REGULATORY UPDATE Fall 2013
emanifest emanifest is a transformational initiative that will modernize and improve cross-border commercial processes. When fully implemented, emanifest will require carriers, freight forwarders and importers in all modes of transportation (air, marine, highway and rail) to electronically transmit advance commercial information to the Canada Border Services Agency (CBSA) within prescribed mode-specific time frames. PAGE 2
emanifest General Requirements With the implementation of emanifest, rail carriers transporting goods into Canada are required to transmit cargo and conveyance data electronically to the CBSA prior to arrival. The cargo and conveyance data must be received and validated by the CBSA a minimum of two hours before the conveyance arrives at the border. To advise the CBSA that the train has physically arrived in Canada, the carrier operating the conveyance must transmit an electronic Conveyance Arrival Certification message. This message must be sent without delay after arrival in Canada, once the train crosses the border at the 49 th parallel. Implementation Timeline The CBSA deployed EDI systems for rail carriers to transmit advance cargo, conveyance and conveyance arrival data in May 2012. Regulations to enforce emanifest requirements for rail carriers are expected to be in place in fall 2013. The CBSA anticipates being able to provide carriers as much as 45 days advance notice of the mandatory compliance date. Once regulations are in place, non-compliant carriers could be subject to penalties. PAGE 3
REQUIREMENTS FOR RAIL CARRIERS Transmission Options Rail carriers must transmit data to the CBSA using EDI methods only. They cannot use the emanifest Portal. Carriers and their service providers must apply to become EDI clients and undergo acceptance testing. The application form is available in Appendix C of the Electronic Commerce Client Requirements Document (ECCRD) Chapter 3: ACI/eManifest Rail. Data Requirements for Rail Carriers emanifest data requirements, business rules and technical user information for transmitting, changing, deleting and amending information are provided in the Electronic Commerce Client Requirements Document (ECCRD) Chapter 3: ACI/eManifest Rail. To request a copy, contact the CBSA s Electronic Commerce Unit (ECU). Carriers and service providers must apply to become an EDI client. The application form is available in Appendix C of the ECCRD Chapter 3: ACI/eManifest Rail. Carriers and/or their service providers must also undergo acceptance testing with the CBSA s ECU which can take a minimum of two to three months to complete. Detailed information on transmitting a Conveyance Arrival Certification message is available in the ACI/eManifest Non-Highway Conveyance Arrival Certification Message Implementation Guide. A copy can be requested by contacting the ECU. PAGE 4
Instruments of International Trade (IIT) Highway and Rail Modes Instruments of International Trade (IIT) Highway and Rail Modes Instruments of International Trade (IIT), also known as Ottawa file and Container Banks, are listed as an exception to the transmission of advance cargo data in the mode-specific chapters of the Electronic Commerce Client Requirements Document (ECCRD) for highway and rail carriers. Advance conveyance data is required, as is cargo data for non-excepted cargo. Ottawa file and Container Banks are empty shipper or importer-owned containers registered under Ottawa file or with container bank numbers, which are used to transport commercial goods to and from Canada. Although carriers are familiar with such equipment, the determination of whether a good qualifies as an IIT and the classification of IITs are the responsibility of the importer/broker, and must be reported and accounted for at the time of arrival in Canada and in accordance with existing requirements. In addition to including the IIT indicator in the Electronic Data Interchange (EDI) conveyance map or emanifest Portal field, the carrier is required to verbally report the IIT to the Canada Border Services Agency officer at the time of arrival. The carrier may choose to present a paper A8A Cargo Control Document for those goods. Carriers should use the following general descriptions of qualified IITs entering Canada, empty, on a commercial conveyance, to determine whether an IIT indicator is required when transmitting advance conveyance data: shipping tanks pallets bins boxes cartons crates load locks/spacers racks trays totes PAGE 5
INWARD CONVEYANCE REPORT Rail carriers general requirements With the implementation of emanifest, rail carriers transporting goods into Canada are required to transmit cargo and conveyance data electronically to the CBSA prior to arrival. The cargo and conveyance data must be received and validated by the CBSA a minimum of two hours before the shipment arrives at the border. On arrival at the border, rail carriers are also required to transmit a Conveyance Arrival Certification message to the CBSA. Conveyance Report Inward Rail carriers must report conveyance and cargo to the CBSA when they arrive at the border. If there is no CBSA office at that point, carriers must report to the nearest CBSA office along the route. The rail carrier has to present or transmit by electronic data interchange (EDI) to the CBSA, a form A 1, Train Report Inward. Alternatively and with prior permission of Import Programs Management Unit, the carrier can provide the internal train consist sheet. The conveyance report must show each car's initials and numbers, whether the cars are local or through (in-transit), or loaded or empty. For enforcement purposes, the CBSA will selectively do train checks when a freight train arrives. If, during a train check, CBSA discovers false information or if a car on the train is not shown on the report, the carrier is liable to penalty action. However, if the railway voluntarily reveals a discrepancy before the train check, CBSA will not apply a penalty. If CBSA has to unload or move a load to examine it, the moving will be done by and at the expense of the carrier. PAGE 6
