Importer Security Filing and Additional Carrier Requirements first went into effect on January 26, 2009. The rule gives The Department of Homeland Security (DHS) and U.S. Customs and Border Protection (CBP) greater ability to identify high-risk shipments in order to prevent smuggling and ensure cargo safety and security.
The Definitive Guide to Importer Security Filing, ISF 10+2, and ISF 5 was designed to help the average importer better understand the ins-and-outs of this complex rule. If you have any questions or need more clarification about the intricacies of ISF please use the comments section at the end of this article.
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What is Importer Security Filing?
Importer Security Filing and Additional Carrier Requirements, commonly referred to as ISF 10+2 or ISF 5, is a requirement of The Department of Homeland Security (DHS) and U.S. Customs and Border Protection (CBP). “Before merchandise arriving by vessel can be imported into the United States, the ‘Importer Security Filing (ISF) Importer,’ or their agent (e.g., licensed customs broker),must electronically submit certain advance cargo information to CBP in the form of an Importer Security Filing. This requirement only applies to cargo arriving in the United States by ocean vessel; it does not apply to cargo arriving by other modes of transportation.”
When is an Importer Security Filing required?
Importer Security Filing is required for all containerized shipments destined to the United States by vessel, i.e. boat or ship. Further more, ISF is also required for break bulk cargo coming to the U.S. by ship and for Foreign Cargo Remaining On Board (FROB), Immediate Exportation (IE), and Transportation & Exportation (T&E) shipments.
Containerized Ocean Cargo
The first eight (8) data elements must be filed 24 hours before cargo is laden aboard a vessel destined to the United States. The second two (2) data elements required 24 hours prior to the ship’s arrival at a U.S. port.
Break Bulk Cargo
Although most break bulk cargo is exempt from the 24 hour prior to lading requirement it is not exempt from Importer Security Filing. All ten (10) break bulk cargo data elements must be filed 24 hours prior to the ship’s arrival at a U.S. port.
Break Bulk Cargo is defined “as cargo that is not containerized, but which is otherwise packaged or bundled.”
The Importer Security Filing rule does not apply to bulk cargo.
Bulk Cargo is defined “as homogeneous cargo that is stowed loose in the hold and is not enclosed in any container such as a box, bale, bag, cask, or the like. Such cargo is also described as bulk freight.”
Air freight does not require an Importer Security Filing.
Cross border shipments, i.e. shipments from Canada or Mexico, do not require an Importer Security Filing.
Foreign Cargo Remaining On Board (FROB), Immediate Exportation (IE), and Transportation & Exportation (T&E) Shipments
Foreign Cargo Remaining On Board (FROB), Immediate Exportation (IE), and Transportation & Exportation (T&E) shipments require five (5) data elements to be filed. These elements comprise ISF 5.
Who is responsible for filing?
Per the rules outlined in Title 19, Chapter I, Part 149, the Importer Security Filing (ISF) Importer is responsible for filing “the Importer Security Filing elements… within the time specified… via a CBP-approved electronic interchange system.” The ISF importer, defined as the “party causing goods to arrive within the limits of a port in the United States by vessel,” varies by shipment type.
- For Foreign Cargo Remaining On Board (FROB), the ISF Importer will be the carrier.
- For Immediate Exportation (IE) and Transportation & Exportation (T&E) in-bond shipments, and for goods being delivered to a Foreign Trade Zone (FTZ), the ISF importer will be the party filing the IE, T&E, or FTZ documents.
- For all other shipments, the ISF Importer will be the goods’ owner, purchaser, consignee, or agent such as a licensed customer broker.
Customs Bond Requirements
Because of the potential penalties associated with filing an ISF, the ISF Importer must posses either an Activity Code 1 Importer/Broker Bond, Activity Code 4 Foreign Trade Zone Bond, or Activity Code 16 Importer Security Filing Bond at the time of ISF transmission. If an ISF Importer had elected an agent to file the ISF, the agent may allow the ISF Importer to post the agent’s bond.
