Automated Commercial Environment (ACE) Electronic Export Manifest for Rail Cargo, 2874-2919 [2024-31331]

Agencies

• DEPARTMENT OF HOMELAND SECURITY
• U.S. Customs and Border Protection

[Federal Register Volume 90, Number 7 (Monday, January 13, 2025)]
[Proposed Rules]
[Pages 2874-2919]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-31331]



[[Page 2873]]

Vol. 90

Monday,

No. 7

January 13, 2025

Part IV





Department of Homeland Security





-----------------------------------------------------------------------





U.S. Customs and Border Protection





-----------------------------------------------------------------------





19 CFR Parts 113 and 123





Automated Commercial Environment (ACE) Electronic Export Manifest for 
Rail Cargo; Proposed Rule

Federal Register / Vol. 90 , No. 7 / Monday, January 13, 2025 / 
Proposed Rules

[[Page 2874]]


-----------------------------------------------------------------------

DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

19 CFR Parts 113 and 123

[Docket No. USCBP-2024-0030]
RIN 1651-AB52


Automated Commercial Environment (ACE) Electronic Export Manifest 
for Rail Cargo

AGENCY: U.S. Customs and Border Protection, DHS.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: This document proposes a new regulation pursuant to the Trade 
Act of 2002 requiring the submission of export manifest data 
electronically to U.S. Customs and Border Protection (CBP) in the 
Automated Commercial Environment (ACE) for cargo transported by rail 
for any train departing the United States. The proposed regulation 
would mandate the electronic transmission of rail export manifest 
information, identify the parties eligible to transmit information, and 
describe the time frames prior to departure of the train in which the 
information is due. This rule would enable CBP to address important 
cargo security concerns while providing efficiencies to the trade.

DATES: Comments must be received by March 14, 2025.

ADDRESSES: Please submit comments, identified by docket number, by the 
following method:
    Federal eRulemaking Portal: https://www.regulations.gov. Follow the 
instructions for submitting comments via docket number USCBP-2024-0030.
    Instructions: All submissions received must include the agency name 
and docket number for this rulemaking. All comments received will be 
posted without change to https://www.regulations.gov, including any 
personal information provided. For detailed instructions on submitting 
comments and additional information on the rulemaking process, see the 
``Public Participation'' heading of the SUPPLEMENTARY INFORMATION 
section of this document.
    Docket: For access to the docket to read the plain language 
summary, background documents or comments received, go to https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: David Garcia, Program Manager, 
Outbound Enforcement and Policy Branch, Office of Field Operations, 
CBP, via email at [email protected], or by telephone, (202) 
344-3277.

SUPPLEMENTARY INFORMATION:

I. Public Participation

    Interested persons are invited to participate in this rulemaking by 
submitting written data, views, or arguments on all aspects of the 
notice of proposed rulemaking. U.S. Customs and Border Protection (CBP) 
also invites comments that relate to any economic, environmental or 
federalism effects that might result from this proposal.
    Comments that will provide the most assistance to CBP in developing 
these procedures will reference a specific portion of the proposed 
rule, explain the reason for any recommended change, and include data, 
information, or authority that support such recommended change.

II. Executive Summary

A. Purpose of the Automated Commercial Environment (ACE) Electronic 
Export Manifest for Rail Cargo

1. Need for the Regulatory Action
    Current regulations are insufficient to adequately capture cargo 
data for rail shipments leaving the United States. CBP is proposing 
this rule to reduce the data gaps existing under current regulations, 
and to address important cargo security concerns resulting from 
incomplete data. This proposed rule will apply to all rail cargo 
exports and provide efficiencies to the trade. CBP does not presently 
require the pre-departure electronic submission of data for all 
exported cargo as it does for imported cargo. This can result in a 
threat to cargo and broader U.S. national security because CBP has no 
regulation prescribing any method or means of review for cargo being 
exported by rail. The electronically transmitted cargo data that is 
submitted prior to departing the United States by rail is limited 
significantly in its scope. Currently, 19 CFR 192.14 requires a U.S. 
Principal Party in Interest (USPPI), the USPPI's agent, or the 
authorized filing agent of a Foreign Principal Party in Interest (FPPI) 
to transmit Electronic Export Information (EEI) to CBP through the 
Automated Commercial Environment (ACE). While this pre-departure data 
is helpful, EEI is generally only required by the Bureau of Census 
regulations on shipments that exceed $2,500 per Schedule B number and 
is not generally required for shipments to Canada, unless certain 
controlled items are involved or the shipment is being transshipped to 
another destination. 15 CFR parts 30 and 758. Because of these 
limitations, there is a significant lack of electronic manifest data 
which inhibits the enforcement efforts by CBP for such exports because 
of the gaps in information. The proposed regulation would create an 
integrated pre-departure electronic export manifest which includes 
receiving advance information for risk assessment purposes from the 
source most likely to have correct information about the cargo. This 
proposed regulation closes the gap which currently exists and requires 
all information to be manifested which enhances the security of the 
rail cargo and aligns the security of exported rail cargo with the 
regulations that are required of rail cargo imported into the United 
States.
2. Statement of Legal Authority
    CBP is authorized to promulgate regulations providing for the 
mandatory transmission of electronic cargo information by way of a CBP-
authorized electronic data interchange (EDI) system before the cargo 
arrives or departs the United States by any mode of commercial 
transportation (sea, air, rail, or truck). Section 343(a) of the Trade 
Act of 2002, as amended (Trade Act) (19 U.S.C. 1415). The required 
cargo information is reasonably necessary to enable CBP to identify 
high-risk shipments for purposes of ensuring cargo safety and security, 
including compliance with export controls; preventing smuggling; and 
commercial risk assessment targeting, pursuant to the laws enforced and 
administered by CBP. 19 U.S.C. 1415(a)(3)(F). CBP needs to obtain 
timely and sufficient data prior to cargo arriving or departing the 
United States via any mode of commercial transportation in order to 
review and conduct risk assessment to identify high-risk shipments and 
inspect cargo effectively.

B. Summary of the Major Provisions of ACE EEM for Rail Cargo

    This proposed rule would mandate the transmission of EEM data in 
addition to the EEI data required under 15 CFR part 30 for all cargo 
prior to departing the United States for Canada and Mexico in the rail 
environment in lieu of paper submissions. The new regulation that CBP 
is seeking to promulgate is proposed 19 CFR 123.93 which would mandate 
the electronic transmission of rail export manifest information, 
identify the parties eligible to transmit information, describe the 
time frames prior to departure of the train in which the information is 
due, and identify an initial filing that must occur 24 hours prior to 
departure from

[[Page 2875]]

the port of export while requiring the remaining data to be transmitted 
at least two hours prior to such departure. The proposed regulation 
designates information as transportation data, cargo data, or empty 
container data, and lists the data elements to be transmitted while 
calling them out as mandatory, conditional, or optional. The data 
elements that are identified as mandatory must be submitted, while 
elements identified as conditional shall be submitted if available, and 
optional elements may be provided at the discretion of the filers. 
These elements allow for CBP to inspect cargo effectively, ensure 
compliance with U.S. export control laws and regulations and identify 
high-risk shipments for purposes of ensuring cargo safety and security.
    CBP proposes adding 19 CFR 123.93(c) which identifies the parties 
that can file the cargo and conveyance data. The outbound carrier is 
responsible for transmitting the export manifest transportation data 
and empty container data. If no other party elects to transmit the 
initial filing data and the export manifest cargo data, then the 
outbound carrier must transmit this data. If another eligible party 
elects to transmit either the initial filing data or export manifest 
cargo data, the outbound carrier may also choose to, but is not 
required to transmit such data. Other eligible parties include USPPI 
and FPPI, as defined by the provisions of section 30.1 of the FTR of 
the Department of Commerce, Bureau of the Census (15 CFR 30.1), or its 
authorized agent. Other eligible filers also include any other party 
with direct knowledge of the export information, such as a customs 
broker, Automated Broker Interface (ABI) filer, NVOCC as defined by 19 
CFR 4.7(b)(3)(ii), or a freight forwarder as defined in 19 CFR 112.1. 
If another party does not transmit advance export information, the 
party that arranges for and/or delivers the cargo to the outbound 
carrier must fully disclose and present to the outbound carrier the 
data elements for the initial filing.
    Proposed 19 CFR 123.93(d) requires a mandatory initial filing of 
seven data elements identified below to be submitted 24 hours prior to 
departure to a foreign port, by either the carrier, USPPI, or other 
qualified parties or their authorized agents. The results of the test 
have shown that some rail carriers would have the export manifest data 
available days in advance prior to departure and therefore would have 
all the necessary information to submit the initial filing data to CBP 
and all other export manifest data well in advance of the 24-hour prior 
to departure deadlines. Except for the initial data elements, CBP would 
require electronic export manifest information in sections 123.93(e), 
and (f) to be transmitted two hours prior to train departure to a 
foreign port from the final U.S. port.
    Proposed 19 CFR 123.93(g) provides for two types of referrals that 
may be issued by CBP after a risk assessment of an outbound export 
manifest data transmission. Should any rail cargo be identified by CBP 
as requiring review, the cargo will be held until required additional 
information related to the shipment is submitted or some other 
appropriate action is taken, as specified by CBP. Once the cargo is 
cleared for loading, a release message will be generated and 
transmitted to the filer. In addition to holds, 19 CFR 123.93(h) would 
provide for procedures for when a CBP officer determines during the 
review that cargo or a rail car may contain a potential threat to the 
train and its vicinity, so that a Do-Not-Load (DNL) instruction can be 
issued, which prohibits the rail carrier from transporting that cargo 
or rail car so that further examination can be conducted. These 
examinations allow for CBP to secure the cargo, conduct risk 
assessment, and inspect cargo effectively.
    As an enforcement tool, CBP is also proposing changes to the 
relevant bond provisions in 19 CFR 113.62 (basic importation and entry 
bond), 19 CFR 113.63 (basic custodial bond), and 19 CFR 113.64 
(International carrier bond) to provide CBP with authority to impose 
liquidated damages on parties that do not provide the mandatory EEM 
data in the manner and in the time frame required. Specifically, CBP 
proposes to amend 19 CFR 113.62 to add new paragraph (k)(3), amend 19 
CFR 113.63 and 19 CFR 113.64, in order to address electronically 
provided outbound information in the time frame required as they 
currently address electronic transmissions for merchandise or cargo 
which is inbound. With each of these regulations, CBP may assess 
liquidated damages if a violation occurs. CBP's primary goal is 
compliance and CBP seeks to work alongside rail carriers and other 
parties to ensure that the proper data is provided in a timely manner, 
for CBP to properly review the data, conduct risk assessment of high-
risk shipments, and enforce U.S. export laws and regulations on U.S. 
rail exports.
    For CBP, the proposed requirement to submit an electronic export 
manifest will enhance cargo security in that it would allow for 
improvements in risk assessment capabilities by allowing CBP to use its 
Automated Targeting System (ATS) to screen all of the data submitted. 
Port operations will enjoy considerable efficiencies through the 
elimination of paper manifests. Storage space currently reserved for 
manifest documents will be freed. Coordination and information exchange 
among CBP, the Department of Commerce, and other Government agencies 
with export jurisdiction will improve. Carriers, USPPIs, non-vessel 
operating common carriers (NVOCC), and other interested parties who 
transmit information will receive better and more rapid examination 
decisions from CBP and improved communication between CBP and trade 
members. The trade will benefit further through the ease of making 
information corrections and additions electronically in contradiction 
to the process that is required with paper submissions which is more 
time consuming to manually complete, distribute, edit and transmit in 
addition to the storage required for paper submissions. These benefits, 
including targeting which is necessary for security purposes, outweigh 
the flexibility of allowing parties to file submissions either by paper 
or electronically.

C. Costs and Benefits

    CBP anticipates that during the time period of analysis including 
the test period and the regulatory period (2016-2030), this proposed 
rule would result in costs, cost savings and benefits to CBP and trade 
members engaging in exporting merchandise out of the United States in 
the rail environment.\1\ CBP estimates present value total costs to CBP 
and trade members would be around $9.3 million using a two percent 
discount rate, or $0.7 million annualized. CBP identified some other 
potential costs from this proposed rule, but CBP was unable to monetize 
these costs, including time burdens to CBP officers if the proposed 
rule results in additional cargo examinations and trade members 
participating in the rail EEM would also need to adjust business 
practices, be required to hold or obtain a qualifying bond, be required 
to have staff available 24 hours a day 7 days a week to respond to CBP 
questions and pay liquidated damages for any violations. Present value 
total cost savings to CBP and trade members are expected to be around 
$59.1 million using a two percent discount rate, or $4.6 million 
annualized. CBP expects

[[Page 2876]]

that there would be additional cost savings to trade members that CBP 
was unable to monetize such as reduced paper, printing and storage 
costs related to paper forms, and reducing or eliminating instances 
where trains need to be deconstructed in order for CBP to examine cargo 
would typically results in a delay of up to 2 hours and results in 
around $3,000 in freight movement costs. CBP anticipates that benefits 
from this proposed rule would include improving CBP's security efforts 
by using ATS to conduct risk assessment on all rail exports, improving 
communication between Federal Agencies with export jurisdiction and 
improving efficiencies to participating trade members from 
transitioning from a paper to an electronic process. However, CBP was 
unable to monetize the expected benefits from this proposed rule. 
Present value total net costs from the implementation of this final 
rule would be around $49.8 million using a two percent discount rate, 
or approximately $3.9 million annualized.\2\ Table 1 displays CBP's 
estimates for future annualized costs, costs savings, benefits, and net 
costs from this proposed rule using a two percent discount rate over 
the period of analysis (2016-2030).
---------------------------------------------------------------------------

    \1\ In the Regulatory Impact Analysis for this NPRM, CBP also 
discusses and provides estimates for the costs, cost savings and 
benefits compared to the baseline (prior to the introduction of the 
rail EEM test) during both the rail EEM test pilot period (2016-
2025) and for the regulatory period (2026-2030).
    \2\ In the economic analysis for this proposed rule, CBP used a 
2% discount rate for estimated future quantified and monetized 
costs, costs savings and benefits based on guidance from OMB 
Circular A-4 (https://www.whitehouse.gov/wp-content/uploads/2023/11/CircularA-4.pdf).
[GRAPHIC] [TIFF OMITTED] TP13JA25.003


[[Page 2877]]



III. Statutory Authority
---------------------------------------------------------------------------

    \3\ These costs to participants are discussed in further detail 
in the Regulatory Period Costs section in the Regulatory Impact 
Analysis below.
    \4\ Details on how CBP conducts targeting and risk assessment 
prior to this proposed rule using paper forms is discussed in the 
`Baseline' section of the regulatory impact analysis for this 
proposed rule.
---------------------------------------------------------------------------

    Section 343(a) of the Trade Act of 2002, as amended (Trade Act) (19 
U.S.C. 1415), authorizes CBP to promulgate regulations providing for 
the mandatory transmission of electronic cargo information by way of a 
CBP-authorized electronic data interchange (EDI) system before the 
cargo is brought into or departs the United States by any mode of 
commercial transportation (sea, air, rail, or truck). The required 
cargo information is reasonably necessary to enable CBP to identify 
high-risk shipments for purposes of ensuring cargo safety and security, 
preventing smuggling, and commercial risk assessment targeting, 
pursuant to the laws enforced and administered by CBP. 19 U.S.C. 
1415(a)(3)(F).
    CBP consulted with carriers throughout the process of developing 
the proposed regulation and during the course of the ACE Export 
Manifest for Rail Cargo Test (see Section IV.B below) that has been 
administered since 2015. 19 U.S.C. 1415(a)(3)(A). As the statute 
requires, the proposed regulation imposes requirements on the party 
most likely to have direct knowledge of information to be provided. 
When requiring information from the party with direct knowledge of that 
information is not practicable, the regulations take into account how, 
under ordinary commercial practices, information is acquired by the 
party on which the requirement is imposed, and whether and how such 
party is able to verify the information. Where information is not 
reasonably verifiable by the party on which a requirement is imposed, 
the regulations shall permit that party to transmit information on the 
basis of what it reasonably believes to be true. 19 U.S.C. 
1415(a)(3)(B). The proposed regulation that CBP is seeking to 
promulgate would require the submission of the export manifest data 
electronically in ACE for cargo transported by rail, pursuant to 
section 343(a), of the Trade Act of 2002, as amended. 19 U.S.C. 
1415(a)(3)(E). The proposed regulation specifically avoids imposing 
requirements that are redundant with one another or that are redundant 
with requirements in other provisions of law, as seen below in Section 
VII.C. 19 U.S.C. 1415(a)(3)(I).

IV. Background

A. Current Regulations

    Under the existing regulations, rail carriers are not required to 
submit a paper or electronic manifest for cargo exported from the 
United States by rail. CBP does have regulations which support the 
transmission of electronic export information (EEI) required by the 
Bureau of the Census Foreign Trade Regulations (FTR) or the Bureau of 
Industry and Security's Export Administration Regulations (EAR). 
Section 192.14 of title 19 of the Code of Federal Regulations (19 CFR 
192.14) implements the requirements of the Trade Act regarding cargo 
departing the United States. Under 19 CFR 192.14, the U.S. Principal 
Party in Interest (USPPI) or its authorized agent or the authorized 
filing agent of the Foreign Principal Party in Interest (FPPI) is 
required to submit certain advance information to CBP for export cargo 
leaving the United States by rail.\5\
---------------------------------------------------------------------------

    \5\ The USPPI is defined in the Bureau of the Census FTR as the 
person or legal entity in the United States that receives the 
primary benefit, monetary or otherwise, from the export transaction. 
Generally, that person or entity is the U.S. seller, manufacturer, 
or order party, or the foreign entity while in the United States 
when purchasing or obtaining the goods for export. 15 CFR 30.1.
---------------------------------------------------------------------------

    Under 19 CFR 192.14, the USPPI or its authorized agent must 
transmit and verify system acceptance of this EEI, generally no later 
than two hours prior to the arrival of the train at the border. See 19 
CFR 192.14(b)(1)(iv). A rail carrier may not load cargo without first 
receiving from the USPPI or its authorized agent either the related EEI 
filing citation, covering all cargo for which the EEI is required, or 
exemption legends, covering cargo for which EEI need not be filed. See 
19 CFR 192.14(c)(4)(i). While the rail carrier is not required to 
submit a rail cargo export manifest to CBP, the outbound rail carrier 
must annotate the carrier's outward manifest, waybill, or other export 
documentation with the applicable Automated Export System (AES) proof 
of filing, post departure, downtime, exclusion, or exemption citations, 
conforming to the approved data formats found in the Bureau of the 
Census FTR. See 15 CFR part 30.
    The current regulations found in 19 CFR 192.14 also require the 
USPPI, the USPPI's authorized agent, or the authorized filing agent of 
the FPPI to electronically transmit to CBP through AES certain EEI. 
This information supports statistical gathering; however, it falls 
short of addressing important cargo security considerations to include 
almost all shipments with a value less than $2,500.00 per Schedule B 
number and shipments directed to Canada, other than those containing 
certain items controlled under the EAR or intended for transshipment 
through Canada, creating a gap in security which the proposed 
regulation seeks to resolve by requiring information on all exports for 
rail cargo. CBP seeks to require the submission of manifest information 
providing CBP the opportunity to review and examine cargo such that 
high risk shipments such as narcotics, weapons or ammunition, including 
any that may not be subject to EEI filing requirements under the FTR or 
EAR, have a means of being discovered and withheld thereby enhancing 
the security of the United States. This proposed regulation will close 
that security gap by requiring compliance with the regulation in order 
to export the cargo as parties will have to provide electronic manifest 
information which CBP can screen and inspect for the safety of the 
United States and its neighboring countries. This proposed regulation 
also aligns with the regulation for rail cargo imported into the United 
States.
    The transmission of EEI is a Bureau of the Census filing regulated 
by 15 CFR part 30 and, with few exceptions, only submitted when the 
value of merchandise is above $2,500.00 per Schedule B number. The 
requirement also does not apply to rail shipments bound for Canada 
unless such shipments contain certain export-controlled items or are 
destined for transshipment to third countries. This regulatory gap 
leaves many shipments outside of CBP security review. The lack of pre-
departure information, which includes commodity information submitted 
by rail carriers into CBP targeting systems, hinders CBP's ability to 
conduct risk assessment and inspect cargo effectively to ensure 
compliance with U.S. export control laws and regulations. The proposed 
regulation would create an integrated pre-departure electronic export 
manifest which includes receiving advance information for risk 
assessment purposes from the source most likely to have correct 
information about the cargo.
    Currently, for exporting purposes, each carrier submits a train 
consist in a format it develops and with the data elements that it 
believes should be reported. The train consist identifies what is on 
the train, the order of the train, and what the train is consisted of 
as it prepares to depart the country. These data elements provide 
export information similar to that required by the provisions of 19 CFR 
123.91, which

[[Page 2878]]

describes electronic information for rail cargo required in advance of 
arrival, and 19 CFR 123.6, which includes a train sheet for arriving 
railroad trains.

B. The ACE Export Manifest for Rail Cargo Test

    On September 9, 2015, CBP published a general notice in the Federal 
Register (80 FR 54305) announcing the National Customs Automation 
Program (NCAP) Test for the transmission through ACE of Electronic 
Export Manifest (EEM) information for rail shipments, the Automated 
Commercial Environment (ACE) Export Manifest for Rail Cargo Test 
(``Test''), which was limited to nine rail carriers.
1. The National Customs Automation Program
    The NCAP was established in Subtitle B of Title VI--Customs 
Modernization, in the North American Free Trade Agreement 
Implementation Act, Public Law 103-182, 107 Stat. 2057, 2188 (1993) 
(Customs Modernization Act) (19 U.S.C. 1411-14). Through NCAP, the 
initial thrust of customs modernization was on trade compliance and the 
development of ACE, the planned successor to the Automated Commercial 
System (ACS). ACE is an automated and electronic system for commercial 
trade processing which is intended to streamline business processes, 
facilitate growth in trade, ensure cargo security, and foster 
participation in global commerce, while ensuring compliance with U.S. 
laws and regulations and reducing costs for CBP and its communities of 
interest. The ability to meet these objectives depends on successfully 
modernizing CBP's business functions and the information technology 
that supports those functions. CBP's modernization efforts are 
accomplished through phased releases of ACE component functionality.
    In part, the Test has been used in furtherance of International 
Trade Data System (ITDS) key initiatives, set forth in section 405 of 
the Security and Accountability for Every Port Act of 2006, Public Law 
109-347, 120 Stat. 1884, 1929-1931 (SAFE Port Act) (19 U.S.C. 1411(d)) 
and Executive Order 13659, Streamlining the Export/Import Process for 
America's Businesses, 79 FR 10655 (February 25, 2014). The purpose of 
ITDS, as stated in section 405, Sec.  411(d)(1)(B) of the SAFE Port Act 
(19 U.S.C. 1411(d)(1)(B)), is to eliminate redundant information 
requirements, efficiently regulate the flow of commerce, and 
effectively enforce laws and regulations relating to international 
trade, by establishing a single portal system operated by CBP for the 
collection and distribution of standard electronic import and export 
data required by all participating Federal agencies. ACE was developed 
by CBP as the ``single window'' for the trade community to comply with 
the ITDS requirement established by the SAFE Port Act. See sec. 405, 
Sec.  411(d)(1)(B) (19 U.S.C. 1411(d)(1)(B)).
2. Data Elements in the Test
    The data elements as set forth in the original Test have been 
mandatory unless otherwise indicated below. The Test has required that 
five conditional data elements must be transmitted to CBP only if the 
particular information pertains to the shipment or cargo. The data 
elements are required to be submitted at the lowest bill level. The 
data elements in the Test for all shipments, including empty rail cars, 
consist of:

(1) Mode of Transportation (containerized rail cargo or non-
containerized rail cargo)
(2) Port of Departure from the United States
(3) Date of Departure
(4) Manifest Number
(5) Train Number
(6) Rail Car Order
(7) Car Locator Message
(8) Hazmat Indicator (Yes/No)
(9) 6-character Hazmat Code (conditional) (If the hazmat indicator is 
yes, then UN (for United Nations Number) or NA (North American Number) 
and the corresponding 4-digit identification number assigned to the 
hazardous material must be provided.)
(10) Marks and Numbers
(11) SCAC (Standard Carrier Alpha Code) for exporting carrier
(12) Shipper name and address (For empty rail cars, the shipper may be 
the railroad from whom the rail carrier received the empty rail car to 
transport.)
(13) Consignee name and address (For empty rail cars, the consignee may 
be the railroad to whom the rail carrier is transporting the empty rail 
car.)
(14) Place where the rail carrier takes possession of the cargo 
shipment or empty rail car
(15) Port of Unlading
(16) Country of Ultimate Destination
(17) Equipment Type Code
(18) Container Number(s) (for containerized shipments) or Rail Car 
Number(s) (for all other shipments)
(19) Empty Indicator (Yes/No)

    If the empty indicator is no, then the following data elements must 
also be provided, as applicable:

(20) Bill of Lading Numbers (Master and House)
(21) Bill of Lading Type (Master, House, Simple or Sub)
(22) Number of House Bills of Lading
(23) Notify Party name and address (conditional)
(24) AES Internal Transaction Number or AES Exemption Statement (per 
shipment)
(25) Cargo Description
(26) Weight of Cargo (may be expressed in either pounds or kilograms)
(27) Quantity of Cargo and Unit of Measure
(28) Seal Number
(29) Split Shipment Indicator (Yes/No)
(30) Portion of split shipment (e.g., 1 of 10, 4 of 10, 5 of 10--Final, 
etc.) (conditional)
(31) In-bond Number (conditional)
(32) Mexican Pedimento Number (only for shipments for export to Mexico) 
(conditional)
3. Test Expansion, Extension, Modification and Second Extension
    On August 14, 2017, CBP extended the Test for an additional two-
year period (82 FR 37893). At the same time, the Test began accepting 
additional applications for all parties that met the eligibility 
requirements of the original nine stakeholders composed of rail 
carriers. CBP consulted with the Commercial Customs Operations Advisory 
Committee (COAC) to address issues concerning the quality, 
accessibility, and timeliness of export manifest data received during 
the Test. One issue of concern was the availability of certain data 
elements required under the Test two hours prior to loading of the 
cargo on the train in preparation for departure from the United States. 
COAC urged CBP to change the filing condition of those data elements.
    After evaluating the initial phase of the Test and considering 
COAC's comments, CBP determined that, to better test the functionality 
and feasibility of submitting the specified export data two hours prior 
to loading of the cargo on the train, the filing condition for nine of 
the data elements should be changed. The modified filing conditions 
enabled CBP to better determine the appropriate reporting requirements 
for each data element. Data elements which are ``mandatory'' must be 
provided to CBP for every shipment. Data elements which are 
``conditional'' must be provided to CBP only if the particular 
information pertains to the cargo. Data elements which are ``optional'' 
may be provided to CBP but are not required.

