Timing of ISF Enforcement Due to Uptick in Non-compliance, M1 Transition
CBP's long-expected decision to ratchet up enforcement of Importer Security Filing (ISF), commonly known as 10+2, came following the successful transition to Automated Commercial Environment: e-Manifest (M1) for vessels as well as a recent decline in ISF compliance, said Craig Clark, who oversees the ISF program at CBP as vessel program manager. The agency recently announced plans to initiate full enforcement of the program, which requires advance cargo information submission to CBP within the 24 hours before the cargo is finished loading onto an ocean vessel going to the U.S., starting July 9 (see 13060712).
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CBP's timing for stronger enforcement was due in part to the transition last year from legacy manifest filing systems to M1(see 12100921), said Clark in an interview. There was some concern then that enhanced enforcement could create some unnecessary complications if there were issues with the transition to M1, he said. CBP has also seen a recent uptick in shipments lacking the ISF information over the last 8 months, which also influenced the decision to begin the enforcement, he said. On a day-to-day basis, about 12 to 15 percent of entries that should have included the ISF information did not include it, he said. Before the uptick, the ISF compliance percentage was in the mid to high nineties, he said.
Depends on the Port
A complete failure to provide the data to CBP is of far more concern to the agency than a typo, and CBP would "take that into consideration," he said. But, different ports have different issues in terms of ISF filers and "one port may not have a problem with no-filers, but may have a problem with egregious violators in terms of late filings or incomplete filings," he said. As a result, such a port may be more interested in going after late or incomplete filers, he said. Still, "all ISF violations are going to be subject to liquidated damages come July 9," he said.
Mismatched bills of lading, which was an early issue in the program but has become less of a problem, is something that is fixable through amendments up to 24 hours before arrival at the first U.S. port, he said. Typically, the mismatched bill of lading has to do with mismatched bill types -- filed against a master bill rather than a house bill -- and would only really be a problem if it made arrival without being corrected, said Clark.
The trade should not be concerned about the possible use of the ISF information for trade enforcement, said Clark. "ISF is statutorily limited to security," he said. "So the ISF data is not used for trade compliance," he said. While the regulations require submission of ISF data within the 24 hours before the cargo is finished loading onto a vessel, in fact, CBP does not have that kind of knowledge, said Clark. "The practical measurement that CBP uses to measure timeliness" is if that information is filed between 48 and 24 hours before departure it is considered compliant, he said.
CBP has said it may issue liquidated damages of $5,000 per violation for the submission of an inaccurate, incomplete or untimely filing. The agency may also withhold the release or transfer of the cargo, or deny permission of a carrier to unlade the merchandise. The program is operating under an interim final rule and it's still unclear when the agency will release a final rule on the ISF program, but Clark said he does not expect any major changes once the final rule is published. Although the effective date of the 10+2 interim final rule was January 26, 2009, the rule allowed for a one-year flexible enforcement period. Since the end of the flexible enforcement period, CBP used a “measured, common sense approach” to enforcement.