NEWS 2008

Customs and Border Protection published its much-anticipated Ocean Importer Security Filing Rule in Tuesday's Federal Register. You can read the announcement here.

The interim rule, known as 10+2, will take effect January 25, 2009 - with enforcement to begin one year later. The 10 additional data elements from importers and 2 from carriers (10+2) that U.S. Customs and Border Protection will require are the following:

Importer

• Seller
• Buyer
• Manufacturer or Supplier
• Location where container is stuffed
• Party to whom the goods are shipped
• Consolidator or stuffer
• Importer of Record number
• Consignee number
• 10-digit harmonized tariff number
• Country of origin

Carrier

• Vessel stow plan
• Carrier status message

Please note that 10+2 will NOT replace AMS and is intended to prevent terrorist weapons from being transported to the United States.

The advance importer security filing requires importers to submit shipping data 24 hours prior to loading at a foreign port. Whereas the data collection under AMS is the responsibility of the exporter, the importer will be fully responsible to gather complete and correct information from the exporter under 10+2. Compliance penalties, after the initial grace period, are $ 5,000.00 per violation. Industry groups are worried that the controversial rule may add huge data collection and information technology costs to doing business.

Through our CHB division, Fracht USA will offer the advanced security filing to importers as a "value added service". We ask for everybody's attention and cooperation in regards to the data collection and would like to thank you in advance for your continuous support.

For additional information, please visit www.cbp.gov or send an email to compliance@fracht.com

The following article was published on The JOURNAL of COMMERCE ONLINE website today:

"The White House Office of Management and Budget has given Customs and Border Protection the authority to move forward with Customs' 10+2 proposal, which would add to the list of security data that importers must file on their shipments.

Customs is expected to move quickly to issue the final rule. The rule has been under review for months by the administration. The delay has forced Customs officials to remain silent on the issue while OMB deliberated, and left members of the trade industry with nothing to do but speculate.

Leaders of the House Ways and Means Committee have urged Customs and Border Protection to take an intermediary step that would allow the 10+2 rule to be tested in a pilot program before it becomes final.

Lawmakers said Customs could use the pilot to test compliance with 10+2 with a small number of importers, and correct any technical problems. All other companies would be encouraged to comply on a voluntary basis."

Effective October 15, 2008, U.S. Customs and Border Protection (CBP) will require that all freight containers in transit to the U.S. by ship, rail or truck have bolt seals that meet the ISO PAS 17712 standard.

This mandate is pursuant to the 2007 amendment to the Safe Port Act, which required this step if DHS and CBP did not issue an interim final rule on minimum container security standards by April 1,2008. Since an interim rule was not issued by that date, the language of the 2007 Safe Ports Act amendment provides the following:

(I) Effective not later than October 15, 2008, all containers in transit to the United States shall be required to meet the requirements of International Organization for Standardization Publicly Available Specification 177712 standard for sealing containers.

Customs is likely to provide exceptions to the bolt seal requirement for containers which cannot accommodate seals (e.g., tanks, open-topped containers), and Customs has indicated that air shipments are not intended to be included in the mandate.

The main impact of this new requirement will be on importers who are not Customs Trade Partnership Against Terrorism (C-TPAT) certified, since C-TPAT importers must currently use seals which meet or exceed the current ISO PAS 17712 standard.

Customs is expected to issue a June 2008 notice to the trade regarding these requirements but Customs did not indicate whether comments will be accepted.

Due to yesterday's final ruling by the California 9th Circuit Court of Appeals, which has denied the American Trucking Association's motion for injunction on the CTF concession programs, the ports of Los Angeles and Long Beach will begin implementing the Clean Truck Fee program on October 1st, 2008. This strategic plan shall help to reduce fuel emissions and air pollutions from the port operations by almost 80 percent over the next five years.

A clean truck fee of $ 35.00 per TEU will be assessed for all loaded containers entering or leaving the terminals via a drayage truck (not applicable for containers being sent by rail to/from LAX), except that if the truck used is 2007 or later model compliant with EPA standards and not purchased with port subsidies/funds or trucks using alternative fuel (i.e.

LNG) will be exempted from the fee application. However, you/we will still end up paying the very same fees to the trucker as a compensation for them to obtain new tractor equipment without subsidies/funds from the ports, making them exempt from these fees.

The CTF fee will be collected by PortCheck (a subsidiary of PierPASS, a non-profit organization) with the beneficiary cargo owners (and/or their representatives such as freight forwarders, brokers, truckers, etc.). It will basically be a mirror system of the current PierPASS TMF traffic mitigation fees collected through PierPASS. However, the two fees will still require two separate payment applications on two separate web based systems (i.e. PortCheck & PierPASS). Therefore, if we have to pay the CTF fees on your behalf (say on DDU/DDP for imports into the United States and/or for ex works orders on the export side from the United States), we will cross bill you as per outlays plus a CTF administration fee of $ 10.00 per container (i.e. only applicable for FCL shipments as the CTF for LCL shipments will be collected & managed through the LCL consolidators on a W/M basis - say approx. $ 3.00 W/M).

See further information on the following websites:

www.polb.com/cleantrucks
www.portoflosangeles.org/cleantrucks

The office finally has power back. We will switch the phones back at around 2 PM EST.

