CBP's 10+2 Penalty and Mitigation Guidelines (Vessel Stow Plans and CSMs)

These guidelines are effective July 17, 2009.

According to CBP, the guidelines are to be used for the assessment and cancellation of claims for liquidated damages incurred by Importer Security Filing (ISF) Importers and carriers for failure to provide the required advance electronic information to CBP within the time period and manner prescribed by the regulations or for providing inaccurate or invalid information. (See ITT's Online Archives or 07/17/09 news, 09071705, for BP summary of the ISF portion of these guidelines.)

Aspects of the guidelines relevant to Vessel Stow Plans and Container Status Messages include the following:

In General

Information received from another party. Where the ISF importer receives any of the ISF information from another party, and where the carrier receives any of the vessel stow plan and container status message information from another party, CBP will take into consideration how, in accordance with ordinary commercial practices, the presenting party acquired such information, and whether and how the presenting party is able to verify this information. Where the presenting party is not reasonably able to verify such information, CBP will permit the party to electronically present such information on the basis of what the party reasonably believes to be true.

DNL, unlading holds, etc. In addition to liquidated damages that may be assessed as provided for below, the failure of an arriving carrier or ISF Importer to provide the required advance electronic cargo information in the time period and manner prescribed by the regulations in 19 CFR, may result in the issuance of a do not load (DNL) hold, the delay or denial of a vessel carrier's preliminary entry-permit/special license to unlade and/or the assessment of any other applicable statutory penalty. CBP may also withhold the release or transfer of the cargo until CBP receives the required information and has had the opportunity to review the documentation and conduct any necessary examination.

Liquidated Damages - VSP

Stow plan. When a carrier arrives at a port of entry where a vessel stow plan is required, Port Directors may assess a claim for liquidated damages against the carrier in the amount of $50,000 per vessel stow plan when a complete, accurate, and timely vessel stow plan was not submitted.

Arrival. A claim for liquidated damages in the amount of $50,000 may be assessed for each vessel arrival.

Cancellation of Liquidated Damages - VSP

Failure to file

First violation. For the first violation, if an arriving carrier incurs a liquidated damages claim for failure to file a vessel stow plan, the liquidated damages claim may be cancelled upon payment of an amount between $5,000 and $25,000, depending on the presence of mitigating or aggravating factors, if CBP determines that law enforcement goals were not compromised by the violation.

Subsequent violations. If an arriving carrier incurs a subsequent liquidated damages claim for failure to file a vessel stow plan, the liquidated damages claim may be cancelled upon payment of an amount not less than $25,000 if CBP determines that law enforcement goals were not compromised by the violation.

Law enforcement goals. No relief will be granted if CBP determines that law enforcement goals were compromised by the violation.

Late and inaccurate filings

First violation. For the first violation, if an arriving carrier incurs a liquidated damages claim for filing a late or inaccurate vessel stow plan, the liquidated damages claim may be cancelled upon payment of an amount between $2,500 and $10,000, depending on the presence of mitigating or aggravating factors, if CBP determines that law enforcement goals were not compromised by the violation.

Subsequent Violations. If the arriving carrier incurs a subsequent liquidated damages claim for filing a late or inaccurate vessel stow plan, the liquidated damages claim may be cancelled upon payment of an amount not less than $5,000 if CBP determines that law enforcement goals were not compromised by the violation.

Law enforcement goals. No relief will be granted if CBP determines that law enforcement goals were compromised by the violation.

Mitigating and Aggravating Factors - VSP

CBP will consider all available information in a petition, taking into account any mitigating, aggravating, and extraordinary factors, in determining the final assessed claim for liquidated damages or penalties.

Mitigating factors (these are not exhaustive):

a) Evidence of progress in the implementation of the vessel stow plan requirement during the flexible enforcement period (i.e., January 26, 2009 through January 26, 2010).

b) Vessel stow plan information was filed late because of vessel diversion due to factors outside of the carrier's control (e.g., due to weather).

c) A carrier which has been validated and is in good standing with the C-TPAT (Customs-Trade Partnership Against Terrorism) program may receive additional mitigation of up to 50% of the normal mitigation amount.

d) Demonstrated remedial action has been taken to prevent future violations.

e) Regarding an inaccurate vessel stow plan, the presenting party acquired the information from another party in accordance with ordinary commercial practices, and can demonstrate that it reasonably believed the information to be true, and it was not reasonably able to verify the information. This is an extraordinary mitigating factor that may warrant cancellation of a claim without payment.

Aggravating factors (these are not exhaustive):

a) Lack of cooperation with CBP or CBP activity is impeded with regard to the case.

b) Evidence of smuggling or attempt to introduce or introduction of merchandise contrary to law. This may be considered an extraordinary aggravating factor.

c) Multiple errors on the vessel stow plan.

d) There is a rising error rate which is indicative of deteriorating performance in the transmission of vessel stow plan information.

Liquidated Damages - Container Status Messages

Failure to file. If a carrier fails to submit a CSM where one is required to be submitted, Port Directors may assess a claim for liquidated damages against the carrier in the amount of $5,000 per container status message.

