U.S. Customs and Border Protection (CBP) will begin full enforcement of the Importer Security Filing requirement on July 9, 2013.
The ISF rule went into effect on Jan. 26, 2009, but for the first year the program had no sanctions so that shippers and carriers could learn how to collect and file the necessary data, develop software systems that could communicate with CBP, or farm out filing to customs brokers and other third parties.
CBP began enforcing the rule in January 2010. It has used its authority to place holds on containers with shipments that don’t have documentation in order, typically upon arrival in the United States, and can order non-intrusive or full inspections of cargo if the ISF data indicates something might be amiss about a shipment, but to date has not issued any damage claims against filers.
For ocean carriers, CBP may refuse to grant a permit to unload the merchandise if they violate the vessel stow plan requirement.
CBP requires importers to submit 10 pieces of data, such as the name and location of the manufacturer, associated with international shipments moving by ocean container. The data must be electronically transmitted 24 hours prior to cargo loading on the vessel and carriers must subsequently provide their vessel stow plans and container status messages. The ISF rule is commonly referred to as “10+2″ because of the two data sets required.
CBP originally said it would start issuing liquidated damages associated with ISF filing mistakes in the fourth quarter of 2010. Liquidated damages is a Customs term that means an importer or its agent failed to meet the conditions of a bond. They are technically different from penalties, which are issued in response to smuggling and other direct violations of law. The ISF rule allows for liquidated damages of $5,000 per violation, which could reach $10,000 on a shipment if amendments to the ISF are filed with errors.
The phased approach to enforcement was designed to minimize disruption to the trade community as it adapted to a new, complex security regime aimed at using advance data for targeting shipments with smuggled contraband or terrorist weapons.
CBP has stressed that every liquidated damage enforcement action instituted by a port will be reviewed by CBP headquarters personnel before being issued, according to a customer note from trade insurance broker Avalon Risk Management.”