Details on CBP's Interim Final Rule on 10+2 for Maritime Cargo (Part VII - Comments on ISF Requirements)

This is Part VII of a multi-part series of summaries of the details of the interim final rule and highlights CBP's responses to comments on Importer Security Filing (ISF) requirements it received on its 10+2 proposed rule. (See future issue of ITT for a summary of the comments received on carrier, bonding, etc. issues and compliance issues.)

Highlights of CBP's Responses to Comments on ISF Requirements

The following are highlights of CBP's responses to comments it received on ISF requirements from the publication of its 10+2 proposed rule (see interim final rule for additional CBP responses to comments on ISF requirements).

Bill of lading number must be provided with ISFs. In response to requests for clarification on whether the bill of lading (BOL) number is a required data field, CBP states that a BOL number is integral to the ISF and therefore, must be provided with the ISF. The BOL number is not a data field, but an identifier which will be provided in the header information. However, CBP is requiring only the number for the BOL at the lowest level (i.e., the regular straight/simple BOL or house BOL) and not the master BOL number.

Under existing 24 Hour Rule requirements, the BOL number is required for containerized cargo 24 hours prior to lading. For bulk cargo and exempted break bulk cargo, the carrier must submit the BOL number 24 hours prior to arrival. Under the interim final rule, for containerized cargo, the ISF is also required 24 hours prior to lading. For break bulk cargo that is exempted for 24 Hour Rule purposes, the ISF is required 24 hours prior to arrival. For bulk cargo, an ISF is not required.

Accordingly, the BOL number will be available for ISF purposes, and has always been a part of the transaction identification. CBP states that it understands that business processes may need to be changed to ensure that the importer has the BOL number in a timely fashion.

CBP notes that it has the capability to accept multiple ISFs per BOL. CBP will issue a unique identification number for each separate, not unified, ISF as part of the acceptance/rejection acknowledgment response. Modification of a particular ISF will be possible using the unique identification number.

CBP does not require use of an agent to file ISF. In response to comments that CBP should only allow U.S.-based entities or Customs-Trade Partnership Against Terrorism (C-TPAT) members to act as an agent for ISF purposes, CBP notes that an ISF Importer may, as a business decision, designate an agent to file the ISF on the ISF Importer's behalf. However, CBP is not requiring the use of an agent and the ISF Importer is ultimately responsible for the timely, accurate, and complete submission of the ISF. CBP disagrees that agents should be limited to U.S.-based entities or C-TPAT members because doing so would greatly limit the flexibility of ISF Importers in selecting agents for ISF purposes.

ISF Importer is ultimately responsible for timely, accurate, and complete submission of ISFs. CBP responded to a question on whether the importer will be held liable if an agent experiences problems with its systems resulting in a late, incomplete, or inaccurate ISF. CBP states that the ISF Importer is ultimately responsible for the timely, accurate, and complete submission of the ISF, regardless of the cause for a late, inaccurate, or incomplete filing.

CBP to send timely confirmation message ISF was received and accepted. In response to a comment that it should work with the trade to identify the mechanisms that are needed for all parties to manage the ISF, including the receipt by importers of a timely confirmation message indicating that the ISF has been received and accepted, CBP states that it will send a response message to the ISF filer indicating whether an ISF has been accepted or rejected by CBP's systems. The response message will contain a unique number generated by CBP which may be shared with other parties.

CBP further states that it will transmit an electronic acknowledgement to the filer only when CBP receives an ISF (which will include a unique identification number). This number cannot be used to perform a query in the Automated Broker Interface (ABI) or Automated Manifest System (AMS). However, the party who submits the advance manifest information and any notify party on the BOL in AMS will receive all status notifications posted to that bill, including the notification that an ISF was accepted for the BOL.

Carriers may submit ISF and advance cargo declaration in same electronic transmission for certain cargo. CBP disagreed with comments that the advance cargo declaration filing should be expanded to include the ISF data elements. However, in response to requests from the trade, CBP states it will allow carriers to submit an ISF for Immediate Exportation (IE), Transportation and Exportation (T&E), or Foreign Cargo Remaining on Board (FROB) and the advance cargo declaration via the same electronic transmission.

No ISF exemption/alteration for C-TPAT partners. CBP disagreed with a comment that C-TPAT members, specifically tier three members², should be exempt from the ISF requirements, especially when shipments have been subject to pre-export scanning at a Container Security Initiative (CSI) port, and stated that it will use the ISF to assess the risk of individual shipments. CBP states that it is not allowing exemption from, or alteration of, the requirement that C-TPAT partners submit ISF information in advance of arrival. CBP emphasizes that C-TPAT membership will continue to be viewed in a positive light for targeting purposes and it is more likely that shipments made by C-TPAT members will be readily and expeditiously cleared, and not be delayed for greater scrutiny.

