Customs to Begin Issuing Penalties for ISF Non-Compliance???

I’m putting question marks on the title of this posting as CBP’s two sentence posting on the CSMS messaging systems has left many in the importing community waiting for details. Here is a copy of the CBP message in entirety:

In order to achieve the most compliance with the least disruption to the trade and to domestic port operations, CBP has been applying a measured and commonsense approach to Importer Security Filing (ISF or 10+2) enforcement. On July 9, 2013 CBP will begin full enforcement of ISF, and will start issuing liquidated damages against ISF importers and carriers for ISF non-compliance.

Please visit http://www.cbp.gov/xp/cgov/trade/cargo_security/carriers/security_filing for more information and send questions to security_filing_general@cbp.dhs.gov.

If you actually visit the CBP website above, you will not currently find any new additional information about ISF filings. The open ended nature of the CBP message is leaving the importing community with number of unanswered questions.

1.) Is CBP going to focus on serial offenders who regularly and consistently fail to file ISF or are they going after each and every ISF non-compliance issue? How will they handle regular importers who might happen to have a late filing once every 100 shipments?

2.) Is CBP going to focus penalties on non-filing OR are they also going to be concerned with late filing of ISF?

3.) How is CBP going to handle possible clerical errors? How is CBP going to handle ISF’s that were filed on time, but with incorrect AMS matching of bills of lading?

Until these questions are answered, the importing community must assume the worst. That every possible instance of ISF non-compliance is subject to penalties. Here are some steps that I would recommend for the importing community.

1.) Importers need to make certain of who is the party responsible for making sure that the ISF is filed on time and correctly for each shipment. There could be multiple parties who maintain partial responsibility. For example, the freight forwarder may be responsible for getting ISF information to the importer in a timely and correct manner. The importer may be responsible for sending this information to the Customs Broker. 

2.) The importing community must make sure they keep records of just when the ISF information are sent over to the party responsible for the ISF filing.

3.) The importing community must make sure that the ISF information they receive is accurate. The #1 leading cause of ISF discrepancy that we see is a bad/incorrect AMS bill of lading number. When we receive an AMS bill of lading number that is not on file, there are two possible reasons that the number is not on file:

  • Either the bill of lading number is incorrect (bad or missing number). OR
  • The AMS filer (carrier or NVOCC) has not yet filed the bill of lading with AMS.

Whenever the ISF filer received a “bill not on file” message, the filer cannot assume that the bill of lading number they used was either correct or incorrect. It is entirely possible that they used the correct number, but the AMS filer just hasn’t completed their AMS filing yet. The ISF filing party must double-check with whomever gave them the ISF information to make sure that the number is accurate and be vigilant about each ISF filing until they receive the “bill on file” message.

Customs may have intentionally left their message vague and open-ended in order to reserve the right to penalize for any ISF non-compliance. Based on the number of messages and phone calls I have received from the importing community about this issue, I would hope that Customs will soon send out a follow up message clarifying how they intend to penalize importers.

Stay tuned. I will send updates when I receive them.

-Jimmy Ting

Great World

jimmyting@great-world.com

t: 650-873-9050 x1019

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