11-Feb-11

Proposed Puerto Rican Regulation Requiring the Scanning of all Inbound Cargo Containers From States May Result in Increased Costs and Supply Chain Delays

The Puerto Rico Ports Authority (PRPA) has issued a proposed regulation that would require all inbound cargo containers, regardless of whether the container was shipped from a company located in the United States or from a company located in a foreign country, to be scanned for contraband. This requirement would be in addition to any security checks that may be performed by Customs and Border Protection (CBP), and would apply to companies that are considered by CBP to be low-security risks, such as C-TPAT certified companies. If implemented, the regulation would result in (1) a significant new expense for U.S. companies shipping to Puerto Rico, and (2) likely significant supply chain delays. In addition, it opens up the possibility that other states may adopt similar regulations that burden interstate commerce to raise revenue for the state.

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