New Cargo Screening Mandate
BIS Updates Encryption Export Rule
100% of Passenger Jet Cargo to be Screened
The Transportation Security Administration (TSA) has announced it is moving forward with the 9/11 Commission Act of 2007 Congressional mandate requiring 100 percent of cargo transported on a passenger aircraft be screened beginning August 1, 2010.
Below is a link to the TSA announcement:
http://www.tsa.gov/assets/pdf/path_forward_to_100_percent.pdf
The inspection program provides that “… all air cargo must be screened at the piece level prior to transport on a passenger aircraft for flights originating in the United States. On August 1, 2010, this mandate will be thoroughly enforced by the Transportation Security Administration (TSA), and our inspectors will be actively ensuring compliance. “
TSA has advised shippers that “Every shipment of cargo carried on passenger aircraft will require screening at piece level, prior to being transported on any passenger aircraft. Skids and pallets will have to be taken apart, screened and reconfigured.” The 9/11 Act specifically identifies the types of screening procedures that must be performed and they range from physical inspection of goods to the use of various screening technologies.
An overview of the 9/11 Act Screening Requirement is provided at the following link:
http://www.tsa.gov/what_we_do/layers/aircargo/certified_screening.shtm#business
TSA is encouraging all shippers to participate in the Certified Cargo Screening Program (CCSP) The program became effective on February 1, 2009 and enables Indirect Air Carriers (IAC’s), shippers and Independent Cargo Screening Facilities (ICSF’s) to screen cargo for flights originating in the U.S.
TSA states that it “designed CCSP to provide businesses with the option to screen cargo in a cost effective manner and at various points of the supply chain.”
Specifically CCSP allows businesses to:
· Screen cargo where it is packaged
· Maintain in-house packaging integrity
· Avoid screening log jams at the airport
· Build bulk configurations to minimize cost
Parties interested in participating in the CCSP program may apply online at www.tsa.gov/CCSP .
NOTE: Due to the potential impact the new screening procedures might have for shippers we suggest that all companies coordinate with their freight forwarders to determine whether their cargo may be effected by the new regulations and what steps should be taken to prevent needless delays.
The Dept. of Commerce’s Bureau of Industry and Security (BIS) Amends Its Rules Concerning Encryption
The new rule streamlines BIS’ procedures concerning many encryption products. The new rule eliminates the ‘review requirement’ for: (a) less sensitive encryption items eligible for license exception ENC and (b) most (but not all) ‘mass-market’ encryption products
The new rule allows exporters and manufacturers of the above type of encryption products to ‘self-classify’ their products. Parties wishing to ‘self-classify’ their products must first register on-line with BIS after which they will be issued an ‘Encryption Registration Number’. Exporters using the ‘self-classify’ procedure must submit an annual self-classification report identifying those products which have been exported. This rule is expected to decrease technical reviews by approximately 70 percent and semi-annual reporting by up to 85 percent.
The new rule also decontrols certain items that perform ‘ancillary cryptography’, e.g. robotics, household appliances, fire alarm systems, etc. In order to be considered decontrolled the item must not have as its primary function any the following: communication, computing, networking or information security and its cryptographic functionality must be limited to supporting its primary function.
A summary of the amendments to the Export Administration Regulations can be found at the BIS website: http://www.bis.doc.gov/encryption/summary.htm
Exporters and manufacturers should make note of an important exception to this easing of the classification requirements:
“This rule eases specific license requirements for many types of encryption technology, except to countries subject to export or reexport license requirements for national security reasons or anti-terrorism reasons, or to countries that are subject to embargoes or sanctions.”
BIS lists the following as important reforms established by the new rule:
· Removing review requirements for less sensitive encryption items;
· Establishing a company registration requirement for encryption items under License Exception ENC or as mass market encryption items;
· Creating an annual self-classification report requirement for such items following submission of an encryption registration;
· Making encryption technology eligible for export and reexport under License Exception ENC, except to countries of greater national security concern;
· Eliminating the semi-annual sales reporting requirement for less sensitive encryption items under License Exception ENC;
· Removing the 30-day delay to export and reexport less sensitive encryption items under License Exception ENC; and
· Removing the 30-day delay to make most mass market encryption items eligible for mass market treatment.
The complete Interim final rule on:
Encryption Export Controls: Revision of License Exception ENC and Mass
Market Eligibility, Submission Procedures, Reporting Requirements,
License Application Requirements, and Addition of Note 4 to Category 5, Part 2
can be found in the Federal Register at: http://www.bis.doc.gov/news/2010/fr_06252010.pdf
NOTE: Although the new rules are a major step in streamlining the historically complicated encryption requirements exporters must review the new regulations very carefully to ensure that they meet all of the corresponding requirements.
Final Call – Customs Broker Exam Class Starting Soon
Middleton & Shrull has a few openings remaining for their upcoming Customs Broker Exam Class to prepare candidates for the October 2010 Customs Broker Exam. Registration will be closing shortly. Please call our office or email Paula@middleton-shrull.com as soon as possible if you are interested in joining the class.
Our training will consist of an eight week session of classes to be held at the Red Roof Inn in Woburn, MA. Classes will begin August 10, 2010 and conclude in the end of September. Classes will be held on Tuesday and Thursday nights from 6:00 PM – 8:30 PM.