subject on the 16th day to general order 

requirements pursuant to § 4.37, 

§ 122.50, or § 123.10 of this chapter, as 

applicable. 

Subpart C—Shipment of Baggage InBond 

§ 18.13 Procedure; manifest. 

(a) In-bond application required. 

Baggage may be forwarded in-bond to 

another port of entry, or to a Customs 

station listed in § 101.4 of this chapter 

without examination or assessment of 

duty at the port or station of first arrival 

at the request of the passenger, the 

transportation company, or the agent of 

either, by filing an in-bond application 

in accordance with the provisions of 

§ 18.1. 

(b) Coast to coast transportation. 

Baggage arriving in-bond or otherwise at 

a port on the Atlantic or Pacific coast, 

destined to a port on the opposite coast, 

may be laden under CBP supervision, 

without examination and without being 

placed in-bond, on a vessel proceeding 

to the opposite coast, provided the 

vessel will proceed to the opposite coast 

without stopping at any other port on 

the first coast. 

§ 18.14 Shipment of baggage in transit to 

foreign countries. 

The baggage of any person in transit 

through the United States from one 

foreign country to another may be 

shipped over a bonded route for 

exportation. Such baggage must be 

shipped under the regulations 

prescribed in § 18.13. See § 123.64 of 

this chapter for the regulations 

applicable to baggage shipped in transit 

through the United States between 

points in Canada or Mexico. 

Subpart D—Transportation and 

Exportation 

§ 18.20 General rules. 

(a) Classes of goods for which a 

transportation and exportation entry is 

authorized. Entry for transportation and 

exportation may be made under § 553, 

Tariff Act of 1930, as amended (19 

U.S.C. 1553), for any merchandise, 

except as provided under § 18.1(l). 

(b) Filing requirement. Transportation 

and exportation entries must be filed via 

a CBP-approved EDI system and in 

accordance with § 18.1. 

(c) Entry procedures. Except as 

provided for in subparts D, E, F and G 

of part 123 of this chapter (relating to 

merchandise in transit through the 

United States between two points in 

contiguous foreign territory), when 

merchandise is entered for 

transportation and exportation, a (TIR) 

carnet, three copies of an air waybill 

(see § 122.92 of this chapter), or the inbond application must be submitted to 

CBP (see § 18.1). The port director may 

require the carrier to provide to CBP 

additional information and 

documentation related to the delivery of 

the merchandise to the bonded carrier. 

(d) No bonded common carrier 

facilities available. Except for 

merchandise covered by a carnet (see 

§ 18.2(a)(2) and (3)), in places where no 

bonded common carrier facilities are 

reasonably available and merchandise is 

permitted to be transported otherwise 

than by a bonded common carrier, the 

port director may permit entry in 

accordance with the procedures 

outlined in this section if he or she is 

satisfied that the revenue will not be 

endangered. A bond on CBP Form 301, 

containing the bond conditions set forth 

in § 113.62 of this chapter in an amount 

equal to double the estimated duties 

that would be owed will be required 

when the port director deems such 

action necessary. The principal on any 

bond filed to guarantee exportation may 

be required by the port director to 

provide evidence of exportation in 

accordance with § 113.55 of this chapter 

within 30 days of exportation. 

(e) Electronic Export Information. 

Filing of Electronic Export Information 

(EEI) is not required for merchandise 

entered for transportation and 

exportation, provided the merchandise 

has not been entered for consumption or 

warehousing, or admitted into an FTZ. 

If the merchandise requires an export 

license, the merchandise is subject to 

the filing requirements of the licensing 

Federal agency. See 15 CFR part 30, 

subpart A. 

(f) Time to export. Any portion of an 

in-bond shipment entered for 

transportation and exportation must be 

exported within 15 calendar days from 

the date of arrival of the last portion of 

the shipment at the port of exportation, 

unless an extension has been granted by 

CBP pursuant to § 18.24. On the 16th 

day, the merchandise will become 

45402 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 

subject to general order requirements 

under § 4.37, § 122.50, or § 123.10 of 

this chapter, as applicable. 

(g) Notice of arrival and proof of 

exportation. Arrival must be reported 

within two business days after the 

arrival at the port of exportation, in 

accordance with § 18.1. Within two 

business days after exportation, the inbond record must be updated via a CBP 

approved EDI system to reflect that the 

merchandise has been exported. The 

principal on any bond filed to guarantee 

exportation may be required by the port 

director to provide evidence of 

exportation in accordance with § 113.55 

of this chapter. 

§ 18.21 [Reserved]. 

§ 18.22 Procedure at port of exportation. 

(a) Transfer of bonded merchandise to 

another conveyance. If in-bond 

merchandise must be transferred to 

another conveyance at the port of 

exportation, the procedure will be as 

prescribed in §§ 18.3 and 18.4(c). 

(b) Transfer of baggage by express 

shipment. An express consignment 

carrier that is bonded as a common 

carrier and is responsible under its bond 

for delivery to the CBP officer in charge 

of the exporting conveyance of articles 

shown to be baggage in the in-bond 

record may transfer the baggage by 

express shipment without a permit from 

the port director and without the use of 

a transfer ticket or other CBP formality 

from its terminal to the exporting 

conveyance for lading under CBP 

supervision. The in-bond record must 

be updated to reflect the name of the 

owner of the baggage or article and the 

name of the conveyance transporting the 

owner of the baggage. See § 18.1. 

§ 18.23 Change of port of exportation or 

first foreign port; change of entry. 