Late filing. If a carrier submits a late CSM where one is required to be submitted, Port Directors may assess a claim for liquidated damages against the carrier in the amount of $5,000 per container status message.

Inaccurate filing. If a carrier submits an inaccurate CSM, Port Directors may assess a claim for liquidated damages against the carrier in the amount of $5,000 per container status message.

$100,00 maximum per arrival. Claims for liquidated damages for failure to file a CSM, late CSMs, and inaccurate CSMs may be assessed up to a maximum of $100,000 per vessel arrival.

Cancellation of Liquidated Damages - CSM

Failure to file

First violation. For the first violation, if a carrier incurs a liquidated damages claim for failure to file a CSM, the liquidated damages claim may be cancelled upon payment of

an amount between $1,000 and $2,000 per CSM not filed, depending on the presence of mitigating or aggravating factors, if CBP determines that law enforcement goals were

not compromised by the violation.

Subsequent violations. If a carrier incurs a subsequent liquidated damages claim for failure to file a CSM, the liquidated damages claim may be cancelled upon payment of an amount not less than $2,500 per CSM not filed if CBP determines that law enforcement goals were not compromised by the violation.

Law enforcement goals. No relief will be granted if CBP determines that law enforcement goals were compromised by the violation.

Late and inaccurate filings

First violation. For the first violation, if a carrier incurs a liquidated damages claim for filing a late or inaccurate CSM, the liquidated damages claim may be cancelled upon payment of an amount between $500 and $1,000 per late or inaccurate CSM, depending on the presence of mitigating or aggravating factors, if CBP determines that law enforcement goals were not compromised by the violation.

Subsequent violations. If a carrier incurs a subsequent liquidated damages claim for filing a late or inaccurate CSM, the liquidated damages claim may be cancelled upon payment of an amount not less than $1,500 per late or inaccurate CSM if CBP determines that law enforcement goals were not compromised by the violation.

Law enforcement goals. No relief will be granted if CBP determines that law enforcement goals were compromised by the violation.

Mitigating and Aggravating Factors - CSM

CBP will consider all available information in a petition, taking into account any mitigating, aggravating, and extraordinary factors, in determining the final assessed claim for liquidated damages or penalties.

Mitigating factors (these are not exhaustive):

a) Evidence of progress in the implementation of the container status message requirement during the flexible enforcement period (i.e., January 26, 2009 through January 26, 2010).

b) Small number of violations compared to the number of container status messages submitted by the carrier.

c) A carrier which has been validated and is in good standing with the C-TPAT program may receive additional mitigation of up to 50% of the normal mitigation amount.

d) Demonstrated remedial action has been taken to prevent future violations.

e) Regarding an inaccurate container status message, the presenting party acquired the information from another party in accordance with ordinary commercial practices, and can demonstrate that it reasonably believed the information to be true, and it was not reasonably able to verify the information. This is an extraordinary mitigating factor that may warrant cancellation of a claim without payment.

Aggravating factors (these are not exhaustive):

a) Lack of cooperation with CBP or CBP activity is impeded with regard to the case.

b) Evidence of smuggling or attempt to introduce or introduction of merchandise contrary to law. This may be considered an extraordinary aggravating factor.

c) Multiple errors on the container status message.

d) There is a rising error rate which is indicative of deteriorating performance in the transmission of container status message information.

Additional Penalties for Serious or Repetitive Violations

A penalty may be assessed under the provisions of 19 USC 1436, or any other applicable statutory penalty authority, with CBP Headquarters approval for serious or repetitive violations. Section 1436 penalties will be mitigated in a manner consistent with current guidelines for Section 1436 penalties.

(The guidelines are titled: Guidelines for the Assessment and Cancellation of Claims for Liquidated Damages for Failure to Comply with the Vessel Stow Plan Requirements (19 CFR 4.7c) and Container Status Message Requirements (19 CFR 4.7d); Guidelines for the Assessment and Cancellation of Claims for Liquidate Damages for Failure to Comply with the Importer Security Filing Requirements (19 CFR 149.2).)

(See ITT's Online Archives or 07/08/09 news, 09070805, for BP summary of a CBP update on 10+2 which covers penalties, etc.

See ITT's Online Archives or 12/23/08 news, 08122310, for the final part of BP's summary on the details of CBP's 10+2 interim final rule, with links to previous parts. See ITT's Online Archives or 07/15/09 news, 09071505, for BP summary of CBP correcting the interim final rule.

See ITT's Online Archives or 03/10/09 news, 09031015, for the final part of BP's summary on CBP's 10+2 FAQ, with links to previous parts.)

CBP contact: Chris Pappas (202) 325-0109

Guidelines available in the July 17, 2009 Customs Bulletin (Volume 43, No. 28) at http://www.cbp.gov/linkhandler/cgov/trade/legal/bulletins_decisions/bulletins_2009/vol43_07172009_no28/43genno28.ctt/43genno28.pdf