CBP Updates, Expands its 10+2 FAQs (Part III - Enforcement, Etc.)

This is Part III of a multi-part series of summaries detailing CBP's updated FAQ document, and highlights new information on enforcement, replacing Importer Security Filings, action codes, and transaction type codes. See future issues of ITT for additional details on the updated FAQ.

Enforcement Measures

Enforcement to Escalate Gradually, Begins with Least Punitive Measures

CBP has provided details on how it plans to "fully enforce" the 10+2 interim final rule's filing requirements. As the flexible enforcement period has ended, the guiding principle is to exercise the least punitive measures available to obtain full compliance. In order to achieve maximum compliance with the least amount of disruption to the trade and to domestic port operations, CBP will apply a measured, common sense approach to enforcement. This deliberative approach towards enforcement should not be viewed as a further extension of the structured review and flexible enforcement period.

At the outset. At the outset, CBP will concentrate its enforcement efforts on importers who are not filing ISFs for U.S.-bound shipments. At the very least, non-compliant ISF Importers should expect to receive a warning and/or will experience delays in the release of their cargo while CBP analyzes and mitigates the potential risk of the cargo. At a minimum, non-compliant importers should expect their shipments to undergo non-intrusive inspection (NII) exam upon arrival in the U.S.

As enforcement matures. As CBP's enforcement regime matures, non-compliant importers will continue to see increases in the amount of manifest holds and examinations, and will be subject to the greater use of stricter enforcement measures such as liquidated damages and do not load (DNL) holds.

C-TPAT companies. For C-TPAT companies that remain non-compliant, CBP will consider suspending, reducing and even revoking their C-TPAT status.

Case-by-case. CBP will evaluate instances of non-compliance on a case-by-case basis and will consider factors surrounding potential violations before applying enforcement actions.

Replacing ISFs

Cannot Use an Entry to Update the ISF

CBP has expanded its response to the question of if a filer can use the entry to update an ISF.

CBP states that filers cannot use entries to update the ISF. Stand-alone ISF transactions can only be updated by replace transactions. Furthermore, unified entry transactions will only update the ISF if the entry is replaced along with an ISF replace transaction.

Action Codes

Action Reason Codes Must be Provided as Part of an ISF-10 Filing

CBP has expanded its definitions of the following action reason codes, which must be provided as part of an ISF-10 filing. They now read as follows

Compliant Transaction. "CT" - All data is present and is based upon the best information available at the time of the filing; no special flexibility rules apply. If "CT" is used, the ISF can be updated if necessary, but CBP does not necessarily expect to see updates for these filings. "CT" is also used to finalize a "FR", "FT" or "FX" filing.

Flexible Range. "FR" - A range of data for the Manufacturer, and/or Ship To Party, and/or Country of Origin, and/or Commodity HTSUS number has been provided. In these cases, the ISF must be updated as soon as better information becomes available, but in any event no later than 24 hours prior to arrival. If "FR" is used, CBP will be expecting to receive a timely update.

Flexible Timing. "FT" - The CS (Consolidator name/address) and/or the LG (Stuffing location) has not been provided. The ISF must be updated as soon as better information becomes available, but in any event no later than 24 hours prior to arrival. If "FT" is used, CBP will be expecting to receive a timely update.

Flexible Range and Flexible Timing. "FX" - A range of data as described in "FR" has been provided and the CS (Consolidator name/address) and/or LG (Stuffing location) has not been provided. The ISF must be updated as soon as better information becomes available, but in any event no later than 24 hours prior to arrival. If "FX" is used, CBP will be expecting to receive a timely update.

Transaction Type Codes

New Transaction Type for OCS Shipments

CBP has updated an answer regarding transaction types to note that CBP has programmed its system to accept a new ISF-10 transaction type - Type 10 for outer continental shelf (OCS) Shipments. This type is reserved for shipments arriving from a U.S. OCS point or from vessels operating over a U.S. OCS point (e.g. rigs, derrick barges, seismic vessels).

CBP notes that more types will be added as needed.

Household Goods & Personal Effects Type Can be Used for Automobiles

CBP has added the following two questions and answers to its FAQs regarding Type 03 household goods and personal effects transactions:

Q: Can the "Type 03 HHG/PE" coded transaction be used for personal use automobiles?

A: Yes. For automobiles or motorcycles, use an HTS from Chapter 87 such as 8703.21 (autos) and 8711.30 (motorcycles).

Q: I purchased some large souvenirs on a recent vacation overseas and was not able to take them on the airplane with me. The bronze statues I purchased are for my own personal use and not for resale. Can I file a "Type 3 ISF" for these types of non-commercial shipments?

A: Yes. The "Type 3" ISF can be used to cover non-commercial shipments of this nature.

(See ITT's Online Archives or 02/03/10 news, 10020305, for Part II of BP's summary on the updated FAQs.

See ITT's Online Archives or 01/25/10 news, 10012505, for BP summary detailing its phased enforcement plan for 10+2.

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.)

CBP's 10+2 FAQs (updated 01/28/10) available at http://www.cbp.gov/linkhandler/cgov/trade/cargo_security/carriers/security_filing/10_2faq.ctt/10_2faq.doc