[[Page 2879]]

    CBP modified the Test to change the following eight mandatory or 
conditional data elements to optional:

 Mode of Transportation (containerized rail cargo or non-
containerized rail cargo) (Data Element #1)
 Place where the carrier took possession (Data Element #14)
 Country of Ultimate Destination (Data Element #16)
 Equipment Type Code (Data Element #17)
 Number of House Bills of Lading (Data Element #22)
 Split Shipment Indicator (Data Element #29)
 Portion of Split Shipment (Data Element #30)
 Mexican Pedimento Number (Data Element #32)

    CBP also modified the Test to change Data Element #10, Marks and 
Numbers, from mandatory to conditional.
    The remaining data elements under the extended Test continued to be 
mandatory, conditional, or optional as provided in the September 9, 
2015, notice, and as detailed in Section IV.B.2. above.
    CBP identified in the expansion and modification of the Test that 
it would reevaluate the filing conditions for each data element to 
determine the feasibility of requiring that data element to be filed 
electronically in ACE within a specified time before the cargo is 
loaded on the train should CBP decide to conduct rulemaking. 
Accordingly, as discussed in more detail below, the proposed regulation 
changes the timing of presentation of most electronic export manifest 
data from two hours prior to loading on the train to two hours prior to 
departure of the train to a foreign port.
    On April 27, 2022, CBP extended the Test for an additional two 
years. (87 FR 25037.)

V. Results of the Test, Modification, Expansion and Extensions

    Since its inception, the Test has assessed the feasibility of 
requiring rail carriers to file export manifest data for which CBP did 
not have regulations established for specific data elements and 
obtained train consists in the format and manner in which the rail 
carriers chose to provide such elements. In addition, the Test has 
assessed the functionality regarding the filing of export manifest data 
for rail cargo electronically to ACE in furtherance of the ITDS 
initiatives described above. CBP also re-engineered AES to move it to 
the ACE platform. The re-engineering and incorporation of AES into ACE 
resulted in the creation of a single automated export processing 
platform for certain export manifest, commodity, licensing, export 
control, and export targeting transactions. This reduces costs for CBP, 
partner government agencies, and the trade community, and improves 
facilitation of export shipments through the supply chain.
    Additionally, the Test has examined the feasibility of requiring 
the rail carrier to submit manifest information electronically in ACE 
generally within a specified time before the cargo has been loaded on 
the train. Test participants were and are required to submit export 
manifest data electronically to ACE at least two hours prior to loading 
of the cargo or, for empty rail cars, upon assembly of the train. This 
time frame has enabled CBP to link the EEI submitted by the USPPI with 
the export manifest information. Much of that success has resulted from 
the fact that a high percentage of information is being transmitted 
well before the two-hour prior to departure deadline. Upon a random 
review of data identifying compliance with time frame submission, CBP 
found that nearly 94% of data transmissions occurred more than 24 hours 
prior to conveyance departure.
    The success of the Test has allowed CBP to determine that the 
electronic submission of manifests provides improvements in 
capabilities at the departure level. As a result of these improvements, 
CBP is now seeking to end the Test and codify this program by proposing 
new regulations in this document.

VI. Purpose and Need of the Rule

    CBP proposes a new regulatory requirement because it does not 
currently have regulations in place requiring the submission of an 
electronic export manifest for cargo transported by rail to assess 
cargo security. The proposed regulatory changes are the culmination of 
CBP's efforts with the Test described above.
    The proposed regulation will leverage the data elements and train 
consist requirements in advance of departure to Mexico and Canada. The 
data elements are already included in the current Test, which has been 
operational since September 9, 2015. 80 FR 54305. The proposed 
regulation identifies the mandatory, conditional, and optional data 
elements and who would be required to submit the data. The proposed 
regulation also would add an initial filing for seven data elements to 
be presented 24 hours prior to departure of the train.
    For CBP, the proposed requirement to submit an electronic export 
manifest will enhance cargo security in that it would allow for 
improvements in risk assessment capabilities at the port level. Port 
operations will enjoy considerable efficiencies through the elimination 
of paper manifests. Storage space currently reserved for manifest 
documents will be freed. Coordination and information exchange among 
CBP, the Department of Commerce, and other Government agencies with 
export jurisdiction will improve. Carriers, USPPIs, non-vessel 
operating common carriers (NVOCC), and other interested parties who 
transmit information will receive better and more rapid examination 
decisions from CBP. The trade will benefit through the ease of making 
information corrections and additions electronically, a process that 
requires cumbersome manifest discrepancy reporting in a paper world.
    The ACE Export Manifest data submission is used to conduct risk 
assessment to identify high-risk rail cargo includes but is not limited 
to weapons, ammunition, currency or narcotics. High risk shipments are 
based on the totality of the review which includes party name, country 
of destination, cargo description, and/or a combination of data 
elements. Data supports a conclusion that Test participants have access 
to the manifest data early in the planning stages of an export rail 
cargo transaction and will be able to comply with these time frames. As 
stated, CBP anticipates that these timeframes will provide adequate 
time to perform proper risk assessment and identification of shipments 
to be inspected early enough in the supply chain to enhance security 
while minimizing disruption to the flow of goods. At present, 
regulations do not provide for any method to screen or secure rail 
cargo exports which this proposed regulation seeks to address. ACE 
Export Manifest data submission allows CBP to use its Automated 
Targeting System (ATS) to screen all of the data submitted which allows 
CBP to make better examination decisions while also reducing the time 
required to make such decisions. Although CBP will aim to identify 
shipments for inspection prior to loading, inspections could 
potentially happen at any time before the train departs the United 
States.
    Any rail cargo identified by CBP as requiring review will be held 
until required additional information related to the shipment is 
submitted to clarify non-descriptive, inaccurate, or insufficient 
information, a physical inspection is performed, or some other

[[Page 2880]]

appropriate action is taken, as specified by CBP. Once the cargo is 
cleared for loading, a release message will be generated and 
transmitted to the filer.

VII. Proposed Requirements

    CBP is seeking to promulgate a new regulation, proposed 19 CFR 
123.93, requiring the submission of export manifest data electronically 
in ACE for cargo transported by rail, pursuant to section 343(a), of 
the Trade Act of 2002, as amended. The proposed regulation would 
mandate the electronic transmission of rail export manifest 
information, identify the parties eligible to transmit information, 
describe the time frames prior to departure of the train in which the 
information is due, and identify an initial filing that must occur 24 
hours prior to departure from the port of export while requiring the 
remaining data to be transmitted at least two hours prior to such 
departure.
    Further, to comply with Section 343 of the Trade Act of 2002, as 
amended (19 U.S.C. 1415), new 19 CFR 123.93 would require parties with 
the most direct knowledge to provide certain information to CBP. In 
furtherance of that goal, the proposed regulatory language sets forth 
differences between transportation data (always required of the carrier 
and carrier only) and cargo data, which can be provided by the party 
with direct knowledge of that information.
    Consistent with the provisions of 19 U.S.C. 1415(a)(3)(B), when 
requiring information from the party with direct knowledge of the 
information is not practicable, the proposed regulation would take into 
account how, under ordinary commercial practices, information is 
acquired by the party on which the requirement is imposed and whether 
and how such party is able to verify the information. Where information 
is not reasonably verifiable by the party, the proposed regulation 
would permit the party to transmit information on the basis of what it 
reasonably believes to be true.
    The proposed regulation designates information as transportation 
data, cargo data, or empty container data, and lists the data elements 
to be transmitted while calling them out as mandatory, conditional, or 
optional. The data elements that are identified as mandatory must be 
submitted. These elements are necessary for CBP to inspect cargo 
effectively, ensure compliance with U.S. export control laws and 
regulations and identify high-risk shipments for purposes of ensuring 
cargo safety and security. Data elements that are identified as 
conditional must be provided if available. Data elements identified as 
optional provide additional information for purposes of clarity and may 
facilitate the clearance process but are not required to be submitted.
    The proposed regulation provides for direction regarding 
enforcement referrals, Do-Not-Load messages, and Hold messages. Any 
rail cargo identified by CBP as requiring review would be held until 
required additional information related to the shipment is submitted to 
clarify non-descriptive, inaccurate, or insufficient information, a 
physical inspection is performed, or some other appropriate action is 
taken, as specified by CBP. If the cargo is cleared for loading, a 
release message would be generated and transmitted to the filer. If a 
potential high-risk cargo is identified, then a CBP officer would 
conduct an examination. The rail carriers would be notified of these 
holds through the integrated system and if a mandatory examination of 
the cargo and/or freight car is required or if CBP needs to conduct 
further review of the data transmitted. In addition to holds, if a CBP 
officer determines during review that cargo or a rail car may contain a 
potential threat to the train and its vicinity, a Do-Not-Load (DNL) 
instruction would be issued, which prohibits the rail carrier from 
transporting that cargo or railcar. The rail carrier should not 
transport any cargo or rail car with a DNL. The advance transmission of 
EEM data would help CBP review and issue holds before cargo is loaded 
or before a train reaches the U.S. port of export, thus facilitating a 
more efficient export process.
    Specifically, CBP is proposing to require seven data elements, 
characterized as an initial filing, to be transmitted no less than 24 
hours prior to train departure. The seven data elements chosen for 
mandatory transmission 24 hours prior to departure would be those data 
elements that would provide CBP with the cargo information it needs to 
perform the appropriate security analysis, including: Bill of Lading 
Number, Total Quantity, Total Weight, Cargo Description, Shipper's Name 
and Address, Consignee Name and Address, and Automated Export System 
(AES) Exemption Statement, as applicable. The proposed rule provides 
for the submission of transportation, conveyance, and empty container 
information two hours prior to departure of the train rather than two 
hours prior to loading (or on assembly of the train in the case of 
information pertinent to empty rail cars). This change in transmission 
timing for all other data elements would combine with the initial 
transmission to afford CBP the ability to better assess risk and 
effectively target and inspect shipments prior to the cargo departing 
the United States to ensure compliance with all U.S. export laws.

A. Initial Data Elements

    Different from the Test's time periods for data presentation, 
proposed 19 CFR 123.93 requires a mandatory initial filing of seven 
data elements identified below to be submitted 24 hours prior to 
departure to a foreign port, by either the carrier, USPPI, or other 
qualified parties or their authorized agents. In proposed 19 CFR 
123.93(b)(1), CBP has determined that requiring this initial filing in 
a time frame even earlier than prescribed in the Test is necessary to 
allow for complete vetting of cargo and transportation information for 
security purposes. The high percentage of data available for 
transmission 24 hours prior to departure supports the feasibility of 
requiring this initial filing. In further support of this proposal, 
some validations would be relaxed until the carrier links the master 
bill and house bill to allow for the submission of advance data. Upon 
receipt of the initial filing submission, CBP would validate and notify 
the filer of the master bill and house bill data, if any data is 
required, or if the house bill has been placed on hold pending the 
updating of the bill. Under the proposed regulation, the carrier would 
have the ultimate responsibility to load, hold, or not load the cargo. 
The carrier, USPPIs and other parties qualified to transmit data (or 
their authorized agent) would be eligible to submit the initial data 
filing as discussed below.
    CBP proposes adding 19 CFR 123.93(c) which identifies the parties 
that can file the cargo and conveyance data. The outbound carrier is 
responsible for transmitting export manifest transportation data and 
empty container data. The outbound carrier must also transmit the 
initial filing data and the export manifest cargo data if no other 
eligible party elects to do so. If another eligible party elects to 
transmit either the initial filing data or export manifest cargo data, 
the outbound carrier may also choose to, but is not required to, 
transmit such data. Other eligible parties include USPPI and FPPI, as 
defined by the provisions of section 30.1 of the FTR of the Department 
of Commerce, Bureau of the Census (15 CFR 30.1), or its authorized 
agent. Other eligible filers also include any other party with direct 
knowledge of the export information, such as a customs broker, 
Automated Broker Interface (ABI) filer, NVOCC as defined by 19 CFR 
4.7(b)(3)(ii), or a freight forwarder

[[Page 2881]]

as defined in 19 CFR 112.1. If another party does not transmit advance 
export information, the party that arranges for and/or delivers the 
cargo to the outbound carrier must fully disclose and present to the 
outbound carrier the data elements for the initial filing. Any party 
transmitting any of the data described in this subsection must be in 
possession of either a CBP Basic Importation and Entry Bond containing 
the provisions found in 19 CFR 113.62, a Basic Custodial Bond 
containing the provisions found in 19 CFR 113.63, or an International 
Carrier Bond containing the provisions found in 19 CFR 113.64.
    CBP also proposes adding 19 CFR 123.93(d) which identifies the 
seven data elements from the Test that are required in the mandatory 
initial filing. Descriptions of those data elements have been revised 
in the proposed rule to clarify the kind and character of data that is 
required. The revised data elements in the proposed rule for the 
initial filing and the Test data elements to which they correspond are 
as follows:
    (1) Bill of lading number, which is necessary to link the 
transmission to the cargo throughout the entire electronic manifest 
process;
    (2) The numbers and quantities of the cargo laden aboard the train 
as contained in the carrier's bill of lading, either master or house, 
as applicable (this means the quantity of the lowest external packaging 
unit; numbers or quantities of containers and pallets do not constitute 
acceptable information; for example, a container holding 10 pallets 
with 200 cartons should be described as 200 cartons) [Test data element 
of Quantity of Cargo and Unit of Measure];
    (3) Total weight of cargo expressed in pounds or kilograms [Test 
data element of Weight of Cargo (may be expressed in either pounds or 
kilograms)];
    (4) A precise cargo description (or the Harmonized Tariff Schedule 
(HTSUS) number(s) to the 6-digit level under which the cargo is 
classified if that information is received from the shipper and weight 
of the cargo; or for a sealed container, the shipper's declared 
description and weight of the cargo (generic descriptions, specifically 
those such as ``FAK'' (``freight of all kinds''), ``general cargo'', 
and ``STC'' (``said to contain'') are not acceptable) [Test data 
element of Cargo Description];
    (5) The shipper's complete name and address, or identification 
number, from the bills of lading (for each house bill in a consolidated 
shipment) [Test data element of Shipper name and address];
    (6) The consignee's complete name and address, or identification 
number, from the bill(s) of lading. (The consignee is the party to whom 
the cargo will be delivered to in a foreign country. However, in the 
case of cargo shipped ``to order of [a named party],'' the ``to order'' 
party must be named as the consignee; and if there is any other 
commercial party listed in the bill of lading for delivery or contact 
purposes, the carrier must also report this other commercial party's 
identity and contact information including address in the ``Notify 
party'' field.) [Test data element of Consignee name and address]; and
    (7) The Automated Export System (AES) Exemption Statement, as 
applicable [Test data element of AES Exemption Statement (per 
shipment)].
    Except for these seven data elements re-described or re-formatted 
above, CBP would require electronic export manifest information in 
sections 123.93(e), and (f) to be transmitted two hours prior to train 
departure to a foreign port. That data comprises all additional data 
elements to be described as export manifest transportation data, cargo 
data, and empty container data. While 32 data elements are described in 
the Test, experience has shown that some are no longer necessary for 
inclusion in the proposed rule.

B. Transportation Data Elements

    Proposed 19 CFR 123.93(e)(1) establishes the obligation on the 
carrier or its agent to supply transportation data. The transportation 
data elements carried forward from the Test to the proposed rule 
include the following:
    (1) Port of Departure from the United States (mandatory);
    (2) Date of Departure (mandatory);
    (3) Mode of Transportation (containerized rail cargo or non-
containerized rail cargo) (optional);
    (4) Equipment Type Code (optional);
    (5) Place where the rail carrier takes possession of the cargo 
shipment or empty rail car (optional);
    (6) Carrier-assigned conveyance name, equipment number and trip 
number (mandatory);
    (7) 6-character Hazmat Code. If the Hazmat Code is provided, then 
UN (for United Nations Number) or NA (North American Number) and the 
corresponding 4-digit identification number assigned to the hazardous 
material must be provided.) (conditional);
    (8) Marks and Numbers (conditional);
    (9) SCAC (Standard Carrier Alpha Code) for the exporting carrier 
(mandatory);
    (10) Container or Equipment Numbers (for containerized shipments) 
or Rail Car Numbers (for all other shipments) (mandatory);
    A transportation data element carried over from the Test to the 
proposed 19 CFR 123.3(e) with an expanded definition is as follows:
    Seal Number (conditional, only required if container was sealed). 
The seal numbers for all seals affixed to containers and/or rail cars 
to the extent that CBP's data system can accept this information (for 
example, if a container has more than two seals, and only two seal 
numbers can be accepted through the system per container, electronic 
presentation of two of these seal numbers for the container would be 
considered as constituting full compliance with this data element).
    In proposed 19 CFR 123.3(e), CBP is adding the transportation data 
element of ``Estimated Time of Departure'' (mandatory) to be supplied 
by the carrier or its agent that was not required in the Test but 
provides important information to CBP.
    Proposed 19 CFR 123.3(e) also adds the transportation data element 
of ``Train Consist'' (mandatory) to be supplied by the carrier or its 
agent. The Train Consist provides CBP with what is on the train from 
the engine through the last car and how the cargo is lined up for 
departure from the United States. The Train Consist is composed of the 
following data elements that were required in the Test:

(1) Manifest Number
(2) Train Number
(3) Rail car order
(4) Empty containers.

C. Cargo Data Elements

    Proposed 19 CFR 123.93(f) establishes the obligation on the party 
with knowledge of the facts or its agent to supply manifest cargo data. 
The cargo data elements carried forward from the Test to the proposed 
rule in addition to the seven data elements forming the Initial Data 
Filing include the 17 data elements listed below. CBP recognizes that 
some cargo data elements would already be requested in the initial data 
elements; those data elements would not need to be transmitted again 
unless there are updates or changes made. The proposed cargo data 
elements are as follows:
    (1) Shipper name and address (for empty rail cars, the shipper may 
be the railroad from whom the rail carrier received the empty rail car 
to transport) (mandatory);
    (2) Consignee name and address (for empty rail cars, the consignee 
may be the railroad to whom the rail carrier is transporting the empty 
rail car) (mandatory);
    (3) Port of Lading (mandatory);
    (4) Port of Unlading (mandatory);

[[Page 2882]]

    (5) Bill of Lading Type (Master, House, Simple or Sub) (mandatory);
    (6) Bill of Lading Numbers (Master, House, Simple or Sub) 
(mandatory);
    (7) AES Internal Transaction Number or In-bond Number (per 
shipment) (mandatory);
    (8) Cargo description (mandatory);
    (9) Weight of cargo (may be expressed in either pounds or 
kilograms) (mandatory);
    (10) Quantity of cargo and unit of measure (mandatory);
    (11) In-bond type (conditional);
    (12) Notify party name and address (conditional);
    (13) Secondary notify party name and address (conditional);
    (14) Mexican Pedimento Number (only for shipments for export to 
Mexico) (optional);
    (15) Secondary notify party SCAC (optional);
    (16) Country of ultimate destination (optional); and
    (17) Number of house bills of lading (optional).
    CBP has determined that the collection of the following data 
elements required in the Test were found to be problematic or 
superfluous or are addressed by other regulations and will not be 
carried forward in the proposed rule:
    (1) Car Locator Message;
    (2) Empty Indicator (yes/no);
    (3) Hazmat Indicator;
    (4) Split Shipment Indicator (Yes/No) \6\; and
---------------------------------------------------------------------------

    \6\ Although split shipment and portion of split shipment were 
data elements identified in the Test, CBP decided it was unnecessary 
to carry them into the proposed rule because they are elements 
required, to the extent necessary, by 15 CFR 30.28.
---------------------------------------------------------------------------

    (5) Portion of split shipment (e.g., 1 of 10, 4 of 10, 5 of 10--
Final, etc.)

D. Examination Referrals

    Proposed 19 CFR 123.93(g) provides for two types of referrals that 
may be issued by CBP after a risk assessment of an outbound export 
manifest data transmission. A referral for information will be 
delivered to the rail carrier or its agent if the information provided 
fails to appropriately describe the cargo or if the information 
provided is inaccurate or insufficient. The data transmitter must then 
add or correct the information prior to the departure of the train from 
the United States. A referral for screening will be issued if the 
potential risk of the cargo is deemed high enough to warrant enhanced 
screening. In this instance, the rail carrier is notified of these 
holds and the notification lets the rail carrier know that a mandatory 
examination of the cargo and or freight car is required or if CBP needs 
to conduct further review of the data transmitted.

E. Do-Not-Load (DNL)/Hold Instructions

    CBP is also proposing to add 19 CFR 123.93(h) to provide for 
procedures for when a CBP officer determines during the review that 
cargo or a rail car may contain a potential threat to the train and its 
vicinity, so that a Do-Not-Load (DNL) instruction can be issued, which 
prohibits the rail carrier from transporting that cargo or rail car. 
The rail carrier should not transport any cargo or rail car with a DNL. 
A Hold instruction will be issued, even after loading, if further 
examination is required. In order to address such issues, data 
transmitters must provide a telephone number and email address that is 
monitored 24 hours a day/seven days a week. Data transmitters must 
respond and fully cooperate when such an instruction or hold is issued.

