Commercial Information Circulars

24-hour hotline : 23 922 922

e-mail address : enquiry@tid.gov.hk

Ref : CR EIC 111/2/16

5 March 2013

Dear Sirs,

Commercial Information Circular No. 193/2013

US : Cargo Priorities under Sequestration

Sequestration is a fiscal policy procedure adopted by US Congress as part of the Budget Control Act (BCA) of 2011. It represents a series of automatic government spending cuts, with effect from 1 March 2013, resulting in changes in the operations and reduction in service levels of various US government agencies. The US Customs and Border Protection (CBP) has issued a series of documents to outline how the spending cuts would affect CBP’s operations and cross-border trade, as well as to advise the trade to make plans to minimise the impact on their businesses.

IMPACT ON IMPORTS

2.As a result of budget cuts and employee furloughs, CBP anticipates increased wait times and reduced hours of service. For instance, in the air environment, increased wait times of up to 50% or more are expected at major US international airports, with peak waits of up to four hours at the busiest airports. There may also be increased and potentially escalating delays for container examinations of up to 5 days or more at major seaports, as well as significant daily back-ups for truck shipments at land border ports. These impacts will likely increase during the summer peak travel season.

3.In the face of sequestration, CBP will continue to keep security as the top priority. Trusted trader programs, such as Customs-Trade Partnership Against Terrorism (C-TPAT) and the Air Cargo Advance Screening (ACAS), will be operated as usual.

ADVICE FOR IMPORTERS

4.To minimise the impact on business, CBP has the following advice to the trade community:

• Pre-filing Entry Data - pre-filing the entry by importers allows CBP and other federal agencies to conduct risk assessments and resolve outstanding issues before the cargo arrives in the US and allows agencies to provide the trade with a release decision as early as possible.
• Perishable Commodities - processing perishable commodities continues to be a top cargo priority.
• Other Government Agencies - CBP will work with its partner government agencies that have oversight responsibilities for import and export shipments to minimise the disruption caused by sequestration.
• CBP Partnership Programs – CBP has no plans to eliminate or reduce trade facilitation benefits for CBP trusted trader participants. C-TPAT members will continue to receive priority ("front-of-the-line") treatment for examinations, and are 4-6 times less likely to undergo an inspection.
• Communication - CBP is committed to ongoing communication with the trade community.

5.More details can be found at the following websites:

• Letter from the CBP to the US trade and travel industry:
  http://www.aaei.org/LinkClick.aspx?fileticket=fNkgjtbH%2BSc%3D&tabid=36
• CBP cargo priorities under sequestration:
  http://www.cbp.gov/xp/cgov/newsroom/advisories/info_seq_cbpops/seq_priorities.xml
• Frequently asked questions:
  http://cbp.gov/xp/cgov/newsroom/advisories/info_seq_cbpops/seq_faq.xml
• Questions and responses regarding the impact of sequestration on imports:
  http://www.cbp.gov/xp/cgov/newsroom/advisories/info_seq_cbpops/seq_ques_resp.xml.

ENQUIRIES

6.For enquiries about the content of this circular, please contact Miss S Y TANG at telephone number 2398 5405.

Yours faithfully,

(Ms Cindy CHENG)

for Director-General of Trade and Industry