CBP is not considering expanding to other modes of transportation at this time. In response to a question on whether CBP plans to apply the 10+2 requirements to other modes in the future, CBP states that at this time, it is not considering expanding the advance data requirements for other modes.

NVOCCs, FROB, house and sub-house bills of lading. CBP disagreed with comments stating that the non-vessel operating common carrier (NVOCC) should be required to submit ISFs for FROB shipments and stated that the obligation for the ISF for FROB remains with the vessel operating carrier because this is the party choosing to transport the cargo to the U.S. CBP understands the house bill of lading level information may belong to the NVOCCs. Therefore, CBP clarifies that the NVOCC can submit the ISF directly to CBP, if it does so as the vessel operating carrier's agent. CBP is requiring an ISF at the lowest level to the house bill of lading level, if applicable. CBP is not requiring ISFs for sub-house bills.

ISF Importer for IE and T&E in-bond shipments, goods delivered to FTZ, etc. CBP states that for IE and T&E in-bond shipments and goods to be delivered to a foreign trade zone (FTZ), the ISF Importer is the party filing the documentation with CBP and not merely a party delivering the form to CBP. For shipments, including personal/household goods, military/government shipments, and delivered duty paid (DDP) shipments that are intended to be entered into the U.S., the ISF Importer would be the owner, purchaser, consignee, or agent such as a licensed customs broker, as the party causing the goods to enter the limits of the U.S. If an NVOCC is the party required to submit an ISF on its own behalf, or as an agent for another party, the NVOCC will need to submit the ISF pursuant to the interim final rule.

Filing the ISF alone does not constitute "customs business." CBP disagreed with comments stating that the ISF, including providing the HTS number (even at the six-digit level), importer of record number, and consignee number is "customs business." According to CBP, "customs business" does not involve the mere electronic transmission of data received for transmission to CBP, but does involve classification for entry purposes. The six-digit HTS number is intended exclusively for ensuring cargo safety and security, and not for determining merchandise entry procedures that fall within the scope of customs business. However, a ten-digit HTS number is needed and is used for merchandise entry purposes and, therefore, classification at the ten-digit level is considered customs business. Therefore, if the ISF and entry or entry summary are provided via a single electronic transmission to CBP, the party making the transmission must be an importer acting on its own behalf or a licensed customs broker.

Unified filings can be amended via same electronic transmission. CBP responded to comments about whether both the ISF and entry will need to be amended independently if they are submitted in the same electronic transmission. CBP states that both can be amended via the same electronic transmission.

ISF information will not be used for commercial enforcement purposes. In response to the question of whether a modification to the ISF will affect the entry summary and impact the examination of the merchandise, CBP states that whether filed as an initial submission or as a modification in a unified filing, the ISF or the entry/entry summary will be accepted or rejected individually as separate and distinct filings. The ISF information, including updates, will be used exclusively for ensuring cargo safety and security and preventing smuggling and will not be used for determining merchandise entry or for any other commercial enforcement purposes.

CBP does not require ISF Importer to seek ruling when data element is unknown. CBP responded to a comment by stating that it is not requiring that the ISF Importer seek a ruling when a data element is unknown. If an ISF Importer does not know an element that is required pursuant to the interim final rule, the ISF Importer must take steps necessary to obtain the information. If the ISF Importer believes that a required data element does not exist for a non-exempt transaction type, the ISF Importer should request a ruling prior to the time required for the ISF.

ISF-10/ISF-5 for IE, T&E, or FROB. CBP states that if an ISF consisting of 10 elements pursuant to new 19 CFR 149.3(a) was initially submitted for a shipment and the shipment is changed to an IE, T&E, or FROB, the ISF must be updated pursuant to new 19 CFR 149.2(d). This update must be performed by submission of an ISF consisting of five elements (ISF-5) as listed in 19 CFR 149.3(b) because these elements are necessary to better assess the security risk of IE, T&E, and FROB shipments.

¹The interim final rule is intended to fulfill the requirements of Section 203 of the Security and Accountability for Every (SAFE) Port Act of 2006 and Section 343(a) of the Trade Act of 2002, as amended by the Maritime Transportation Security Act of 2002.

²Tier 3 is the highest level of C-TPAT benefits provided.

(See ITT's Online Archives or 11/25/08, 11/26/08, 12/03/08, 12/09/08, 12/10/08, and 12/17/08 news, 08112505, 08112605, 08120305, 08120905, 08121010, and 08121710, for Parts I-VI of BP's series of summaries on the details of CBP's 10+2 interim final rule.

See ITT's Online Archives or 11/24/08 news, 08112400, for BP summary announcing the publication of CBP's 10+2 interim final rule, with links to other recent BP summaries on 10+2.).

CBP contact - Richard DiNucci (202) 344-2513

Interim final rule (D/N USCBP-2007-0077, CBP Dec. 08-46, FR Pub 11/25/08) available at http://edocket.access.gpo.gov/2008/pdf/E8-27048.pdf.