F. Other Technical Amendments to Part 123

    By adding new subpart J, CBP is revising the scope provision (19 
CFR 123.0) to reflect that customs procedures at the Canadian and 
Mexican borders would include electronic information for cargo in 
advance of departure which is not presently addressed in the 
regulation.

G. Proposed Amendments to CBP Bond Conditions

    As an enforcement tool, CBP is also proposing changes to the 
relevant bond provisions in 19 CFR 113.62 (basic importation and entry 
bond), in 19 CFR 113.63 (basic custodial bond), and 19 CFR 113.64 
(International carrier bond) to provide CBP with authority to impose 
liquidated damages on parties that do not provide the mandatory EEM 
data in the manner and in the time frame required. Specifically, CBP 
proposes to amend 19 CFR 113.62 to add new paragraph (k)(3) to address 
electronically provided outbound information. Section 113.62(k) 
currently addresses electronic transmissions for merchandise or cargo 
which is inbound. CBP also proposes to amend 19 CFR 113.63 to include 
advance outbound information provided to CBP electronically and in the 
manner and in the time period required under 19 CFR 123.93. CBP is also 
seeking to amend 19 CFR 113.64 to include outbound information provided 
electronically by international carriers in the manner and time period 
required under 19 CFR 123.93. With each of these regulations, CBP may 
assess liquidated damages if a violation occurs. Any party that 
violates the bond conditions for outbound data transmission as 
described above in this proposed rule agrees to pay liquidated damages 
of $5,000 for each violation and up to a maximum of $100,000 per 
departure. Compliance is CBP's goal and CBP aspires to work alongside 
rail carriers and other parties to ensure that trade members provide 
the proper data in a timely manner, so that CBP can properly review the 
data, conduct risk assessment of high-risk shipments, and enforce U.S. 
export laws and regulations on U.S. rail exports.

VIII. Regulatory Analyses

A. Executive Orders 12866 and 13563 (Regulatory Planning and Review)

    Executive Orders 12866 (Regulatory Planning and Review), as amended 
by Executive Order 14094 (Modernizing Regulatory Review), and 13563 
(Improving Regulation and Regulatory Review) direct agencies to assess 
the costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility.
    The Office of Management and Budget (OMB) has designated this rule 
a ``significant regulatory action'' as defined under section 3(f) of 
E.O. 12866, as amended by Executive Order 14094. Accordingly, OMB has 
reviewed this rule.
    In summary, CBP expects that this proposed rule would result in a 
present value total combined net cost savings of $49.8 million using a 
two percent discount rate, or approximately $3.8 million annualized 
(2023 U.S. dollars) to CBP, outbound rail carriers and other related 
parties during the period of analysis (2016 to 2030). CBP anticipates 
that this proposed rule would also provide added benefits from enhanced 
cargo security measures by improving compliance and the enforcement of 
U.S. export laws and regulations on U.S. rail exports, while also 
improving the facilitation of the export process. The following is the 
economic analysis of the potential impacts from this proposed rule.
Purpose and Background
    CBP's mission includes ensuring cargo security and preventing 
smuggling, while enforcing U.S. trade laws and regulations. CBP needs 
to obtain timely and sufficient data prior to

[[Page 2883]]

cargo arriving or departing the United States via any mode of 
commercial transportation in order to review and conduct risk 
assessment to identify high-risk shipments and inspect cargo 
effectively. According to Section 343(a) of the Trade Act of 2002, as 
amended (Trade Act) (19 U.S.C. 1415), CBP is authorized to establish 
regulations that provide for the mandatory electronic transmission of 
data by way of a CBP-approved electronic data interchange before cargo 
arrives or departs the United States in all environments (sea, air, 
rail, and truck). Transmitting export manifest data electronically, 
instead of on paper or via email, allows CBP to use its Automated 
Targeting System (ATS) to screen all of the data submitted. This allows 
CBP to make better examination decisions while also reducing the time 
required to make such decisions. Trade members also experience 
efficiencies through quicker CBP examination decisions and improved 
communication between CBP and trade members. The requirement to submit 
manifest data through an electronic data interchange (ACE) which is the 
same system through which data is incorporated from AES is also 
important to help facilitate a more efficient trade process for all 
federal agencies and trade members involved. Submitting electronic 
manifest data (specifically pre-arrival or pre-departure) significantly 
increases CBP's ability to conduct risk assessment and identify high-
risk cargo to ensure cargo security and to prevent smuggling. The 
electronic environment would improve and expedite communications 
between CBP and trade members in resolving examinations where 
additional or corrected information of the transmission is required.
Baseline
    In the rail environment, CBP currently requires the advance 
electronic submission of data for all cargo being brought into the 
United States, but CBP does not require the pre-departure electronic 
submission of data for all exported cargo. CBP requires some 
electronically transmitted cargo data prior to departing the United 
States by rail but this data is significantly limited in scope. Current 
regulations \7\ require the U.S. Principal Party in Interest (USPPI), 
the USPPI's agent, or the authorized filing agent of the Foreign 
Principal Party in Interest (FPPI) to transmit Electronic Export 
Information (EEI) to CBP through the Automated Commercial Environment 
(ACE), no later than two hours prior to the arrival of the train at the 
border. Although this pre-departure data is helpful, the information 
provided by EEI falls short of what CBP requires for proper 
enforcement.
---------------------------------------------------------------------------

    \7\ See 19 CFR 192.14.
---------------------------------------------------------------------------

    The required transmission of EEI is subject to certain exemptions, 
as established by the Bureau of the Census regulations,\8\ which 
generally only require EEI transmission on shipments greater than 
$2,500 and do not require the transmission of EEI for shipments 
destined for Canada, unless the shipment contains certain controlled 
items or is being transshipped to another destination.\9\ Therefore, 
numerous low dollar value shipments and/or Canadian-bound shipments of 
merchandise departing the United States by rail do not have EEI 
transmitted for CBP to review. The lack of detailed electronic manifest 
data for some shipments and the unavailability of electronic cargo data 
on lower value merchandise shipments impedes CBP's enforcement efforts 
on rail exports.
---------------------------------------------------------------------------

    \8\ See 15 CFR part 30.
    \9\ See 15 CFR 30.36.
---------------------------------------------------------------------------

    Although CBP receives limited pre-departure electronic data for 
rail exports, CBP usually receives additional pre-departure data from 
rail carriers or their agents. This information, however, is submitted 
via attachments to an email, which is not the most efficient or 
effective method to obtain such data and perform risk assessment.\10\ 
During the export cargo process, the rail carrier may not load cargo 
without first receiving from the USPPI or its authorized agent either 
the related EEI filing citation, covering all cargo for which the EEI 
is required, or exemption legends, covering cargo for which EEI need 
not be filed. While the rail carrier is not required to submit a rail 
cargo export manifest to CBP, the outbound rail carrier must annotate 
the carrier's outward manifest, waybill, or other export documentation 
with the applicable Automated Export System (AES) proof of filing, post 
departure, downtime, exclusion, or exemption citations, conforming to 
the approved data formats found in the Bureau of the Census Foreign 
Trade Regulations.\11\
---------------------------------------------------------------------------

    \10\ This information is submitted by rail carriers for trains 
transporting cargo out of the United States and is provided 
regardless of whether an EEI submission is required.
    \11\ See 15 CFR part 30.
---------------------------------------------------------------------------

    In the baseline rail carriers or their agents submit finalized 
train consists to CBP in a format of the rail carrier's choosing before 
a train is granted permission to depart from the U.S. port of 
export.12 13 Rail carriers or their agents can provide this 
data via email prior to a train's arrival at the U.S. port of export 
(pre-departure) or present this data to a CBP officer at departure when 
the train arrives at the U.S. port of export (at departure). The 
submission of such data pre-departure via email is not mandatory, nor 
is there a required time frame for submitting such information. 
However, rail carriers have the incentive to provide this information 
pre-departure so that CBP has time to review the information before the 
train reaches the U.S. port of export, expediting the export process 
and usually rail carriers send this information to CBP at least two 
hours prior to a train's arrival at the United States border.\14\ If 
rail carriers or agents choose not to provide this data pre-departure, 
they must present the finalized train consists to CBP upon arrival at 
the U.S. port of export at which point CBP officers must complete the 
review of the train consists while the train is at the U.S. port of 
export, resulting in a delay in the train's departure.
---------------------------------------------------------------------------

    \12\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, subject matter expert on 
February 25, 2022.
    \13\ A train consist is document that generally refers to the 
contents of a train including the position of the locomotives and 
cars, as well as both non-hazardous and hazardous freight within 
those cars.
    \14\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, subject matter expert on June 
21, 2022.
---------------------------------------------------------------------------

    Once this information is received by CBP (either via email or in 
person at the port of export) CBP officers will then conduct a review 
of the export information, which includes manually reviewing the 
finalized train consist (paper version or emailed) and address any 
issues. CBP officers must then also compare this data with any EEI 
information electronically submitted for that train along with any 
other documents. To ensure proper cargo security, during this review 
CBP officers must also conduct their targeting, risk assessment 
measures and determine if any cargo needs to be examined before a train 
departs the United States. In the baseline scenario, CBP is not able to 
automatically use ATS for risk assessment on the export information 
contained on the train consists provided by rail carriers to CBP.\15\ 
Although CBP officers can manually query ATS with information provided 
on the finalized train consists, CBP notes this is a cumbersome and 
time-consuming process and is not a frequent

[[Page 2884]]

occurrence. If during CBP's review of this information, prior to the 
train's arrival at the U.S. port of export, CBP officers find any 
discrepancies or missing data, CBP communicates via email to the rail 
carrier that submitted the data, requesting updates or corrections to 
the data provided. The CBP review process, including communications 
between CBP and rail carriers about discrepancies discovered while 
reviewing train consist information, can be unnecessarily cumbersome 
and time consuming because this data is provided via email attachments 
and the formats can be inconsistent across rail carriers. If CBP is not 
provided the pre-departure data or is not provided the data in a time 
frame that allows for CBP to properly review, request, and receive 
updates from rail carriers, and conduct proper risk assessment or 
manually examine high-risk cargo or shipment, then a CBP officer must 
resolve these issues at the U.S. port of export. This usually results 
in a delay to the train's departure.
---------------------------------------------------------------------------

    \15\ In the baseline scenario CBP is not able use ATS for risk 
assessment on export data submitted on paper forms (or via email) 
and paper forms cannot be automatically uploaded or submitted to ATS 
for risk assessment. A primary benefit of this proposed rule would 
be allowing CBP to automatically use ATS for risk assessment on all 
rail EEM data provided.
---------------------------------------------------------------------------

    CBP does not track how often rail carriers provide this pre-
departure data nor to what extent CBP officers are able to conduct some 
or all of their manual review of the data prior to the train's arrival 
to the U.S. port of export. Sometimes CBP identifies a high-risk cargo 
or shipment during manual review at the U.S. port of export or while 
reviewing pre-departure data but does not have time to adjudicate the 
shipment prior to a train's arrival at the U.S. port of export. In this 
situation, the CBP officer holds the train until one or more freight 
car(s) can be removed from the already constructed train for 
examination, which can cause delays and can be costly to rail 
carriers.\16\
---------------------------------------------------------------------------

    \16\ Unfortunately, CBP does not track how often manual 
examinations occur on average each year as these examinations are 
not entered into a system of record.
---------------------------------------------------------------------------

    This proposed rule would establish a requirement for the electronic 
transmission of export manifest data pre-departure from the United 
States for all cargo in the rail environment. CBP defines the process 
described above as the regulatory baseline and the analysis of this 
proposed rule attempts to measure any incremental costs, cost savings 
or benefits compared to the baseline scenario.
The ACE Export Manifest for Rail Cargo Test
    CBP has been working toward developing a new process to require the 
transmission of electronic export manifest (EEM) data for all cargo 
departing the United States by rail to enhance CBP's efforts to ensure 
cargo security while also preventing smuggling, and to be compliant 
with the Trade Act. CBP expects that the transmission of pre-departure 
EEM data would help CBP obtain all the necessary data to successfully 
review and conduct risk assessment measures before trains reach the 
U.S. port of export, thereby limiting the number of issues that CBP 
must address at the U.S. port of export and reducing potential delays. 
Rail carriers have also acknowledged that the baseline process of 
sending forms of rail export data by email is unnecessarily costly, 
time burdensome and inconsistent with the process for providing data on 
cargo entering the United States.\17\ As such, rail carriers have been 
supportive of CBP's efforts to provide a more efficient process by 
allowing for the transmission of rail EEM data.
---------------------------------------------------------------------------

    \17\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, on June 21, 2022.
---------------------------------------------------------------------------

    In September of 2015, CBP introduced a two-year pilot test program, 
referred to in this analysis as the ACE Export Manifest for Rail Cargo 
Test (the Test), to determine the feasibility for rail carriers or 
their agents to provide pre-departure EEM data for rail exports to CBP 
via ACE within a specified time before cargo departs the United States. 
To test the functionality of this new process, CBP initially limited 
participation in the Test to nine rail carriers. During this initial 
phase of the Test, CBP worked with rail carriers who agreed to 
participate and submit EEM data to CBP via ACE in addition to providing 
paper forms. The participants were large rail companies, similar in 
most respects to those that did not participate. As such, CBP believes 
their experience with the test is informative for analyzing the effects 
of the rule. CBP requests comment on any meaningful differences between 
the participants and the non-participants that would affect the 
analysis. CBP requested that participants continue to submit data in 
paper forms as they did before the Test so that CBP could capture any 
inconsistencies or issues with the electronic transmission of rail 
export manifest data to CBP. In the Test, CBP requested that 
participants provide rail EEM data to CBP at least two hours prior to 
loading the cargo onto the train, or in the case of empty rail cars 
upon assembly of the train.\18\ Because the ACE system would conduct a 
majority of the risk assessment and review of electronically 
transmitted data, CBP anticipated that this two-hour window would 
provide enough time for CBP to review pre-departure EEM data prior to 
the cargo being loaded onto trains and before the trains have been 
assembled. The two-hour time frame also provided CBP the opportunity to 
notify rail carriers or agents to revise and correct export manifest 
data where necessary before the cargo is loaded. This increased the 
chance that CBP could conduct cargo inspections before cargo is loaded 
and trains are assembled, avoiding costly time burdens if issues were 
to be addressed after the train has been constructed. The required 
deadline for EEM data also provided CBP an opportunity to compare any 
EEI submitted by the USPPI with the export manifest data to properly 
conduct safety and security screening for cargo departing the United 
States on rail.
---------------------------------------------------------------------------

    \18\ CBP notes that although the Test requested export manifest 
data to be provided within certain deadlines, participants were not 
required to provide data within these time frames. Participants were 
given flexibility to provide the data to CBP electronically and were 
not penalized if export manifest data was not submitted within the 
time frames of the Test. However, CBP experienced high levels of 
compliance with submitting EEM data transmissions with 94 percent of 
all data transmissions were submitted greater than 24 hours prior to 
the departure time.
---------------------------------------------------------------------------

    One major improvement of the Test is that rail carriers can provide 
and revise export manifest data electronically on a flow basis when the 
export data becomes available during the export process. Typically, 
rail carriers provide export manifest data in documents known as bills 
of lading (bills), which act as a receipt and contract of transporting 
cargo and goods. These bills can come from a number of sources 
depending on which party is privy to the information and the timing of 
when the information is provided. A house bill contains cargo details 
and is issued directly by a party such as a Non-Vessel Operating Common 
Carrier (NVOCC) or freight forwarder. This bill acts as the receipt of 
exported goods and provides export manifest data at its lowest level. 
Carriers issue a master bill which includes all other export manifest 
information such as transportation details for the transporting train 
covering any number of house bills that are included on that train. 
Additionally, in the case where a NVOCC or freight forwarder is not 
involved in the shipment transaction and the carrier has the specific 
cargo data available, the carrier can issue a ``simple bill,'' which is 
similar to a house bill and contains cargo details at the lowest bill 
level of export manifest data. In the rail environment, house bills and 
master bills are not typically issued because rail carriers usually 
issue simple bills for all cargo and then submit finalized

[[Page 2885]]

train consists to CBP. These consists include the simple bills 
associated with all the cargo on the train and any other transportation 
data for the train prior to departure from the U.S. port of export. The 
Test allows participants to transmit these simple bills on a flow basis 
when the information becomes available. This differs from the baseline 
scenario where rail carriers typically waited for simple bills to be 
finalized before sending the export manifest data in the finalized 
train consist in a paper format to CBP for review. The transmission of 
EEM data, via ACE, allows for the integrated system to conduct a large 
portion of the review process using data validations, checks and risk 
assessment measures prior to the rail carriers loading cargo onto 
freight cars or constructing the train. Additionally, upon transmission 
of the pre-departure EEM data, CBP can review data on a flow basis 
while rail carriers provide updated data throughout the export process.
    The integrated system will generate two types of holds when rail 
carriers transmit bills: 2H Documentation holds, which notifies the 
rail carriers or their agents in the integrated system of outstanding 
issues with the data provided, and 1H Enforcement holds, which result 
from risk assessment. In the instance of a 2H Documentation hold, the 
rail carrier or agent must add or revise the missing or incorrect 
reference data in order to release the hold on the cargo prior to 
departure from the United States. The 2H Documentation holds 
automatically generated by ACE do not require any action or response 
from CBP or CBP officers and only affect rail carriers or their agents. 
The integrated system assists CBP in its risk assessment efforts and 
the identification of high-risk cargo. If during the integrated systems 
risk assessment, a potential high-risk cargo is identified, then a 1H 
Enforcement hold is generated which requires a CBP officer to conduct a 
review of the export manifest data submitted.\19\ The rail carriers are 
notified of these holds through the integrated system which lets them 
know if a mandatory examination of the cargo and or freight car is 
required or if CBP needs to conduct further review of the data 
transmitted. These holds can be issued and addressed even after rail 
carriers load the cargo. If a 1H Enforcement hold is issued to a rail 
carrier after loading the cargo and CBP requests to inspect the cargo, 
the rail carrier must provide CBP with a location where CBP can conduct 
a proper examination. In addition to holds, if a CBP officer determines 
during review that cargo or a rail car may contain a potential threat 
to the train and its vicinity, a Do-Not-Load (DNL) instruction is 
issued, which prohibits the rail carrier from transporting that cargo 
or rail car. The rail carrier should not transport any cargo or rail 
car with a DNL. The transmission of EEM data in advance would help CBP 
review and issue holds before cargo is loaded or before a train reaches 
the U.S. port of export. This transmission facilitates a more efficient 
export process by reducing the likelihood of a freight car or cargo 
being removed from a constructed train and the resulting delays when 
departing the U.S. port of export.
---------------------------------------------------------------------------

    \19\ CBP officers can also issue 1H Enforcement holds during 
manual review of electronic export manifest data transmitted.
---------------------------------------------------------------------------

    Rail carriers participating in the Test provide a number of 
mandatory and conditional data elements electronically to CBP via ACE. 
CBP determined that the selected data elements (listed below) would 
provide the information necessary to conduct proper cargo security 
enforcement. Rail carriers were already providing these data elements 
by the time of departure from the U.S. port of export to CBP prior to 
the Test but in paper form within the finalized train consists. The 
Test also required participating rail carriers to submit these data 
elements at the lowest bill level possible. The necessary data elements 
CBP selected during this initial phase of the Test, including empty 
rail cars, consisted of the following:

(1) Mode of Transportation (containerized rail cargo or non-
containerized rail cargo)
(2) Port of Departure from the United States
(3) Date of Departure
(4) Manifest Number
(5) Train Number
(6) Rail Car Order
(7) Car Locator Message
(8) Hazmat Indicator (Yes/No)
(9) 6-character Hazmat Code (conditional) (If the hazmat indicator is 
yes, then UN (for United Nations Number) or NA (North American Number) 
and the corresponding 4-digit identification number assigned to the 
hazardous material must be provided.)
(10) Marks and Numbers
(11) SCAC (Standard Carrier Alpha Code) for exporting carrier
(12) Shipper name and address (For empty rail cars, the shipper may be 
the railroad from whom the rail carrier received the empty rail car to 
transport.)
(13) Consignee name and address (For empty rail cars, the consignee may 
be the railroad to whom the rail carrier is transporting the empty rail 
car.)
(14) Place where the rail carrier takes possession of the cargo 
shipment or empty rail car
(15) Port of Unlading
(16) Country of Ultimate Destination
(17) Equipment Type Code
(18) Container Number(s) (for containerized shipments) or Rail Car 
Number(s) (for all other shipments)
(19) Empty Indicator (Yes/No)

    Additionally, if the rail carrier identified that the rail car is 
not empty (empty indicator is no), then CBP also required information 
for the following data elements for non-empty rail cars, as applicable:

(20) Bill of Lading Numbers (Master and House)
(21) Bill of Lading Type (Master, House, Simple or Sub)
(22) Number of house bills of lading
(23) Notify Party name and address (conditional)
(24) AES Internal Transaction Number or AES Exemption Statement (per 
shipment)
(25) Cargo Description
(26) Weight of Cargo (may be expressed in either pounds or kilograms)
(27) Quantity of Cargo and Unit of Measure
(28) Seal Number
(29) Split Shipment Indicator (Yes/No)
(30) Portion of split shipment (e.g., 1 of 10, 4 of 10, 5 of 10--Final, 
etc.) (conditional)
(31) In-bond Number (conditional)
(32) Mexican Pedimento Number (only for shipments for export to Mexico) 
(conditional)

    After the initial two-year period, CBP determined that the initial 
phase of the Test had been feasible and functional for participating 
rail carriers to provide EEM data and therefore CBP extended the test 
in 2017. At that time, CBP expanded the Test and made it available to 
all rail carriers and other trade members (beyond the initial nine rail 
carrier limit) which met the eligibility criteria.\20\ After the first 
two years of the

[[Page 2886]]

Test, CBP received feedback from rail carriers from the Commercial 
Customs Operations Advisory Committee (COAC), which stressed that rail 
carriers may not have access to certain export manifest data elements 
requested by CBP two hours prior to loading of cargo. Therefore, CBP 
determined to change the filing condition for nine of the pre-departure 
export manifest data elements for the Test moving forward. As part of 
the Test extension, CBP separated EEM data elements into three 
categories, mandatory, conditional, and optional data, and requested 
this information for all cargo and empty rail cars, at least two hours 
prior to loading of the cargo. CBP changed the following pre-departure 
EEM data elements (which were originally mandatory) to optional for the 
Test extension.
---------------------------------------------------------------------------

    \20\ Limited to those parties able to electronically transmit 
manifest data in the identified acceptable format. Prospective ACE 
Export Manifest for Rail Cargo Test participants must have the 
technical capability to electronically submit data to CBP and 
receive response message sets via Cargo-ANSI X12 (also known as 
``Rail X12'') or Unified XML and must successfully complete 
certification testing with their client representative. Once parties 
have applied to participate, they must complete a test phase to 
determine if the data transmission is in the required readable 
format. Applicants will be notified once they have successfully 
completed testing and are permitted to participate fully in the 
test. In selecting participants, CBP takes into consideration the 
order in which the applications are received.
---------------------------------------------------------------------------

 Mode of Transportation (containerized rail cargo or non-
containerized rail cargo) (Original Data Element #1)
 Place where the carrier took possession (Original Data Element 
#14)
 Country of Ultimate Destination (Original Data Element #16)
 Equipment Type Code (Original Data Element #17)
 Number of house bills of lading (Original Data Element #22)
 Split Shipment Indicator (Original Data Element #29)
 Portion of split shipment (Original Data Element #30)
 Mexican Pedimento Number (Original Data Element #32)

    CBP also modified the Test by changing the following data element 
from mandatory to conditional:

 Marks and Numbers (Data Element #10)
    CBP has continuously extended or renewed the Test to gauge the 
functionality and feasibility of implementing the requirement of 
providing EEM data to CBP prior to a train's departure. CBP believes 
that the Test has been successful and CBP is proposing to make the 
transmission of pre-departure EEM data mandatory for all cargo 
departing the United States in the rail environment.
The ACE Export Manifest for Rail Cargo Program
    This proposed rule would mandate the transmission of EEM data for 
all cargo prior to departing the United States in the rail environment 
in lieu of paper submissions, see Section VII `Proposed Requirements' 
above for discussion on the regulatory requirements of this proposed 
rule. CBP anticipates that providing this requirement for the 
transmission of pre-departure EEM data would significantly improve 
CBP's ability to conduct proper cargo security, prevent smuggling, and 
aid in facilitating a more effective and efficient trade process. Under 
this proposed rule, the parties most likely to have the correct data on 
rail export cargo would be able to provide it to CBP through ACE. The 
experience and knowledge CBP gained during the Test influenced CBP to 
change some of the requirements for providing EEM data in this proposed 
rule.
    CBP evaluated the time frames for electronic manifest data 
transmission during the Test, the most important data elements needed 
for risk assessment and screening cargo, and the unavailability to rail 
carriers of certain data elements at given time frames and decided to 
group the rail EEM data elements based on the deadlines for submission 
of data and on which party likely has the correct information to 
provide the export manifest data. The proposed rule would allow rail 
carriers, carrier's agents, NVOCCs, freight forwarders, customhouse 
brokers (CHB), or anyone with direct knowledge of the export manifest 
data to provide specific pre-departure export manifest data to CBP, 
using CBP's ACE as a data transmission portal. The proposed rule 
mandates that a party transmitting any specific EEM data must have a 
bond on file with CBP. Additionally, the party that transmits any EEM 
data electronically to CBP is also the responsible party for addressing 
any questions, issues, instructions or holds resulting from CBP's 
review of that specific data. Therefore, CBP would require that any 
party transmitting EEM data to CBP provide a telephone number and email 
address that the party monitors 24 hours per day and seven days a week 
to quickly address any instructions or holds that CBP issues.
    To improve CBP's risk assessment and screening efforts using pre-
departure EEM data, this proposed rule would require an initial filing 
of seven mandatory data elements, which must be transmitted to CBP by 
any eligible party at least 24 hours prior to the departure from the 
U.S. port of export. The rail carrier is responsible for providing the 
initial filing data elements to CBP if no other eligible party elects 
to transmit the data. Eligible parties should transmit all other pre-
departure EEM data elements to CBP no later than two hours prior to 
departure from the U.S. port of export, except for data on empty 
containers which would be required upon assembly of the train. From 
CBP's experience during the Test, CBP does not anticipate that changing 
the time frames for data transmission in this proposed rule would cause 
any data transmission issues for parties submitting the 
information.\21\ Depending on the party providing the EEM data, the 
required export data may be available at different points in time 
during the export rail transaction process. Some rail carriers would 
have the export manifest data available days in advance prior to 
departure and therefore would have all the necessary information to 
submit the initial filing data to CBP and all other export manifest 
data well in advance of the 24-hour and 2-hour prior to departure 
deadlines.\22\ CBP anticipates that all rail carriers would likely 
obtain the necessary export data elements to provide the required 
transportation and cargo EEM data within the two-hour prior to 
departure deadline.\23\ However, for some rail carriers acquiring the 
necessary data for the initial filing 24 hours prior to departure may 
require a change in business practices and additional coordination with 
other trade members or parties that have the required export manifest 
data. CBP does not believe that in such instances the export manifest 
data does not exist rather, the other trade members have not yet 
provided this information to the rail carrier.\24\ CBP expects that in 
such instances the costs to rail carriers to obtain this information 
from other trade members a few hours earlier would be minimal. 
Additionally, if other trade members are reluctant to provide this 
information to rail carriers within the 24-hour prior to departure 
deadlines, the other trade members would be able to provide this data 
to CBP directly as participant in the rail EEM process.
---------------------------------------------------------------------------

    \21\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, on June 21, 2022.
    \22\ CBP obtained feedback and information from Trade members on 
when in the export transaction process, the export manifest data is 
typically available for them to submit to CBP. Information obtained 
in February 2023.
    \23\ CBP obtained feedback and information from Trade members on 
when in the export transaction process, the export manifest data is 
typically available for them to submit to CBP. Information obtained 
in February 2023.
    \24\ Information provided during discussion with some Trade 
members in regard to the timeline for when export manifest data is 
available to provide to CBP and challenges to providing pre-
departure data well in advance. Data obtained in February 2023.
---------------------------------------------------------------------------

    CBP notes that during the Test, participants were already providing 
most of the data required in the initial filing well in advance of 
departure and within the 24 hours prior to departure time frame.\25\ 
CBP expects that rail carriers and other trade members would

[[Page 2887]]

have access to most export manifest data early in the planning stages 
of an export rail cargo transaction and would be able to comply with 
these time frames. Additionally, participating parties would be able to 
transmit EEM data to CBP on a flow basis whenever it becomes available 
to help facilitate CBP's review of the export data and the overall 
export process. CBP anticipates that these time frames would provide 
CBP adequate time to perform proper risk assessment and identify any 
cargo CBP should examine, early enough in the supply chain to enhance 
security while minimizing disruption to the flow of goods. Upon 
submission of the initial filing, CBP would validate or notify the 
responsible party of any holds or DNLs. The party that transmits the 
data is responsible for providing answers and updates on the data to 
CBP but the ultimate responsibility to load, hold, or not load cargo 
falls on the rail carrier.
---------------------------------------------------------------------------

    \25\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, on August 2, 2022.
---------------------------------------------------------------------------

    The seven data elements CBP selected for the initial filing were 
mandatory data elements in the Test; however, CBP revised the 
descriptions of these elements in this proposed rule to provide 
additional clarity on the data required. The initial filing data 
elements required in this proposed rule include the following, listed 
as well are the data elements' corresponding descriptions during the 
Test:
    (1) Bill of lading number,
    (2) The numbers and quantities of the cargo laden aboard the train 
as contained in the carrier's bill of lading, either master or house, 
as applicable (this means the quantity of the lowest external packaging 
unit; the numbers or quantities of containers and pallets do not 
constitute acceptable information; for example, a container holding 10 
pallets with 200 cartons should be described as 200 cartons [Test data 
element of Quantity of Cargo and Unit of Measure],
    (3) Total weight of cargo expressed in pounds or kilograms [Test 
data element of Weight of Cargo (may be expressed in either pounds or 
kilograms)],
    (4) A precise cargo description (or the Harmonized Tariff Schedule 
(HTSUS) number(s) to the 6-digit level under which the cargo is 
classified if that information is received from the shipper and weight 
of the cargo); or for a sealed container, the shipper's declared 
description and weight of the cargo (generic descriptions, specifically 
those such as ``FAK'' [``freight of all kinds''], ``general cargo'', 
and ``STC'' [``said to contain''] are not acceptable) [Test data 
element of Cargo Description],
    (5) The shipper's complete name and address, or identification 
number, from the bills of lading (for each house bill in a consolidated 
shipment) [Test data element of Shipper name and address],
    (6) The consignee's complete name and address, or identification 
number, from the bill(s) of lading (The consignee is the party to whom 
the cargo will be delivered in a foreign country. However, in the case 
of cargo shipped ``to order of [a named party],'' the ``to order'' 
party must be named as the consignee; and if there is any other 
commercial party listed in the bill of lading for delivery or contact 
purposes, the carrier must also report this other commercial party's 
identity and contact information including address in the ``Notify 
party'' field.) [Test data element of Consignee name and address], and
    (7) AES Exemption Statement, as applicable [Test data element AES 
Exemption Statement (per shipment)].
    In this proposed rule, CBP groups the remaining rail EEM data 
elements based on CBP's understanding of which parties may have the 
best knowledge of the export manifest data elements. CBP categorizes 
these remaining data elements as export manifest transportation data, 
export manifest cargo data, and empty container data. According to this 
proposed rule, the rail carrier or its agent is responsible for 
transmitting to CBP the EEM data on any empty container rail cars.\26\ 
This data must be submitted electronically no later than the time of 
assembly of the train. For EEM transportation data, the rail carrier or 
its agent must also transmit this data at least two hours prior to 
departure from the U.S. port of export. The rail carrier or its agent 
is responsible for providing the following EEM transportation data 
elements to CBP in this proposed rule:
---------------------------------------------------------------------------

    \26\ If applicable, empty container rail car data would be 
included in the Train Consist data element of the mandatory data 
elements for transportation data. Empty containers are listed in the 
train consist and do not require any additional data to be provided 
as per this proposed rule.
---------------------------------------------------------------------------

Mandatory Elements
(1) Port of departure from the United States
(2) Date of departure
(3) Estimated time of departure
(4) Carrier-assigned conveyance name, equipment number and trip number
(5) Train Consist, which includes: (A) manifest number, (B) train 
number, (C) rail car order, and (D) empty containers (if applicable)
(6) The rail carrier identification SCAC code (the unique Standard 
Carrier Alpha Code assigned for each carrier by the National Motor 
Freight Traffic Association; see Sec.  4.7a(c)(2)(iii) of this chapter)
(7) Container or equipment numbers (for containerized shipments) or 
Rail Car Numbers (for all other shipments)
Conditional Elements
(1) 6-character Hazmat Code. (If the Hazmat indicator is yes, then UN 
(for United Nations Number) or NA (North American Number) and the 
corresponding 4-digit identification number assigned to the hazardous 
material must be provided)
(2) Marks and numbers
(3) Seal number (only required if container was sealed.) \27\
---------------------------------------------------------------------------

    \27\ The seal numbers for all seals affixed to containers and/or 
rail cars to the extent that CBP's data system can accept this 
information (for example, if a container has more than two seals, 
and only two seal numbers can be accepted through the system per 
container, electronic presentation of two of these seal numbers for 
the container would be considered as constituting full compliance 
with this data element).
---------------------------------------------------------------------------

Optional Elements
(1) Mode of transportation (containerized rail cargo or non-
containerized rail cargo)
(2) Equipment type code
(3) Place where the rail carrier takes possession of the cargo shipment 
or empty rail car

    CBP provides additional flexibility in this proposed rule by 
allowing any eligible party with the most direct information to provide 
EEM cargo data to CBP two hours prior to departure from the U.S. port 
of export. However, the rail carrier or its agent may also elect to 
transmit the mandatory EEM cargo data and in the case that no other 
party elects to provide the required EEM cargo data, it is the rail 
carrier's responsibility to provide this EEM cargo data to CBP.\28\ The 
following data elements comprise the CBP-requested EEM cargo data for 
rail EEM in this proposed rule. CBP notes that if the data was provided 
during the initial filing it does not need to be transmitted again 
unless there were updates or changes made to the data.
---------------------------------------------------------------------------

    \28\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, on June 21, 2022.
---------------------------------------------------------------------------

Mandatory Elements
(1) Shipper name and address (For empty rail cars, the shipper may be 
the railroad from whom the rail carrier received the empty rail car to 
transport.)
(2) Consignee name and address (For empty rail cars, the consignee may 
be the railroad to whom the rail carrier is transporting the empty rail 
car.)
(3) Port of lading
(4) Port of unlading
(5) Bill of lading type (Master, House, Simple or Sub)

[[Page 2888]]

(6) Bill of lading numbers (Master, House, Simple or Sub)
(7) AES Internal Transaction Number or In-bond number (per shipment)
(8) Cargo description
(9) Weight of cargo (may be expressed in either pounds or kilograms)
(10) Quantity of cargo and unit of measure
Conditional Elements
(1) In-bond type
(2) Notify party name and address
(3) Secondary notify party name and address
Optional Elements
(1) Mexican Pedimento Number (only for shipments for export to Mexico)
(2) Secondary notify party SCAC
(3) Country of ultimate destination
(4) Number of house bills of lading

    After participants transmit the EEM cargo and transportation data 
to CBP via ACE, CBP would validate or notify the responsible party of 
any holds. Additionally, a CBP officer would review the finalized train 
consist prior to the train's departure from the U.S. port of export. 
CBP anticipates that obtaining this data through the integrated system 
would help CBP work with rail carriers and other parties to address 
almost all issues identified during the CBP review before the train 
reaches the U.S. port of export and possibly some before loading of the 
cargo. This would significantly reduce any delays at the U.S. port of 
exports from instances where CBP officers conduct review and address 
issues while the train is at the U.S. port of export. CBP anticipates 
that through the obtaining of pre-departure rail EEM data, CBP officers 
would be able to conduct the appropriate risk assessment and screening 
and complete their review of all export manifest data prior to a 
train's arrival at the U.S. port of export.\29\
---------------------------------------------------------------------------

    \29\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, on November 8, 2022.
---------------------------------------------------------------------------

    In the initial Test, CBP requested that 32 data elements be 
submitted two hours prior to the cargo loading. The experience gained 
during the Test has allowed CBP to revise which data elements should be 
mandatory, conditional, optional, and unnecessary. Of the original 32 
data elements put forth in the initial Test, five data elements were 
determined by CBP to be unnecessary and CBP no longer requests these 
EEM data elements in this proposed rule. CBP lists these below.

(1) Car Locator Message
(2) Empty Indicator (yes/no)
(3) Hazmat Indicator
(4) Split Shipment Indicator (Yes/No)
(5) Portion of split shipment (e.g., 1 of 10, 4 of 10, 5 of 10--Final, 
etc.)

    As an enforcement tool, this proposed rule provides CBP with 
authority to impose liquidated damages on parties that do not provide 
the mandatory EEM data in the manner and in the time frame required. 
CBP retains the enforcement discretion to assess liquidated damages 
when a violation occurs. Any party that violates the requirements for 
data transmission as described above in this proposed rule is subject 
to pay liquidated damages of $5,000 for each violation and up to a 
maximum of $100,000 per departure. Although there is the possibility 
for liquidated damages, compliance is CBP's goal and CBP aspires to 
work alongside rail carriers and other parties to ensure that trade 
members provide the proper data in a timely manner, so that CBP can 
properly review the data, conduct risk assessment of high-risk 
shipments, and enforce U.S. export laws and regulations on U.S. rail 
exports.\30\
---------------------------------------------------------------------------

    \30\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, on June 21, 2022.
---------------------------------------------------------------------------

Time Periods of Analysis
    This analysis primarily focuses on the potential impacts of this 
proposed rule after it would be in effect, but it also includes a 
discussion of the impacts during the Test that is in place before the 
proposed rule is finalized. The costs, cost savings and benefits of the 
Test are sunk (already incurred and cannot be recovered) for the 
purposes of deciding whether to proceed with the proposed rule, but 
they are important for understanding the full costs and benefits of 
implementing the rail EEM as a whole. To give the reader a full view of 
the effects of CBP's requiring rail EEM data through the entire span of 
time, CBP analyzes the effects of implementing rail EEM collection over 
two time periods comparing each time period to the baseline scenario 
that existed prior to the rail EEM test. First, CBP analyzes the 
effects from Test used for the collection of pre-departure manifest 
data on rail exports during the pilot period, fiscal years 2016-
2025.\31\ Second, CBP analyzes the effects of the proposed rule when 
CBP assumes it would be implemented as a final rule which would mandate 
the transmission of EEM data in the rail environment during the five-
year regulatory period, beginning in fiscal year 2026 and ending in 
fiscal year 2030 For the regulatory period, CBP estimates, to the 
extent data is available, the additional total projected costs, cost 
savings and benefits to the Federal Government, rail carriers and other 
trade members as a result of requiring the transmission of EEM data for 
trains departing the United States, compared to the baseline scenario. 
In the analysis for this proposed rule, CBP defines the pilot period as 
fiscal years 2016-2025 and the regulatory period as fiscal years 2026-
2030. At the conclusion of the analysis, CBP includes tables showing 
the effects of the proposed rule across both periods--effectively 
showing the full results of the pilot and the proposed rule against the 
baseline (the world without the rail EEM test). While CBP provides 
information about the two time periods separately for full transparency 
and to make clear which costs are sunk and which are incremental to 
this proposed rule, CBP also sums the two time periods for a full 
accounting of the effects of the rail EEM program as a whole. 
Additionally, all references to years are for fiscal years unless 
otherwise noted.
---------------------------------------------------------------------------

    \31\ CBP anticipates that the Test would still be active until 
fiscal year 2026 when the proposed rule would be finalized; however, 
at the time this analysis was written CBP only had actual data up 
through fiscal year 2023. Therefore, CBP provides estimates, not 
actual data, for the fiscal years 2024 and 2025 in this analysis. 
CBP compares the costs, cost savings and benefits during the Test to 
the baseline scenario, CBP assumes these effects to be sunk and are 
not incremental to this rule.
---------------------------------------------------------------------------

Population Affected by Rule
    CBP expects that this proposed rule would affect a number of 
different parties. During the regulatory period, as the transmitting of 
EEM data expands, CBP expects broader effects on rail carriers, other 
trade members (such as USPPIs, FPPIs, NVOCCs, freight forwarders, 
Customhouse Brokers (CHB), or other parties with knowledge of manifest 
data elements), CBP, and other government agencies that oversee U.S. 
exports. CBP expects that this proposed rule would affect all seven 
rail carrier companies currently exporting cargo from the United States 
by rail. Although CBP does not have the necessary data to provide an 
exact estimate for how many other trade members this proposed rule 
would affect, CBP acknowledges that this proposed rule could result in 
some minor effects to a large number of other trade members, 
specifically in case they elect to provide EEM cargo data directly to 
CBP via ACE. CBP expects that this proposed rule would also improve the 
facilitation of the export process at around 68 U.S. ports of export, 
currently conducting the exportation of goods from the United States in 
the rail environment.

[[Page 2889]]

    Because the Test was limited in scope, the effects were largely 
experienced by a few rail carriers, possibly some other trade members 
and CBP during the pilot period. Although CBP only made the initial 
Test available to nine carriers, CBP then extended the test to all 
eligible parties; however, only two rail carriers actively participated 
in the Test. The two rail carriers participating in the rail EEM test 
have similar business characteristics to the remaining rail carriers 
that would be affected by this proposed rule. All are large carriers 
that operate internationally. Therefore, CBP anticipates that the 
effects on the rail carriers participating in the rail EEM Test 
accurately represents the effects that the remaining rail carriers 
would experience from this proposed rule. CBP requests comment on this 
matter.
Rail EEM Test Data and Export Rail Projections
    CBP was able to identify the number of export manifest data 
transmissions and train consists transmitted electronically by 
participating rail carriers during the Test from 2016-2023. Because 
CBP's pilot period includes future years, CBP does not have actual Test 
data available for 2024 and 2025. To address this issue CBP had to 
provide estimates the final two years of the pilot period. These 
estimates are based on actual data in previous years. From 2016-2023 
rail EEM test participants provided a total of 1,563,694 export 
manifest data transmissions and 10,308 train consists electronically to 
CBP via ACE.\32\ To estimate the number of export manifest data 
transmissions that would occur during the final two years of the pilot 
period CBP used the average number of rail EEM data transmissions from 
2017-2023 (211,225) and the average number of train consists submitted 
electronically to CBP from 2021-2023 (2,911).\33\ According to CBP's 
projections for the final two years of the pilot period and the actual 
data obtained (2016-2023), CBP expects that during the entire pilot 
period rail EEM test participants would submit around 1,986,143 export 
manifest data transmissions and 16,129 electronic train consists. Total 
electronic data transmissions to CBP from participants in the rail EEM 
test would be 2,002,276 during the pilot period.\34\ Table 2 below 
displays CBP's actual and estimated number of export manifest data 
transmissions and train consists submitted electronically to CBP during 
the pilot period.
---------------------------------------------------------------------------

    \32\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, subject matter expert on 
December 6, 2022, and May 10, 2024. Data obtained from CBP's ACE.
    \33\ CBP excluded 2016 from the average for export manifest data 
transmissions due to lack of participation in that year. CBP used 
only three years of data 2021-2023 for the electronic train consists 
transmitted, because these were the only full years of data during 
the pilot period when all train consists were actually transmitted 
by participating rail carriers in the Test.
    \34\ This number represents the total number of electronic 
transmissions sent to CBP by rail EEM test participants (export 
manifest data transmissions + electronic train consists).
[GRAPHIC] [TIFF OMITTED] TP13JA25.004

    Unfortunately, outside of the limited EEM data provided by Test 
participants, all other export rail data (excluding data for EEI 
requirements) submitted by rail carriers was on paper forms and 
therefore CBP was unable to obtain actual rail export volumes (by train 
or by train car). Therefore, CBP used train import volume data as a 
proxy for train export volume data to calculate the possible number of 
EEM data transmissions as a result from this proposed rule during the 
regulatory period. CBP anticipates that the number of train cars 
entering the United States with rail imports is likely comparable to 
the number of train cars exiting the United States for rail 
exports.\35\ CBP used existing internal data on inbound train cars to 
project the volume of outbound train cars during the final two years of 
the pilot period and the regulatory period. Inbound train car volumes 
have been largely consistent from 2017-2023 and CBP anticipates that on 
average, rail volume should remain relatively constant in future years 
as compared to the volumes recorded over the past seven years.
---------------------------------------------------------------------------

    \35\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, subject matter expert on June 
21, 2022. CBP used car volume instead of train volume because import 
volumes by train would be inaccurate since they tracked by rail car 
fee payments which are capped per year.
---------------------------------------------------------------------------

    CBP estimates that from 2016-2023 there were a total of around 35.6 
million train cars departing the United States, or

[[Page 2890]]

on average 4.4 million each year.\36\ Because CBP anticipates that the 
outbound train volume will remain relatively constant during future 
years, CBP used the average number of estimated outbound train cars 
during 2017-2023 (4.19 million) for the number of expected outbound 
train cars for each future year.\37\ Although CBP has data available on 
the number of train cars, CBP does not know how many actual trains 
would engage in exporting goods in the rail environment during the 
regulatory period. Therefore, CBP does not know exactly how many train 
consists rail carriers would submit requiring a CBP officer to review 
each year during the regulatory period. To provide an estimate for how 
many train departures would likely be involved in exporting goods in 
the rail environment during the regulatory period, CBP used 2021, 2022 
and 2023 Test data on the number of simple bills transmitted compared 
to the number of train consists transmitted. Over the course of these 
three years a total of 633,336 simple bills and 8,732 train consists 
were electronically transmitted to CBP as part of the Test, or on 
average approximately 72.5 simple bills per train consist.\38\ CBP used 
this ratio of simple bills (train cars) to train consists (trains) and 
the expected outbound train cars to estimate the total number of trains 
that would transmit electronic train consists when exporting goods from 
the United States during future years.
---------------------------------------------------------------------------

    \36\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, subject matter expert on 
December 6, 2022, and May 9, 2024. Data obtained from CBP's 
Borderstat and OMR databases on inbound rail statistics from FY 
2017-FY 2023.
    \37\ Inbound rail volume decreased significantly between 2016 to 
2017 and volume remained relatively the same between 2017-2023. 
Therefore, CBP omitted the 2016 inbound rail volumes for the 
estimate for the regulatory period volume because CBP believes this 
would have skewed the annual volume upward.
    \38\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, subject matter expert on 
December 6, 2022, and May 10, 2024. Data obtained from CBP's ACE. 
CBP used only three years of data 2021-2023, because these were the 
only full years of data during the pilot period when all train 
consists were actually transmitted by participating rail carriers in 
the Test. Additionally, CBP notes that most of the time the ratio of 
a simple bill to train car is 1 to 1, however a simple bill could be 
submitted for multiple train cars or vice versa. Because CBP only 
knows the number of simple bills transmitted during the Test and not 
the number of train cars, CBP assumes in this analysis that the 
ratio of a simple bill to train car is 1 to 1, essentially the 
number of simple bills represents the number of train cars.
---------------------------------------------------------------------------

    CBP anticipates that each year during the regulatory period, 
approximately 4,191,807 train cars and 57,794 trains would depart the 
United States with export goods requiring the transmission of export 
manifest data. In total CBP expects that during the regulatory period, 
rail EEM participants would transmit approximately 21,248,006 data 
transmissions to CBP or around 4,249,601 annually. Table 3 below 
displays CBP's estimate for total outbound train cars and trains during 
2016-2023 and projected outbound train cars and trains for the final 
two years of the pilot period and the regulatory period, and the 
estimated total EEM data transmissions during the regulatory period.
[GRAPHIC] [TIFF OMITTED] TP13JA25.005


[[Page 2891]]


