Concepts for The Carrier
Process of the Future
  Examination of shipments for contraband will be conducted at the first point of arrival. To enable Customs to target high-risk shipments, mandatory data elements will be required at the first point of arrival in Canada for each shipment. Without this essential information shipments will not move beyond the first point of arrival.
   The data will be provided to Customs electronically, to allow use of systems based selectivity and targeting tools. Transmission of this data prior to arrival will enhance the process and minimize if not eliminate delays. As previously mentioned, low risk shipments will enjoy expedited processing.
  The use of driver registration will support the pre-arrival processing approach and expedite clearance. The Sufferance Warehouse program is also undergoing a review to ensure that these facilities too can utilize the modern approach to Customs release processes.
  A modernized, appropriate, and effective sanctions regime for carrier infractions must be implemented before CR can be initiated.
  An integrated, centralized approach to resolve Other Government Department (OGD) issues and requirements is also included in the CR mandate, together with the adoption of internationally sanctioned data requirements and communication protocols.

Data Element
Requirements
  When determining the mandatory data elements necessary for cargo reporting, it was necessary to answer several questions:
 
• What basic elements are required to achieve release?
• What additional elements are required to assess and manage risk?
• What data elements are needed to accommodate OGD requirements?

From this process, the following 25 data elements were identified as being essential to permit movement of the goods beyond the point of first arrival:

1. Vehicle/Equipment Identification
2. Seal Number
3. Driver/Crew Identification
4. Carrier Name & Address
5. Carrier Code
6. Shipper Name and Address
7. Consignee Name and Address
8. Destination of Goods
9. Description of Goods
10. Hazardous Material Indicator
(4 digit UN code)
11. Quantity (Number of Packages)
12. Qualifier (Type and Marks of Packages)
13. Gross Weight (specify lbs; kg; etc.)

14. Special Instructions/Notify Party
15. Port of Entry
16. Country of Export
17. Foreign Point of Lading
18. Country of Transshipment (Routing)
19. Country of Origin (of Goods)
20. Importer Name & Address
21. Importer Business Number (BN)
22. Vendor Name and Address
23. Exporter Name and Address
24. OGD Admissibility Requirements
25. H.S. Code (to ten digits of detail)

  Only four other data elements are required to obtain Customs release of each shipment:   Transaction Number; Total Value for Duty; Currency Code/Currency of Settlement; and Cargo Control Number. Other data elements are required to complete the B3 entry.
 
Driver Registration
   CR must employ driver registration as a component of risk management. An unregistered driver is an unknown quantity. By registering and having his/her background researched, a driver becomes a known quantity.
   Communication and verification of driver identity may be addressed through the use of transponder technology, barcodes, photo ID, and/or biometrics.
 
Electronic Commerce
   The ability of Customs to process ever increasing trade volumes lies with the continued development of EDI communications tools. If information is not received in an electronic format, it will have to be converted. This is both time consuming, expensive and is expected to create delays in the delivery of goods.
 
Conclusion
   The concept of Carrier Re-engineering introduces increased reporting requirements for unknown and high-risk shipments. It enhances the ability of Customs to detect contraband along with health safety issues. It requires a move away from paper-based processes toward EDI and other electronic alternatives.
   Russell A. Farrow Limited has always been in the vanguard of automation and we stand ready and prepared to meet the challenges and opportunities of the 21st Century.

 
  Question: What are the pros and cons re obtaining North American Free Trade Agreement (NAFTA) Certificates of Origin on goods that are duty free under the Most Favoured Nations (MFN) tariff treatment?
   Answer: This is an excellent question. I always recommend using NAFTA whenever goods qualify, regardless of their dutiable status under MFN.
There are several reasons:

1. NAFTA is duty free and the rates will not increase (unless NAFTA collapses, which is not likely to happen).
2. MFN rates could increase (e.g.: the result of a trade war). This has happened several times in recent years.
3. The goods could be reclassified to a tariff item that is not duty free under MFN. Effective January 1, 1998, Customs have four years to re-assess.
4. If you enter NAFTA goods / materials under MFN, use them to manufacture a product and subsequently export the finished product to a NAFTA country, you must treat those goods/materials as non-originating. That detail could disqualify the finished product from NAFTA preference.

Points 2, 3, and 4 may never happen, but having a piece of paper and using tariff treatment (TT)10 guarantees that it won't. If nothing else, having a NAFTA certificate of origin is cheap insurance.