UNCLAS SECTION 01 OF 04 TOKYO 003553

SIPDIS

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: ETRD ECON ECOM JA
SUBJECT: Honda Motors on DHS's CBP Advance Trade Data Elements and
C-
TPAT Programs


1. (SBU) Summary. Honda Motor Company visited the Embassy on July
20
to provide feedback on U.S. Custom and Border Protection's (CBP)
proposed Advance Trade Data Elements (ATDE) requirement. Honda also

outlined some of their experiences with the Customs-Trade
Partnership
Against Terrorism (C-TPAT) program. While supportive of U.S. port
security programs, Honda is concerned that security requirements
have
lengthened their supply chain and increased their inventory
requirements. Accommodating the ATDE's new data field requirements,

moreover, will be a time-consuming and expensive process. Honda
finds
the C-TPAT validation programs to be poorly coordinated and uneven
in
their thoroughness. The EU has similar requirements, but a
different
database format which will add to the expense and difficulty of
managing the security programs for Honda. CBP may wish to do more
outreach to the Japanese export community in Japan to build goodwill

and continue to encourage cooperation with CBP programs. End
Summary.


2. (SBU) Honda is one of the largest Japanese importers
participating
in the C-TPAT program. Honda Motors requested a meeting with
Embassy
Custom and Border Protection (CBP) and Economic Section
representatives
to explain their concerns with CBP's proposed Advance Trade Data
Elements requirement and their experience with the C-TPAT program.
CBP
had invited comments on the 10+2 Advanced Trade Data Elements
initiative on their website, and after coordinating with their
Washington, DC office, Honda decided to approach the Embassy to
deliver
their first round of observations (For CBP see:
http://www.cbp.gov/xp/cgov/
import/carriers/trade_overview.xml).
Although this cable covers Honda's views, the Embassy's CBP attach

explained at length the origins and logic of the CBP programs. He
also
noted that the twelve applications by Honda's several subsidiary
companies in the United States had complicated the administration of

the C-TPAT program in Honda's case, and Honda Japan could improve
coordination efforts by consolidating the twelve separate C-TPAT
importer entities in the United States.

CBP's 10+2 Advance Trade Data Elements (ATDE) Initiative
-------------- --


3. (SBU) The Honda representatives said that Honda is supportive
of
U.S. efforts to increase port security efforts in the United States
and
Honda's North American companies have been active participants in
the
C-TPAT since its inception in 2001. A main challenge for Honda,
however, is to shorten its supply chain lead time. The 24-hour
advanced manifest data transmission rule introduced in 2002 already
has
caused Honda to deliver their containers to the shipping companies
they
use for shipments to the United States two days earlier. This has
forced Honda to extend their supply chain and have two additional
days
of inventory sitting at the port of export. While this is not
required
by C-TPAT, Japan port procedures traditionally have items packed
before
the manifest is created. As such, manifested items sit idle during
the
24-hour data transmission period.


4. (SBU) The Safe Port Act of 2006 promises to complicate further


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Honda's supply chain management, the Honda representatives noted.
The
additional data field requirements proposed by CBP under the Act
will
be expensive and difficult to implement. Honda's export systems are

designed to communicate "manifest data," and do not have the fields

containing the information requested in the Advance Trade Data
Initiative. Another problem is the definition of fields such as
"manufacturer name and address." Currently, for a container
entering
the United States, Honda fills this field in the manifest with
"Honda."
A container departing Japan under the proposed rules, however, could

have parts from several suppliers. As currently configured, their
export database cannot identify manufacturers' names and addresses
in a
multi-sourced parts shipment under one invoice. The Honda
representatives stated that to incorporate the additional data
fields -
- once the definition of the information needed in the fields is
agreed
to -- multiple systems would need to be redesigned. They estimate
it
would take a minimum of six months to do so. The Honda
representatives
requested the CBP allow sufficient time to prepare for the
implementation of the Advance Trade Data Element proposal as Honda's

data systems are not currently sophisticated enough to provide CBP
the
Advance Trade Data elements.


