Starting on July 9, 2013, U.S. Customs and Border Protection (CBP) will begin the liquidated damages phase of Importer Security Filing (ISF) enforcement. According to the press release:
CBP may issue liquidated damages of $5,000 per violation for the submission of an inaccurate, incomplete or untimely filing. Liquidated damages in simplified terms refer to a penalty secured by a bond. If goods for which an ISF has not been filed arrive in the U.S., CBP may withhold the release or transfer of the cargo. For carrier violations of the vessel stow plan requirement, CBP may refuse to grant a permit to unlade for the merchandise. Additionally, noncompliant cargo could be subject to further inspection on arrival.
The Importer Security Filing regulation — commonly referred to as “10+2” because importers or their agents have to submit ten data elements to customs 24 hours prior to vessel departure, and ocean carriers have to submit two additional data elements — was published in the Federal Register on November 25, 2008 and has been in effect since January 26, 2009. In short, importers, freight forwarders, and customs brokers have had almost five years to get their act together, so there’s really no good excuse for not being prepared at this point.
Last week on Talking Logistics, I interviewed Kevin Gavin, VP of Supply Chain Compliance at Descartes Systems Group (a Talking Logistics sponsor) about various cargo security and trade compliance programs, including ISF. Watch the short clip below where Kevin shares two data-related problems some companies still experience that could lead to ISF non-compliance.
Finally, as I wrote back in November 2008, if there’s ever a business process that lends itself perfectly to a network-based solution, it has to be “10+2” compliance. This is really a data collection and connectivity challenge, and freight forwarders and network-based solution providers are in the best position to address it. What you do with the data is less important (and easier) than getting the data (timely, accurate, and complete) in the first place.