(a) Change of port of exportation or 

first foreign port. The carrier or any of 

the parties provided for in § 18.1(c) 

must notify CBP of a change of the port 

of exportation or first foreign port that 

was provided in the original in-bond 

application by updating the in-bond 

record via a CBP-approved EDI system 

within two business days of learning of 

the change in accordance with § 18.1(h). 

(b) Change of entry. Merchandise 

received at the anticipated port of 

exportation may, in lieu of export, be 

admitted into an FTZ, entered for 

consumption, warehouse, or any other 

form of entry, and is subject to all the 

conditions pertaining to merchandise 

entered at a port of first arrival. 

§ 18.24 Retention of goods within port 

limits; dividing of shipments. 

(a) Retention of goods within port 

limits. Upon receipt of a written request 

by the carrier or any of the parties 

provided for in § 18.1(c), the port 

director, in his or her discretion, may 

allow in-transit merchandise, including 

merchandise covered by a (TIR) carnet, 

to remain within the port limits of the 

port of exportation under CBP 

supervision without extra expense to 

the Government for a period not 

exceeding 90 days. Upon obtaining CBP 

approval, the carrier or any of the 

parties provided for in § 18.1(c) must 

submit an immediate exportation inbond application pursuant to §§ 18.1 

and 18.25 of this chapter. Upon further 

requests, additional extensions of 90 

days or less may be granted by the port 

director, but the merchandise may not 

remain in the port limits for more than 

one year from the date of arrival of the 

importing conveyance at the port of first 

arrival. Any merchandise that remains 

in the port limits without authorization 

is subject to general order requirements 

under § 4.37, § 122.50, or § 123.10 of 

this chapter, as applicable. 

(b) Divided shipments at the port of 

exportation. The dividing of an in-bond 

shipment after it has arrived at the port 

of exportation will be permitted when 

exportation in its entirety is not possible 

by reason of the different destinations to 

which portions of the shipment are 

destined, when the exporting vessel 

cannot properly accommodate the entire 

quantity, or in similar circumstances. 

The carrier or any of the parties named 

in § 18.1(c) must update the in-bond 

record with the new information 

regarding the divided shipment within 

two business days of the dividing of the 

shipment. In the case, however, of 

merchandise being transported under 

cover of a carnet, the dividing of a 

shipment is not permitted. 

Subpart E—Immediate Exportation 

§ 18.25 Direct exportation. 

(a) Merchandise—(1) General. Except 

for exportations by mail as provided for 

in subpart F of part 145 of this chapter 

(see also § 158.45 of this chapter), an inbond application must be transmitted as 

provided under § 18.1, for the following 

merchandise when it is to be directly 

exported without transportation to 

another port: 

(i) Merchandise in CBP custody for 

which no entry has been made or 

completed; 

(ii) Merchandise covered by an 

unliquidated consumption entry; or 

(iii) Merchandise that has been 

entered in good faith but is found to be 

prohibited under any law of the United 

States. 

(2) Carnets. If a TIR carnet covers the 

merchandise that is to be exported 

directly without transportation, the 

carnet will be discharged or canceled, as 

appropriate (see part 114 of this 

chapter), and an in-bond application 

must be transmitted, as provided by this 

part. If an A.T.A. carnet covers the 

merchandise that is to be exported 

directly without transportation, the 

carnet must be discharged by the 

certification of the appropriate 

transportation and reexportation 

vouchers by CBP officers as necessary. 

(b) Restriction on immediate 

exportation by truck. Trucks arriving at 

a U.S. port of entry, carrying shipments 

for which an immediate exportation 

entry is presented as the sole means of 

entry, may be denied authorization to 

proceed. The port director may require 

the truck to return to the country from 

which it came or may allow the filing 

of a new entry. 

(c) Time to export. Any portion of an 

in-bond shipment entered for immediate 

exportation pursuant to an in-bond 

entry must be exported within 15 

calendar days from the date of arrival at 

the port of exportation, unless an 

extension has been granted by CBP 

pursuant to § 18.24(a). On the 16th day, 

the merchandise will become subject to 

general order requirements under 

§§ 4.37, 122.50, or 123.10 of this 

chapter, as applicable. 

(d) Electronic Export Information. 

Filing of Electronic Export Information 

(EEI) is not required for merchandise 

entered under an Immediate Exportation 

entry provided that the merchandise has 

not been entered for consumption, for 

warehousing, or admitted to a FTZ. If 

the merchandise requires an export 

license, the merchandise is subject to 

the filing requirements of the licensing 

Federal agency. See 15 CFR part 30, 

subpart A. 

(e) Exportation without landing, 

vessels. If the merchandise is exported 

on the arriving vessel without landing, 

a representative of the vessel who has 

knowledge of the facts must certify that 

the merchandise entered for exportation 

was not discharged during the vessel’s 

stay in port. A charge will be made 

against the continuous bond on CBP 

Form 301, containing the bond 

conditions set forth in § 113.64 of this 

chapter, if on file. If a continuous bond 

is not on file, a single entry bond 

containing the bond conditions set forth 

in § 113.64 will be required. If the 

merchandise is covered by a TIR carnet, 

the carnet must not be taken on charge 

(see § 114.22(c)(2) of this chapter). 

Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 45403 

(f) Notice and proof of exportation. 

Within two business days after 

exportation of merchandise described in 

paragraph (a) of this section, the in-bond 

record must be updated via a CBPapproved EDI system to reflect that the 

merchandise has been exported. The 

principal on any bond filed to guarantee 

exportation may be required by the port 

director to provide evidence of 

exportation in accordance with § 113.55 

of this chapter within 30 days of 

exportation. 

