The Legal Corner, December 2013 Issue:
First let me wish all of you a Happy Thanksgiving and Happy Hanukkah for those of you who ate both turkey and your favorite Hanukkah treats. The turkey part was really quite sufficient.
In preparing this article and after being halfway complete, I realized that the article was substantially the same as a presentation I had made to the trade in early 2006. Although the TSA has significantly changed its “procedures,” the difficulties in ensuring our security are quite similar. Rather than reinvent the wheel, I am presenting as it was given verbatim in January 2006. Compare the similarities of the agencies (CBP, TSA, and FDA) and realize that even when dealing with security, perhaps our Government’s priorities need to be reviewed.
WHERE ARE WE?
CARGO SECURITY – 2005
All of us involved in the international transportation of cargo have seen and felt the consequences of Government regulations in this area. Almost all Federal Agencies have implemented rules intended to prevent the possibility of a terrorist attack being consummated through infiltration of our legitimate supply chain. Fortunately, we have never experienced any such terrorist attack involving cargo.
There are many issues that have arisen resulting from the various Government Agency regulations put in place intended to prevent such a terrorist attack.
CUSTOMS AND BORDER PROTECTION (“CBP”)
Customs is mandated to collect documentation and information prior to the arrival of air carriers carrying cargo. The regulations dictate that through the Automated Manifest System (“AMS”), Customs collect specific information pertaining to the imported cargo on the air carrier. The system clearly is not fully implemented as Customs has yet to require certain of the information described in the relevant regulations. For example, full descriptions of the products are not currently being required to be submitted prior to the arrival of the air carrier. Thus, the “data set” allowing Customs to target specific shippers or importers has yet to be developed.
Despite this, the airlines are being penalized for failure to timely submit other required information even though there are significant questions as to whether this failure has any impact on the security of the air carrier as well as the public. It should also be noted that because of current commercial realities, the airlines, under present circumstances, will not in most instances be able to comply with the strict description requirements of the CBP regulations.
TRANSPORTATION SECURITY ADMINISTRATION (“TSA”)
Soon after the unfortunate events of 9/11, the predecessor to TSA instituted procedures to implement the “Known Shipper Program.” The TSA has now taken on that task. Essentially, the program was designed to ensure that cargo carried by an air carrier be identified as coming from an entity whose legitimacy has been reviewed and documented. The requirement is to ensure that data is compiled in order to make determination as to which cargo should be targeted for closer security examination prior to its being placed on board the air carrier. It has been questioned as to whether the freight forwarder (“Indirect Air Carrier, IAC”) has the ability to present appropriate information to the TSA, allowing that agency to make such determination based upon the IAC’s representations. There seems to be no rational connection between the information submitted by the IAC and the possible determination as to whether this cargo represents a security threat. It further appears that only certain Government agencies, such as the FBI, IRS and related agencies, possess the type of information sought to establish whether a particular shipper is bona fide. It is questionable whether the information being gathered from the IAC can be relied upon to develop the required “data set.”
Note: Due to industry pressure, this task is now performed by the Government (2013).
FOOD AND DRUG ADMINISTRATION (“FDA”)
Here again we have an agency reacting to congressional mandates to implement regulations to ensure the safety of U.S. citizenry through a secure supply chain. The regulations implemented by the FDA apply specifically to food products that will be consumed within the United States borders. The regulations which have been in effect for two years require, among other things, that food “facilities” be registered with the FDA. These requirements apply not only to U.S. facilities, but also to foreign facilities. This registration program, although not admitted in public by the FDA, has not been successful. The vast majority of food facilities have yet to properly register in the United States. Other “facilities” abroad such as warehouses and certain transportation entities, have also not registered. Thus, the data needed to determine which cargo needs to be examined prior to release into the stream of commerce, is not available.
Industry has spent countless dollars and utilized many man hours in its attempt to comply with this regulatory scheme. There has clearly not been any significant re-evaluation by either Congress or the FDA as to how to either improve or scrap this program. Based upon information being collected, it is certainly questionable as to whether there is any impact on our security under the current procedures.
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I am not the first to point out that many of the procedures developed to enhance cargo security by air have been stand-alone procedures without the knowledge interchange among Government Agencies that would perhaps ensure the relevancy and efficiency of regulations intended to protect our cargo supply chain against terrorist infiltration. This has been the topic of many Government meetings and symposiums.
Most recently, at the Trade Symposium entitled GLOBALIZING TRADE SECURITY AND FACILITATION held in Washington, DC on Nov. 2-4, 2005, and sponsored by the Department of Homeland Security (CBP), there were significant discussions that there be “one stop shopping” for collection and dissemination of information pertaining to the cargo entering the United States. Thus, rather than requiring the air cargo information be submitted separately to various Government agencies, the necessary security information would be submitted only once and then disseminated as needed. This rational approach can only be achieved after the air cargo industry, as a group, educates our Government officials not only as to what information is available, but also educates those same individuals as to how the purchase, sale, transportation and distribution of imported air cargo takes place.
by Carl R. Soller
McBreen & Kopko
Carl R. Soller, Special Customs, International Cargo and Regulatory Compliance Counsel to McBreen & Kopko is counsel to the JFK Airport Customs Brokers and Freight Forwarders Association and a recognized expert in his practice areas. He and his firm concentrate their Air Cargo Practice in all business and regulatory matters on a nationwide basis. He offers advice on supply chain security and its related Government Regulations to the Air Cargo Community as well as advice and a vast range of assistance to importers and exporters of all kinds of consumer goods. He can be reached at (646) 502-5791 or csoller@mklawnyc.com