    In addition to the number of export manifest data transmissions and 
train consists submitted electronically from 2016-2023, CBP also 
obtained information from the Test on the number of 2H Documentation 
and 1H Enforcement holds that were issued during these years. According 
to CBP internal data as part of the rail EEM test from 2016-2023 CBP 
issued a total of 31,202 2H Documentation holds and 795 1H Enforcement 
holds.\40\ To determine the number of holds that would be issued by CBP 
in the final two years of the pilot period CBP used the percent of 
export manifest data transmissions submitted that resulted in a 2H 
Documentation or a 1H Enforcement hold. Based on the information 
obtained during the Test, on average a 2H Documentation hold was issued 
on approximately 3.78 percent of all export manifest data transmissions 
and on average a 1H Enforcement hold was issued on 0.05 percent of all 
export manifest data transmissions.\41\
---------------------------------------------------------------------------

    \39\ To estimate the number of total outbound train cars in 
future years, CBP used the average volume of train cars during the 
seven year period (2017-2023) = 4,191,807 annually.
    \40\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, subject matter expert on 
December 6, 2022, and May 10, 2024. Data obtained from CBP's ACE.
    \41\ Based on data from CBP's ACE tracking the total number of 
holds issued during the rail EEM test. 2H holds were not initially 
issued as complete functionality of the Test was gradually 
implemented. CBP notes that 2H holds were only generated starting in 
2020 and to calculate the average percent of data transmission that 
had a 2H hold issued CBP only used 2020-2023 data. 1H Enforcement 
holds were being issued during the entire Test and therefore CBP 
calculated the average percent of data transmissions that had a 1H 
hold issued using data from 2016-2023.
---------------------------------------------------------------------------

    To estimate the number of holds issued in 2024 and 2025 CBP 
multiplied the percentage of EEM data transmissions resulting in a 2H 
Documentation hold (3.78%) and 1H Enforcement hold (0.05%) by the 
expected total number of rail EEM data transmissions during 2024 and 
2025 (see Table 2). CBP anticipates that during the pilot period CBP 
would issue around 47,375 2H Documentation holds and around 1,049 1H 
Enforcement holds.
    CBP expects that these holds would be issued at a similar frequency 
during the regulatory period. Therefore, to estimate the number of CBP 
holds that would be issued during the regulatory period, CBP multiplied 
the percentage of data transmissions that were issued 2H Documentation 
holds (3.78%) and 1H Enforcement holds (0.05%) by the estimated number 
of total data transmissions (see Table 3), for each year of the 
regulatory period. According to CBP's estimates, CBP would issue a 
total of 802,400 2H Documentation holds or on average 160,480 annually 
and around 11,137 1H Enforcement holds or on average 2,227 annually 
during the regulatory period. Table 4 displays CBP's estimates for 
total holds that would be issued during the regulatory period.
[GRAPHIC] [TIFF OMITTED] TP13JA25.006


[[Page 2892]]


    CBP believes that it is possible that the total number of holds 
could be less than these estimates during the regulatory period as rail 
carriers and other trade members become more familiar and efficient at 
providing the pre-departure EEM data, potentially improving compliance 
and limiting the number of holds CBP issues. CBP did not issue any DNL 
holds during the Test and does not expect a significant number of DNL 
holds to be issued during the regulatory period. If DNL holds are 
issued this would be an additional cost to rail carriers, who are 
ultimately responsible for loading and not loading cargo.
Pilot Period
Costs
    CBP expects that CBP, participating rail carriers, other trade 
members incur some costs during the pilot period when compared to the 
baseline.\42\ CBP's primary cost during the pilot period was from 
implementing the Test EEM data tool into ACE. ACE was already in place 
prior to the Test; therefore, CBP did not need to develop an entirely 
new system. However, there were some development and ongoing systems 
costs to CBP during the introduction and operation of the Test. 
Initially, CBP incurred systems costs of approximately $608,000 to 
develop and implement the Test EEM tool into ACE.\43\ During the pilot 
period, CBP incurs ongoing operations and maintenance costs associated 
with the Test, which costs CBP on average approximately $101,350 each 
year. CBP estimates that total systems costs to CBP for developing and 
operating the Test would be approximately $1.6 million during the pilot 
period.
---------------------------------------------------------------------------

    \42\ Other trade members would include USPPIs, FPPIs, NVOCCs, 
freight forwarders, or other third parties with knowledge of 
manifest data elements.
    \43\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, on December 7, 2022. Rail EEM 
ACE cost estimates were provided by CBP's Office of Information and 
Technology and provided development and ongoing costs that increase 
at a fixed rate each year.
---------------------------------------------------------------------------

    CBP also incurs some time burdens while conducting additional 
review of EEM data when compared to the baseline. As stated earlier, in 
the baseline scenario the rail carriers provided export rail data to 
CBP all at once in the finalized train consists at or prior to 
departure from the United States. Therefore, under the baseline 
scenario, CBP was unable to review export data until the finalized 
train consist was submitted. During the Test, participants provide EEM 
data on a flow basis, so CBP is able to review the data when 
participants transmitted the EEM data and does not have to wait for 
rail carriers to finalize all the data and submit it together in the 
train consist. When participants transmit the EEM data to CBP via ACE, 
the integrated system can identify potential high-risk cargo and issue 
a 1H Enforcement hold, which requires manual review from a CBP officer. 
As discussed earlier, 2H Documentation holds generated by ACE do not 
require any action or response from CBP officers, therefore CBP does 
not anticipate any time burden to CBP when a 2H Documentation hold is 
issued. CBP estimates that this additional review of each 1H 
Enforcement hold imposes an average time burden of approximately 5 
minutes (0.083 hours) to CBP officers.\44\ In addition to reviewing the 
EEM data transmitted, CBP officers also incur time burdens when 
addressing and resolving 1H Enforcement holds. Depending on the 
complexity of the 1H Enforcement hold, the time burden to CBP officers 
to address and resolve these holds varies from a few minutes to a few 
hours if a hold requires a CBP officer to manually examine cargo or a 
train car.\45\ CBP does not know how many issued 1H Enforcement holds 
result in cargo examinations during the pilot period or if the Test 
result in additional examinations when compared to the baseline 
scenario. However, CBP notes that the majority of these 1H Enforcement 
holds do not result in a cargo examination and CBP officers are able to 
address and resolve the majority of these holds in a few minutes.\46\ 
CBP estimates that, on average, CBP officers incur an additional time 
burden of 10 minutes (0.167 hours) to address and resolve each 1H 
Enforcement hold.\47\ In total, CBP expects on average a CBP officer 
incurs a time burden of approximately 15 minutes (0.25 hours) to review 
and resolve each 1H Enforcement hold.
---------------------------------------------------------------------------

    \44\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, on August 2, 2022. 1H 
Enforcement holds can also be issued by CBP officers upon manual 
review of export manifest data.
    \45\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, on June 21, 2022.
    \46\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, on November 8, 2022.
    \47\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, subject matter expert on 
November 21, 2022. Data obtained from CBP's OMR database.
---------------------------------------------------------------------------

    During the pilot period, CBP estimates that rail carriers will 
transmit a total of 2,002,272 EEM data submissions as part of the Test, 
resulting in approximately 1,049 1H Enforcement holds issued which 
require additional review by a CBP officer.\48\ CBP calculates the time 
burden to CBP officers during the pilot period by multiplying the 
estimated number of 1H Enforcement holds (1,049) by the expected 
average time burden to CBP officers to review, address and resolve the 
average 1H Enforcement hold (15 minutes, 0.25 hours). CBP expects that 
CBP officers incurs a time burden of approximately 262 hours (1,049 
holds x 0.25 hours) during the pilot period. CBP estimates the costs to 
CBP officers by multiplying the total time burden (262 hours) by the 
average hourly loaded rate for a CBP officer ($101.44) = $26,608.\49\ 
Table 5 shows CBP's estimate for the time and cost burden to CBP 
officers when reviewing and resolving 1H Enforcement holds during the 
pilot period.
---------------------------------------------------------------------------

    \48\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, subject matter expert on 
December 6, 2022 and May 10, 2024. Data obtained by CBP's ACE and 
based on CBP estimates for years 2024-2025.
    \49\ CBP bases this wage on the FY 2023 salary, benefits, 
premium pay, non-salary costs, and awards of the national average of 
CBP Officer Positions, which is equal to a GS-11, Step 10. Source: 
Email correspondence with CBP's Office of Finance on September 26, 
2023.

---------------------------------------------------------------------------

[[Page 2893]]

[GRAPHIC] [TIFF OMITTED] TP13JA25.007

    In addition to CBP, rail carrier participants and some other trade 
members incur costs during the pilot period. The Test implements a few 
changes that affect rail carrier participants, such as providing 
advance EEM data within CBP-requested deadlines prior to cargo loading 
onto trains, transmitting the requested EEM data elements to CBP, and 
responding to and addressing any issued holds or questions from CBP 
about the data provided. So far during the pilot period, the 
participating rail carriers demonstrate very high levels of compliance 
with providing data within the requested deadlines of the Test, as 
approximately 94 percent of EEM data provided to CBP was transmitted on 
time.\50\ From 2016-2023, the participating rail carriers 
electronically transmitted a total of 1,574,002 EEM data submissions, 
including 1,563,694 simple bills and 10,308 train consists, 
representing around 4 percent of all estimated export manifest data 
submissions.\51\
---------------------------------------------------------------------------

    \50\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, subject matter expert on June 
21, 2022.
    \51\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, subject matter expert on 
December 6, 2022 and May 10, 2024. Data obtained from CBP's ACE, 
Borderstat and OMR databases. CBP notes that most of the time the 
ratio of a simple bill to train car is 1 to 1, however a simple bill 
could be submitted for multiple train cars or vice versa. Because 
CBP only knows the number of simple bills transmitted during the 
Test and not the number of train cars, CBP assumes in this analysis 
that the ratio of a simple bill to train car is 1 to 1, essentially 
the number of simple bills represents the number of train cars. CBP 
determined the number of total export manifest data submissions 
during the pilot period by accounting for if all export manifest 
data were transmitted electronically and by assuming one simple bill 
per estimated departing train car and one train consist per 
departing rain, based on the volume of inbound train cars and CBP's 
estimate for the number of simple bills (train cars) per train.
---------------------------------------------------------------------------

    Since CBP requests that rail carriers participating in the Test 
continue to provide the paper forms in addition to the EEM data, these 
rail carriers incur an additional time burden to submit the new 
electronic data during the Test. CBP estimates that on average rail 
carriers incur a time burden of approximately 40 minutes (0.667 hours) 
per train to transmit the EEM data.\52\ Unfortunately, CBP does not 
have data on the exact number of total trains for which the 
participating rail carriers provide electronic data during the pilot 
period.\53\ Therefore, to provide an estimate, CBP used 2021-2023 data 
from the Test on the number of simple bills transmitted compared to the 
number of train consists transmitted.\54\ Over the course of these 
years rail carriers electronically transmitted to CBP a total of 
633,336 simple bills and 8,732 train consists as part of the Test, or 
on average approximately 72.5 simple bills per train consist. CBP used 
this ratio of simple bills (train cars) to train consists (trains) and 
the total estimated number of simple bills that would be transmitted 
during each year of the pilot period (2016-2025) to estimate the total 
number of trains for which rail carriers will transmit electronic 
export manifest data to CBP. According to CBP's estimates, there will 
be approximately 27,384 trains that will have EEM data transmitted to 
CBP when departing the United States. Assuming that the Test 
participants will transmit EEM data for approximately 27,384 trains, 
CBP estimates that these rail carrier participants incur a time burden 
of 18,256 hours for transmission purposes (27,384 trains x 0.667 
hours). To estimate the time burden costs, CBP multiplied the time 
burden hours by the average hourly loaded wage rate for exporters 
($35.62).\55\ CBP estimates that,

[[Page 2894]]

during the pilot period when submitting the EEM data to CBP, Test 
participants incur a total cost of around $650,273 or on average 
$65,027 annually. Table 6 below displays CBP's estimate for the number 
of trains that depart the United States and provide EEM data, the 
estimated time burden and costs to rail carriers during each year of 
the pilot period.
---------------------------------------------------------------------------

    \52\ Information was obtained from feedback and discussions with 
Trade members on the potential impacts of providing EEM data in 
addition to the paper forms. Data obtained in February 2023.
    \53\ Rail EEM test participants didn't start providing the train 
consists electronically to CBP on a consistent basis until 2021, 
therefore CBP does not know how many actual trains had electronic 
data transmitted to CBP earlier in the pilot period.
    \54\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, subject matter expert on 
December 6, 2022, and May 10, 2024. Data obtained from CBP's ACE. 
CBP used only three years of year of data 2021-2023, because these 
were the only full years of data during the pilot period when all 
train consists were actually transmitted by participating rail 
carriers in the Test.
    \55\ Source of median wage rate: U.S. Bureau of Labor 
Statistics. Occupational Employment and Wage Statistics, ``May 2022 
National Occupational Employment and Wage Estimates United States.'' 
Updated April 25, 2023. Available at https://www.bls.gov/oes/2022/may/oes_nat.htm. Accessed August 21, 2023. The total compensation to 
wages and salaries ratio is equal to the total compensation cost per 
hour worked for Office and Administrative Support occupations 
($32.52) divided by the wages and salaries cost per hour worked for 
the same occupation category ($22.01). See ``Table 2. Employer Costs 
for Employee Compensation for civilian workers by occupational and 
industry group.'' Bureau of Labor Statistics, ``Employer Costs for 
Employee Compensation--December 2022.'' Released March 17, 2023. 
Available at https://www.bls.gov/news.release/archives/ecec_03172023.pdf. Accessed August 29, 2023.. CBP assumes an annual 
growth rate of 7.01% based on the prior year's change in the 
implicit price deflator, published by the Bureau of Economic 
Analysis. To adjust to 2023 dollars, multiply by the 2021-2022 
percent change in the Bureau of Economic Analysis's Implicit Price 
Deflators for Gross Domestic Product (127.224/118.895-1). See 
``Table 1.1.9. Implicit Price Deflators for Gross Domestic 
Product,'' Line 1 Gross Domestic Product, annual. Bureau of Economic 
Analysis. Updated August 30, 2023. Available at https://apps.bea.gov/iTable/?reqid=19&step=2&isuri=1&categories=survey#eyJhcHBpZCI6MTksInN0ZXBzIjpbMSwyLDMsM10sImRhdGEiOltbImNhdGVnb3JpZXMiLCJTdXJ2ZXkiXSxbIk5JUEFfVGFibGVfTGlzdCIsIjEzIl0sWyJGaXJzdF9ZZWFyIiwiMjAxNiJdLFsiTGFzdF9ZZWFyIiwiMjAyMyJdLFsiU2NhbGUiLCIwIl0sWyJTZXJpZXMiLCJBIl1dfQ==. Accessed 
September 20, 2023.
[GRAPHIC] [TIFF OMITTED] TP13JA25.008

    CBP expects that rail carriers participating in the Test and other 
trade members also face time burdens and costs when responding to 2H 
Documentation holds and 1H Enforcement holds. According to CBP internal 
data and estimates for 2024 and 2025, during the pilot period, CBP will 
issue a total of 47,375 2H Documentation holds and 1,049 1H Enforcement 
holds. CBP has not issued any DNL instructions during the Test.\56\ By 
the end of 2023, rail carriers have shown high rates of compliance and 
responsiveness to CBP holds during the Test, with over 99.8% of holds 
being resolved and cargo released.\57\ CBP expects that the time burden 
to respond to each hold depends on the complexity of the issue and if 
the hold results in an examination of cargo which would be more time 
consuming. When responding to holds, if a rail carrier does not have 
the necessary information and needs to obtain the data from another 
trade member, that would also impose a time burden on the other trade 
member. CBP believes that on average the overall time burden to trade 
(rail carriers and other trade members) when reviewing and addressing 
these holds is approximately 12.5 minutes (0.21 hours) per hold.\58\ 
Based on CBP Test data and estimates for 2024 and 2025, there will be a 
total of 48,424 holds issued during the pilot period (see Table 4) and 
CBP estimates these holds will impose a time burden to trade of around 
10,088 hours (48,424 holds x 0.21 hours per hold). CBP estimated the 
cost to trade by multiplying the total expected hours spent reviewing 
and addressing holds (10,088) by the average hourly loaded wage rate 
for exporters ($35.62). CBP expects that during the pilot period 
reviewing and addressing holds issued by CBP cost trade approximately 
$359,350 or on average $35,935 annually. Table 7 shows CBP estimates 
for the total number of holds issued, the estimated time burden and 
costs to rail carriers during each year of the pilot period.
---------------------------------------------------------------------------

    \56\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, subject matter expert on 
December 6, 2022, and May 10, 2024.
    \57\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, subject matter expert on June 
21, 2022, and May 10, 2024. Data obtained from CBP's ACE.
    \58\ Data obtained from CBP discussion with Trade members on the 
potential costs to review and resolve holds issued by CBP in 
response to EEM data transmitted. Time burdens vary greatly 
depending on the complexity of the issue; CBP took this into 
consideration when calculating the average time burden to review and 
address an issued hold. Data obtained in February 2023.

---------------------------------------------------------------------------

[[Page 2895]]

[GRAPHIC] [TIFF OMITTED] TP13JA25.009

    From the Test, CBP does not know to what extent obtaining pre-
departure EEM data improves CBP's enforcement, resulting in identifying 
additional high-risk cargo or other compliance issues, beyond what CBP 
would have identified prior to the Test. CBP notes that for all pre-
departure EEM that was transmitted to the Test, CBP was able to use ATS 
for risk assessment compared to the baseline scenario where CBP was 
only able to use ATS on a very limited number of export cargo data in 
the rail environment.\59\ If CBP identifies more high-risk cargo as a 
result of the Test, that may result in larger time burdens on rail 
carriers to respond to and address CBP requests for cargo examination.
---------------------------------------------------------------------------

    \59\ CBP can only use ATS on electronically transmitted data; 
therefore, because the majority of export manifest data provided to 
CBP prior to this proposed rule was submitted in paper and or via 
email, CBP was not able to use ATS to screen any cargo associated 
with these paper forms.
---------------------------------------------------------------------------

    During the pilot period, rail carriers that voluntarily participate 
in the Test, incur costs to adjust and maintain their IT systems to 
interact with CBP's ACE and provide the required pre-departure EEM data 
to CBP. The EEM data requirements are very similar to data requirements 
for advance electronic import manifest data required during the import 
process.\60\ Because rail carriers have already developed systems for 
those electronic processes at import, Test participants do not need to 
develop entirely new IT systems to transmit EEM data for the Test, but 
rather rail carriers make adjustments to their already existing 
internal systems.\61\ As rail carriers already have systems to 
interface with ACE for import filings, among other things, systems 
needed to be modified rather than developed. In addition, rail carrier 
employees who file information for imports are typically the same who 
file for export. The cost of adjusting and maintaining internal systems 
to support providing EEM data to CBP can vary depending on the rail 
carrier or trade member. Therefore, CBP provides a range of estimates 
for the internal system costs to the average Test participant during 
the pilot period. CBP anticipates that the annual internal systems 
costs required to participate in the Test could range from $10,000 to 
$60,000 each year.\62\ CBP used the midpoint within the range, $35,000, 
as CBP's primary estimate for annual internal systems costs to the 
average rail carrier participating in the Test. As alternate estimates, 
CBP used a low estimate of $10,000 and the high estimate of $60,000 for 
the annual internal systems costs per year. According to CBP's primary 
estimate, the two Test participants will incur approximately $700,000 
in total costs to adjust and maintain their internal systems for 
providing electronic export manifest data to CBP during the pilot 
period. CBP's alternate low and high estimate show that internal 
systems total costs to the two rail carriers will be between $200,000 
and $1,200,000 during the pilot period. Table 8 displays CBP's range of 
cost estimates for annual internal systems costs to the two rail 
carrier participants during the pilot period.
---------------------------------------------------------------------------

    \60\ Data obtained from feedback provided by Trade members on 
similarities between providing electronic import manifest data and 
the requested EEM. Data obtained in December 2022 and February 2023.
    \61\ Data obtained from feedback provided by Trade members on 
potential necessary development, adjustments and maintenance of 
existing internal systems to support providing EEM to CBP via ACE. 
Data obtained in December 2022 and February 2023.
    \62\ Data was obtained from feedback from Trade members on the 
potential costs to internal systems to support providing EEM to CBP 
via ACE. Data was obtained in December 2022 and February 2023.

---------------------------------------------------------------------------

[[Page 2896]]

[GRAPHIC] [TIFF OMITTED] TP13JA25.010

    CBP estimates that total overall costs from the Test during the 
pilot period will be approximately $3.6 million or on average $335,767. 
Total estimated costs to CBP and trade as a result of the Test are 
displayed below in Table 9. CBP estimates that during the pilot period 
CBP will incur costs of approximately $1.6 million or on average 
$164,805 annually. According to CBP's primary estimate for total costs 
to trade from participating in the Test during the pilot period, costs 
will be approximately 1.7 million or on average $170,962 annually.
[GRAPHIC] [TIFF OMITTED] TP13JA25.011

Cost Savings
    CBP anticipates that the implementation of the Test also provides 
cost savings during the pilot period. As CBP expected, obtaining EEM 
data through the Test is a more efficient process than obtaining export 
data from paper forms. As stated earlier, CBP officers manually review 
all finalized train consists prior to a train's departure from the 
United States, regardless of whether rail carriers submit the train 
consists in paper or electronic form. During the pilot period, when CBP 
receives electronic finalized train consists from participating rail 
carriers the time burden to review those consists decreased 
substantially

[[Page 2897]]

compared to reviewing the paper consists. Additionally, CBP officers 
are able to conduct and complete their review of a transmitted 
electronic train consist prior to that train's arrival to the U.S. port 
of export.\63\ CBP's review of these train consists requires on average 
35 minutes (0.583 hours) when submitted electronically compared to an 
average of 2.5 hours when they were submitted to CBP on paper 
forms.\64\ To estimate the total time savings, CBP multiplied the 
average time savings of reviewing a train consist transmitted 
electronically (2.5 hours-35 minutes = 1.92 hours) by the total number 
of estimated train consists that will be transmitted electronically 
during the pilot period (16,129, see Table 2). CBP estimates that the 
Test will generate time savings of approximately 30,915 hours to CBP 
officers. CBP then multiplied the estimated time savings (30,915 hours) 
by the average hourly loaded rate for a CBP officer ($101.44) to 
estimate the total cost savings of approximately $3.1 million to CBP 
during the pilot period. Table 10 shows CBP's estimates for the time 
savings and cost savings to CBP officers from swifter review of 
electronic train consists for each year of the pilot period.
---------------------------------------------------------------------------

    \63\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, subject matter expert on 
November 8, 2022. With electronic transmitted data, the system 
assists in much of the cargo screening and review of the data 
allowing CBP to conduct a quicker and more thorough review of export 
manifest data.
    \64\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, subject matter expert on 
August 2, 2022.
[GRAPHIC] [TIFF OMITTED] TP13JA25.012

    CBP anticipates that rail carriers may also experience time and 
cost savings from the Test resulting in a more efficient export process 
at the U.S. port of export. Rail carriers support CBP's transition to 
EEM data because rail carriers acknowledge that the former process of 
providing export information on paper forms is inefficient and 
unnecessarily burdensome to all parties involved. Additionally, the 
existing export process using paper forms is inconsistent with the 
import process which has already transitioned to electronic data 
transmission. Rail carriers have experienced a more efficient import 
process as a result, and they acknowledge the potential for 
improvements to the export process from providing electronic data.
    CBP's review of electronic train consists is significantly quicker 
than train consists in paper form. In the baseline scenario, CBP does 
not know how often rail carriers sent finalized train consists by email 
in advance of departure and to what extent CBP officers were able to 
fully conduct their review of the paper train consist prior to the 
train's arrival to the U.S. port of export. If CBP officers, prior to 
the Test, were unable to start their review of a train's consist before 
the train reached the U.S. port of export and the train was held at the 
U.S. port of export until CBP officers conducted a review of the train 
consist, then participants in the Test experience a time savings 
similar to that estimated above for CBP's officers during CBP's review 
process (1.92 hours) when transmitting an electric train consist. 
However, CBP does not know in the baseline scenario the extent to which 
rail carriers sent finalized pre-departure data via email to CBP 
providing CBP officers enough time to review the paper train consists 
prior to the train's arrival to the U.S. port of export. Therefore, 
during the pilot period CBP does not know exactly how much time savings 
rail carriers experience from a swifter CBP review of electronic train 
consists at the U.S. port of export. To estimate the potential time 
savings to rail carrier participants during the pilot period from 
quicker CBP processing time, CBP provides a range of time savings under 
a few situations that could occur in the baseline scenario depending on 
the amount of review CBP officers complete before the train's arrival 
to the U.S. port of export.
    In Scenario 1, where CBP officers did not begin the review of paper 
train consists until the train arrived at the