(g) Explosives. Gunpowder and other 

explosive substances, the deposit of 

which in any public store or bonded 

warehouse is prohibited by law, may be 

entered on arrival from a foreign port for 

immediate exportation in-bond by sea, 

but must be transferred directly from the 

importing to the exporting vessel. 

(h) Transfer by express shipment. The 

transfer of articles by express shipment 

must be in accordance with the 

procedures set forth in § 18.22. 

§ 18.26 Indirect exportation. 

(a) Indirect exportation, vessels. 

Merchandise that had been intended to 

be exported without landing from an 

importing vessel in accordance with 

§ 18.25(e) may instead be transported inbond to another port for exportation and 

entered for transportation and 

exportation in accordance with the 

procedure in § 18.20, upon the 

transmission of an in-bond application 

to CBP pursuant to § 18.1, via a CBPapproved EDI system. Upon acceptance 

of the entry by CBP and acceptance of 

the merchandise by the bonded carrier, 

the bonded carrier assumes liability for 

the transportation and exportation of the 

merchandise. If the merchandise was 

prohibited entry by any Government 

agency, that fact must be noted in the 

in-bond application. 

(b) Carnets. If merchandise to be 

transported in-bond to another port for 

exportation was imported under cover 

of a TIR carnet, the carnet must be 

discharged or canceled at the port of 

importation and the merchandise 

transported under an electronic in-bond 

application (see § 18.20). If merchandise 

to be transported in-bond to another 

port for exportation was imported under 

cover of an A.T.A. carnet, the 

appropriate transit voucher will be 

accepted in lieu of an electronic in-bond 

application. One transit voucher will be 

certified by CBP officers at the port of 

importation and a second transit 

voucher, together with the reexportation 

voucher, will be certified at the port of 

exportation. 

(c) Transfer at selected port of 

exportation. If the merchandise is to be 

transferred to another conveyance after 

arrival at the port selected for 

exportation pursuant to paragraph (a) of 

this section, the procedure prescribed in 

§ 18.4(c) will be followed. The 

provisions of §§ 18.23 and 18.24 will 

also be followed in applicable cases. 

(d) Time to export. Any portion of an 

in-bond shipment entered for indirect 

exportation following an in-bond entry 

must be exported within 15 calendar 

days from the date of arrival at the port 

of exportation, unless an extension has 

been granted by CBP pursuant to 

§ 18.24(a). On the 16th day, the 

merchandise will become subject to 

general order requirements under § 4.37, 

§ 122.50, or § 123.10 of this chapter, as 

applicable. 

(e) Notice and proof of exportation. 

Within two business days after 

exportation, the in-bond record must be 

updated via a CBP-approved EDI system 

to reflect that the merchandise has been 

exported. The principal on any bond 

filed to guarantee exportation may be 

required by the port director to provide 

evidence of exportation in accordance 

with § 113.55 of this chapter within 30 

days of exportation. 

§ 18.27 Port marks. 

Port marks may be added by authority 

of the port director and under the 

supervision of a CBP officer. The 

original marks and the port marks must 

appear in all documentation or the 

electronic equivalent must appear in 

electronic records pertaining to the 

exportation. 

Subpart F—Merchandise Transported 

by Pipeline 

§ 18.31 Pipeline transportation of bonded 

merchandise. 

(a) General procedures—(1) 

Applicability. Merchandise may be 

transported by pipeline under the 

procedures in this part, as appropriate, 

and unless otherwise specifically 

provided for in this section. 

(2) In-bond application. For purposes 

of this section, the in-bond application 

will be made by submitting a CBP Form 

7512 or by electronic submission via a 

CBP-approved EDI system. 

(b) Bill of lading to account for 

merchandise. Unless CBP has 

reasonable cause to suspect fraud, CBP 

will accept a bill of lading or equivalent 

document of receipt issued by the 

pipeline operator to the shipper and 

accepted by the consignee to account for 

the quantity of merchandise transported 

by pipeline and to maintain the identity 

of the merchandise. 

(c) Procedures when pipeline is only 

carrier. When a pipeline is the only 

carrier of the in-bond merchandise and 

there is no transfer to another carrier, 

the bill of lading or equivalent 

document of receipt issued by the 

pipeline operator to the shipper must be 

submitted with the in-bond application. 

If there are no discrepancies between 

the bill of lading or equivalent 

document of receipt and the in-bond 

application for the merchandise, and 

provided that CBP has no reasonable 

cause to suspect fraud, the bill of lading 

or equivalent document of receipt will 

be accepted by CBP as establishing the 

quantity and identity of the 

merchandise transported. The pipeline 

operator is responsible for any 

discrepancies, including shortages, 

irregular deliveries, or nondeliveries at 

the port of destination or exportation 

(see § 18.8). 

(d) Procedures when there is more 

than one carrier (i.e., transfer of the 

merchandise)—(1) Pipeline as initial 

carrier. When a pipeline is the initial 

carrier of merchandise to be transported 

in-bond and the merchandise is 

transferred to another conveyance 

(either a different mode of 

transportation or a pipeline operated by 

another operator), the procedures for 

transfers in § 18.3 and paragraph (c) of 

this section must be followed, except 

that— 

(i) When the merchandise is to be 

transferred to one conveyance, a copy of 

the bill of lading or equivalent 

document issued by the pipeline 

operator to the shipper must be 

delivered to the person in charge of the 

conveyance for transmission to CBP; or 

(ii) When the merchandise is to be 

transferred to more than one 

conveyance, a copy of the bill of lading 

or equivalent document issued by the 

pipeline operator to the shipper must be 

delivered to the person in charge of each 

additional conveyance, for transmission 

to CBP. 

