Import News from the Importers Institute - The Role of NZ Customs in US Security

The US Customs Service introduced new security systems for US-bound containers. The New Zealand Customs Service has gone one better.

The new "24-hour rule" for shipments destined to (or transiting through) the US is part of CSI - Container Security Initiative. This is one of several security initiatives developed by the US after 9/11. The rule is quite simple: at the moment, carriers are required to present manifests (lists of cargo carried) to US Customs before the cargo is unloaded in a US port; in the future, they will be required to do that electronically, 24 hours before the cargo is loaded in an overseas port.

The idea is that this will give US Customs an opportunity to examine that cargo (or reject it) before it is actually loaded on a vessel bound for the US. To do this, US Customs will locate its own inspectors in some of the larger ports around the world.

It is not likely that they will want to have any inspectors in New Zealand, given the relatively small volume of trade, low perceived risk and their ability to call on the services of an efficient, co-operative and non-corrupt local Customs service.

Shipping companies will need to lengthen their cut-off times and insist on more accurate descriptions (terms like "freight all kinds" and "said to contain" are no longer accepted). It is likely that they will be over-cautious during the initial stages - some shipping companies are stipulating five day cut-offs! We expect that this will settle down in time, as they compete with each other to provide a more flexible service.

Exporters (shippers) will therefore be affected only to the extent that they will need to adapt to earlier cut-offs. Those that are using our commercial export documentation services ( http://www.silva.co.nz/Clear.htm) do not need to be concerned with accuracy of data descriptions, as we will be in a position to provide harmonised system numbers to the shipping companies. They will also have to tell us who the intended recipient of the cargo is, even when the bill of lading is consigned "to order" (usually the notify party).

Individual exporters will not have to (or, in effect, be permitted to) lodge manifests with US Customs - only carriers and forwarders with a special licence and bond will be allowed to do that.

Exporters who do not have software to submit declarations to Customs can use our error-corrected web service for On-line Customs Clearances, http://www.silva.co.nz/customs.

When these measures were first mooted, shipping companies and forwarders tried to lobby the US authorities to water down the regulations. This was a waste of time on their part. A senior US Customs official told me during a conference that many of these security decisions are being made by people with crew-cuts and no sense of humour!

Exporters should not assume that shipping companies will tolerate last-minute shipments. The consequences for them, in terms of not being allowed to unship some containers on arrival, would simply be too dire to contemplate. There are also monetary penalties for submitting inaccurate or incomplete data. Our advice to exporters is, be prepared to comply with requests of shipping companies and forwarders and add up to a week to the average transit time.

The New Zealand Customs Service has decided to adopt a pro-active strategy. Individual export declarations (entries) will be required for most shipments before they are loaded on board a ship or aircraft. Many containers will be sealed with an official seal; in the case of primary produce this will be done under contract by the quarantine inspection people from MAF, who inspect and certify the quality of the produce. The law will be changed to permit pre-shipment inspections when required (by, for example, US Customs). There may be some new computer x-ray equipment on the way.

The big question is, will any of this actually increase security? At best, only marginally. The American Customs computer systems are pre-historic (that means, pre-Internet). The data submitted is not normalised and is of inherent low quality. Unlike the New Zealand Customs export entries, export manifests are not required to include harmonised system numbers and the names of exporters and importers are not coded. This means that any alerts can only be matched against free text queries and the mountains of data collected will be quite useless for any subsequent analysis.

The US initiative is a typical case of doing something for the sake of being seen to be doing something. It may be a minor deterrent and it is probably cathartic, but it will not deliver any real security. That will come only from surveillance, intelligence-gathering and ideological work - most of it beyond the border. It will come as we progressively manage to convince brain-washed middle-Eastern boys that there will not be 72 virgins waiting for them when the explosives strapped to their bodies by middle-aged bearded mullahs go off in a disco or a bus.

The New Zealand Customs initiatives were not taken in response to American demands, rather they anticipate them. The idea is that, by improving our reporting and surveillance of exports, New Zealand will continue to be perceived as a low risk country. Ultimately, this will facilitate our trade, especially in the aftermath of the next big scare. It will also help us to cope with the inevitable me-too security requirements yet to be devised by the French.

The Importers Institute is normally no big friend of increased red tape. However, in this instance, we decided to endorse the NZ Customs strategy and congratulate the Service on being proactive.

Customs is not asking our exporters to bear an unbearable burden, just to move from being very sloppy with their regulatory compliance paperwork to moderately efficient. Just like importers.

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