ISF Submissions Increased After Enforcement Started, but CBP Can Do Better at Evaluating Effectiveness, GAO Says

The agency should also examine ISF enforcement strategies used by CBP's risk targeting teams at the ports, known as advance targeting units (ATUs), to determine whether certain enforcement methods can be applied to ports “with relatively low submission rates,” the GAO said. CBP also ought to enforce the ISF rule’s Additional Carrier Requirement for submission of container status messages (CSMs) when targeters find carrier non-compliance, the GAO said.

The Department of Homeland Security concurred with the recommendations. In a response letter to the GAO, DHS GAO-Office of Inspector-General Liaison Office Director Jim Crumpacker said the department expects to meet all three recommendations by Feb. 28. The agency intends to publish a final rule in December expanding the definition of "importer" under ISF regulations (see 1607050028). The GAO noted that CBP officials said this would apply to filings for immediate exportation shipments, transportation and exportation shipments, and for foreign-trade zone imports -- including ISF-5 forms for in-transit cargo -- to cover the party that has the best access to the required information. Submission rates for ISF-5’s ranged from about 68 percent to 80 percent from 2013 through 2015, the report says. However, the GAO discounted ISF-5 from review criteria, as CBP isn’t yet enforcing submission requirements for the form.

CBP’s National Targeting Center-Cargo will discuss ISF enforcement strategies with all ATUs during monthly conference calls, to help assess whether certain enforcement strategies can be applied to ports with relatively low ISF submission rates, Crumpacker wrote. Furthermore, the CBP Office of Field Operations (OFO) Cargo and Conveyance Security division will work separately with ports of entry with “low” submission rates to identify potential solutions to raise the rates, he wrote. OFO will also analyze ISF data to evaluate the program for the number of unmanifested containers and if/how they were mitigated for risk before arrival, as well as the number of times Customs-Trade Partnership Against Terrorism participants were identified as an ISF entity and given targeting benefits but did not receive the same treatment based on manifest information, and the number of times potential terrorism matches were made against ISF entities versus the number of times not matched using the same manifest data, Crumpacker said. “Once completed, OFO will review the results of the analysis and, if needed, take action to implement the changes.”

After CBP authorized ATUs to issue liquidated damage claims in July 2013, ISF-10 submission rates rose to about 98 percent by the end of that year, continuing to rise to 99 percent by the end of 2015, the GAO said. While CBP provided the GAO examples of daily reports it produced calculating the acceptance rate of vessel stow plans submitted, the agency hasn’t comprehensively calculated submission rates over time, the report says. However, CBP officials told the GAO that overall compliance with stow plan submissions is likely near 100 percent, because CBP generates daily reports on vessels scheduled for arrival without stow plans, and follows up with non-submitting carriers prior to reaching port, according to the report.

CBP has processes for monitoring whether importers and carriers have submitted required ISFs and stow plans, but not CSMs, as carriers use their private data systems to produce the messages and CBP officials don’t have direct access to these systems to know if a CSM was created and, therefore, is required for submission, the GAO said. “As a result, we were not able to determine carriers’ compliance with the requirement to submit CSMs,” the report says. But targeters can sometimes determine whether CSMs weren’t submitted based on knowledge of a container’s location learned from other sources of information. However, ATUs don’t have enough resources to issue a liquidated damage claim for every case of CSM non-compliance, because CBP receives a very high volume of CSMs, as many as 30 million, on a monthly basis, the GAO said. CSMs are also often outdated, ATU officials told the GAO.

“Although it may not be feasible to determine every instance of CSM noncompliance, targeters may identify cases of noncompliance when reviewing CSMs for containers of interest as they target,” the report says. “For example, a targeter at one ATU reviewed a container that had arrived at the port from Guatemala in late April 2016, but the most recent CSM for the container was from early March 2016.” This shows that CBP likely didn’t receive the most recent CSMs from the carrier, the GAO said. By enforcing CSM compliance through mechanisms like liquidated damage claims in instances like this, CBP could incentivize carriers to submit all CSMs, giving CBP targeters more information that could help cargo risk assessments, the report says. ATUs issued 67 liquidated damage claims to 20 importers and 12 carriers from 2013 through 2015.

CBP hasn’t assessed the effects of ISF cargo holds and liquidated damage claims, including how its enforcement strategy could maximize importers’ and carriers’ ISF compliance, the report says. Although CBP credits increased submissions to its intensified enforcement since 2013, “submission rates vary at individual ports overseen by ATUs that enforce the ISF requirement differently,” the GAO said. Different types of evaluations, such as individual port case studies, could help assess ATUs’ enforcement methods, according to the report. “Without such an evaluation at the port level, CBP cannot be assured that its enforcement strategy is meeting the objective of maximizing compliance with ISF rule requirements.” Tracking the number of unmanifested containers that ATUs discover from reviewing vessel stow plans could help CBP determine whether it is sharpening its ability to detect high-risk shipments, the GAO said.