(2) Transfer to pipeline from initial 

carrier other than a pipeline. When 

merchandise initially transported inbond by a carrier other than a pipeline 

is transferred to a pipeline, the 

procedures in § 18.3 and paragraph (c) 

of this section must be followed, except 

that the bill of lading or other equivalent 

document of receipt issued by the 

pipeline operator to the shipper must be 

transmitted to CBP. 

(3) Initial carrier liable for 

discrepancies. In the case of either 

paragraph (d)(1) or (2) of this section, 

the initial carrier will be responsible for 

any discrepancies, including shortages, 

irregular deliveries, or nondeliveries, at 

the port of destination or failure to 

export at the port of exportation (see 

generally § 18.8). 

45404 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 

(e) Recordkeeping. The shipper, 

pipeline operator, and consignee are 

subject to the recordkeeping 

requirements in 19 U.S.C. 1508 and 

1509, as provided for in part 163 of this 

chapter. 

Subpart G—Merchandise Not 

Otherwise Subject to CBP Control 

Exported Under Cover of a TIR Carnet 

§ 18.41 Applicability. 

The provisions of §§ 18.41 through 

18.45 apply only to merchandise to be 

exported under cover of a TIR carnet for 

the convenience of the U.S. exporter or 

other party in interest and do not apply 

to merchandise otherwise required to be 

transported in bond under the 

provisions of this chapter. Merchandise 

to be exported under cover of a TIR 

carnet for the convenience of the U.S. 

exporter or other party in interest may 

be transported with the use of the 

facilities of either bonded or nonbonded carriers. 

§ 18.42 Direct exportation. 

At the port of exportation, the 

container or road vehicle, the 

merchandise, and the TIR carnet shall 

be made available to the port director. 

Any required Electronic Export 

Information (EEI) shall be filed in 

accordance with the applicable 

regulations of the Bureau of the Census 

(15 CFR part 30). The port director shall 

examine the merchandise to the extent 

he believes necessary to determine that 

the carnet has been properly completed 

and shall verify that the container or 

road vehicle has the necessary 

certificate of approval or approval plate 

intact and is in satisfactory condition. 

After completion of any required 

examination and supervision of loading, 

the port director will seal the container 

or road vehicle with customs seals and 

ascertain that the TIR plates are 

properly affixed and sealed. See 

§ 18.4(d). In the case of heavy or bulky 

goods moving under cover of a TIR 

carnet, the port director shall cause a 

customs seal or label, as appropriate, to 

be affixed. He shall also remove two 

vouchers from the carnet, execute the 

appropriate counterfoils, and return the 

carnet to the carrier or agent to 

accompany the merchandise. 

§ 18.43 Indirect exportation. 

(a) Filing of Electronic Export 

Information. When merchandise is to 

move from one U.S. port to another for 

actual exportation at the second port, 

any Electronic Export Information (EEI) 

required to be validated shall be filed in 

accordance with the procedures 

described in the applicable regulations 

of the Bureau of the Census (15 CFR part 

30). 

(b) Origination port procedure. The 

port director shall follow the procedure 

provided in § 18.42 in respect to 

examination of the merchandise, 

supervision of loading, sealing or 

labeling, and affixing of TIR plates. The 

port director will remove one voucher 

from the carnet, execute the appropriate 

counterfoil, and return the carnet to the 

carrier or agent to accompany the 

container or road vehicle to the port of 

actual exportation. 

(c) Port of exportation procedure. At 

the port of actual exportation, the carnet 

and the container (or heavy or bulky 

goods) or road vehicle shall be 

presented to the port director who shall 

verify that seals or labels are intact and 

that there is no evidence of tampering. 

After verification, the port director shall 

remove the appropriate voucher from 

the carnet, execute the counterfoil, and 

return the carnet to the carrier or agent. 

§ 18.44 Abandonment of exportation. 

In the event that exportation is 

abandoned at any time after 

merchandise has been placed under 

cover of a TIR carnet, the carrier or 

agent shall deliver the carnet to the 

nearest CBP office or to the CBP office 

at the origination port for cancellation 

(see § 114.26(c) of this chapter). When 

the carnet has been canceled, the carrier 

or agent may remove customs seals or 

labels and unload the container (or 

heavy or bulky goods) or road vehicle 

without customs supervision. 

§ 18.45 Supervision of exportation. 

The provisions of §§ 18.41 through 

18.44 do not require the director of the 

port of actual exportation to verify that 

merchandise moving under cover of a 

TIR carnet is loaded on board the 

exporting carrier. 

Subpart H—Importer Security Filings 

§ 18.46 Changes to Importer Security 

Filing information. 

For merchandise transported in bond, 

which at the time of transmission of the 

Importer Security Filing as required by 

§ 149.2 of this chapter is intended to be 

entered as an immediate exportation (IE) 

or transportation and exportation (T&E) 

shipment, permission from the port 

director of the origination port is needed 

to change the in-bond entry into a 

consumption entry. Such permission 

will only be granted upon receipt by 

CBP of a complete Importer Security 

Filing as required by part 149 of this 

chapter. 

PART 19—CUSTOMS WAREHOUSES, 

CONTAINER STATIONS AND 

CONTROL OF MERCHANDISE 

THEREIN 

■ 10. The general authority for part 19 

continues to read as follows: 

Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1202 

(General Note 3(i), Harmonized Tariff 

Schedule of the United States), 1624. 

