ISF enforcement strategy

   U.S. Customs and Border Protection has implemented a revised enforcement strategy for the Importer Security Filing which provides for local discretion at the port level based on infrastructure and staffing resources. The agency says the strategy provides a more standardized approach which will permit headquarters to better analyze non-compliant ISF filings and educate violators.
   Last summer, the use of liquidated damages to enforce compliance with ISF went into effect. CBP may issue liquidated damages of $5,000 per violation for the submission of an inaccurate, incomplete or late filing. 
   Liquidated damages essentially are penalties secured by a bond. If goods for which an ISF has not been filed arrive in the United States, CBP may withhold the release or transfer of the cargo. 
   Under the rule, importers must electronically submit 10 pieces of cargo-related information prior to vessel loading for security screening. ISF has been gradually phased in since its inception in 2009.
   Soon after full enforcement went into effect, the agency noticed a pattern of issues and realized it needed to refine its guidance to field offices on how to enforce the rule, ISF program manager Craig Clark said in an interview. The guidance was revised in consultation with industry.
   Ports of entry are now giving violators at least three warnings (either by e-mail, telephone or letter), with some kind of outreach to the violator that they are not in compliance with the filing requirements, Clark explained. On the fourth instance, a violator may begin to receive liquidated damages.
   Customs has also reiterated to officers at the ports to focus on enforcing the most serious violations, such as “significantly” late ISFs and shipments that arrive without an ISF. Each port has its own dynamics and risk profiles, so it is left up to local port to define when to penalize someone for being late.
   The definition boils down to a “an ISF that is filed so late that it negatively impacts CBP’s ability to target that cargo,” Clark said. The port director retains discretion to enforce ISF by using the cargo holds introduced last summer.
   Currently, CBP is only enforcing the full ISF with 10 data elements. The enforcement rules don’t apply for the ISF 5, which is used for in-transit shipments or freight-on-board.
   CBP also said the one-year headquarter period that began last July has also been extended until May 2015. CBP will analyze the informed compliance records to ensure violations align with the intent of the enforcement strategy.

This column was published in the July 2014 issue of American Shipper.