Canada’s e-manifest rule rolls to forwarders

Under new rules that took effect last month, freight forwarders managing inbound shipments to Canada must now submit electronic house bills of lading prior to arrival.

   Under new rules that went into effect Nov. 7, freight forwarders managing inbound shipments to Canada must now submit electronic house bills of lading prior to arrival so the customs service can analyze the data and assess whether the shipment poses a risk from a security, safety, health, or economic standpoint. Transportation intermediaries have eight months to get systems in place to transmit the advance data before meaningful penalties kick in.
   The move is the final step toward implementation of the Canada Border Services Agency’s Advanced Commercial Information and electronic-manifest programs, which roughly mirror many of the pre-arrival data requirements in the United States. A dozen years ago, the agency promulgated a rule for ocean carriers to submit manifests 24-hours prior to departure from a foreign port. In 2006, cargo airlines and indirect air carriers were required to transmit conveyance, cargo, and supplementary cargo data four hours prior to arrival, or before departure for shorter flights.
   In January, e-manifest regulations went into effect requiring highway carriers to transmit cargo data an hour prior to arrival at the land border and rail carriers to do the same two hours before arrival. The highway advanced filing regulations were developed over a five-year period. In the next 12 to 18 months, importers will be required to submit electronic declarations about the actual shipment contents, as is done in the U.S. under the Importer Security Filing program, according to Oryst Dydynsky, a cross-border and regulatory affairs consultant with Descartes Systems Group.
   Eliminating paper shipping documents and automating import/export process is part of a broader modernization underway at Canada Customs that includes the development of a single-window portal for companies to file entry documents to multiple agencies with responsibility for clearing shipments.
   CBSA is conducting a phased roll-out of the forwarder filing requirements on consolidated freight, as it did with other modes. The house bill is a forwarder’s bill of service to the customer and is copied to the carrier to be attached to the master bill.
   Forwarders and co-loaders must also send a message to CBSA that their house bill submissions for a particular shipment are complete and no more will be filed. The “close” message establishes a link between the master bill number and the house bills.
   Forwarders have an “informed compliance” period through Jan. 10, during which penalties for violations will not be issued and CBSA will work closely with forwarders on corrective measures. From Jan. 11 to July 11, forwarders that do not submit accurate and timely e-manifests will be issued non-monetary penalties—essentially notices of non-compliance.
   Beginning July 12, non-compliant forwarders may be subject to fines.
   It is important for agents, lawyers and other parties to a transaction to know who is responsible for the new filings and how any penalties will be applied, so that no shipments fall between the cracks and result in unintended liability, Dydynsky said during a recent Descartes webinar.
   Administrative penalties in the highway mode can be as high as $2,000 for a violation and escalate up to $8,000 for subsequent infractions. Dydynsky said he has seen cases in which a trucker has been fined $250 for arriving at the border checkpoint before the e-manifest is filed.
   Traders can make transmissions to CBSA via an EDI connection or use the online e-manifest portal. The downside of the portal, which is primarily designed to help small- and medium-size businesses, is that there is no ability to archive the data and no integration with a firm’s back-office systems. That means companies have to print out the document for their records. But Dydynsky said compliance technology providers, such as Descartes, can automate the data capture for retention, as well as sharing with partners and customers.
   EDI service providers are required to apply to CBSA for approval of their software interface and then test the system before handling transmissions on behalf of customers. Dydynsky recommended that forwarders get a copy of the Electronic Commerce Client Requirements Document, available on the CBSA website.
   CBSA has enhanced the communication between shipment parties—carriers, forwarders, customs brokers, and warehouse operators—if they are identified on the manifest. It is issuing notices for completeness, arrival and status, and deconsolidation. The biggest benefit for transportation intermediaries is the deconsolidation notice, which informs the forwarder, as well as the terminal or warehouse, that the house-level freight is released and ready to be picked up at the railhead, airport or port, Dydynsky said.
   The de-consolidation notice is sent by request only, but Glenn Palanacki, Descartes’ product manager for North American Customs, suggested forwarders should consider the notice a mandatory piece of data to receive.
   Dydynsky urged forwarders to get a valid code and start transmitting house bills as soon as possible, even if they are not in perfect order, to get practice and iron out problems before real penalties kick in. Sometimes penalties are sent to the wrong person in a company because CBSA may rely on old contact info in their system, so companies should also make sure the correct person is on the CBSA list.
   CBSA has said any shipments that pose potential health, safety or security concerns, after review of the shipment data, will be examined at first port of arrival. If a commercial exam is also necessary, the agency will try to do it at same time to save the cost of a double exam.