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Enforcement of Rule Expanding Definition of ISF Importer Postponed Due to Shutdown

Wednesday, January 23, 2019
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection has suspended its planned enforcement of a regulatory change concerning the importer security filing importer due to a lapse in funding. CBP had planned to begin issuing liquidated damages claims for violations of the so-called ISF-5 requirements as of Jan. 21 but now states that it will issue additional guidance following the end of the current federal government shutdown.

ISF importers must transmit an ISF to CBP no later than 24 hours before the cargo is laden aboard a vessel destined to the U.S. (or any time prior to lading for foreign cargo remaining on board). The ISF consists of either ten data elements for shipments of goods intended to be entered into the U.S. or delivered to a foreign-trade zone or five data elements for shipments entirely of FROB cargo or goods intended to be transported as immediate exportation or transportation and exportation in-bond shipments.

Under previous regulations, the ISF importer was the party causing goods to arrive within the limits of a port in the U.S. by vessel, typically the goods’ owner, purchaser, or consignee or an agent such as a licensed customs broker. However, these regulations limited the definition of ISF importer for specified types of shipments: for FROB cargo, the ISF importer was the vessel-operating common carrier, and for IT and T&E in-bond shipments and goods to be delivered to an FTZ, the ISF importer was the party filing the IE, T&E, or FTZ documentation.

CBP concluded that these limitations did not reflect commercial reality and in some cases designated a party as the ISF importer even though it had no commercial interest in the shipment and limited access to the ISF data. In some cases, the party responsible may not even have been involved in the importation at the time the ISF had to be filed.

As a result, in April 2018 CBP issued a final rule expanding the definition of ISF importer to place responsibility for filing the ISF with the party causing the goods to enter the limits of a port in the U.S. and most likely to have access to the required ISF information. Specifically, for FROB shipments the ISF importer could be a non-vessel-operating common carrier as well as a VOCC, and for IE and T&E in-bond shipments and goods to be delivered to an FTZ the ISF importer could be the goods’ owner, purchaser, consignee, or agent (e.g., a licensed customs broker, carrier, or NVOCC). However, CBP said that while this rule shifted the legal responsibility for filing the ISF in these instances it would not change who actually submits the data in the “vast majority of cases.”

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