The bonding requirements for Importer Security Filing can be met using one of three options:
- ISF Single Entry Bond – CBP Activity Code 16
- ISF Continuous Bond – CBP Activity Code 16
- Continuous Importer/Broker Bond – CBP Activity Code 1
- Continuous Foreign Trade Zone Bond – CBP Activity Code 4
Because every importer is different, the best option will vary between IORs. Typically, either an ISF single entry bond or continuous importer/broker bond are the most cost effective options. This is due to the fact that a Continuous Importer/Broker Bond meets the requirements for both entry and ISF.
What must be filed?
Importer Security Filing requires the electronic submission of ten (10), two (2), or five (5) data elements dependent upon the type of shipment or party filing.
ISF 10+2 Data Elements
Importer Security Filing requires compliance from both the ISF Importer and the carrier. The ISF importer is responsible for ten (10) data elements and the carrier two (2). Hence ISF 10+2.
Importer Security Filing (ISF) Importer
The ISF Importer is responsible for the filing of ten (10) data elements. Of these ten, eight (8) must be filed at least 24 hours before the cargo is laden ,i.e. “loaded,” aboard a vessel destined to the United States. The remaining two (2) must be filed at least 24 hours prior to the ship’s arrival at the U.S. port. All ten (10) data elements may be filed at least 24 hours before the cargo is loaded.
24 hours before the cargo is laden aboard a vessel destined to the United States
- Seller: Name and address of the seller. If the goods being imported are not part of a sales transaction, the name and address of the owner must be provided.
- Buyer: Name and address of the buyer. If the goods being importer are not part of a sales transaction, the name and address of the owner must be provided.
- Importer of record (IOR) number / FTZ applicant identification number: Federal Employer Identification Number (FEIN), Social Security Number (SSN), or Customs Assigned Importer Number of the entity liable to pay duties to CBP or Foreign Trade Zone operator
- Consignee number(s): Federal Employer Identification Number (FEIN), Social Security Number (SSN), or Customs Assigned Importer Number of the individual(s) or firm(s) in the United Sate on whose account the merchandise is shipped.
- Manufacturer (or supplier):* Name and address of the final or last party involved in the manufacture, assembly, production, or growth of the commodity or name and address of the supplier of the finished goods.
- Ship to party:* Name and address of the first party who will physically receive after release from CBP custody.
- Country of origin:* Country of manufacture, production, or growth. May or may not be the country of export. Refer to Title 19, Chapter I, Part 134
- Commodity Harmonized Tariff Schedule of the United States (HTSUS) number:* The HTSUS number must be provided to the 6-digit level but may be provided to the 10-digit level. The first 6-digits are the same for every country that participates in the Harmonized Commodity Description and Coding System
Important note about Manufacturer (or supplier), Ship to party, Country of origin, and HTSUS number
*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.
24 hours prior to the ship’s arrival at a U.S. port
- Container stuffing location: Name and physical address(es) where the goods were stuffed into the container. For break bulk, the name and physical address(es) where the goods where made “ship ready.”
- Consolidator (stuffer): Name and address of the party who stuffed or arranged the stuffing of the container. For break bulk, The name and address of the party who made the goods “ship ready.”
Carrier or Steamship Line
In addition to the ten (10) data elements required from the ISF importer, carriers are responsible for transmitting two (2) data elements in the ISF 10+2 transaction. Both the Vessel Stow Plan and Container Status Messages (CMS) must be filed at least 24 hours before cargo laden aboard a vessel at a foreign port. In addition to this rule, Container Status Messages must be submitted daily for certain events relating to all containers laden with cargo destined to the United States.
- Vessel stow plan: Must include standard information relating to the vessel as well as each container.
- With regard to the vessel, the vessel stow plan must include:
- Vessel name
- Vessel operator
- Voyage number
- With regard to each container, the vessel stow plan must include:
- Container operator
- Equipment number
- Equipment size and type
- Stow position
- Hazmat code (if applicable)
- Port of lading
- Port of discharge
- With regard to the vessel, the vessel stow plan must include:
- Container status messages: Carriers must submit a CSM when any required event occurs and is recorded. Carriers must submit CSMs no later than 24 hours after the message is entered into the carriers equipment tracking system.
ISF 5 Data Elements
For Foreign Cargo Remaining On Board (FROB), Immediate Exportation (IE), and Transport & Export (T&E) shipments, five (5) data elements are required to be filed.
- Booking party: Name and address of the part who reserved the shipment.