[[Page 2898]]

port, rail carriers participating in the Test would experience on 
average a time savings of 1.92 hours per train from a more efficient 
CBP review using electronic train consists, assuming no 1H Enforcement 
holds, or other issues CBP identified during the review of the consist. 
In Scenario 2, during the baseline, where rail carriers sent finalized 
train consists by email pre-departure and CBP officers were able to 
complete their review of these paper train consists prior to all trains 
arriving at the U.S. port of export, rail carriers participating in the 
Test would likely not experience any time savings from transmitting 
electronic train consists. CBP anticipates that in this scenario CBP 
officers were able to fully complete their review of the paper or 
electronic train consist prior to the train's arrival to the U.S. port 
of export avoiding any delays to departure from CBP officers conducting 
their review at the U.S. port of export. CBP is uncertain to what 
extent these time savings are experienced by rail carriers during the 
pilot period; however, CBP believes that it would likely be between the 
1.92 hours and zero hours per train. For the purposes of this analysis, 
CBP uses Scenario 3, which is the mid-point between the two values 
(0.96 hours), as the primary estimate for time savings per electronic 
train consist reviewed during the pilot period. CBP also considered a 
Scenario 4 which assumes CBP officers were able to complete 25 percent 
of the review of finalized train consists prior to a train's arrival at 
the U.S. port of export during the baseline.
    For illustrative purposes, CBP presents these potential time 
savings to rail carriers in range estimates based on how much review 
CBP officers completed prior to a train's arrival to the port in the 
baseline. CBP multiplied the average time savings per train by the 
estimated number of electronic train consists transmitted to CBP 
(16,129, see Table 2) during the pilot period to estimate the total 
potential time savings from expedited CBP processing at the U.S. port 
of export. To calculate the cost savings CBP multiplied these potential 
time savings by the average hourly loaded wage rate for exporters 
($35.62). CBP's primary estimate for time savings and costs savings to 
rail carriers from swifter CBP review of train consists will be 
approximately 15,484 hours and $551,546. Table 11 displays CBP's 
primary estimate along with range estimates for potential time savings 
and cost savings to rail carriers at the U.S. port of export during the 
pilot period depending on if during the baseline CBP officers were able 
to complete 0 percent of their review of train consists, 25 percent of 
their review and 100 percent of their review prior to a train's arrival 
at the U.S. port of export.\65\
---------------------------------------------------------------------------

    \65\ To provide additional possible outcomes CBP also includes 
Scenario 4 which assumes CBP officers were able to complete 25 
percent of the review of finalized train consists prior to a train's 
arrival at the U.S. port of export.
[GRAPHIC] [TIFF OMITTED] TP13JA25.013

    CBP expects that participating rail carriers also experience 
additional time savings from the Test when compared to the baseline 
when making corrections to submitted data.\66\ Making updates and 
corrections to data transmitted electronically is significantly more 
efficient than making updates and corrections to emailed paper forms. 
Additionally, the Test allows participants to transmit data when it 
becomes available, and the Test allows them to continuously edit and 
update data in ACE on a flow basis. CBP estimates that during the pilot 
period making such corrections when transmitting EEM data save Test 
participants on average 15 minutes (0.25 hours) per train.\67\ To 
calculate the time savings, CBP used the estimate discussed earlier for 
total trains that had electronic data submitted during the pilot period 
(27,384 see Table 6) multiplied by the expected time savings per train 
(0.25 hours). CBP estimates that the total time savings to rail 
carriers from making data corrections in the electronic environment 
will be approximately 6,846 hours during the pilot period. CBP 
multiplied the estimated time savings by the average hourly loaded wage 
rate for exporters ($35.62) and anticipates the total cost savings to 
rail carrier participants from making data corrections in the 
electronic environment will be approximately $243,852 or on average 
$24,385 annually during the pilot period. Table 12 shows CBP's estimate 
for time savings and cost savings to rail carrier participants while 
making data corrections to EEM compared to paper forms during the pilot 
period.
---------------------------------------------------------------------------

    \66\ Information was obtained from feedback and discussions with 
Trade members on the potential effects of providing EEM data. Data 
obtained in February 2023.
    \67\ Information was obtained from feedback and discussions with 
Trade members on the potential effects of providing EEM data. Data 
obtained in February 2023.

---------------------------------------------------------------------------

[[Page 2899]]

[GRAPHIC] [TIFF OMITTED] TP13JA25.014

    CBP anticipates there would be a savings to rail carriers during 
the Test when CBP identifies issues before trains are loaded and 
assembled. In the baseline scenario, when CBP identifies a high-risk 
cargo, the cargo has usually already been loaded onto the train, 
requiring a burdensome and time-consuming process to detach or unload 
the cargo from an assembled train. CBP estimates that to physically 
detach a freight car from an assembled train typically costs around 
$3,000 and can result in a delay of up to two hours.\68\ This includes 
the freight and labor costs to safely decouple a train car from a built 
train. Under this rule, the pre-departure EEM data transmitted to CBP 
would improve CBP's ability to identify high-risk cargo before it is 
loaded onto a train, avoiding the costly action of deconstructing 
trains and unloading cargo for examination. CBP does not track the 
number of cargo examinations and was unable to generate an estimate for 
the average number of cargo examinations each year, but feedback 
received from trade members suggests that such examinations are not a 
frequent occurrence.\69\
---------------------------------------------------------------------------

    \68\ Information was obtained from feedback and discussions with 
Trade members on the potential costs and time burden to remove a 
train car from a constructed train in order for CBP to conduct an 
examination of the cargo or container. Data obtained in February 
2023.
    \69\ Information was obtained from feedback and discussions with 
Trade members on the frequency of cargo examinations prior to the 
Test and during the Test suggesting such an occurrence was fairly 
uncommon. Data obtained in February 2023.
---------------------------------------------------------------------------

    CBP estimates that during the pilot period total cost savings as a 
result of the Test will be approximately $3.9 million or on average 
$393,137 annually. CBP expects that trade will experience a total cost 
savings of approximately $795,398 or on average $79,539 annually. Table 
13 displays CBP's estimates for cost savings to CBP, trade and total 
overall cost savings during the pilot period as a result of the Test.

[[Page 2900]]

[GRAPHIC] [TIFF OMITTED] TP13JA25.015

    CBP requests feedback and comments from rail carriers and other 
trade members on the costs and cost savings to rail carriers and other 
trade members during the Test pilot period discussed above and any 
other costs or cost savings to rail carriers and other trade members 
that CBP did not address in this analysis.
Benefits
    According to Section 343(a) of the Trade Act of 2002, as amended 
(Trade Act) (19 U.S.C. 1415), CBP is authorized to establish 
regulations that provide for the mandatory electronic transmission of 
data by way of a CBP-approved electronic data interchange before cargo 
arrives in or departs the United States in all environments (sea, air, 
rail, and truck). The Test was developed and implemented as a way for 
CBP to test a feasible process to meet its requirements as per the 
Trade Act. In addition to meeting its statutory requirements, CBP 
likely experiences benefits during the pilot period. CBP does not have 
the data available to quantify these benefits and therefore will 
discuss these benefits qualitatively. The primary benefit of requiring 
pre-departure EEM data is improving CBP's security efforts and its 
ability to use ATS to identify high-risk cargo prior to departing the 
United States, while minimizing the disruption to the export process. 
In the baseline, CBP officers usually manually review train consists at 
the time of departure without using CBP's ATS, so CBP cannot take 
advantage of the ATS risk assessment during the rail exit process. All 
EEM data transmitted to CBP as part of the Test are screened by CBP 
using ATS prior to departure, providing a more robust review and 
improving CBP's security efforts. Additionally, the gained efficiencies 
from obtaining data in an integrated system allow CBP to review export 
rail data more efficiently prior to departure and provide CBP officers 
the ability to allocate more time to mission-critical activities of 
cargo security and safety.
Net Impact
    CBP has provided its primary estimates for the total costs and cost 
savings from the Test during the pilot period, displayed in Table 14. 
CBP estimates that the net cost savings will be approximately $573,700 
or on average $57,370 annually.

[[Page 2901]]

[GRAPHIC] [TIFF OMITTED] TP13JA25.016

    Table 15 displays CBP's primary estimate for quantifiable net cost 
savings from the Test adjusted for discounting. As shown, CBP expects 
that this proposed rule will result in total net cost savings to CBP, 
rail carriers and other trade members during the pilot period of around 
$343,946 using a two percent discount rate. CBP estimates that 
annualized net cost savings will be around $38,290 using a two percent 
discount rate.
[GRAPHIC] [TIFF OMITTED] TP13JA25.017

Regulatory Period
    For the regulatory period, CBP estimated the future costs, cost 
savings, and benefits to rail carriers, the Federal Government, and 
other trade members as a result of requiring EEM data in the rail 
environment. CBP anticipates the effects of the proposed rule would be 
similar to those experienced during the pilot period but on a larger 
scale as the proposed rule would make transmission of pre-departure EEM 
data mandatory for all U.S. exports in the rail environment.
Costs
    CBP anticipates that this proposed rule would result in costs to 
both CBP and trade members during the regulatory period. CBP will bear 
technology and opportunity costs by expanding the existing test to a 
requirement for all rail carriers. CBP does not anticipate it will 
incur any costs to develop new systems during the regulatory period 
because CBP completed the system development and implementation of the 
rail EEM data tool application into ACE during the pilot period. CBP 
does expect to incur some ongoing systems operations and maintenance 
costs associated with the rail EEM data application in ACE. Over the 
course of the regulatory period, CBP estimates that ongoing systems 
costs in ACE would be approximately $586,026 or on average $117,205 
each year.\70\
---------------------------------------------------------------------------

    \70\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, on December 7, 2022. Rail EEM 
ACE cost estimates were provided by CBP's Office of Information and 
Technology, ongoing costs are expected increase at a fixed rate each 
year.
---------------------------------------------------------------------------

    In addition to the ongoing systems costs, CBP expects to incur 
additional time burdens as a result of CBP officers manually reviewing, 
addressing and resolving 1H Enforcement holds. CBP estimates that a 
total of 11,137 1H Enforcement holds would be issued during the 
regulatory period (see Table 4 above). CBP expects that the time burden 
to a CBP officer to manually review a 1H Enforcement hold on average is 
about 5 minutes (0.083 hours). CBP also anticipates that CBP officers 
will incur an additional time burden to address and resolve these 1H 
Enforcement holds. Depending on the complexity of the hold and if it is 
determined that a CBP officer needs to manually examine cargo, the time 
burden to CBP officers to address and resolve these holds varies from a 
few minutes to a few hours.\71\ CBP expects that the majority of these 
1H Enforcement holds issued would not result in a cargo 
examination.\72\ CBP estimates that the average time burden incurred by 
CBP officers during the regulatory period for addressing and resolving 
1H Enforcement holds is the

[[Page 2902]]

same as during the pilot period, 10 minutes (0.167 hours).\73\ 
Combined, CBP expects that that on average the total time burden to CBP 
officers during the regulatory period to review, address and resolve a 
1H Enforcement hold is approximately 15 minutes (0.25 hours). CBP 
estimates that the proposed rule would result in 1H Enforcement holds 
that would cause an additional time burden to CBP officers of 
approximately 2,784 hours (11,137 1H Enforcement holds x 0.25 hours per 
hold). CBP calculated the costs to CBP officers in the regulatory 
period, by multiplying the total time burden (2,784) hours by the 
average hourly loaded rate for a CBP Officer ($101.44) = $282,433. 
Table 16 shows CBP estimates for total costs to CBP during the 
regulatory period including ongoing systems and maintenance costs and 
the time burden and cost to CBP officers from additional review of 1H 
Enforcement holds during the regulatory period. Over the regulatory 
period this proposed rule would cost CBP approximately $868,459 or on 
average $173,691 annually.
---------------------------------------------------------------------------

    \71\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, subject matter expert on June 
21, 2022.
    \72\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, subject matter expert on 
November 8, 2022.
    \73\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, subject matter expert on 
November 21, 2022.
[GRAPHIC] [TIFF OMITTED] TP13JA25.018

    CBP does not expect that this proposed rule would result in 
additional cargo examinations when compared to the baseline. In the 
case where CBP determines it is necessary to conduct a physical 
examination of cargo or a container on average a CBP officer is able to 
complete the examination and submit the findings in about 60 
minutes.\74\ Given the CBP officer hourly loaded wage rate of $101.44, 
CBP estimates the average time burden cost to CBP to conduct a cargo or 
container examination is approximately $101.44 per examination. If 
there are more manual examinations of cargo as a result of 1H 
Enforcement holds when compared to the baseline, then the time burden 
to CBP officers during the regulatory period could be larger than CBP 
expected. Unfortunately, CBP does not have data on how many 1H 
Enforcement holds typically result in a cargo examination. However, 
because the EEM data is provided in advance of departure CBP would 
likely be able to issue holds before trains reach the U.S. port of 
export and possibly before cargo is loaded, limiting the time burden 
and costs of conducting these cargo examinations when compared to the 
baseline scenario.
---------------------------------------------------------------------------

    \74\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, on December 15, 2022.
---------------------------------------------------------------------------

    CBP anticipates that this proposed rule would result in costs to 
trade members in the form of both systems and opportunity costs. CBP 
expects that the remaining rail carriers (five) that did not 
participate in the Test would incur costs to adjust and maintain their 
IT systems to provide the electronic export manifest data directly to 
CBP via ACE. CBP anticipates that the cost of adjusting and maintaining 
internal systems can vary depending on the rail carrier or trade member 
and therefore CBP provides a range of estimates for the annual internal 
system costs to the rail EEM participants during the regulatory period. 
CBP anticipates that the annual internal systems costs would range from 
the low end $10,000 to as high as $60,000 each year.\75\ For the 
primary estimate during the regulatory period CBP used the same 
estimate as proposed during the pilot period, $35,000 in internal 
system costs to the average rail EEM participant to maintain its 
internal systems each year. To provide a range of cost estimates, CBP 
also provides estimates if maintaining the internal systems cost the 
average Rail EEM participant $10,000 each year or $60,000 each year. 
CBP expects that at least the seven rail carriers will incur these 
systems costs each year of the regulatory period; however, CBP does not 
know how many other trade members would also elect to participate and 
provide the EEM cargo data directly to CBP via ACE thus incurring 
systems costs. CBP notes that it is voluntary for the other trade 
members to provide the EEM cargo data. If no other party provides this 
EEM cargo data, then it must be provided by rail carriers. CBP believes 
that other trade members would only participate if it were beneficial 
for their business or company. Therefore, CBP does not anticipate these 
other trade members would participate if it resulted in a net cost. To 
estimate the cost to rail carriers from operating and maintaining their 
internal systems to support participation in providing EEM data, CBP 
multiplied the average annual cost by the number of expected rail 
carrier participants each year (seven). According to CBP's primary 
estimate for operating and maintaining internal systems, rail EEM 
participants would incur costs of approximately $1.2 million or on 
average $245,000 annually. Under CBP's low estimate, rail EEM 
participants would incur costs of around $350,000 or $70,000 annually 
and the high estimate shows internal systems costs of approximately 
$2.1

[[Page 2903]]

million or $420,000 annually. Table 17 displays CBP's estimates of 
internal systems costs to trade members during the regulatory period.
---------------------------------------------------------------------------

    \75\ Data obtained from feedback and discussions with Trade 
members on the potential costs associated with internal systems to 
support providing EEM to CBP via ACE. Data was obtained in December 
2022 and February 2023.
[GRAPHIC] [TIFF OMITTED] TP13JA25.019

    The proposed rule adjusted data elements and deadlines for the 
transmission of EEM data from what CBP established during the Test. 
Rail EEM participants (rail carriers and other trade members such as 
USPPIs, FPPIs, NVOCCs, freight forwarders, CHB, or other third-parties 
with knowledge of manifest data elements) would provide the initial 
filing data elements to CBP 24 hours prior to the cargo and train 
departing the U.S. port of export. As stated earlier, during the Test 
CBP considered what data elements were most important, CBP's needs, and 
what trade members could provide, given the time frames recommended and 
CBP adjusted the required data elements for this proposed rule. CBP 
expects that most rail carriers would have access to most export 
manifest data early in the planning stages of an export rail cargo 
transaction and would be able to comply with the new deadlines imposed 
by the proposed rule. CBP notes that some rail carriers will have the 
export manifest data available days in advance prior to departure and 
therefore would have all the necessary information to submit the 
initial filing data to CBP and all other export manifest data well in 
advance of the 24-hour and 2-hour prior to departure deadlines.\76\ CBP 
anticipates that all parties that would participate in transmitting EEM 
data to CBP would have the necessary export data elements to provide 
the required EEM data within the two-hour prior to departure 
deadline.\77\ However, for some rail carriers acquiring the necessary 
data for the initial filing 24 hours prior to departure may require a 
change in business practices and additional coordination with other 
trade members or parties that have the required export information. CBP 
does not believe that in such instances the export manifest data does 
not exist; rather, the other trade member has not yet provided this 
information to the rail carrier.\78\ Based on input from the trade 
community, CBP expects that in such instances the net costs to rail 
carriers to obtain this information earlier from other trade members 
would be minimal. Additionally, if other trade members are reluctant to 
provide this information to the rail carriers within the 24-hour prior 
to departure deadlines the other trade members would be able to provide 
this data to CBP directly as a rail EEM participant.
---------------------------------------------------------------------------

    \76\ CBP obtained feedback and information from Trade members on 
when in the export transaction process, the export manifest data is 
typically available for them to submit to CBP. Information obtained 
in February 2023.
    \77\ Data obtained from feedback and discussions with Trade 
members on the timeline for when export manifest data elements are 
made available and can be provided to CBP. Data was obtained in 
February 2023.
    \78\ Information provided during discussion with some Trade 
members in regard to the timeline for when export manifest data is 
available to be provided to CBP and challenges to providing pre-
departure data well in advance. Data obtained in February 2023.
---------------------------------------------------------------------------

    The transition from a paper form process to an electronic data 
process could also result in parties that provide EEM data adjusting 
business practices. CBP expects any costs related to adjusting business 
practices would be minimal and should not have a large effect on rail 
carriers and other trade members, specifically because they likely 
already have such practices developed to provide manifest data for rail 
imports.\79\ Additionally, participation in directly providing the rail 
EEM data to CBP by other trade members is voluntary; CBP expects that 
these parties would likely only directly provide data to CBP if the 
benefits outweighed the costs to their company. CBP requests comments 
from rail carriers and trade members on the potential costs during the 
regulatory period related to internal system adjustments, operation and 
maintenance needed to support transmitting pre-departure EEM data to 
CBP via ACE. CBP also requests comment on any other costs to trade 
members associated with transitioning from paper forms to the 
transmission of EEM data that CBP did not address in this analysis.
---------------------------------------------------------------------------

    \79\ CBP requested feedback from Trade members on the potential 
costs from adjusting business practices as a result of this proposed 
rule. Trade members suggested that there could be some costs but 
were unable to provide additional details on the costs for such 
adjustments to business practices or if this would be a one-time 
adjustment cost or ongoing adjustment costs.
---------------------------------------------------------------------------

    CBP expects that rail carriers and other trade members that provide 
EEM data to CBP would incur time burdens and costs while responding to 
CBP-issued holds. During the regulatory period, the party that provides 
the EEM data to CBP is the party responsible for responding to any 
questions, holds or issues that arise from CBP's review of that export 
data. During the regulatory period CBP expects that the time burden to 
respond to each hold depends on the complexity of the issue. When a 
party is reviewing and responding to holds, if that party does not have 
the necessary information and needs to obtain the data from another 
trade member, that would impose an additional time burden on both 
parties. To estimate the time burden to trade to review and resolve the 
average hold (including both 2H Documentation holds and 1H Enforcement 
holds) during the regulatory period CBP used the same time burden 
estimate as proposed during the pilot period of approximately 12.5 
minutes (0.21 hours) to trade when reviewing and resolving each 2H 
Documentation and 1H Enforcement hold.\80\
---------------------------------------------------------------------------

    \80\ Data obtained from CBP discussion with Trade members on the 
potential costs to review and resolve holds issued by CBP in 
response to EEM data transmitted. Time burdens vary greatly 
depending on the complexity of the issue. CBP took this into 
consideration when calculating the average time burden to review and 
address an issued hold. Data obtained in February 2023.
---------------------------------------------------------------------------

    CBP does not expect that such holds would result in CBP officers 
conducting additional cargo examinations when compared to the baseline. 
Cargo examinations conducted after cargo has

[[Page 2904]]

been loaded onto the train is a burdensome and time-consuming process 
and would result in a larger time burden to resolve holds that result 
in an examination. CBP does not track the number of cargo examinations 
and was unable to generate an estimate for the average number of cargo 
examinations each year, but feedback received from trade members 
suggests that cargo examinations are not a frequent occurrence.\81\ 
Although CBP does not anticipate examinations would increase as a 
result of this proposed rule, if CBP did conduct more examinations when 
compared to the baseline then time burden costs to trade members to 
review and resolve holds could be higher than what CBP provides in this 
analysis. Additionally, CBP does not track and was unable to estimate 
the number of holds issued that would result in multiple parties being 
involved in reviewing and resolving of holds. If responding to issued 
holds always requires multiple parties to be involved, then the time 
burden to review and resolve a hold would also likely be higher than 
the 12.5-minute estimate CBP provided above.
---------------------------------------------------------------------------

    \81\ Information was obtained from feedback and discussions with 
Trade members on the frequency of cargo examinations prior to the 
Test and during the Test suggesting such an occurrence was fairly 
uncommon. Data obtained in February 2023.
---------------------------------------------------------------------------

    To estimate the time burden to trade during the regulatory period 
when reviewing and resolving holds, CBP multiplied the total number of 
expected holds issued each year during the regulatory period by the 
estimated average time burden to review and resolve a hold (0.21 
hours). CBP expects that during the regulatory period trade will review 
and resolve around 813,537 holds (see Table 4) resulting in a total 
time burden of approximately 169,487 hours or on average 33,897 hours 
annually. CBP calculated the costs to trade from reviewing and 
resolving these holds by multiplying the total hours of time burden by 
the average hourly loaded wage rate for exporters ($35.62). CBP 
anticipates that overall costs to trade from reviewing and resolving 
holds as a result of this proposed rule would be around $6.0 million or 
on average $1.2 million annually. Table 18 shows CBP's regulatory 
period estimates for time burden and costs to trade associated with the 
review and resolution of holds issued by CBP.
[GRAPHIC] [TIFF OMITTED] TP13JA25.020

    The proposed rule prohibits rail carriers from transporting cargo 
with a hold across the border until the issues have been addressed and 
the hold has been lifted. Upon notification of a hold being issued on a 
specific cargo the party responsible for providing that information to 
CBP would need to contact CBP for specifics and further instructions 
regarding the hold. If CBP requires a manual examination of cargo, the 
rail carrier must coordinate with CBP to identify a place where a 
proper examination of cargo can be conducted. CBP would prohibit a 
train's departure from a U.S. port of export if there are any 
unresolved holds issued for cargo currently loaded onto a train. 
Parties that do not address a CBP-issued hold on specific cargo or 
freight cars before the required deadlines could face enforcement 
actions. Because CBP experienced very high rates of compliance during 
the Test (the compliance rate was over 99.8%), CBP expects excellent 
rates of compliance during the regulatory period.\82\ As stated 
earlier, CBP's primary goal is compliance and CBP intends to work with 
parties providing the EEM data during this process to minimize the 
disruption of the flow of goods.
---------------------------------------------------------------------------