Cargo Reporting and Control Procedures Cargo Reporting and Control Procedures For Non-EDI Rail Carriers At the point of importation, the railway agent must provide CBSA with a cargo control document for each shipment. CBSA will compare the cargo control documents to form A 1, Train Report Inward, to ensure that there is a cargo control document for every railcar listed as loaded. If there are any discrepancies, CBSA will notify the railway agent immediately to arrange for the agent to provide all missing documents. PAGE 7
Cargo Reporting and Control Procedures For EDI Rail Carriers Before the goods arrive in Canada, the rail carrier must transmit by EDI to CBSA cargo details for each shipment destined for Canada. If CBSA finds discrepancies, the carrier will receive a reject message. If CBSA accepts the data, CBSA will store it in the CBSA EDI database pending arrival of the goods. Before or upon arrival of the goods in Canada, the rail carrier transmits by EDI, form A 1 Train Report Inward, identifying shipments for which CBSA have received and accepted cargo details. When the in-bond freight arrives at its final destination (rail sufferance yard), the railway agent must endorse the longroom and customs delivery authority's copies of the cargo control document. CBSA does not need this endorsement if a car is left on an authorized private siding or in the case of EDItransmitted cargo control documents. The railway agent then must present a copy of the document to the consignee or broker to advise them of the arrival of the shipment. The consignee or broker must file these documents with CBSA when he or she presents the release document. Shipments that cannot enter Canada due to CBSA prohibitions or the regulations of other government departments, such as the Canadian Food Inspection Agency (CFIA), must be returned immediately to the United States under CBSA control. If CBSA must refer shipments to the CFIA for inspection, the CFIA will stamp the back of the longroom copy of the paper cargo control document or of the EDI white paper manifest when the importation is authorized. PAGE 8
Beyond the Border Canada and the United States continue to pursue a joint approach to cargo security that enhances security, facilitates international trade, and respects national sovereignty. The effort, a key part of the Beyond the Border (BTB) Action Plan, is referred to as the Integrated Cargo Security Strategy (ICSS). PAGE 9
Beyond the Border The Integrated Cargo Security Strategy (ICSS) is aimed at identifying and resolving security concerns as early as possible in the supply chain or at the perimeter, with the expectation that this will reduce the level of these activities at the Canada-U.S. border. The ICSS outlines how Canada and the U.S. will reduce duplication of efforts and processes, and work together offshore and at the physical border to facilitate the movement of secure cargo. It recognizes the importance of: having common advance data requirements; sharing advance timely information for cargo shipments arriving in Canada or the U.S. from offshore; harmonizing targeting and risk assessment methodologies; and sharing examination results. PAGE 10
Beyond the Border Integrated Cargo Security Strategy (ICSS) The binational (Canada United States) ICSS sets out the vision, objectives and actions to address risks at the earliest opportunity by moving activities related to risk mitigation away from the Canada U.S. border. Together, these activities are to significantly streamline the flow of trade crossing our common border while enhancing security. Prince Rupert Pilot On October 1, 2012 the Prince Rupert, British Columbia pilot started, where Canada is examining offshore cargo (on behalf of the U.S.) which is destined to the U.S. via rail. The pilot targets high-risk cargo that is destined for the U.S. before arrival at the marine port of Prince Rupert and allows for examinations at the perimeter before the cargo moves by train to the land border. The U.S. National Targeting Centre (NTC) risk assesses all cargo arriving at the Canadian port that transits to the U.S. by rail and identifies the shipments of highest risk. The Canada Border Services Agency (CBSA) is conducting examinations on behalf of U.S. Customs and Border Protection (CBP) for security and contraband. Any contraband or security concerns are dealt with in Canada and information is shared with the U.S. Examination results are also shared via U.S. developed systems allowing for real-time sharing of information (both images and examination results). Containers are secured with high-security bolt seals for transit through Canada to the land border. At the land border CBP officers see the high-security bolt seal and know that risk has been negated, thereby eliminating the need for duplicate inspections. The Canadian NTC continues to risk assess all cargo arriving as imports. PAGE 11
Trade compliance best practices: Knowledge, Education and Training Trade compliance legislation is complex and daunting, the more educated and trained customs professionals within organizations are, the better prepared they are to deal with the intricacies of the rules and regulations. Senior Management Buy In- Ensuring buy-in and support from senior management is key to implementing a global trade compliance program within any organization. Internal Controls Documented processes and procedures within a trade compliance department will mitigate potential errors in the supply chain. It ensures for enhanced communication internally with other departments within the organization, with customs service providers and suppliers. Working collaboratively. Audit Check - Companies should perform internal and external audit checks to ensure their compliance practices are satisfying applicable rules and regulations. PAGE 12
Conclusion Laurie Tannous Vice President Government and Industry Relations Laurie.tannous@farrow.com PAGE 13
Thank you. PAGE 14