Customs and Border Protection (CBP) is issuing fines and penalties for Importer Security Filings (ISF). Because of the up to $10,000 fine, now is the time to prepare for the full enforcement phase of ISF. Importer Security Filing Resource Headquarters has put together 10 Tips to help you avoid Importer Security Filing Penalties and/or Fines. Use these best practices to develop a rock solid ISF compliance plan.
Tip #1 – Require vendors provide all ten (10) data elements
48 72 hours before the ship is loaded.
Because filing an ISF late may result in a $5,000 liquidated damages penalty, all ten (10) data elements must be collected well before the ship is loaded. Requiring your vendors, seller, manufacturer, freight forwarder, etc., to provide this information in a timely manner is important. While 72 hours is appropriate for most importers, a more lengthy timeline may be more appropriate for your business.
Tip #2 – Ensure ISF Filing is complete and transmit as soon as you get the data.
Putting off the transmission of your ISF filing will not only put you in panic mode but may also cost you up to $10,000. As you know, filing your ISF late may result in a $5,000 penalty. In addition, filing incomplete or inaccurate data may result in another $5,000 penalty. To avoid these fines, file as soon as you have collected all ten (10) elements.
Note: You may not get a bill of lading match until the bill is entered into the Automated Manifest System (AMS) if you file your ISF early. Customs will continue to look for a match. Until a bill match is discovered, keep an eye on your ISF.
Tip #3 – Confirm an unmatched bill of lading (B/L).
As a best practice, always confirm a bill match for your ISF transmissions. If you do not have a bill match after your goods have left the foreign port, contact the carrier or freight forwarder to confirm both your bill type and bill number. Finally, if your data was incorrect, update your ISF as soon as possible and make note of the change in your own records.
Tip #4 – Use an ISF template.
A great way to avoid Importer Security Filing penalties is to use an ISF template when collecting ISF data. Ensure the template you use includes all ten (10) data elements as well as a place to keep great notes about each.
Tip #5 – Secure a Customs Bond early.
Often forgotten by new and experienced importers alike is the need for a customs bond when filing an ISF. For most ISF importers, an Activity Code 1 Continuous Importer/Broker Bond is the best option. An Activity Code 16 Single Transaction Importer Security Filing bond may be more cost effective for smaller importers.
Tip #6 – Do not delete but instead update your Importer Security Filing.
Deleting and refiling an ISF will result in a late filing. On the other hand, updating your ISF is the best practice to ensure compliance. Remember, for each of the four data elements, manufacturer, ship to party, country of origin, and HTSUS number, ISF importers must initially file the ISF based on the best available data. “ISF Importers will be required to update as soon as more precise or more accurate information is available,” no later than 24 hours before arrival at a U.S. port to avoid importer security filing penalties.
Tip #7 – Monitor your monthly ISF progress report.
If you have not already, sign up for ISF progress reports in the Automated Commericial Environment (ACE). You may also be able to obtain a progress report from your Customs Broker, Freight Forwarder, or ISF Software Provider. The report should always includes details about the number of ISF transactions, timeliness, and errors.
Tip #8 – Keep amazing records.
Customs and Border Protection has a six (6) year statute of limitation for liquidated damages penalties. Although CBP has not officially addressed ISF record keeping, Title 19 Chapter I Part 163 outlines a 5 year requirement for Customs business. Based on this information, keeping all ISF transaction data including templates and notes for a minimum of six (6) years is a best practice. This may not help you avoid Importer Security Filing penalties. However, it will help in mitigation of penalties in the late future.
Tip #9 – File late if you have to.
CBP may detain, seize, or hold cargo that in which an ISF is considered significantly late. As such, it is always best practice to file as early as possible to avoid Importer Security Filing penalties. However, the worst possible action for an ISF Importer is failure to file. If you realized late in the timeline that you have failed to file, contact a Customs Broker or self-file your ISF as soon as possible. In most cases, the customs broker filing the ISF or the surety company issuing the bond will likely require $5000 to $10,000 in collateral before the ISF is filed.
Tip #10 – Hold your vendors and suppliers responsible.
Because timeliness of the filing may be the easiest way to incur a fine or penalty, building language into your contacts with your vendors and/or suppliers is important. Include a clause holding the vendor liable for the cost of a penalty is they are at fault.
Conclusion – Avoid Importer Security Filing Penalties
In conclusion, use these ten (10) tips to build a strong ISF compliance profile and avoid Importer Security Filing penalties.
Read “The Definitive Guide to Importer Security Filing, ISF 10+2, and ISF 5” to learn more about Importer Security Filing and how to avoid Importer Security Filing penalties
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