As of June 25, CBP was in 2nd Phase of ISF Enforcement

Ports Had Been Notified of Second Phase

As of June 25, CBP stated it had moved into the second phase of its graduated enforcement of ISF, but was not yet in a liquidated damages mode. CBP stated that if there was not an ISF, CBP could use non-intrusive inspection (NII) or other means to address the situation. At the June 25, 2010 meeting, CBP stated that ports will issue a hold, but no claims for liquidated damages. CBP issued a memo to the ports on the second phase and will do the same once CBP moves into the third phase. CBP had been finding acceptable ISF volume and compliance rates (90-92%).

(CBP had previously stated that it would not be issuing any liquidated damages for ISF issues during the first quarter beginning January 26, 2010. CBP had also stated that when it moved into the second quarter, if CBP sees repeated incidents of no ISFs being filed and no response from the importer, CBP may issue a claim for liquidated damages. During the third and fourth quarters, CBP stated that it will take a much stronger enforcement approach, including the issuance of liquidated damages on a more regular basis.

In addition, CBP has stated that the field will initiate claims for ISF liquidated damages, but all claims will be processed through Headquarters for the first year or so until the ports have had time to adjust.)

ISF “Statute of Limitations” Issue under CBP Review

COAC’s ISF Subcommittee submitted recommendations for shortening the ISF statute of limitations (also referred to as ISF finality) at the May 11, 2010 COAC meeting. A CBP official stated that the issue of ISF finality is under review by the Office of Rulings and Regulations (OR&R).

(CBP’s position on ISF finality has been that “pursuant to 28 USC 2415, the statute of limitations for ISF liquidated damages is six years from the date of the breach of the bond. CBP will not limit its authority to enforce the ISF requirements.”)

A CBP official suggested to the ISF Subcommittee that it would not be completely happy with OR&R’s current position on this issue, noting that CBP’s concern is protection of the agency for any kind of fraud or negligence. CBP states that it will not limit authority in terms of being able to go back to the filer/importer, but will not come back after the fact to nitpick minor infractions. CBP further stated that OR&R will develop language on ISF finality and liquidated damages which will be included in CBP’s mitigation guidelines in the Informed Compliance Publication (ICP) on Fines and Penalties.

CBP Has Funding, Completed Most Programming for ISF Data Warehouse

At the meeting, a CBP official stated that CBP has been working on a data warehouse concept, has secured additional funding, and has completed a lot of the programming. The data warehouse’s portal will allow access to the importer, broker, surety, filer, and carrier and there will be standardized downloadable reports, as well as some ad hoc reports. CBP is expected to provide the Subcommittee with an overview of the data warehouse system at a later date.

(In the July 2010 version of its 10+2 FAQ, CBP stated that it is in the process of developing a data warehouse that will allow importers to create and extract reports from CBP; this will include the capability to obtain ISF transactional data. CBP will make every effort to deploy this capability to Tier 3 and Tier 2 C-TPAT importers sometime in the fall of 2010. See ITT’s Online Archives or 07/16/10 news, 10071633, for BP summary.)

ISF Portal for SMEs Almost Completed

CBP has been working on an ISF portal for small to medium sized enterprises (SMEs). According to CBP, programmers are looking at a few registration flaws and then the portal will be ready. A CBP official notes that the SME portal is 99% complete and user friendly.

CBP’s Planned Redesign of Web Site Could Improve ISF Visibility

CBP is planning a redesign of its Web site (www.CBP.gov) and the Subcommittee notes that this could be an opportunity to provide feedback not only on improving visibility on ISF content but also on other improvements to the Web site, especially those geared toward helping the small to medium sized entities (SMEs).

ISF Benefits Document Awaiting Full COAC Review, Feedback

A Subcommittee member has drafted a one page document regarding ISF benefits and it has been circulated to the full COAC for review and feedback.

CBP is Updating its Publications to Reflect ISF

The Subcommittee also discussed with CBP officials a checklist of ISF publications. During the discussion, a CBP official stated that CBP’s Informed Compliance Publication on Fines & Penalties would be updated with respect to ISF penalties and mitigation options once OR&R has completed its review of the ISF finality matter.

In addition, CBP’s Importing to the U.S. publication will also be updated to include a section on ISF. CBP is also planning ISF audio podcasts.

New Importers Brochure is Being Prepared by CBP

The Subcommittee provided CBP with feedback on its Tips for New Importer’s document, including stating that because the document is geared towards the small to medium sized entities, the language should be as basic as possible.

ISF Subcommittee minutes, posted 07/14/10