Article by: Brian Walczyk, Manager, TradeInsights, LCB/CCS

U.S. CBP updated their IEEPA FAQ giving additional clarity on what qualifies for the in-transit exemption.  “Feeder” vessel loading dates will not qualify for the in-transit exemption, as outlined in the FAQ.  Rather, it must be the vessel arriving at the U.S. waterway port cargo loading date that will qualify for the in-transit exemption.

The latest FAQ “How are feeder vessel scenarios impacted by the in-transit guidance for the reciprocal entries?” provides two scenarios:

“[Qualifies for In-transit Exemption] ANSWER – SCENARIO A: Prior to the cutoff date for the reciprocal tariff in-transit provision, U.S. bound cargo is loaded onto a vessel destined for the U.S. En route to the U.S., this vessel stops at foreign ports to load/offload other cargo, or refuel, but the U.S. bound cargo remains onboard. This vessel arrives at a U.S. port of entry to unload the U.S. bound cargo and make entry.

The cargo in this scenario does qualify for the exception from reciprocal tariffs pursuant to the in-transit provision because prior to the cutoff date, the U.S. bound cargo was laden onto a vessel destined for the U.S. upon departure from the original port of loading and was never unladen or transferred onto another vessel.

Consequently, this vessel constitutes the “final mode of transit” for the laden goods.

[Does not qualify for In-transit Exemption] ANSWER – SCENARIO B: Prior to the cutoff date for the reciprocal tariff in-transit provision, U.S. bound cargo is loaded onto a vessel destined for a foreign port prior to shipment to the U.S. At this foreign port, after the cutoff date, the U.S. bound cargo is transferred onto a different vessel that is destined for the U.S. This new vessel then arrives at a U.S. port of entry to unload the U.S. bound cargo and make entry.

The cargo in this scenario does not qualify for the in-transit exception for reciprocal tariffs because the U.S. bound cargo was laden onto a vessel destined for the U.S. after the cutoff date irrespective of when it departed from the original port of lading; it was thus not loaded onto a vessel that was the final mode of transit prior to the cutoff date for the reciprocal tariff in-transit exception.”

We will continue to monitor this situation and issue updates as needed.

Please contact your V. Alexander account team, or you may also contact our Trade Compliance team at tradeinsights@valexander.com with any questions.