5. (SBU) Honda wished to know how some of their sourcing
information
would be protected as it is business confidential. The Honda
representatives also noted somewhat plaintively that the EU will be

requiring advance data beginning in July 2009, but the data elements

that the EU will require are not exactly the same as those required
by
the United States. This would require them to maintain multiple
databases for the same purpose of security which seems neither
necessary nor cost effective.


6. (SBU) From Honda's perspective they consider themselves proven

"good citizens" as they have worked hard to meet the requirements of

the C-TPAT so their imports will face less obstacles while
contributing
to U.S. port security overall. As such, Honda feels rather than
being
saddled with new security requirements they instead should be
granted
some leeway when it comes to the new Advance Trade Data Elements,
either to be exempt in whole or in part for some of the data
elements.


C-TPAT Issues
--------------


7. (SBU) The Honda representatives felt that they were misinformed

about the benefits of participating in the C-TPAT program. They
noted
that Honda still has to file additional data 24 hours prior to
vessel
loading despite being in the C-TPAT program. Moreover, Honda has
not
noticed any difference in the inspection rate when it comes to their

containers before and after the implementation of the C-TPAT
program.


8. (SBU) From the Honda perspective, poorly coordinated CBP supply

chain security validation team visits also are a problem. Honda

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complained that they have received four CBP validation teams in the

past two years from the Miami C-TPAT office, and are scheduled to
receive two more teams later in 2007.

Past Visits:
June 22, 2005 - Shizuoka, Japan for Honda Manufacturing of South
Carolina by Miami CBP office;
June 23, 2005 - Saitama Japan for Honda Manufacturing of Alabama by

Miami CBP office;
August 25, 2005 - Tochigi, Japan for Honda R&D America/Honda
Research
Institute by Miami CBP office
May 17, 2007 - Saitama, Japan for Honda Trading America Corporation
by
Miami CBP office

Future Visits:
September 13, 2007 -- Mie Japan for Calhac Inc. by Long Beach CBP
office
October 29, 2007 - Mie, Japan for Honda of America Manufacturing by

Miami CBP office


9. (SBU) Honda reported that the validation teams seem to be
uneven
in the thoroughness of their review, the time spent during
validation
visits, and the documentation requested, etc. Honda proposed that

rather than have different teams coming from different U.S. ports to

see different companies in Japan that it would be more efficient and

effective to have one overall U.S. coordinator for Honda that could

pursue these validations in an organized fashion.

Comment
--------------


10. (SBU) While the law needs to be implemented expeditiously,
Honda's approach to the Embassy was a good faith effort to give the
USG
some feedback on our port security programs and Post hopes their
comments will be helpful to CBP. For example, Honda points
regarding
coordination of two upcoming C-TPAT trips to Japan were valid.
(Note:
the CBP Attach has already notified CBP's C-TPAT program, and
C-TPAT
will follow-up on Honda's concerns. CBP, moreover, will provide a
one
year implementation period for the ATDE initiative to allow
sufficient
time for all companies to comply. From the perspective of DHS/CBP,
the
increase in data from the ATDE initiative will help CBP to better
identify the parties involved in import transactions and allow CBP
to
improve trade facilitation efforts.


11. (SBU) Based on their participation in industry organizations,

Honda suspects Japanese industry may be as yet unaware of the
Advance
Trade Data Elements Initiative because industry is focused mainly on

implementing the current 24-hour rule procedures. (Note: Honda's

largest competitors, however, are currently active participants in
the
Advanced Trade Data Initiative and ready to work with CBP on
implementing the new requirements, thus Honda's portrayal of a
general
ignorance may be masking an effort to catch-up with the competition.



12. (SBU) Since some of Honda's concerns are legitimate, Post
suggests that stepped-up outreach to the Japanese import/export and


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investor community could engender some goodwill and more cooperation

while avoiding additional complaints from our biggest and more
reliable
importers. This extra effort may be all the more important given
recent Congressional moves to require the screening of all container

traffic bound for the United States within five years.