Import declaration rules waived for second half of 2016

Customs sign-3Regular visitors to CommLawBlog know that the FCC maintains technical rules for radio transmitters and certain other equipment. These rules typically specify power, bandwidth, frequency stability, out-of-band emissions – that sort of thing. They’re intended to minimize the likelihood that a device will cause unwanted interference to others.

When first introduced decades ago, the rules primarily targeted U.S. manufacturers. Today, though, a large fraction of the electronic devices sold in the U.S. are made overseas. Does this mean that foreign-made equipment is creating a greater risk of interference here in the U.S.?

Of course not.

While the FCC has no jurisdiction over foreign factories, it can exert control over imported equipment – and effectively impose its technical rules on such equipment – at their point of entry into the country. This is accomplished through a set of procedural “importation rules” that essentially require that any wireless device (with a few exceptions) imported into the U.S. comply with the FCC’s technical rules. (The importation rules apply not only to devices imported for marketing, but also to not-yet-compliant devices brought in for trade shows and other devices that will not be sold in the U.S. See the various categories here. Don’t forget – other rules also govern the display and operation of non-compliant devices at trade shows!)

Thanks to the influence of some unnamed importer brokers and manufacturers, the FCC has already taken care of an issue that won’t arise until mid-2016: waiver of certain import declaration and associated filing requirements.

Section 2.1203 of the rules requires a party (generally the customs broker hired by the manufacturer or importer) to declare that equipment being imported satisfies either the FCC’s technical rules or one of the exceptions. Section 2.1205 outlines how that declaration is to be submitted. While the FCC’s own Form 740 is available for the few occasions when paper filings are necessary, far more often the declarations required by the FCC are reported through an electronic system maintained by U.S. Customs and Border Protection (CBP). But CBP is in the midst of deploying a new electronic system – and, once deployed, the new system won’t accept the required FCC information. CBP expects the old system to be phased out by July 1 of next year.

As matters currently stand, some 20,000 reports are filed each week, almost all through the CBP process. Once CBP’s computerized reporting system won’t be available for collection of FCC-mandated declarations, those declarations will have to be collected through paper filings on FCC Form 740, imposing a major burden not only on importers but also on the FCC, which will have to process all that paper.

What should the FCC do?

The Commission’s conundrum is further complicated by the fact that the FCC is in the midst of revamping its equipment authorization rules. One proposal under consideration: eliminating the importation filing requirement. If that requirement is eventually tossed, there will be no further need to collect the declarations at the border, and the fact that CBP will no longer have the capacity to collect them for the FCC will be immaterial. But if the FCC decides to retain the importation filing requirement, obviously the FCC will have a problem.

The FCC now tells us that it may not resolve the fate of the importation rules by July 1, 2016, when the CBP system is scheduled to go down. So as of July 1, the FCC and importers will have to utilize the old-fashioned, labor-intensive, eco-unfriendly Form 740, at least until the fate of the importation rules is ultimately determined.

The FCC has concluded that this would cause “significant burdens” that will look pretty silly if the FCC ultimately determines to cut back the filing requirement. Accordingly, the FCC has ordered that it will waive the Section 2.1203 and 2.1205 filing requirements, but only for the second half of 2016 (i.e., July 1, 2016 – December 31, 2016), at the end of which period it hopes to be have decided whether to continue those requirements.

IMPORTANT: The waiver does NOT take effect until July 1, 2016. The present filing requirements remain in force for the eight months until then.