By: Adrienne Braumiller, Partner

The Importer Security Filing (ISF) rule, also known as ISF 10+2, relates to import cargo coming into the U.S. via ocean vessel. The rule states that an ISF Importer, or their agent, must electronically submit certain advance cargo information to Customs and Border Patrol (CBP) before the goods arrive into the U.S. It is important to note that bulk cargo is not subject to this rule.

The Importer Security Filing is completed by the ISF Importer. Generally, the ISF Importer is the party causing the goods to arrive within the limits of a port in the U.S. by vessel. For foreign cargo remaining on board (FROB shipments), the ISF importer is the carrier. For immediate exportation (IE) and transportation and exportation (T&E) in-bond shipments, and goods to be delivered to a foreign trade zone (FTZ), the ISF Importer is the party filing the related documentation.

The Importer Security Filing (ISF-10) requires the following information 24 hours before the cargo arrives in the U.S.: the (1) seller, (2) buyer, (3) importer of record number/FTZ applicant identification number, (4) consignee number, (5) manufacturer (or supplier), (6) ship to party, (7) the country of origin, (8) Commodity Harmonized Tariff Schedule of the U.S. (HTSUS) number, (9) container stuffing location, and (10) the consolidator.

Specifically for FROB, IE, and T&E shipments, the Importer Security Filing (ISF-5) requires: the (1) booking party, (2) foreign port of unlading, (3) place of delivery, (4) ship to party, and the (5) commodity HTSUS number. The ISF-5 for the IE and T&E shipments must be submitted 24 hours before the cargo is laden aboard a vessel heading to the U.S. On the other hand, the ISF-5 for FROB shipments must be submitted any time before lading.

Recently, CBP revised its enforcement procedure for ISF-10s to allow for local discretion at the port level. This revision will allow CBP HQ “greater visibility” of repeat violators and problematic areas geographically. Ports are to focus their enforcement actions on serious violations, such as missing or significantly late filings. CBP has left ports to determine the parameters of “significantly late” that best address each port’s unique circumstances. Now that ports are releasing their definitions of “significantly late,” the enforcement procedures are clearer. For example, the Port of San Francisco issued an Information Notice, effective June 30, 2014, stating that “for repeat offenders, liquidated damages claims will be requested for significantly late ISF submissions (i.e., 10 days after departure, 48 hours prior to arrival, after arrival, etc.).” Also, the Port of L.A./Long Beach will begin issuing liquidated damages and requiring that an ISF be on file 72 hours before the cargo’s arrival.

Furthermore, late filers of ISF-10s will be allowed three warnings before liquidated damages are issued. The initial contact following a late filing counts as one of the three warnings and can be in the form of an email, letter, or telephone call. Since the revisions of the enforcement procedure, the CBP has approved 63 liquidated damages claims against violators. However, individual ports have the discretion to pursue the claim, and they may simply choose not to.

CBP is now in the process of revising the enforcement procedures for ISF-5s (relating to FROB, IE, and T&E shipments). As of now, violators of ISF-5s do not face holds or liquidated damages claims. This is because the class of persons required to file ISF-5s is narrowly defined. CBP will allow public comment on the newly promulgated rule; thereafter, the rule will become operational.

The single best way to avoid penalties, whether in the form of liquidated damages or holds, is to file one’s ISF on time, taking into consideration which port the cargo is destined for. Also, timeliness avoids the hassle of figuring out whether the filing is “significantly late” and makes sure that uncertainty is eliminated.  Furthermore, even if certain information that is required to be submitted is not available at the time of filing, an estimate can be submitted. Just remember to continuously update as more precise information is acquired.