Final Phase of ISF Enforcement


As many of you may have already heard we have entered the final phase of the enforcement of Importer Security Filing as of July 9th 2013 and with a new news release CBP announced about penalties for non-compliance.  The goal is to achieve maximum compliance with the least amount of disruption to the trade and to domestic port operations.

Working in the industry I also spent considerable time trying to spread the news to our customers and draw the attention to this very important subject and I can say the massive amounts CBP can assess got the most attention of all. It’s seems to be the best time to re-evaluate your company’s ISF compliance, your responsibility as an importer and maybe discuss with your supplier about providing isf data on time. I would like to mention briefly about violations and what to expect. Following are the items under which an importer can be issued a liquidated damages claim for ISF filings. Late filing, an inaccurate filing, a failure to update an ISF, and the failure to withdraw an ISF.

Late filing –  If an ISF Importer submits a late ISF, Port Directors may assess a claim for liquidated damages against the party in the amount of $5,000 per late ISF.

Inaccurate filing – If an ISF Importer submits an inaccurate ISF, Port Directors may assess a claim for liquidated damages against the party in the amount of $5,000 per inaccurate ISF.

Updates –  If an ISF Importer submits an inaccurate ISF update Port Directors may assess a claim for liquidated damages against the party for the first inaccurate ISF update in the amount of $5,000.

Withdrawals – If an ISF Importer fails to withdraw an ISF as required by 19 CFR 149.2(e), Port Directors may assess a claim for liquidated damages against the party in the amount of $5,000. For the first violation of a late or inaccurate ISF or an inaccurate ISF update, the liquidated damages claim may be cancelled upon payment of an amount between $1,000 and $2,000, depending on the presence of mitigating or aggravating factors, if CBP determines that law enforcement goals were not compromised by the violation. For subsequent Violations the amount goes up to min. $2500.

Mitigating Factors are defined as evidence of progress in implementation of ISF requirements during flexible enforcement period, small percentage of violations compared to number of shipments requiring ISF, certified Tier 2 or 3 C-TPAT member, demonstrated corrective actions, ISF information was filed late because of vessel diversion due to factors outside of the ISF Importer’s control, incorrect data from 3rd parties.

Aggravating factors include lack of cooperation with CBP, evidence of smuggling, multiple errors on ISF, rising error rate on transmission of ISF information. If you are a new importer or haven’t fully complied with importer security filing, there steps that you should take to avoid any possible damage. The best place to start is reading “ISF Frequently Asked Questions.”  this document explains what importers should do how agency responds in specific situations and it’s a great source for anyone involved in 10+2 compliance.

Many importer rely on their customs brokers on ISF compliance, some on their logistics service providers but there are more sources to get expert assistance like trade consultants, global trade software companies and import/export associations. You can define which is the best solution for your company.

Another great idea is having a ISF manual for your existing and new employees as well  as your suppliers. It’s a dynamic enforcement and it’s better to keep your staff educated about it with a up to date manual.

Your suppliers are important aspect of ISF enforcement , and since 2009 many importers had their suppliers to undergo training in ISF compliance. It is for best to include ISF compliance in your supplier contracts or purchase orders. Because you need to rely on the data from your suppliers and freight service provider, it’s better to mention about it from the beginning especially when the time frame for isf filing is so tight.

Finally, automation is another solution promoted by trade management software companies. Ensuring the accuracy and minimizing the errors; automation can be a big time saver.