    \82\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, subject matter expert on 
August 2, 2022.
---------------------------------------------------------------------------

    This proposed rule would also require a party providing the EEM 
data to CBP to have a bond on file with CBP. Carriers and other 
potential filers generally are all subject to other bond requirements 
that would qualify them to submit EEM data to CBP.\83\ Therefore, CBP 
expects that any costs to rail carriers or other trade members from 
being required to have a bond to provide export manifest data 
electronically to CBP would be negligible. Rail carriers and other 
trade members could also incur some costs to meet the requirement of 
this proposed rule of having someone available 24 hours a day 7 days a 
week to respond to questions and issues that may arise from CBP's 
review for EEM data transmitted. CBP anticipates that any additional 
staffing costs to participants would be negligible because they 
typically have someone working at all times for other business 
operations that can respond to CBP questions and issues.
---------------------------------------------------------------------------

    \83\ CBP anticipates that any of the following bonds would be 
appropriate depending upon the party filing, CBP Basic Importation 
and Entry Bond containing the provisions found in section 113.62 of 
this chapter, a Basic Custodial Bond containing the provisions found 
in 113.63 of this chapter, or an International Carrier Bond 
containing the provisions found in section 113.64 of this chapter.
---------------------------------------------------------------------------

    Rail carriers and other trade members may also be subject to claims 
for liquidated damages of $5,000 for each

[[Page 2905]]

violation and up to a maximum of $100,000 per departure for 
noncompliance. These claims imposed by CBP are a compliance tool and 
CBP anticipates that there would be high levels of compliance from 
participants during the regulatory period such that violations that 
result in claim issuance would likely not be a common occurrence. CBP 
acknowledges that compliance is CBP's primary goal and CBP plans to 
work with rail carriers and other trade members to ensure they provide 
the appropriate EEM data in a timely manner. To the extent that CBP 
issues claims against rail carriers or other trade members that would 
place an additional cost onto these parties as a result of this 
proposed rule, costs that would not be incurred if the charged parties 
are compliant.
    CBP estimated that during the regulatory period total overall costs 
of the proposed rule would be approximately $8.1 million or on average 
$1.6 million annually. Table 19 below displays CBP's estimates for 
total costs to CBP and trade members as a result of this proposed rule. 
CBP requests feedback and comments on the regulatory period costs from 
this proposed rule to rail carriers and other trade members discussed 
above and any other cost to rail carriers and other trade members that 
CBP did not address in this analysis. 
[GRAPHIC] [TIFF OMITTED] TP13JA25.021

Cost Savings
    The mandatory transmission of pre-departure EEM data would provide 
cost savings to CBP and to some trade members during the regulatory 
period. As discussed in the pilot period cost savings section of this 
analysis, obtaining, and reviewing EEM data is a more efficient process 
when compared to working with paper forms. During the regulatory 
period, CBP officers would continue to review all train consists prior 
to each train departing the U.S. port of export. As the transmission of 
EEM data becomes mandatory for all cargo departing the United States in 
the rail environment, CBP would experience more time savings through 
the expedited review of train consists. To estimate the time savings to 
CBP during the regulatory period CBP uses the time savings estimate 
provided during the pilot period of 1.92 hours per train consist. CBP 
multiplied this time savings per train consist by the forecasted number 
of departing trains exporting goods during the regulatory period, 
288,969 trains (see Table 3). CBP estimates that as a result of this 
proposed rule CBP would experience time savings of approximately 
110,771 hours each year or 553,857 hours in total during the regulatory 
period. To calculate the total cost savings, CBP multiplied the time 
savings estimate by the average loaded hour wage rate for a CBP officer 
($101.44). CBP estimates that the total cost savings to CBP during the 
regulatory period would be approximately $56.2 million or on average 
$11.2 million annually. Table 20 displays these estimated time and cost 
savings to CBP for each year of the regulatory period.
[GRAPHIC] [TIFF OMITTED] TP13JA25.022


[[Page 2906]]


    Because the transmission of EEM data would be mandatory for all 
cargo trains departing across approximately 68 U.S. ports of export as 
a result of this proposed rule, rail carriers and other trade members 
would likely experience some time and cost savings during the 
regulatory period. CBP notes that during the pilot period when Test 
participants transmitted all EEM within the required deadlines, CBP 
officers are able to complete their review of those train consists 
prior to that train's arrival to the U.S. port of export. CBP 
anticipates this would also be the case during the regulatory 
period.\84\ Therefore, the time savings to rail carriers during the 
regulatory period from a swifter CBP processing of an electronic train 
consist is dependent on how much review of a paper train consist CBP 
completed before the train arrives at the U.S. port of export in the 
baseline. CBP defines a few potential scenarios depending on when rail 
carriers provided export data to CBP prior to this proposed rule. In 
Scenario 1 rail carriers prior to this proposed rule did not provide 
export data pre-departure to CBP--meaning CBP officers were unable to 
start their review of the train consist until the train is at the U.S. 
port of export--in this scenario CBP anticipates these rail carriers 
would experience the same amount of time savings per train as CBP 
officers: 1.92 hours per outbound train. For Scenario 2, rail carriers 
who, prior to this proposed rule, provided pre-departure export data 
and the finalized train consists to CBP in advance such that CBP 
officers were able to conduct and complete their review of this 
information before the train arrived at the U.S. port of export, these 
rail carriers would likely not experience any time savings from the 
expedited CBP review of train consists. As CBP does not have data prior 
to this proposed rule on how many trains submit pre-departure export 
data to CBP in time for CBP to review it, CBP anticipates that the time 
savings to rail carriers from the expedited review of electronic train 
consists would be somewhere between 1.92 hours to 0 hours per departing 
train. Similar to the pilot period estimate, CBP determined to use the 
midpoint between these two values (0.96 hours) as Scenario 3 and as 
CBP's primary estimate for the time savings to rail carriers per 
outbound train during the regulatory period. CBP also provides the 
potential time savings from Scenario 4 which assumes CBP officers were 
able to complete 25 percent of the review of finalized train consists 
prior to a train's arrival at the U.S. port of export.
---------------------------------------------------------------------------

    \84\ Information provided by CBP's Cargo and Conveyance 
Security, Office of Field Operations, subject matter expert on 
November 8, 2022.
---------------------------------------------------------------------------

    Because of this uncertainty for the actual amount of time savings 
to rail carriers from this process CBP provides a range of potential 
time savings to rail carriers during the regulatory period using the 
same alternate estimates provided in the pilot period portion of this 
analysis, assuming CBP officers completed 0 percent of their review of 
train consists in Scenario 1 (1.92 hours of time savings per train), 
100 percent of their review in Scenario 2 (0 hours of time savings per 
train), 50 percent of their review in Scenario 3 (0.96 hours of time 
savings per train), and 25 percent of their review in Scenario 4 (0.48 
hours of time saving per train) before the train arrives at the U.S. 
port of export. CBP estimated the time savings to rail carriers by 
multiplying the average time savings per train by the forecasted number 
of outbound trains (see Table 3) during each year of the regulatory 
period. CBP then calculated a range of potential cost savings each year 
of the regulatory period by multiplying the estimated time savings by 
the average hourly loaded wage rate for exporters ($35.62). Under CBP's 
primary estimate, time savings to rail carriers during the regulatory 
period from swifter CBP review of electronic train consists would be 
approximately 277,410 hours or on average 55,482 hours annually. Cost 
savings to rail carriers would be approximately $9.88 million during 
the regulatory period or on average $1.98 million annually. According 
to CBP's range of estimates, cost savings to rail carriers from shorter 
review time of train consists could be anywhere from $0 to $19.8 
million or at most on average $3.95 million annually. Table 21 displays 
CBP's primary estimate and alternative range estimates for these 
potential time savings and cost savings to rail carriers and other 
trade members.

[[Page 2907]]

[GRAPHIC] [TIFF OMITTED] TP13JA25.023

    CBP expects that rail carriers and other trade members that decide 
to provide EEM cargo data would also experience some other time and 
costs savings as a result of this proposed rule. During the regulatory 
period, rail carriers would transmit EEM data to CBP and would no 
longer submit finalized train consists in paper form to CBP either via 
email or at the U.S. port of export. Eliminating the time burden and 
cost to provide the paper form train consists would be a cost savings 
of this proposed rule, but parties would now incur the time and cost to 
provide the EEM data. CBP expects providing the EEM data takes less 
time than providing the data on paper forms and rail EEM participants 
would experience a time savings when providing EEM data.\85\ During the 
regulatory period, CBP estimates that eliminating paper forms and 
providing the EEM data would help rail carriers and other trade members 
to automate the process for providing export manifest data to CBP and 
would generate a time savings of approximately 20 minutes (0.333 hours) 
on average for each train exporting goods out of the United States.\86\
---------------------------------------------------------------------------

    \85\ Information was obtained from feedback and discussions with 
Trade members on the potential effects of providing EEM data instead 
of paper forms. Data obtained in February 2023.
    \86\ Information was obtained from feedback and discussions with 
Trade members on the potential effects of providing EEM data instead 
of paper forms. Data obtained in February 2023.
---------------------------------------------------------------------------

    CBP used the number of total outbound trains estimated above 
288,969 (see Table 3) for the number of trains that would potentially 
be affected and experience this time savings during the regulatory 
period. According to CBP calculations, trade members would experience a 
total of 96,323 hours (288,969 trains x 0.333 hours) in time savings 
from a more efficient process of providing the electronic export 
manifest data when compared to the baseline. To provide an estimate for 
the total cost savings from this process, CBP multiplied the total 
expected time savings (96,323 hours) by the average hourly loaded wage 
rate for exporters ($35.62). CBP estimates that these cost savings to 
trade during the regulatory period would be approximately $3.43 million 
or on average $686,204 annually. Additionally, during the regulatory 
period CBP expects that rail EEM participants will experience time 
savings when making corrections and/or updates to electronically 
transmitted data in ACE when compared to making corrections and updates 
to paper forms

[[Page 2908]]

in the baseline scenario. CBP uses the same time savings estimate used 
in the pilot period of 15 minutes (0.25 hours) per train for the time 
savings experienced by rail EEM participants during the regulatory 
period. CBP multiplied this time savings per train by the expected 
number of outbound trains during each year of the regulatory period 
(57,794 trains, see Table 3). CBP estimates that rail EEM participants 
would experience a time savings of approximately 72,242 hours on 
average and 14,448 each year from being able to make updates and 
corrections to EEM data in ACE when compared to paper forms. To provide 
an estimate for the total cost savings from this process, CBP 
multiplied the total expected time savings during the regulatory period 
(72,242 hours) by the average hourly loaded wage rate for exporters 
($35.62). CBP estimates that these cost savings to trade during the 
regulatory period would be approximately $2.57 million or on average 
$514,653 annually. Table 22 displays CBP estimates for time savings to 
rail EEM participants from transitioning to transmitting EEM data and 
making corrections and updates to electronic data in ACE. Overall, CBP 
estimates that transitioning to EEM data transmission would save rail 
EEM participants approximately $6.0 million or on average $1.2 million 
annually.
[GRAPHIC] [TIFF OMITTED] TP13JA25.024

    CBP also expects that rail carriers would experience time and cost 
savings if the pre-departure EEM data results in CBP identifying a 
high-risk cargo prior to that cargo being loaded or added to a train, 
thereby avoiding the costly burden of identifying high-risk cargo after 
the train has been constructed. CBP did not track how often such 
examinations occur prior to this proposed rule and CBP was unable to 
provide an estimate for how often such examinations occur, but CBP 
expects that they are fairly uncommon.\87\ Additionally, CBP does not 
anticipate this rule would result in additional examinations compared 
to the baseline. CBP estimates that the cost to rail carriers to remove 
a car from a constructed train for CBP examination is approximately 
$3,000 per occurrence and results in a delay of up to two hours.\88\ 
This includes the freight and labor costs to safely decouple a train 
car from a built train. Rail carriers would avoid these costs if CBP 
receives pre-departure data and is able to issue holds and examine 
these cargo or train cars before constructed to the train. 
Additionally, moving to transmission of EEM data would reduce the space 
required to store and file paper form manifest documents generating 
savings to rail carriers and other trade members. Unfortunately, CBP 
does not have data available to provide a quantifiable estimate for the 
savings to trade members from reduced storage space as a result of 
eliminating paper form manifest documents, but based on feedback from 
trade members, does not consider the costs to be substantial.
---------------------------------------------------------------------------

    \87\ Information was obtained from feedback and discussions with 
Trade members on the frequency of cargo examinations prior to the 
Test and during the Test suggesting such an occurrence was fairly 
uncommon. Data obtained in February 2023.
    \88\ Information was obtained from feedback and discussions with 
Trade members on the potential costs and time burden to remove a 
train car from a constructed train in order for CBP to conduct an 
examination of the cargo or container. Data obtained in February 
2023.
---------------------------------------------------------------------------

    CBP estimates that total cost savings as a result of this proposed 
rule would be approximately $72.1 million or on average $14.4 million 
annually during the regulatory period. In total, CBP anticipates that 
trade members will experience a cost savings of $15.9 million or on 
average $3.2 million during the regulatory period, while CBP would 
experience cost savings of around $56.2 million or on average $11.2 
million annually. Table 23 below displays CBP's estimates for total 
cost savings to CBP and trade during each year of the regulatory 
period. CBP requests feedback and comments from rail carriers and trade 
members on

[[Page 2909]]

CBP's estimates for the cost savings to trade as a result of this 
proposed rule and any other potential cost savings from this proposed 
rule that CBP may not have included in this analysis.
[GRAPHIC] [TIFF OMITTED] TP13JA25.025

Benefits
    CBP expects that parties involved in U.S. rail exports would likely 
experience benefits as a result of this proposed rule during the 
regulatory period. Unfortunately, CBP does not have the data available 
to quantify these benefits and therefore will discuss these benefits 
qualitatively. A primary benefit of requiring pre-departure EEM data 
would be an improvement in CBP's security efforts and its ability to 
use CBP's ATS to conduct risk assessment for all rail export cargo 
prior to departing the United States, while also minimizing the 
disruption to the export process. This proposed rule would assist CBP 
in preventing illegal, dangerous, and hazardous cargo from being 
exported out of the United States and would allow CBP to ensure cargo 
safety and security for all exports in the rail environment. 
Additionally, transitioning to electronic data would reduce the use of 
paper for all parties involved and bring the outbound rail process 
level with existing inbound rail processing technology. The deadlines 
for submitting EEM data and the gained efficiencies from moving from 
paper forms to electronic data transmission using an integrated system 
would provide CBP more time to review the necessary detailed export 
data prior to a train's departure, allowing CBP officers to allocate 
more time to mission-critical activities. CBP also anticipates this 
proposed rule would generate benefits to the Federal Government through 
improved coordination and communication among CBP, the Department of 
Commerce, and other Government agencies with export jurisdiction, while 
enforcing U.S. export laws and regulations. In addition, CBP would be 
compliant in the rail environment with the Trade Act, which requires 
CBP to establish regulations providing for the mandatory electronic 
transmission of data by way of a CBP-approved electronic data 
interchange before cargo arrives or departs the United States in all 
environments.
Net Impact of the Proposed Rule
    CBP anticipates that the cost savings generated from this proposed 
rule would outweigh the costs during the regulatory period. In 
addition, this rule generates meaningful unquantified security 
benefits. During the regulatory period, CBP anticipates that this 
proposed rule would generate net cost savings to both CBP and trade 
members. CBP notes that lack of data available prevented CBP from 
providing exact estimates for some of the potential costs and cost 
savings from the implementation of rail EEM and therefore the actual 
net cost savings could be more or less than what CBP's primary 
estimates project in this analysis. Additionally, CBP acknowledges that 
for other trade members, participating directly in providing rail EEM 
data to CBP is voluntary and CBP expects that they would only do so if 
it were beneficial to their company and the benefits or cost savings 
outweigh the costs. Because CBP does not have data on how many of these 
other trade members would decide to directly participate in providing 
rail EEM data during the regulatory period the actual costs and cost 
savings from this proposed rule could be higher than what CBP has 
provided during the regulatory period of this analysis. For this 
reason, CBP presents a range of estimates. CBP estimates that, during 
the regulatory period, CBP, rail carriers, and other trade members bear 
costs of approximately $8.1 million or an average of $1.6 million per 
year. Meanwhile, CBP estimates a total cost savings to CBP, rail 
carriers and other trade members of approximately $72.1 million during 
the regulatory period, or an average of $14.4 million per year. This 
results in a net cost savings of approximately $63.9 million, or an 
average of $12.8 million per year. Table 24 displays CBP's estimates 
for costs and cost savings to CBP and trade members during each year of 
the regulatory period.

[[Page 2910]]

[GRAPHIC] [TIFF OMITTED] TP13JA25.026

[GRAPHIC] [TIFF OMITTED] TP13JA25.027

    Table 25 shows the discounted total quantified costs during the 
regulatory period from this proposed rule. As shown, the total costs 
over the 5-year regulatory period of analysis would be around $7.4 
million using a two percent discount rate. Expected annualized costs 
from this proposed rule are about 1.6 million using a two percent 
discount rate.
[GRAPHIC] [TIFF OMITTED] TP13JA25.028

    Table 26 displays the discounted total quantified cost savings as a 
result of this proposed rule during the regulatory period. CBP's 
primary estimates show that this rule will provide cost savings to CBP, 
rail carriers and other trade members of around $68.0 million using a 
two percent discount rate. Annualized cost savings from this proposed 
rule would be approximately $14.4 million.

[[Page 2911]]

[GRAPHIC] [TIFF OMITTED] TP13JA25.029

    Table 27 displays CBP's primary estimate for quantifiable net cost 
savings from the implementation of rail EEM. As shown, CBP expects that 
this proposed rule would result in total net cost savings to CBP, rail 
carriers and other trade members of around $60.3 million using a two 
percent discount rate. CBP estimates that annualized net cost savings 
are approximately $12.8 million using a two percent discount rate.
Total Impact of the Proposed Rail EEM Program
    CBP anticipates that over the entire 15-year time period of 
analysis 2016-2030, the proposed rail EEM program would result in 
overall net cost savings compared to the baseline (before the rail EEM 
test was introduced). Initially as the rail EEM test was introduced, 
costs outweighed the cost savings but CBP estimates that as the test 
expanded and after the proposed rule would be implemented, cost savings 
would far outweigh the costs incurred by this proposed rule. In 
addition, CBP expects that this proposed rule would generate meaningful 
unquantified security benefits after it is implemented as discussed 
above in the regulatory period net impact section. CBP estimates that 
between 2016-2030 the rail EEM program would result in total costs of 
$11,488,249 or on average $765,883 annually. Additionally, the rail EEM 
program would result total cost savings of $76,000,235 or on average 
$5,066,682 annually between 2016-2030. CBP estimates that total net 
cost savings from the rail EEM program during the period of analysis 
2016-2030 would be $64,511,986 or on average $4,300,799 annually when 
compared to the baseline. Table 28 displays CBP's estimates for total 
costs, cost savings and net cost savings as a result of this proposed 
rule from 2016-2030.
[GRAPHIC] [TIFF OMITTED] TP13JA25.030


[[Page 2912]]


[GRAPHIC] [TIFF OMITTED] TP13JA25.031

    Table 29 shows the discounted total quantified costs from the rail 
EEM program from 2016-2030 compared to the baseline scenario. As shown, 
the total costs over the 15-year period of analysis would be $9,330,571 
using a two percent discount rate. Expected total annualized costs from 
this proposed rule are $726,156 using a two percent discount rate.
[GRAPHIC] [TIFF OMITTED] TP13JA25.032

    Table 30 shows the discounted total quantified costs savings as a 
result of this proposed rule from 2016-2030. As shown, the total cost 
savings over the 15-year period of analysis would be $59,120,631 using 
a two percent discount rate. Expected total annualized cost savings 
from this proposed rule would be $4,601,091 using a two percent 
discount rate.
[GRAPHIC] [TIFF OMITTED] TP13JA25.033

    Table 31 shows the discounted total quantified net cost savings 
during the regulatory period from this proposed rule. As shown, the 
total net cost savings over the 15-year period of analysis compared to 
the baseline would be $49,790,060 using a two percent discount rate. 
Expected total annualized net cost savings from this proposed rule 
would be $3,874,935 using a two percent discount rate. Accounting 
statements 1 and 2 show the expected costs, cost savings and benefits 
from this proposed rule for the regulatory period and the program as a 
whole, respectively. Though CBP presents the costs of the program as a 
whole, including both the pilot period and the regulatory period, the 
costs of the pilot period are sunk for the purposes of decision-making. 
Therefore, CBP considered the net effects for the regulatory period 
when deciding whether to proceed with this rule.