* * * * * 

■ 11. In § 19.15, revise paragraphs (f) 

and (g)(1) to read as follows: 

§ 19.15 Withdrawal for exportation of 

articles manufactured in bond; waste or 

byproducts for consumption. 

* * * * * 

(f) The general procedure covering 

warehouse withdrawals for exportation 

must be followed in the case of articles 

withdrawn for exportation from a 

bonded manufacturing warehouse. 

(g)(1) Articles may be withdrawn for 

transportation and delivery to a bonded 

storage warehouse at an exterior port 

under the provisions of section 311, 

Tariff Act of 1930, as amended (19 

U.S.C. 1311), for the sole purpose of 

immediate exportation, except for 

distilled spirits which may be 

withdrawn under the provisions of 

§ 311 for transportation and delivery to 

any bonded storage warehouse for the 

sole purpose of immediate exportation 

or may be withdrawn pursuant to 

section 309(a) of the Tariff Act of 1930, 

as amended (19 U.S.C. 1309(a)). To 

make a withdrawal an in-bond 

application must be filed (see part 18 of 

this chapter), as provided for in § 144.36 

of this chapter. A rewarehouse entry 

shall be made in accordance with 

§ 144.34(b) of this chapter, supported by 

a bond on CBP Form 301, containing the 

bond conditions set forth in § 113.63 of 

this chapter. 

* * * * * 

PART 113—CBP BONDS 

■ 12. The general authority for part 113 

continues to read as follows: 

Authority: 19 U.S.C. 66, 1623, 1624. 

* * * * * 

■ 13. In § 113.63, revise paragraph (c)(1) 

to read as follows: 

§ 113.63 Basic custodial bond conditions. 

* * * * * 

(c) * * * 

(1) If a bonded carrier, to report inbond arrivals and exportations in the 

manner and in the time prescribed by 

regulation and to export in-bond 

merchandise in the time periods 

prescribed by regulation. 

* * * * * 

Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 45405 

PART 122—AIR COMMERCE 

REGULATIONS 

14. The general authority for part 122 

continues to read as follows: 

Authority: 5 U.S.C. 301; 19 U.S.C. 58b, 66, 

1431, 1433, 1436, 1448, 1459, 1590, 1594, 

1623, 1624, 1644, 1644a, 2071 note. 

■ 15. In § 122.92, revise paragraph (g) to 

read as follows: 

§ 122.92 Procedure at port of origin. 

* * * * * 

(g) Warning labels. The carrier shall 

supply and attach the warning label, as 

described in § 18.4(b)(3) of this chapter, 

to each bonded package. 

■ 16. In § 122.118, revise paragraph (b) 

to read as follows: 

§ 122.118 Exportation from port of arrival. 

* * * * * 

(b) Time. Transit air cargo must be 

exported from the port of arrival within 

15 days from the date the exporting 

airline receives the cargo. After the 15- 

day period, the individual cargo 

shipments must be made the subject of 

individual entries, as appropriate. 

* * * * * 

■ 17. In § 122.119, revise paragraph (b) 

to read as follows: 

§ 122.119 Transportation to another U.S. 

port. 

* * * * * 

(b) Time. Transit air cargo traveling to 

a final port of destination in the U.S. 

shall be delivered to Customs at its 

destination within 30 days from the date 

the receiving airline gives the receipt for 

the cargo at the port of arrival. 

* * * * * 

■ 18. In § 122.120, revise paragraphs (c) 

and (k) to read as follows: 

§ 122.120 Transportation to another port 

for exportation. 

* * * * * 

(c) Time. Transit air cargo covered by 

this section shall be delivered to CBP at 

the port of exportation within 30 days 

from the date of receipt by the 

forwarding airline. 

* * * * * 

(k) Failure to deliver. If all or part of 

the cargo listed on the transit air cargo 

manifest is not accounted for with an 

exportation copy within 45 days, the 

director of the port of arrival shall take 

action as provided in § 122.119(d). 

PART 123—CBP RELATIONS WITH 

CANADA AND MEXICO 

■ 19. The general authority 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)), 1431, 1433, 1436, 

1448, 1624, 2071 note. 

* * * * * 

■ 20. In § 123.31, revise paragraph (b) to 

read as follows: 

§ 123.31 Merchandise in transit. 

* * * * * 

(b) From one point in a contiguous 

country to another through the United 

States. Merchandise may be transported 

from point to point in Canada or in 

Mexico through the United States in 

bond in accordance with the procedures 

set forth in §§ 18.1 and 18.20 through 

18.24 of this chapter except where those 

procedures are modified by this subpart 

or subparts E for trucks transiting the 

United States, F for commercial 

traveler’s samples, or G for baggage. 

■ 21. Revise § 123.32 to read as follows: 

§ 123.32 In-bond application. 

An in-bond application must be 

submitted pursuant to part 18 of this 

chapter upon arrival of merchandise 

which is to proceed under the 

provisions of this subpart. 

§ 123.34 [Removed and Reserved]. 

■ 22. Remove and reserve § 123.34. 

■ 23. In § 123.42, revise the paragraph 

(c) heading and paragraphs (c)(1) and (d) 

introductory text, to read as follows: 

§ 123.42 Truck shipments transiting the 

United States. 