- Foreign port of unlading: Port code for the foreign where the cargo in unloaded.
- Place of delivery: City code for where the goods are delivered.
- Ship to party: Name and address of the first party who will physically receive after release from CBP custody.
- Commodity HTSUS number: The HTSUS number must be provided to the 6-digit level but may be provided to the 10-digit level.
How will the Importer Security Filing be enforced?
When the Importer Security Filing rule was initially rolled out, CBP announced a delayed enforcement policy. During the first twelve (12) months, CBP would “show restraint in enforcing the rule.” When originally announced, the flexible enforcement period was scheduled to end of January 26, 2010. Because of compliance issues, this delayed enforcement policy lasted significantly longer than initially expected and eventually evolved into a measured “three-strikes” ISF enforcement strategy.
Measured “Three-Strikes” Importer Security Filing Enforcement Strategy
From May 13, 2014 to June 30, 2016, CBP enforced a revised enforcement strategy which provided for local discretion at the port level. First, this approach provided a standardized approach to compliance with the goal to increase compliance across ISF importers.
Key points to the rule included:
- Port discretion based on local resources
- At least three (3) warnings to non-compliant ISF importers with “informed compliance outreach” from the port
- CBP Headquarters review period concluding on May 13, 2015
- Note: This review period in actuality lasted almost three (3) years; from July 9, 2013 to June 30, 2016
- Liquidated damages claims to be issued within 6 months
- Note: This was an estimated of time for claims and did not change the CBP six-year statute of limitations
- Ports to focus enforcement on most severe violations
As of June 30, 2016, CBP now enforces a more strict policy for Importer Security Filing.
In short, for ISF non-compliance:
- Local ports no longer required to send LD requests to CBP
- “Three-strikes” rule discontinued
- No change in cargo hold guidelines
Liquidated Damages Penalties
Penalties for Importer Security Filing non-compliance are issued as ISF Liquidated Damages Penalties. While an ISF importer may not think that filing late, inaccurate or incomplete data is no big deal, CBP thinks differently. Consequently, these penalties are typically issued in $5,000 increments. Because CBP is not looking to put importers out of business, the maximum amount CBP will issue for ISF Liquidated Damages penalties is $10,000.
First of all, an ISF Importer may be issued a $5000 ISF Liquidated Damages Penalty for late filing.
Also, an ISF Importer be issued a $5000 ISF Liquidated Damages Penalty for inaccurate data.
Another type of $5000 ISF Liquidated Damages Penalty an ISF importer may be issued is for incomplete data.
Failure to File
Finally, an ISF Importer may come across an ISF Liquidated Damages Penalty for failure to file. Because this is the most severe Importer Security Filing violation, CBP may withhold the release or transfer for the cargo. In addition, CBP may refuse to let the goods be unloaded from the vessel. Ultimately, CBP may issue a “do not load” order at origin or further inspection on arrival.
Who can file an Importer Security Filing?
First of all, for ISF 10+2 it is the responsibility of the Importer Security Filing Importer to ensure that the first ten (10) data elements of the ISF is filed both timely and correctly. Customs and Border Protection place the responsibility to file on the ISF Importer or an authorized agent.
Next, for the other two (2) ISF 10+2 data element, the carrier is required to file.
Finally, for ISF 5 transactions, the ISF Importer, FTZ Operator, or an authorized agent may file the 5 data elements.
Importer Security Filing Importer
As with all Customs business, the importer has the right to file their own ISF. This can be accomplished with, but not limited to, one of the below tools.
- Self-file through the Automated Commercial Environment (ACE)
- Self-file through an approved software vendor like Strix (formally known as TRG Direct) or ACELYNK
- Self-file through an in-house software solution
A Licensed Customs Broker can file your ISF on your behalf using an approved software. This is a great option for new or uninformed importers.
Other Designated Agent
Because Importer Security Filing is not regulated the same way as other CBP business, you can designate another authorized agent to file your ISF. This may be a freight forwarder or third-party agency.
As you can see, Importer Security Filing is a complex set of rules with potentially severe monetary penalties for non-compliance. Use this guide to increase your understanding and compliance.
Don’t forget, if you have any questions or need clarification, use the comments section below and we will get back with you as soon as possible.
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