Enforcement for ISF-10 shipments has been in place for nearly a decade, and compliance is now higher than 95 percent.
The Importer Security Filing only affects ocean vessel imports. It does not affect cargo imports entering the U.S. by other modes of transportation. The ISF also does not apply to bulk cargo.
Requirements for Filing ISF
Nether ocean carrier, nor the seller of goods, can transmit Importer Security Filing on behalf of the importer. Only the importer or their agent, such as a licensed customs broker, should file.
- Filers have to do all Importer Security Filings electronically;
- They must make corrections before goods dock at U.S. ports;
- Only the party submitting the filing can make changes.
Importers must transmit an ISF to CBP no later than 24 hours before the cargo is laden aboard a vessel destined to the U.S. Or any time before lading for foreign cargo remaining on board. The ISF consists of ten data elements for shipments of goods intended for entry into the U.S., including a foreign-trade zone (ISF-10). Shipments entirely of FROB cargo or goods for immediate exportation or transportation and exportation in-bond require ISF of five data elements (ISF-5).
Importers are legally responsible for their filings’ accuracy and timeliness, regardless of whether a customs broker or other intermediary does the actual filing. Typically, the importer is the owner of the goods, purchaser, consignee, or agent, such as a broker.
The filer has to submit the Importer Security Filing at the lowest bill of lading level (i.e., house bill or regular bill) that is in the Automated Manifest System (AMS). The bill of lading number is the link between the Importer Security Filing and the customs manifest data.
The Importer must post a bond to secure their ISF. For this purpose, she can purchase the Appendix-D bond. Also, CBP accepts Continues Bond (type 1, 2, 3, or 4) in place of the ISF bond.
Penalties and Costs
Customs can assess $5,000 damages, up to a maximum of $10,000 per shipment, for violations such as failure to submit ISF timely, accurately, or completely, including:
- Failure to file;
- Late filing;
- Incomplete filing;
- Failure to withdraw ISF;
- Failure to ensure Importer Security Filing matches the Bill of Lading.
The importer may also face cargo holds until CBP receives the required information and reviews and examines the documentation.
Mitigating Penalties
The good news is that the first violations may be mitigated to $1,000-$2,000 depending on the mitigating circumstances and other factors of the violation.
One mitigating circumstance is the evidence of progress with timely processing. It is also helpful if you have a small number of violations compared to the total number of ISF declarations you have filed. Mitigation of liquidated damages can also occur if inaccurate filings are due to events beyond the importer’s control, such as receiving incorrect information from another person in the supply chain.
The best way to file correctly and to avoid penalties is to hire a licensed customs broker.
ISF-10 data elements
1. Seller – Name and address of the last known entity who sold the goods or the goods’ owner. The seller information is generally available on the commercial invoice.
2. Buyer – Name and address of the last known entity who bought the goods or the name and address of the goods owner. Buyer information is generally available on the commercial invoice. If the goods are sold in transit and the buyer information changes, the filer must amend ISF.
3. Importer of Record number/FTZ Applicant ID number – The IRS number, EIN, Social Security number, or Customs assigned importer number of the entity liable for payment of all duties and responsible for meeting all requirements for importation. For Foreign Trade Zone shipments, the IRS number of the party who files the documentation.
4. Consignee number – The IRS number, EIN, Social Security number, or Customs assigned importer number of the individual or firm in the U.S. on whose account the merchandise is shipped.
5. Manufacturer (or supplier) – Name and address of the entity that last manufactures, assembles, produces, or grows the commodity, or the supplier’s name and address. However, for textiles, the broker must have the actual manufacturer for entry purposes.
6. Ship to party – Name and address of the first deliver-to party that receives the goods after Customs released them. If the ship-to party is unknown, the facility where the merchandise will be unladen (e.g., pier). If there are multiple delivery stop-offs, report only the first one.
7. Country of origin – Country of manufacture, production, or growth of the article, based upon the U.S import laws, rules, and regulations. This is the same information that will be on the Customs entry.
8. Harmonized Tariff Schedule number – Tariff number under which the article is classified in the HTSUS.
The final rule requires six digits, but Customs will accept eight digits or the full ten digits HTS number. It means the filer has to pre-classify all goods.
9. Container stuffing location – Names and addresses of the physical locations where the goods were stuffed into the container. The filer can report a “scheduled” stuffing location, but she must amend ISF before arrival once the actual stuffing location is known. The filer does not need to report the container number with the Importer Security Filing.
10. Consolidator (stuffer) – Name and address of the party who stuffed the container or arranged for the container’s stuffing. For breakbulk shipments, the name and address of the party who made the goods “ship ready” or the party who arranged it.
ISF Amendments
The filer must amend the Importer Security Filing if there is a change or if more accurate information becomes available before the goods enter the limits of the port of the first arrival in the United States.
However, if the filer used a flexible filing option, she must update the ISF with the correct or more accurate information as soon as it is known. But in any event, no later than 24 hours before the arrival of the vessel in the first U.S. port.
If the importer used an agent to perform the filing, she should contact the agent for amending the ISF.