* * * * * 

(c) Procedure at U.S. port of arrival— 

(1) Filing of in-bond application. An inbond application must be filed pursuant 

to § 18.1 of this chapter prior to or upon 

arrival at a U.S. port. At CBP’s 

discretion the driver may be required to 

present four validated copies of the 

United States-Canada Transit Manifest, 

CBP Form 7512–B Canada 81⁄2, to the 

CBP officer, who will review the 

manifest for accuracy and verify its 

validation by Canadian Customs. If the 

manifest is found not to be validated 

properly, the truck will be required to 

be returned to the Canadian port of 

departure so that the manifest may be 

validated in accordance with Canadian 

Customs regulations. If the manifest is 

validated properly and no irregularity is 

found, the truck will be sealed unless 

sealing is waived by CBP. The CBP 

officer will note in the in-bond record 

and, if paper, on the manifest, the seal 

numbers or the waiver of sealing, retain 

the original, and return three copies of 

the manifest to the driver for 

presentation to CBP at the U.S. port of 

exportation. 

* * * * * 

(d) Procedure at U.S. port of 

exportation. The arrival of the in-bond 

shipment at the port of exportation must 

be reported to CBP in accordance with 

§ 18.1 of this chapter. 

* * * * * 

■ 24. In § 123.52, revise paragraph (a) to 

read as follows: 

§ 123.52 Commercial samples transported 

by automobile through the United States 

between ports in Canada. 

(a) General provisions. A commercial 

traveler arriving from Canada may be 

permitted to transport effectively corded 

and sealed samples in his automobile 

without further sealing in the United 

States, upon compliance with this 

section and subject to the conditions of 

§ 18.20(d) of this chapter, since customs 

bonded carriers as described in § 18.2 of 

this chapter are not considered to be 

reasonably available. Samples having a 

total value of not more than $200 may 

be carried by a nonresident commercial 

traveler through the United States 

without cording and sealing and 

without an in-transit manifest in 

accordance with § 148.41 of this 

chapter. 

* * * * * 

■ 25. In § 123.64, revise paragraph (a) to 

read as follows: 

§ 123.64 Baggage in transit through the 

United States between ports in Canada or 

in Mexico. 

(a) Procedure. Baggage in transit from 

point to point in Canada or Mexico 

through the United States may be 

transported in-bond through the United 

States in accordance with the 

procedures set forth in §§ 18.1, 18.13, 

18.14, and 18.20 through 18.24 of this 

chapter except where those procedures 

are modified by this section. 

* * * * * 

PART 141—ENTRY OF MERCHANDISE 

■ 26. The general authority for part 141 

continues to read as follows: 

Authority: 19 U.S.C. 66, 1414, 1448, 1484, 

1624. 

■ 27. In § 141.61, revise paragraph 

(e)(1)(i)(A) to read as follows: 

§ 141.61 Completion of entry and entry 

summary documentation. 

* * * * * 

(e) Statistical information—(1) 

Information required on entry summary 

or withdrawal form—(i) Where form 

provides space—(A) Single invoice. For 

each class or kind of merchandise 

subject to a separate statistical reporting 

number, the applicable information 

required by the General Statistical 

Notes, Harmonized Tariff Schedule of 

the United States (HTSUS), must be 

shown on the entry summary, CBP Form 

45406 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 

7501. The applicable information must 

also be shown on the in-bond 

application filed pursuant to part 18 of 

this chapter when it is used to 

document an incoming vessel shipment 

proceeding to a third country pursuant 

to an entry for transportation and 

exportation, or immediate exportation. 

* * * * * 

PART 142—ENTRY PROCESS 

■ 28. The general authority for part 142 

continues to read as follows: 

Authority: 19 U.S.C. 66, 1448, 1484, 1624. 

■ 29. In § 142.18, revise paragraphs 

(a)(1) and (2) to read as follows: 

§ 142.18 Entry summary not required for 

prohibited merchandise. 

(a) * * * 

(1) An entry for exportation filed 

using an in-bond application pursuant 

to part 18 of this chapter, or an 

application to destroy the merchandise 

under CBP supervision is made within 

10 days after the time of entry, and the 

exportation or destruction is 

accomplished promptly, or 

(2) An entry for transportation and 

exportation, filed using an in-bond 

application pursuant to part 18 of this 

chapter, is made within 10 days after 

the time of entry and domestic carriage 

of the merchandise does not conflict 

with the requirements of another 

Federal agency. 

* * * * * 

■ 30. In § 142.28, revise paragraph (a)(2) 

to read as follows: 

§ 142.28 Withdrawal or entry summary not 

required for prohibited merchandise. 

(a) * * * 

(2) An entry for exportation or for 

transportation and exportation filed 

using an in-bond application pursuant 

to part 18 of this chapter, or an 

application to destroy the merchandise, 

is made within the specified time limit, 

and the exportation or destruction is 

accomplished promptly. 

* * * * * 

PART 143—SPECIAL ENTRY 

PROCEDURES 

■ 31. The general authority for part 143 

continues to read as follows: 

Authority: 19 U.S.C. 66, 1414, 1481, 1484, 

1498, 1624, 1641. 

■ 32. In § 143.1, revise paragraph (c) to 

read as follows: 

§ 143.1 Eligibility. 

* * * * * 

(c) Participants for other purposes. 

Upon approval by CBP, any party may 

participate in ABI for other purposes, 

including transmission of protests, filing 

of in-bond applications, and 

applications for FTZ admission (CBP 

Form 214). 

PART 144—WAREHOUSE AND 

REWAREHOUSE ENTRIES AND 

WITHDRAWALS 

■ 33. The general authority for part 144 

continues to read as follows: 

Authority: 19 U.S.C. 66, 1484, 1557, 1559, 

1624. 

