ISF Enforcement Update - August 2016
Customs and Border Protection recently issued a revision to the procedure regarding penalties/liquidated damaged for ISF’s (or Importer Security Filing).
For some time now Customs and Border Protection (CBP) has been lenient in the issuance of liquidated damage claims for late ISF’s. In fact, before a liquidated damage claim against an importer could be issued, it had to be sent and approved by CBP headquarters.
However, for shipments that are on the water on or after June 30, 2016, the ports will no longer be required to send a request for liquidated damage claims to CBP headquarters for review. The “three strikes” approach has ended as well. Each port will have authority to manage their local enforcement policy. Some ports may issue cargo holds for late ISF’s, others may issue liquidated damage claims. Individual Port policies will apply to each port. It is anticipated that CBP will continue to focus on repeat offenders for late and inaccurate ISF information.
We at ER Hawthorne can assist you with this process. It is imperative that ISF information be filed timely and accurately in this new phase of enforcement.
Background information on ISF:
On January 26, 2009, the new rule titled Importer Security Filing and Additional Carrier Requirements (commonly known as “10+2”) went into effect. This new rule applies to import cargo arriving to the United States by vessel. Failure to comply with the new rule could ultimately result in monetary penalties, increased inspections and delay of cargo. The information submitted in Importer Security Filings improves U.S. Customs and Border Protection’s (CBP) ability to identify high-risk shipments in order to prevent smuggling and ensure cargo safety and security.
What is an Importer Security Filing?
Under the new rule, before merchandise arriving by vessel can be imported into the United States, the “Importer Security Filing (ISF) Importer,” or their agent (e.g., licensed customs broker), must electronically submit certain advance cargo information to CBP in the form of an Importer Security Filing. This requirement only applies to cargo arriving in the United States by ocean vessel; it does not apply to cargo arriving by other modes of transportation.
Who is Responsible for the Filing?
The ISF Importer is required to submit the Importer Security Filing. The ISF Importer is the party causing the goods to arrive within the limits of a port in the United States by vessel. Typically, the ISF Importer is the goods’ owner, purchaser, consignee, or agent such as a licensed customs broker. However, for foreign cargo remaining on board (FROB), the ISF Importer is the carrier. For immediate exportation (IE) and transportation and exportation (T&E) in-bond shipments, and goods to be delivered to a foreign trade zone (FTZ), the ISF Importer is the party filing the IE, T&E, or FTZ documentation.
What Must Be Filed?
Shipments Consisting of Goods Intended to be Entered into the United States and Goods Intended to be Delivered to a Foreign Trade Zone ISF Importers, or their agent, must provide eight data elements, no later than 24 hours before the cargo is laden aboard a vessel destined to the United States. Those data elements include:
• Importer of record number / FTZ applicant identification number
• Consignee number(s)
•Manufacturer (or supplier)*
• Ship to party *
• Country of origin *
• Commodity Harmonized Tariff Schedule of the United States (HTSUS) number*
* ISF Importers have flexibility with respect to the submission of these four data elements. For these data elements, importers may submit a range of acceptable responses based on facts available to the ISF Importer at the time of submission. The Importer Security Filing must be updated as soon as more accurate or precise data becomes available and no later than 24 hours prior to the ship’s arrival at a U.S. port.
Two additional data elements must be submitted as early as possible, but no later than 24 hours prior to the ship’s arrival at a U.S. port. These data elements are:
• Container stuffing location; and
FROB, IE Shipments, and T&E Shipments
For shipments consisting entirely of FROB and shipments consisting entirely of goods intended to be transported in-bond as an IE or T&E, the Importer Security Filing must consist of five elements. Importer Security Filings for IE and T&E shipments must be submitted no later than 24 hours before the cargo is laden aboard a vessel destined to the United States and Importer Security Filings for FROB must be submitted any time prior to lading. The following five data elements must be submitted for FROB, IE and T&E shipments:
• Booking party
• Foreign port of unlading
• Place of delivery
• Ship to party
• Commodity HTSUS number
Bulk and Break Bulk Cargo
An Importer Security Filing is not required for bulk cargo. For break bulk cargo that is exempt from the 24 hour prior to lading timing requirement for 24 Hour Rule purposes, the Importer Security Filing is required 24 hours prior to arrival.
How Will the Rule be Enforced?
The interim final rule includes a delayed enforcement date of 12 months after the interim final rule takes effect. During this 12-month period, CBP will show restraint in enforcing the rule. CBP will take into account difficulties that importers may face in complying with the rule as long as importers are making a good faith effort and satisfactory progress toward compliance. The flexible enforcement period will end January 26, 2010. CBP may issue liquidated damages of $5,000 per violation for the submission of an inaccurate, incomplete or untimely filing. If goods for which an ISF has not been filed arrive in the U.S., CBP may withhold the release or transfer of the cargo; CBP may refuse to grant a permit to unlade for the merchandise; and if such cargo is unladen without permission, it may be subject to seizure. Additionally, noncompliant cargo could be subject to “do not load” orders at origin or further inspection on arrival.
We at ER Hawthorne can assist you with this process. It is important that the ISF information be filed timely and accurately in this new phase of enforcement. Contact us at ER Hawthorne. We are here to assist your company's customs broker services and shipping needs.