On 12 July 2004 the Managers published a news article concerning the clausing of bills of lading with the phrase said to contain for cargoes destined for the United States of America.
Members may recall that in that article our New York lawyers, Freehill Hogan & Mahar, expressed their opinion that the Trade Act 2002 (the Act) and associated Federal regulations only prohibited the phrase from being used in cargo manifests for cargoes subject to the Automated Manifest System. Freehill Hogan & Mahar were of the opinion that as long as an accurate description of the cargo carried within a container is included on a bill of lading then it is possible for the phrase said to contain to be prefixed to a bill of lading thereby providing a measure of protection against potential shortage claims.
Freehill Hogan & Mahar have informed the Managers that the US Customs and Border Protection Service have now issued an Information Letter. The purpose of an Information Letter is to advise how Customs law will be interpreted by the US Customs and Border Protection Service. The Information Letter confirms the previous advice given in our article. The US Customs and Border Service specifically state in the letter that they are not aware of any provision which would prohibit bills of lading from including the phrase said to contain. However, the use of the phrase on cargo declarations would be in violation of the Act and Federal regulations. Such a declaration on a cargo manifest would enable the US Customs and Border Protection Service to prevent or delay the unloading of cargo. Civil and criminal breaches of the Act can render the wrongdoer liable to either a fine of US$5,000 or more and/or imprisonment.
For further information please contact Freehill Hogan & Mahar or the Managers.