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Importer Security Filing Enforcement to Tighten June 30

Monday, June 20, 2016
Sandler, Travis & Rosenberg Trade Report

Tighter enforcement of the importer security filing requirement beginning June 30 could result in an increase in penalties or cargo holds at some ports and may also present a challenge to small and new importers.

Under the ISF rule, importers and maritime cargo carriers must submit additional cargo data prior to lading goods on board vessels destined to the U.S. customs territory. Importers have to report 10 data elements on each ISF or five for shipments consisting entirely of freight remaining on board cargo or goods intended to be transported in-bond as an immediate entry or transportation and exportation entry. CBP’s goal is to have all data elements filed 24 hours prior to lading, but it allows for some flexibility either in timing or interpretation for six of the data elements.

Importers are legally responsible for the accuracy and timeliness of their ISF filings, regardless of whether a customs broker or other intermediary does the actual filing. Typically, the ISF importer is the goods’ owner, purchaser, consignee or agent, such as a broker. For foreign cargo remaining on board, the ISF importer is the carrier. For immediate exportation and transportation and exportation in-bond shipments, and goods to be delivered to a foreign-trade zone, the ISF importer is the party filing the IE, T&E or FTZ documentation.

In 2014 CBP adopted a revised enforcement strategy for the ISF-10 requirement that provided for discretion at the port level based on infrastructure and staffing resources (i.e., cargo holds vs. liquidated damage claims). Under this strategy CBP has given at least three warnings to violating importers before pursuing LD claims against their bonds (the so-called three strikes approach). Ports were advised to focus enforcement actions on the most severe violations; i.e., significantly late or missing ISFs, which are subject to penalties of $5,000 to $10,000 each. Under this strategy ISF filings after arrival are always late and exposed to both LD claims and ISF holds.

CBP now states that for shipments that are on the water on or after June 30 (a) ports will no longer be required to send requests for LD claims to CBP headquarters for review and (b) the three strikes approach to LD claims will end. CBP notes that there is no change to cargo holds for ISF non-compliance and that ports may hold cargo instead of (or in addition to) initiating LD claims.

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