CBP will be increasing enforcement of violations effective May 14, 2015.

On May 14, the informed compliance period for Importer Security Filing (ISF) will come to an end and Customs and Border Protection (CBP) will move into full ISF enforcement. ISF violations will now be issued by local CBP ports and will no longer be sent to CBP headquarters for review and approval. In addition, the local CBP ports will no longer be required to issue three warnings before proceeding to penalties and liquidated damages. Although the local ports continue to maintain the discretion to issue warnings, they are no longer required to do so. CBP ports have been advised to focus on the most severe violations that include significantly late or missing ISFs. What is considered “significantly late” will be left to individual ports’ discretion. However, CBP clarified that this type of violation is intended only to apply to shipments where the ISF filing (or lack thereof) negatively affected CBP’s ability to assess risk and hold cargo. Nevertheless, all untimely ISF filings are late and subject to liquidated damages claims and ISF holds.^[1]

ISF Reporting

On January 26, 2009, a new rule titled Importer Security Filing and Additional Carrier Requirements (commonly known as “10+2”) went into effect. The rule requires—for security purposes—that containerized cargo information be transmitted to the agency at least 24 hours before goods are loaded onto an ocean vessel headed to the United States for shipment into the United States^[2] Specifically, importers are required to provide the following 10 data elements to CBP:

    Manufacturer (or supplier) name and address

    Seller (or owner) name and address

    Buyer (or owner) name and address

    Ship-to name and address

    Container stuffing location

    Consolidator (stuffer) name and address

    Importer of record number/foreign trade zone applicant identification number

    Consignee number(s)

    Country of origin

    Commodity Harmonized Tariff Schedule number to six digits

The carrier must provide two data elements:

    Vessel stow plan

    Container status messages

Additionally, the bill of lading (BOL) number, sometimes referred to as the 11th data element, is necessary to properly link an ISF to the CBP manifest data. Importers must use the lowest BOL level on the ISF. CBP will accept either the house BOL level or the regular BOL level. Without a matching bill to the ISF, it will appear to CBP as if no ISF was filed.

CBP may issue liquidated damages of $5,000 per violation for an inaccurate, incomplete, or untimely filing. However, CBP has set a cap of a maximum of $10,000 against any one ISF. If goods for which an ISF has not been filed arrive in the United States, 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. Violation letters may be sent to the importer within six months of the violation, but CBP may make a claim for up to six years from the violation date.

Phased-In Approach

During the first year after ISF implementation, CBP warned importers of infractions. After the initial phase-in period, on January 26, 2010, ISF became fully effective. During this informed compliance period, CBP issued three warning letters before assessing liquidated damages. Importers that did not file ISFs were subject to further scrutiny, including document reviews, nonintrusive inspections, or intensive cargo examinations.

In the last phase of CBP’s full ISF implementation, ports will no longer be required to issue warnings before assessing a liquidated damages claim. Local ports are also given full authority to issue liquidated damages without prior review and approval by CBP headquarters. Although headquarters will no longer review and approve liquidated damages claims, it will conduct analysis of the informed compliance records. For importers that have already been warned, this means that they may now be subject to new or additional fines and/or penalties.

_{[1]. There are currently no ISF-5 data reporting rules while CBP continues to work on a proposed rulemaking.}

_{[2]. 19 CFR §149.2(b).}