While our office did not sustain any damage there is still a lot of construction going on in and around the building and power is still somewhat unreliable in parts of Houston. The port and lots of truckers, warehouse are working in a reduced capacity.

Please bear with them as things are slowly getting back to normal.

In the aftermath of Hurricane Ike our Houston office remains without power. At this time it's not sure when power will be restored. Most employees are also out of power at home so they will not be able to check their e-mails and their cell phones are running out of battery quickly as well.

We have therefore re-routed all phone calls and faxes from the Houston numbers to New York.

To ensure compliance, Fracht USA will implement the following procedures on cargo with a cut-off date of September 1, 2008:

NO DOCS / NO LOAD for all export cargo.

Failure to provide legible, complete and accurate export documents by the deadlines indicated on the booking confirmation (document cut-off) will result in cargo not being loaded.

Any FCL roll over fees due to failure to provide accurate and timely export documentation will be for the account of the cargo.

For further information, please take a look at the presentation published by the U.S. Census Bureau.

Federal Trade Regulations and most frequently asked questions may be found in the Federal Register / Vol. 73, No. 106 / Monday June 2, 2008 at www.census.gov/trade.

Should you have any questions, please contact us at any time.

Now that mandatory AES filing is close it pays to brush up on the Title 15, Part 30 Foreign Trade Regulations that U.S. Census bureau has published.

Go to http://www.census.gov/foreign-trade/regulations/regs/flipper/index.html for details.

The Census Bureau’s Foreign Trade Division is excited to announce the publication of the Foreign Trade Regulations (FTR), Title 15, Part 30. The publication of the final rule implements the provisions of the Foreign Relations Authorization Act, Public Law 107-228, requiring mandatory filing of export information via the Automated Export System (AES). This final rule was published in the Federal Register on June 2, 2008. The FTR will become effective 30 days from the date of publication on July 2, 2008. We are also providing the trade an additional 90 days from the effective date to implement these new regulations.

Implementation of the FTR will occur on September 30, 2008. After the 90-day implementation period, you must file your export information electronically through the AES. If you currently file paper Shipper’s Export Declarations (SEDs), STOP!

After September 30, 2008, exporters that submit paper SEDs will be in violation of the FTR and subject to penalties. Your export information must be filed electronically through the AES.

In addition, all exporters must adhere to the new filing timeframes determined by the mode of transportation. These new regulations have tougher penalty provisions that will affect all parties involved in the export process. It is important that you understand these new requirements so that you avoid costly penalties.

If you have any questions with regards to the new regulations or the AES, please contact the Foreign Trade Division on 800-549-0595. Select option 1 to reach the Automated Export Branch for technical issues or option 3 to reach the Regulations, Outreach and Education Branch for regulatory concerns. The entire FTR along with other information, including a list of frequently asked questions, can also be found on our Website at www.census.gov/trade.

Our Customs House Brokers office in Lynbrook, NY has new contact numbers effective May 20th, 2008:

The old numbers will continue to work until further notice.

We are pleased to announce our new office location. Effective April 25, 2008, we are relocating to:

16800 Greenspoint Park Drive,
Suite 100
Houston, TX 77060

Our email addresses, phone and fax numbers will remain the same.

We have the great pleasure to inform you about the opening of our own branch in Taipei City (Taiwan) under following address:

Fracht FWO Logistics Co., Ltd.
12F, No. 273, SEC. 4, Hsin Yi Road,
Taipei City 106
Taiwan, R.O.C.

Tel: +886 2 2704 0717 / +886 2 2704 0239
Fax: +886 2 2704 7467

Mr. David Wei (Managing Director)
E-Mail: david.wei@fracht.com.tw

By opening Fracht Taiwan we will take another important step to broaden the services we can offer our customers.

We have the pleasure of informing you that our office in Rio de Janeiro is now open. It is located in the traditional Business Center in Rio de Janeiro at Rio Branco Avenue.

Our manager is Mr. Pierre Villenave, which has extrensive experience in ocean and air shipments and great relationships in the International Market. This office will concentrate on Project Cargo.

Below the full address:

Av. Rio Branco n. 181 – 10
Andar sala 1003 – Centro

Telephone 021-2531-2035
Telephone and fax 021-2283-5038
E-mail: fracht.rio@fracht.com.br

We are very pleased to inform you that Fracht FWO is a certified partner of the C-TPAT (Customs Trade Partnership Against Terrorism) Program.

C-TPAT is a joint business-government program, initiated to strenghten the international supply chain security against terrorism in the United States of America and abroad. We encourage you to participate in C-TPAT and/or other security initiatives to further secure the international supply chain. Please send an email to compliance@fracht.com for further information or visit the U.S. Customs and Border Protection website www.cbp.gov.

In a continued effort to improve customer service we have decided to merge the JFK and Manhattan offices. As of January 28, 2008 we can be reached at:

Fracht FWO Inc.
29W 30th Street
12th Floor
New York, NY 10001

As part of the reorganization of Fracht USA we have decided to close our Baltimore branch effective January 31, 2008.

All current customers will be well taken care of by our Manhattan office, which can be reached at:

Please note the new address of our CHB division effective January 2, 2008.

Fracht FWO Inc. CHB
303 Merrick Road
Suite 510
Lynbrook, NY 11563

Phone: (718) 553-7914
Fax:     (718) 995-8242