* * * * * 

■ 34. In § 144.22, revise paragraph (b) to 

read as follows: 

§ 144.22 Endorsement of transfer on 

withdrawal form. 

* * * * * 

(b) In-bond application filed pursuant 

to part 18 of this chapter, for 

merchandise to be withdrawn for 

transportation, exportation, or 

transportation and exportation. 

■ 35. In § 144.36, revise paragraphs (c), 

(d) introductory text, (f), and (g)(4) to 

read as follows: 

§ 144.36 Withdrawal for transportation. 

* * * * * 

(c) Form. (1) A withdrawal for 

transportation shall be filed by 

submitting an in-bond application 

pursuant to part 18 of this chapter. 

(2) Separate withdrawals for 

transportation from a single warehouse, 

via a single conveyance, consigned to 

the same consignee, and deposited into 

a single warehouse, can be filed using 

one in-bond application, under one 

control number, provided that the 

information for each withdrawal, as 

required in paragraph (d) of this section 

is provided in the in-bond application 

for certification by CBP. With the 

exception of alcohol and tobacco 

products, this procedure will not be 

allowed for merchandise that is in any 

way restricted (for example, quota/visa). 

(3) The requirement that an in-bond 

application be filed and the information 

required in paragraph (d) of this section 

be shown will not be required if the 

merchandise qualifies under the 

exemption in § 144.34(c). 

(d) Information required. In addition 

to the statement of quantity required by 

§ 144.32, the following information for 

the merchandise being withdrawn must 

be provided in the in-bond application: 

* * * * * 

(f) Forwarding procedure. The 

merchandise must be forwarded in 

accordance with the general provisions 

for transportation in bond (§§ 18.1 

through 18.9 of this chapter). However, 

when the alternate procedures for 

transfers between integrated bonded 

warehouses under § 144.34(c) are 

employed, the merchandise need not be 

delivered to a bonded carrier for 

transportation, and an entry for 

transportation and a rewarehouse entry 

will not be required. 

(g) * * * 

(4) Forwarded to another port or 

returned to the origination port in 

accordance with §§ 18.5(c) or 18.9 of 

this chapter; 

* * * * * 

■ 36. In § 144.37, revise paragraphs (a) 

and (b) to read as follows: 

§ 144.37 Withdrawal for exportation. 

(a) Form. A withdrawal for either 

direct or indirect exportation must be 

filed by submitting an in-bond 

application pursuant to part 18 of this 

chapter or on CBP Form 7501 in 3 

copies for merchandise being exported 

under cover of a TIR carnet. The inbond application or CBP Form 7501 

must contain all of the statistical 

information as provided in § 141.61(e) 

of this chapter. The port director may 

require an extra copy or copies of CBP 

Form 7501 for use in connection with 

the delivery of merchandise to the 

carrier. 

(b) Procedure for indirect 

exportation—(1) Forwarding. 

Merchandise withdrawn for indirect 

exportation (transportation and 

exportation) must be forwarded to the 

port of exportation in accordance with 

the general provisions for transportation 

in bond (part 18 of this chapter). 

(2) Dividing of shipments. The 

dividing up for exportation of 

shipments arriving under warehouse 

withdrawals for indirect exportation 

will be permitted only when various 

portions of a shipment are destined to 

different destinations, when the export 

vessel cannot properly accommodate 

the entire quantity, or in other similar 

circumstances. In the case of 

merchandise moving under cover of a 

TIR carnet, if the merchandise is not to 

be exported or if the shipment is to be 

divided, appropriate entry will be 

required and the carnet discharged. The 

provisions of §§ 18.23 and 18.24 of this 

chapter concerning change of 

destination or retention of merchandise 

on the dock must also be followed in 

applicable cases. 

* * * * * 

PART 146—FOREIGN TRADE ZONES 

■ 37. The general authority for part 146 

continues to read as follows: 

Authority: 19 U.S.C. 66, 81a–81u, 1202 

(General Note 3(i), Harmonized Tariff 

Schedule of the United States), 1623, 1624. 

Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 45407 

■ 38. In § 146.62, revise paragraphs (a) 

and (b)(2) to read as follows: 

§ 146.62 Entry. 

(a) General. Entry for foreign 

merchandise that is to be transferred 

from a zone, or removed from a zone for 

exportation or transportation to another 

port, for consumption or warehouse, 

will be made by filing an in-bond 

application pursuant to part 18 of this 

chapter, CBP Form 3461, CBP Form 

7501, or other applicable CBP forms. If 

entry is made on CBP Form 3461, the 

person making entry shall file an entry 

summary for all the merchandise 

covered by the CBP Form 3461 within 

10 business days after the time of entry. 

(b) * * * 

(2) An in-bond application for 

merchandise to be transferred to another 

port or zone or for exportation must 

provide that the merchandise covered is 

foreign trade zone merchandise; give the 

number of the zone from which the 

merchandise was transferred; state the 

status of the merchandise; and, if 

applicable, bear the notation or 

endorsement provided for in § 146.64(c), 

§ 146.66(b), or § 146.70(c). 

* * * * * 

■ 39. In § 146.66, revise paragraphs (a) 

and (b) and remove the words ‘‘Customs 

Form’’ and add in their place the words 

‘‘CBP Form’’ wherever they appear in 

paragraphs (c)(1) and (2) and (d). 

The revisions read as follows: 

§ 146.66 Transfer of merchandise from one 

zone to another. 

