April 2006 | Commentary | Risks and Rewards

Knock on Wood Packaging Materials

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Q: We are importing several containers of roof tiles from Spain. The pallets used for the shipment contain paper documents certifying that they were treated to ward off insects and other vermin. The shipment arrived at the destination port, but Customs informed us that the paper documents are not an acceptable proof of treatment. They are threatening to return the shipment. What can we do?

A: I recently received this urgent call from a U.S. logistics service provider. Unfortunately for the caller, there was no way to prevent the re-exportation of the shipment. It was returned to its port of origin.

On Feb. 1, 2006, the U.S. Department of Agriculture's Animal and Plant Health Inspection Service, in cooperation with Customs and Border Protection (CBP), began enforcing Phase Two of the new wood packaging materials regulation. Phase One went into effect in 2005.

The regulation is based on the standards defined in the International Plant Protection Convention for wood packaging materials. Its aim is to prescribe globally accepted measures to reduce the risk of pest introductions through packaging materials. The United States is one of many countries that have adopted the international standards.

Phase Two requires all commodity imports—either entering or moving through the United States—containing wood packaging material consisting of pallets, crates, and other dunnage, be heat treated or fumigated with methyl bromide. Shipments must also be marked with an approved international logo certifying that the materials have been appropriately treated.

Shipments that violate the rule may enter the United States only if a CBP port director deems it possible to separate approved materials from the non-compliant portion of the shipment. Consignees must make arrangements to export the non-compliant materials before CBP will release the approved cargo. All costs associated with this segregation process are the importer's responsibility.

Full-time enforcement of the regulation will begin after July 4, 2006. At that time, all wooden packaging materials need to meet the import regulations and be free of timber pests before entering or transiting through the United States.

In the case of the roof tile shipment, the pallets used to hold the tiles were, in fact, treated, according to the certification. But the phytosanitary measures of the new regulation specifically require the wooden packaging materials to carry a "legible and permanent" mark certifying they were treated in accordance with the regulation. Because the mark must be visible to CBP inspectors, it should be placed on both sides of the packaging material.

In this case, the pallets' paper certificate was not considered an appropriate mark. Because a paper document can be removed and transferred to another pallet, it is not a "permanent" mark as required by the regulation.

Plan for Compliance

It may be some time before all packaging material in the world is properly treated and documented in accordance with the new regulation. In the interim, shippers and service providers need to ensure their compliance programs include the receipt and inspection of properly documented packaging material in shipments destined for the United States. Packaging material that doesn't comply with the requirement should be rejected or treated as required.

Undoubtedly, shippers face additional costs and procedures to comply with this new measure. But the costs associated with the segregation and possible return of goods containing non-compliant materials can be significant, both in expense and possible lost business.

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