[[Page 2913]]

[GRAPHIC] [TIFF OMITTED] TP13JA25.034


[[Page 2914]]


[GRAPHIC] [TIFF OMITTED] TP13JA25.035


[[Page 2915]]



B. Regulatory Flexibility Act

    This section examines the impact on small entities as required by 
the Regulatory Flexibility Act (5 U.S.C. 601 et. seq.), as amended by 
the Small Business Regulatory Enforcement and Fairness Act of 1996. A 
small entity may be a small business (defined as any independently 
owned and operated business not dominant in its field that qualifies as 
a small business per the Small Business Act); a small not-for-profit 
organization; or a small governmental jurisdiction (locality with fewer 
than 50,000 people).
    CBP acknowledges that this proposed rule, requiring pre-departure 
transmission of EEM data, could potentially affect a large number of 
small U.S. entities. CBP expects that all seven rail carrier companies 
that engage in exporting goods from the United States in the rail 
environment and an unknown number of other trade members (such as 
USPPIs, FPPIs, NVOCCs, freight forwarders, CHB, or other third parties 
with knowledge of export manifest data elements) at approximately 68 
U.S. ports of export would be affected by this proposed rule. CBP notes 
that of the seven rail carriers affected by this proposed rule, two 
carriers are Canadian companies and the other five companies are large 
companies according to the U.S. Small Business Administration's size 
standards for small businesses.\89\ Therefore, CBP does not anticipate 
that this proposed rule would affect any small U.S. entity rail 
carriers. The scope of impact on small U.S. entities depends largely on 
how many other trade members elect to provide electronic manifest cargo 
data voluntarily to CBP as a result of this proposed rule. This 
proposed rule does not require other trade members to provide 
electronic manifest cargo to CBP, and CBP expects that they would only 
do so if their benefits outweigh the costs. CBP expects that even if 
this proposed rule affects a significant number of small U.S. entities, 
such entities would not incur significant net costs. CBP expects that 
this proposed rule would save businesses time and money by 
transitioning from a paper process to a more efficient electronic 
process. CBP anticipates that providing rail export data electronically 
would generate time savings to those submitting data to CBP, when 
making any corrections to data submitted electronically, and would 
reduce paper, and printing costs. According to CBP's calculations on 
the impacts from this proposed rule on average the estimated cost to 
provide a single rail EEM data transmission to CBP is approximately 
$0.34, meanwhile the estimated cost savings per data transmission is 
around $0.75, resulting in a net savings per data transmission.\90\ CBP 
does not know how many of these trade members will choose to submit 
this data to CBP or how often, so CBP is unable to estimate the annual 
savings to these trade members as a result of this rule. Overall, as 
discussed above, this rule would result in average annual total filing 
costs to trade members of $1,452,424 and savings of $3,177,127. We note 
that these costs and savings will be split between rail carriers (which 
are not small businesses) and other trade members (which may be small 
businesses). CBP anticipates that cost savings outweigh costs for 
parties affected; hence, CBP does not expect small U.S. entities would 
experience net costs as a result of this proposed rule. Therefore, CBP 
certifies that this proposed rule would not have a significant economic 
impact on a substantial number of small U.S. entities. CBP requests 
comments from the public on CBP's certification that this proposed rule 
would not have a significant economic impact on a substantial number of 
small U.S. entities.
---------------------------------------------------------------------------

    \89\ CBP compared the five U.S. companies with the given U.S. 
Small Business Administration's size standards for small businesses 
based on the associated NAICS classification listed in Hoovers 
Online Company Reports, available at https://subscriber.hoovers.com/H/home/.
    \90\ According to CBP's estimates each year during the 
regulatory period total costs to trade members would be $1,452,424, 
the total cost savings to trade would be $3,177,127 and the total 
expected rail EEM data transmissions each year are expected to be 
around 4,249,601. CBP calculated the average cost per rail EEM data 
submission by dividing the total cost by the estimated number of 
rail EEM data transmission ($1,452,424/4,249,602 = $0.34) and the 
average cost savings per rail EEM data submission by dividing the 
total cost saving by the estimated number of rail EEM data 
transmission ($3,177,127/4,249,601 = $0.75).
---------------------------------------------------------------------------

C. Paperwork Reduction Act

    An agency may not conduct, or sponsor, and an individual is not 
required to respond to a collection of information unless it displays a 
valid OMB control number. The collections of information in the current 
regulations have already been approved by the Office of Management and 
Budget (OMB) in accordance with the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507) and assigned OMB control number 1651-0001. This collection 
already provides estimated burdens to the public for voluntarily 
participating in the Rail EEM test. CBP anticipates that this proposed 
rule would result in an additional time burden to respondents that 
would provide rail EEM directly to CBP. This proposed rule establishes 
new requirements for trade members to provide rail EEM data to CBP 
prior to a train departing from a U.S. port of export. CBP notes that 
prior to providing EEM data, rail carriers typically incurred time 
burdens to provide some export data to CBP that were not originally 
included on this information collection or any other information 
collection as the data was not a statutory or regulatory requirement. 
Trade members have expressed that providing export data to CBP as part 
of the rail EEM did provide a reduction in time burden compared to the 
prior process, but because the original time burden to provide export 
data to CBP prior to rail EEM was not included in this information 
collection CBP estimates that the time burden to the public from this 
proposed rule would be insignificant.
    As a result of this proposed rule, CBP estimates that at least all 
seven major rail carriers that currently engage in exporting goods out 
of the United States in the rail environment would be affected. 
Collection 1651-0001 would be revised to reflect the changed burden 
hours for requiring trade members to provide rail EEM data to CBP prior 
to departure of the train from a U.S. port of export. The new 
information collection requirements from this proposed rule would 
result in the following change in the estimated time burdens to the 
public for the information collection number 1651-0001 from submitting 
rail EEM data to CBP:
    Estimated number of respondents annually: 7.
    Average responses per respondent: 598,830.
    Total responses: 4,191,807.
    Estimated time burden per respondent: 5,506 hours.
    Total added time burden: 38,545 hours.
    CBP estimates that this added time burden would increase the cost 
to the public by $1,372,986 and adjust the total cost to the public for 
this information collection to $611,127,188.
    CBP also expects that this new information collection requirement 
would result in a decrease in the annual cost to the Federal Government 
through the automated review of rail EEM data by ATS. CBP officers 
would experience a reduced time burden from reviewing only 0.05 percent 
of all rail EEM responses provided by the public. This revision to the 
total number of responses reviewed by CBP for this information 
collection decreased by 12,803 responses resulting in a reduced

[[Page 2916]]

time burden of around 1,067 hours and cost reduction of around $77,884 
annually.

D. Privacy

    CBP will ensure that all Privacy Act requirements and applicable 
DHS privacy policies are adhered as a result of this proposed 
regulation.\91\ CBP has issued a Privacy Impact Assessment (PIA) for 
the Automated Commercial Environment (ACE),\92\ which outlines how CBP 
ensures compliance with Privacy Act protections and DHS privacy 
policies, including DHS's Fair Information Practice Principles (FIPPs). 
The FIPPs account for the nature and purpose of the information being 
collected in relation to DHS's mission to preserve, protect and secure 
the United States. The PIA addresses issues such as the security, 
integrity, and sharing of data, use limitation and transparency. The 
PIA is publicly available at: https://www.dhs.gov/privacy-documents-us-customs-and-border-protection.
---------------------------------------------------------------------------

    \91\ See the DHS Privacy Policy web page, available at https://www.dhs.gov/privacy-policy-guidance.
    \92\ See U.S. Department of Homeland Security, U.S. Customs and 
Border Protection, Privacy Impact Assessment for The Automated 
Commercial Environment, DHS/CBP/PIA-003 and all subsequent updates, 
available at https://www.dhs.gov/privacy-documents-us-customs-and-border-protection.
---------------------------------------------------------------------------

    The Privacy Act of 1974 requires that federal agencies issue a 
System of Record Notice (SORN) to provide the public notice regarding 
personally identifiable information (PII) collected in a system of 
records. SORNs explain how the information is used, retained, and may 
be accessed or corrected, and whether certain portions of the system 
are subject to Privacy Act exemptions for law enforcement, national 
security, or other reasons. CBP issued the DHS/CBP-001 Import 
Information Systems (IIS) System of Records and the DHS/CBP-020 Export 
Information System (EIS) System of Records, which provide coverage for 
the proposed regulation.\93\
---------------------------------------------------------------------------

    \93\ See DHS/CBP-001 Import Information System, 81 FR 48826 
(July 26, 2016), available at https://www.federalregister.gov/documents/2016/07/26/2016-17596/privacy-act-of-1974-department-of-homeland-security-us-customs-and-border-protection-dhscbp-001; and 
DHS/CBP-020 Export Information Systems (EIS), 80 FR 53181 (September 
02, 2015), available at https://www.federalregister.gov/documents/2015/09/02/2015-21675/privacy-act-of-1974-department-of-homeland-security-us-customs-and-border-protection-dhscbp-020.
---------------------------------------------------------------------------

E. Unfunded Mandates Reform Act of 1995

    This rule will not result in the expenditure by State, local, and 
tribal governments, in the aggregate, or by the private sector, of $100 
million or more in any one year (adjusted for inflation), and it will 
not significantly or uniquely affect small governments. Therefore, no 
actions are necessary under the provisions of the Unfunded Mandates 
Reform Act of 1995.

IX. Signing Authority

    The signing authority for these amendments falls under 19 CFR 
0.2(a). Accordingly, this document is signed by the Secretary of 
Homeland Security (or his delegate).

List of Subjects

19 CFR Part 113

    Common Carriers, Exports, Freight, Laboratories, Reporting and 
recordkeeping requirements, Surety bonds.

19 CFR Part 123

    Canada, Customs duties and inspection, Freight, International 
Boundaries, Mexico, Motor Carriers, Railroads, Reporting and 
recordkeeping requirements, Vessels.

    For the reasons stated in the preamble, parts 113 and 123 of title 
19, Code of Federal Regulations (19 CFR parts 113 and 123), are 
proposed to be amended as set forth below:

PART 113--CBP Bonds

0
1. The general authority section for part 113 continues to read as 
follows:


    Authority: 19 U.S.C. 66, 1623, 1624.

0
2. Amend Sec.  113.62 by adding paragraph (k)(3) to read as follows:


Sec.  113.62  Basic importation and entry bond conditions.

* * * * *
    (k) Agreement to comply with electronic entry and/or advance cargo 
information filing requirements. (1) * * *
    (2) * * *
    (3) If the principal elects to provide advance outbound information 
to CBP electronically, the principal agrees to provide such information 
in the manner and in the time period required under Sec.  123.93 of 
this chapter. If the principal defaults with regard to these 
obligations, the principal and surety (jointly and severally) agree to 
pay liquidated damages of $5,000 for each violation.
* * * * *
0
3. Amend Sec.  113.63 by revising and republishing paragraph (g) to 
read as follows:


Sec.  113.63  Basic custodial bond conditions.

* * * * *
    (g) Agreement to comply with electronic entry and/or advance cargo 
information filing requirements. (1) The principal agrees to comply 
with all Importer Security Filing requirements set forth in part 149 of 
this chapter including but not limited to providing security filing 
information to CBP in the manner and in the time period prescribed by 
regulation. If the principal defaults with regard to any obligation, 
the principal and surety (jointly and severally) agree to pay 
liquidated damages of $5,000 per violation.
    (2) If the principal elects to provide advance outbound information 
to CBP electronically, the principal agrees to provide such information 
in the manner and in the time period required under Sec.  123.93 of 
this chapter. If the principal defaults with regard to these 
obligations, the principal and surety (jointly and severally) agree to 
pay liquidated damages of $5,000 for each violation.
* * * * *
0
4. Amend Sec.  113.64 by revising and republishing paragraph (d) to 
read as follows:


Sec.  113.64  International carrier bond conditions.

* * * * *
    (d) Agreement to provide advance cargo information. (1) The 
incoming carrier agrees to provide advance cargo information to CBP in 
the manner and in the time period required under Sec. Sec.  4.7 and 
4.7a of this chapter. If the incoming carrier, as principal, defaults 
with regard to these obligations, the principal and surety (jointly and 
severally) agree to pay liquidated damages of $5,000 for each 
violation, to a maximum of $100,000 per conveyance arrival.
    (2) The outbound carrier agrees to transmit advance outbound 
information to CBP electronically, in the manner and in the time period 
required under Sec.  123.93 of this chapter. If the outbound carrier, 
as principal, defaults with regard to these obligations, the principal 
and surety (jointly and severally) agree to pay liquidated damages of 
$5,000 for each violation, to a maximum of $100,000 per departure.
* * * * *

PART 123--CBP RELATIONS WITH CANADA AND MEXICO

0
1. The general authority section for part 123 continues to read as 
follows:

    Authority:  19 U.S.C. 66, 1202 (General Note 3(i), Harmonized 
Tariff Schedule of the United States (HTSUS)), 1415, 1431, 1433, 
1436, 1448, 1624, 2071 note.

0
2. Revise and republish Sec.  123.0 to read as follows:


Sec.  123.0  Scope.

    This part contains special regulations pertaining to Customs 
procedures at the

[[Page 2917]]

Canadian and Mexican borders. Included are provisions governing report 
of arrival, manifesting, unlading and lading, instruments of 
international traffic, shipments in transit through Canada or Mexico or 
through the United States, commercial traveler's samples transiting the 
United States or Canada, baggage arriving from Canada or Mexico 
including baggage transiting the United States or Canada or Mexico, and 
electronic information for rail and truck cargo in advance of arrival 
or departure. Aircraft arriving from or departing for Canada or Mexico 
are governed by the provisions of part 122 of this chapter. The arrival 
of all vessels from, and clearance of all vessels departing for, Canada 
or Mexico are governed by the provisions of part 4 of this chapter. 
Fees for services provided in connection with the arrival of aircraft, 
vessels, vehicles and other conveyances from Canada or Mexico are set 
forth in Sec.  24.22 of this chapter. Regulations pertaining to the 
treatment of goods from Canada or Mexico under the North American Free 
Trade Agreement are contained in part 181 of this chapter. The 
requirements for the United States Postal Service to transmit advance 
electronic information for inbound international mail shipments are set 
forth in Sec.  145.74 of this chapter.
0
3. Revise the heading of Subpart J to read as follows:

Subpart J--Advance Information for Cargo Arriving or Departing by 
Rail or Truck

0
4. Add section 123.93 to Subpart J to read as follows:


Sec.  123.93  Electronic information for rail conveyance and cargo 
required in advance of export.

    (a) General requirement. Pursuant to section 343(a), Trade Act of 
2002, as amended (19 U.S.C. 1415), for any train departing the United 
States, U.S. Customs and Border Protection (CBP) must receive 
electronically from the rail carrier, or other eligible filer as 
specified in paragraph (c), certain information concerning the train 
and cargo, as enumerated in paragraphs (d), (e), and (f) of this 
section. CBP must receive this information, known as outbound 
electronic rail manifest data, no later than the time frames prescribed 
in paragraph (b) of this section. The transmission of the required data 
must occur through the Automated Commercial Environment (ACE) or any 
other CBP-authorized electronic data interchange system. Any 
examination referrals must be resolved in accordance with the 
provisions and time frames prescribed in paragraph (g) of this section. 
Any Do-Not-Load (DNL) or Hold instructions must be addressed in 
accordance with the provisions prescribed in paragraph (h) of this 
section.
    (b) Time frame for transmitting data. (1) Initial filing. The 
required initial filing data enumerated in paragraph (d) of this 
section must be transmitted as early as practicable, but no later than 
24 hours prior to departure of the train from the United States.
    (2) Subsequent Filing. The required subsequent filing will include 
the data identified below:
    (i) Export manifest cargo data. Export manifest cargo data other 
than initial filing data must be transmitted no later than two hours 
prior to departure of the train from the United States.
    (ii) Export manifest transportation data. Export manifest 
transportation data other than initial filing data must be transmitted 
no later than two hours prior to departure of the train from the United 
States.
    (iii) Empty container data. Data related to empty containers must 
be transmitted no later than the time of assembly of the train.
    (3) Updates. The party who transmits data must update it if, after 
the filing is transmitted, any of the transmitted data changes or more 
accurate data becomes available. Updates are required upon discovery of 
data changes.
    (c) Parties filing cargo and conveyance data. (1) Outbound carrier. 
The outbound carrier is responsible for transmitting export manifest 
transportation data and empty container data. If no other eligible 
party elects to transmit the initial filing data or export manifest 
cargo data, the outbound carrier must transmit it. If another eligible 
party elects to transmit either the initial filing data or export 
manifest cargo data, the outbound carrier may also choose to do so.
    (2) Other filers. In addition to the outbound carrier for whom 
participation is mandatory, one of the following parties meeting the 
qualifications of paragraph (a) of this section that require 
transmission of information through ACE or any other CBP-authorized 
electronic data interchange system may elect to transmit to CBP the 
initial filing data and/or the export manifest cargo data for outgoing 
cargo listed in paragraph (d) of this section:
    (i) The U.S. Principal Party in Interest (USPPI), as defined by the 
provisions of section 30.1 of the Foreign Trade Regulations (FTR) of 
the Department of Commerce, Bureau of the Census (15 CFR 30.1), or its 
authorized agent;
    (ii) The Foreign Principal Party in Interest (FPPI) or its 
authorized agent with the FPPI being defined by the provisions of 
section 30.1 of the Foreign Trade Regulations (FTR) of the Department 
of Commerce, Bureau of the Census, (15 CFR 30.1); or
    (iii) Any other party with direct knowledge of the export 
information, which may include a customs broker, Automated Broker 
Interface (ABI) filer, non-vessel operating common carrier (NVOCC) as 
defined by Sec.  4.7(b)(3)(ii) of this chapter, or a freight forwarder 
as defined in Sec.  112.1 of this chapter.
    (3) Nonparticipation by other party. If another party specified in 
paragraph (c)(2) of this section does not transmit advance export 
information to CBP, the party that arranges for and/or delivers the 
cargo to the outbound carrier must fully disclose and present to the 
outbound carrier the cargo information listed in paragraph (d) of this 
section. The outbound carrier must transmit this information to CBP in 
accordance with this section.
    (4) Bond required. A party transmitting any of the information 
described in this subsection must have at least one of the following 
bonds on file with CBP: a CBP Basic Importation and Entry Bond 
containing the provisions found in Sec.  113.62 of this chapter, a 
Basic Custodial Bond containing the provisions found in Sec.  113.63 of 
this chapter, or an International Carrier Bond containing the 
provisions found in Sec.  113.64 of this chapter.
    (5) Required information in possession of third party. Any entity, 
other than the outbound carrier or a party described in paragraph 
(c)(2) of this section, in possession of data required to be 
transmitted to CBP under this section must fully disclose and present 
the required data to either the outbound carrier or other electronic 
filer, as applicable, which must transmit such data to CBP.
    (6) Party receiving information believed to be accurate. Where the 
party electronically transmitting the data required in paragraph (d) of 
this section receives any of this information from another party, CBP 
will take into consideration how, in accordance with ordinary 
commercial practices, the transmitting party acquired such information, 
and whether and how the transmitting party is able to verify this 
information. Where the transmitting party is not reasonably able to 
verify such information, CBP will permit the party to electronically 
transmit the information based on what that party reasonably believes 
to be true.
    (d) Initial Filing. The following information comprises the initial 
filing which is mandatory and may be made

[[Page 2918]]

by any party identified in paragraph (c)(1) or (c)(2) of this section:
    (1) Bill of lading number;
    (2) The numbers and quantities of the cargo laden aboard the train 
as contained in the carrier's bill of lading, either master or house, 
as applicable (this means the quantity of the lowest external packaging 
unit; numbers or quantities of containers and pallets do not constitute 
acceptable information; for example, a container holding 10 pallets 
with 200 cartons should be described as 200 cartons);
    (3) Total weight of cargo expressed in pounds or kilograms;
    (4) A precise cargo description (or the Harmonized Tariff Schedule 
(HTSUS) number(s) to the 6-digit level under which the cargo is 
classified if that information is received from the shipper) and weight 
of the cargo; or, for a sealed container, the shipper's declared 
description and weight of the cargo (generic descriptions, specifically 
those such as ``FAK'' (``freight of all kinds''), ``general cargo,'' 
and ``STC'' (``said to contain'') are not acceptable);
    (5) The shipper's complete name and address, or identification 
number, from the bill(s) of lading (for each house bill in a 
consolidated shipment);
    (6) The consignee's complete name and address, or identification 
number, from the bill(s) of lading (The consignee is the party to whom 
the cargo will be delivered in the foreign country. However, in the 
case of cargo shipped ``to order of [a named party],'' the ``to order'' 
party must be named as the consignee; and if there is any other 
commercial party listed in the bill of lading for delivery or contact 
purposes, the carrier must also report this other commercial party's 
identity and contact information including address in the ``Notify 
party'' field.); and
    (7) The Automated Export System (AES) Exemption Statement, as 
applicable.
    (e) Export manifest transportation data. (1) Mandatory data. The 
following transportation data is mandatory and must be transmitted by 
the rail carrier or its agent:
    (i) Port of departure from the United States;
    (ii) Date of departure;
    (iii) Estimated time of departure;
    (iv) Carrier-assigned conveyance name, equipment number and trip 
number;
    (v) Train Consist, which includes:
    (A) Manifest number;
    (B) Train number;
    (C) Rail car order; and
    (D) Empty containers;
    (vi) The rail carrier identification SCAC code (the unique Standard 
Carrier Alpha Code assigned for each carrier by the National Motor 
Freight Traffic Association; see Sec.  4.7a(c)(2)(iii) of this 
chapter); and
    (vii) Container or equipment numbers (for containerized shipments) 
or rail car Numbers (for all other shipments).
    (2) Conditional data. The following transportation data is 
conditional and must be transmitted by the rail carrier or agent if 
applicable:
    (i) 6-character Hazmat Code. The UN (for United Nations Number) or 
NA (North American Number) and the corresponding 4-digit identification 
number assigned to the hazardous material must be provided;
    (ii) Marks and numbers; and
    (iii) Seal number (only required if container was sealed). The seal 
numbers for all seals affixed to containers and/or rail cars to the 
extent that CBP's data system can accept this information (for example, 
if a container has more than two seals, and only two seal numbers can 
be accepted through the system per container, electronic presentation 
of two of these seal numbers for the container would be considered as 
constituting full compliance with this data element).
    (3) Optional data. The following transportation data is optional 
and may be transmitted by the rail carrier or its agent:
    (i) Mode of transportation (containerized rail cargo or non-
containerized rail cargo);
    (ii) Equipment type code; and
    (iii) Place where the rail carrier takes possession of the cargo 
shipment or empty rail car.
    (f) Export manifest cargo data. (1) Mandatory data. The following 
export manifest cargo data is mandatory and may be transmitted by any 
party eligible to transmit as described in paragraph (c) of this 
section. If the information has been provided in the initial filing, it 
need not be transmitted again unless there are updates or changes:
    (i) Shipper name and address (for empty rail cars, the shipper may 
be the railroad from whom the rail carrier received the empty rail car 
to transport);
    (ii) Consignee name and address (for empty rail cars, the consignee 
may be the railroad to whom the rail carrier is transporting the empty 
rail car);
    (iii) Port of Lading;
    (iv) Port of Unlading;
    (v) Bill of Lading type (Master, House, Simple or Sub);
    (vi) Bill of Lading Numbers (Master, House, Simple or Sub);
    (vii) AES Internal Transaction Number or In-bond Number (per 
shipment);
    (viii) Cargo description;
    (ix) Weight of cargo (may be expressed in either pounds or 
kilograms); and
    (x) Quantity of cargo and unit of measure.
    (2) Conditional data. The following export manifest cargo data is 
conditional and must be transmitted if applicable:
    (i) In-bond type;
    (ii) Notify party name and address; and
    (iii) Secondary notify party name and address.
    (3) Optional data. The following export manifest cargo data is 
optional and may be transmitted by any party eligible to transmit as 
described in paragraph (c):
    (i) Mexican Pedimento Number (only for shipments for export to 
Mexico);
    (ii) Secondary notify party Standard Carrier Alpha Code (SCAC);
    (iii) Country of ultimate destination; and
    (iv) Number of house bills of lading.
    (g) Examination referrals. (1) Potential referrals. There are two 
types of referrals that may be issued by CBP after a risk assessment of 
an outbound export manifest data transmission.
    (i) Referral for information. A referral for information will be 
issued if a risk assessment of the cargo cannot be conducted due to 
non-descriptive, inaccurate, or insufficient data. This can be due to 
typographical errors, vague cargo descriptions, and/or unverifiable 
information; or
    (ii) Referral for screening. A referral for screening will be 
issued if the potential risk of the cargo is deemed high enough to 
warrant enhanced screening.
    (2) Rail export referral resolution. All outbound rail export data 
transmitters must respond to and take the necessary action to address 
all referrals, no later than prior to departure of the train. The 
appropriate protocols and time frame for taking the necessary action to 
address these referrals must be followed as directed. The parties 
responsible for taking the necessary action to address outbound rail 
export data referrals are as follows:
    (i) Referral for information. The data transmitter is responsible 
for taking the necessary action to address a referral for information. 
The last party to file the outbound rail manifest data for which 
referral is sought is responsible for such action.
    (ii) Referral for screening. If the outbound rail export manifest 
transmitter is the rail carrier, it may address a referral for 
screening directly. If the outbound rail export manifest transmitter is 
a party other than the

[[Page 2919]]

outbound rail carrier, it may choose to address the referral for 
screening directly while informing the outbound carrier of the 
referral. If the outbound rail export manifest transmitter chooses not 
to address the referral for screening, it must notify the outbound rail 
carrier of the referral for screening. Upon such notification, the 
outbound rail carrier is responsible for taking the necessary action to 
address the referral.
    (3) Prohibition on transporting cargo with unresolved referrals. 
The outbound rail carrier may not transport cargo destined for 
departure from the United States until all referrals issued pursuant to 
this section with respect to such cargo have been resolved.
    (h) Do-Not-Load (DNL)/Hold instructions. (1) A Do-Not-Load (DNL) 
instruction will be issued if it is determined that the cargo or rail 
car may contain a potential threat to the train and its vicinity.
    (2) A Hold instruction will be issued, even after loading, if it is 
determined that further examination of the cargo or rail car is 
required.
    (3) All outbound rail manifest data transmitters must provide a 
telephone number and email address that is monitored 24 hours/7 days a 
week in case a Do-Not-Load (DNL) instruction is issued. All 
transmitters and/or outbound rail carriers, as applicable, must respond 
and fully cooperate when the entity is reached by phone and/or email 
when a Do-Not-Load (DNL) or Hold instruction is issued. The party with 
physical possession of the cargo will be required to carry out the Do-
Not-Load (DNL) or Hold protocols and the directions provided by law 
enforcement authorities.
    (4) The outbound rail carrier may not transport cargo with a Do-
Not-Load (DNL) or Hold instruction.

Alejandro N. Mayorkas,
Secretary of Homeland Security.
[FR Doc. 2024-31331 Filed 1-7-25; 4:15 pm]
BILLING CODE 9111-14-P