U.S. Considers Trade Rules For Cylinders, Tanks, Trucks

As global trade increases, streamlining and international reciprocity in regulatory requirements become more important for GAWDA member companies. Two new initiatives are intended to ease the process of crossing borders with your products.

First, in 2001, the United States and Canadian Governments created the United States-Canada Regulatory Cooperation Council (RCC) to promote bilateral commerce by increasing regulatory cooperation between the two countries. The parties issued a Joint Action Plan in December 2011 with a two-year deadline for specific working group projects; one of these working groups involves dangerous goods means of containment, i.e., compressed gas cylinders and tank trucks.

The objectives include mutual regulatory recognition of cylinders and tank trucks by each country “provided an equivalent level of safety can be maintained” and identifying areas where standards and approval processes for these containers can be improved.

The U.S. Department of Transportation has established a docket for public comments on these initiatives.

According to comments to a DOT docket filed by the American Trucking Associations, some of the differences between United States and Canadian requirements in the transportation of dangerous goods have produced confusion. For example, when carrying dangerous goods from the United States into Canada, the United States placarding requirements are accepted as “compliant” only until the first stop in Canada, and then the driver must ensure compliance with Canadian placarding requirements.

Other commenters suggested the following approaches:

  • Extending reciprocity to the United States Special Permits and Canada’s permits for equivalent level of safety (“PELs”), provided that they maintain an appropriate level of safety.
  • Allowing free-and-clear cross border transportation of returning empty containers in all modes.
  • Equivalence and full reciprocity for security clearances authorizing the movement of dangerous goods issued by both United States and Canadian authorities.
  • Full implementation of Globally Harmonized System (“GHS”) provisions and associated use of pictograms, thus reducing the current practice of providing information in multiple languages.

In addition, United States Customs and Border Protection (CBP) has reached a tentative agreement with industry on how to treat residue in commercial containers returning to the United States from any foreign country, including residue in cylinders and tank trucks. CBP generally requires importers to declare the value of the contents of any such containers and to pay duty and user fees if applicable. But for most companies, this imposes unnecessary costs and administrative burdens. Moreover, raising import costs is contrary to the CBP’s stated goal of reducing import costs for trade.

Generally, the residue has no commercial value (or even a negative value because, in many cases, the container is going to be cleaned and the residue destroyed), or it remains in the container to be re-filled with the same product; therefore, CBP reasons this product should not be subject to entry regulations. But to date, there has been no clear guidance regarding how the value of the residue should be determined.

CBP plans to publish a proposal in the Federal Register setting out its test approach to this issue. The proposed solution would still require manifesting of the residue in order to protect officer safety and promote cargo security. But it would provide manifesting and entry guidance to the trade. Additionally, all data would be submitted to CBP electronically.

If the container is empty or the residue amount is below three percent of the container capacity for cylinders or trucks (seven percent for rail tank cars), the shipment would be manifested as either empty or an instrument in international traffic with residue. If the residue is declared to have no commercial value, then the CBP will accept the carrier’s or importer’s declaration that the residue has no commercial value, as the container will either be cleaned with the residue destroyed or refilled without cleaning for export.

If the carrier or importer declares the residue has commercial value, then CBP will accept the declaration for the stated value, and an entry based on the declared value is required. The default importer of record for the entry will be the carrier unless another owner or another purchaser is identified.

For enforcement purposes, the CBP will accept the declared manifested quantities and values, and compliance will be assumed under the above procedures unless and until CBP discovers that a particular carrier and/or importer is providing inaccurate information.

Gases and Welding Distributors Association
Richard P. Schweitzer, Esq. Meet the Author
GAWDA’s Government Affairs and Human Resources Legal Consultant Richard P. Schweitzer, Esq., is president of Richard P. Schweitzer, PLLC in Washington, D.C. Members can reach him at 202-223-3040 and rpschweitzer@rpslegal.com.