(a) At the same port. A transfer of 

merchandise to another zone with a 

different operator at the same port 

(including a consolidated port) must be 

made by a licensed cartman or a bonded 

carrier as provided for in § 112.2(b) of 

this chapter or by the operator of the 

zone for which the merchandise is 

destined under an entry for immediate 

transportation filed via an in-bond 

application pursuant to part 18 of this 

chapter or other appropriate form with 

a CBP Form 214 filed at the destination 

zone. A transfer of merchandise 

between zone sites at the same port 

having the same operator may be made 

under a permit on CBP Form 6043 or 

under a local control system approved 

by the port director wherein any loss of 

merchandise between sites will be 

treated as if the loss occurred in the 

zone. 

(b) At a different port. A transfer of 

merchandise from a zone at one port of 

entry to a zone at another port must be 

made by bonded carrier under an entry 

for immediate transportation filed via an 

in-bond application pursuant to part 18 

of this chapter. All copies of the entry 

must bear a notation that the 

merchandise is being transferred to 

another zone designated by its number. 

* * * * * 

■ 40. In § 146.67, revise paragraphs (b) 

and (c) to read as follows: 

§ 146.67 Transfer of merchandise for 

exportation. 

* * * * * 

(b) Immediate exportation. Each 

transfer of merchandise to the customs 

territory for exportation at the port 

where the zone is located will be made 

under an entry for immediate 

exportation filed in an in-bond 

application pursuant to part 18 of this 

chapter. The person making entry must 

furnish an export bond on CBP Form 

301 containing the bond conditions 

provided for in § 113.63 of this chapter. 

(c) Transportation and exportation. 

Each transfer of merchandise to the 

customs territory for transportation to 

and exportation from a different port 

will be made under an entry for 

transportation and exportation in an inbond application pursuant to part 18 of 

this chapter. The bonded carrier will be 

responsible for exportation of the 

merchandise in accordance with § 18.26 

of this chapter. 

* * * * * 

■ 41. Revise § 146.68 to read as follows: 

§ 146.68 Transfer for transportation or 

exportation; estimated production. 

(a) Weekly permit. The port director 

may allow the person making entry for 

merchandise provided for in § 146.63(c) 

to file an application for a weekly 

permit to enter and release merchandise 

during a calendar week for exportation, 

transportation, or transportation and 

exportation. The application will be 

made by filing an in-bond application 

pursuant to part 18 of this chapter. The 

in-bond application must provide 

invoice or schedule information like 

that required in § 146.63(c)(1). If actual 

transfers will exceed the estimate for the 

week, the person with the right to make 

entry must file a supplemental in-bond 

application to cover the additional 

merchandise to be transferred from the 

subzone or zone site. No merchandise 

covered by the weekly permit may be 

transferred from the zone before 

approval of the application by the port 

director. 

(b) Individual entries. After approval 

of the application for a weekly permit 

by the port director, the person making 

entry will be authorized to file 

individual in-bond applications for 

exportation, transportation, or 

transportation and exportation of the 

merchandise covered by permit. Upon 

transfer of the merchandise, the carrier 

must update the in-bond record via a 

CBP-approved EDI system to ensure its 

assumption of liability under the 

carrier’s or cartman’s bond. CBP will 

consider the time of entry to be when 

the removing carrier updates the inbond record. 

(c) Statement of merchandise entered. 

The person making entry for 

merchandise under an approved weekly 

permit must file with the port director, 

by the close of business on the second 

business day of the week following the 

week designated on the permit, a 

statement of the merchandise entered 

under that permit. The statement must 

list each in-bond application by its 

unique IT number, and must provide a 

reconciliation of the quantities on the 

weekly permit with the manifested 

quantities on the individual in-bond 

applications submitted to CBP, as well 

as an explanation of any discrepancy. 

PART 151—EXAMINATION, 

SAMPLING, AND TESTING OF 

MERCHANDISE 

■ 42. The general authority for part 151 

continues to read as follows: 

Authority: 19 U.S.C. 66, 1202 (General 

Note 3(i) and (j), Harmonized Tariff Schedule 

of the United States (HTSUS)), 1624. 

* * * * * 

■ 43. Revise § 151.9 to read as follows: 

§ 151.9 Immediate transportation entry 

delivered outside port limits. 

When merchandise covered by an 

immediate transportation entry has been 

authorized by the port director to be 

delivered to a place outside a port of 

entry as provided for in § 18.11(a) of this 

chapter, the provisions of § 151.7 must 

be complied with to the same extent as 

if the merchandise had been delivered 

to the port of entry, and then authorized 

to be examined elsewhere than at the 

public stores, wharf, or other place 

under the control of CBP. 

PART 181—NORTH AMERICAN FREE 

TRADE AGREEMENT 

■ 44. The general authority for part 181 

continues to read as follows: 

Authority: 19 U.S.C. 66, 1202 (General 

Note 3(i), Harmonized Tariff Schedule of the 

United States), 1624, 3314. 

* * * * * 

§ 181.47 [Amended]. 

■ 45. In § 181.47, amend paragraph 

(b)(2)(ii)(E) by removing the words ‘‘CBP 

7512’’ and adding in their place the 

45408 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Rules and Regulations 

words ‘‘In-bond application submitted 

pursuant to part 18 of this chapter’’. 

Kevin K. McAleenan, 

Acting Commissioner. 

Approved: September 20, 2017. 

Timothy E. Skud, 

Deputy Assistant Secretary of the Treasury. 

[FR Doc. 2017–20495 Filed 9–27–17; 8:45 am] 

BILLING CODE 9111–14–P