In the realm of international trade, the process of importing goods into the United States can be a complex and intricate task. It involves a myriad of regulations, procedures, and documentation, all of which are overseen by the U.S. Customs and Border Protection (CBP). One such requirement is the Importer Security Filing (ISF), also known as “10+2”, which is a crucial part of ensuring the security of maritime cargo entering the United States.
This glossary article aims to provide a comprehensive understanding of the various terms and definitions associated with ISF Filing. It is designed to serve as a resource for importers, freight forwarders, customs brokers, and anyone else involved in the import process. By understanding these terms, you can navigate the complexities of customs entry more effectively and ensure compliance with all relevant regulations.
ISF Filing: An Overview
The Importer Security Filing (ISF) is a requirement by the CBP for all ocean cargo imported into the United States. It was implemented in 2009 as part of the SAFE Port Act of 2006 to enhance the security of U.S. borders and ports. The ISF must be filed by the importer or their agent (such as a licensed customs broker) at least 24 hours before the cargo is loaded onto the vessel at the foreign port.
The “10+2” in ISF refers to the 10 data elements required from the importer and the 2 data elements required from the carrier. These data elements provide detailed information about the cargo, including its description, origin, destination, and the parties involved in the transaction. Failure to comply with ISF requirements can result in significant penalties, cargo holds, and increased inspections.
ISF Importer
The ISF Importer is the party responsible for ensuring that the ISF is filed correctly and on time. This can be the goods’ owner, purchaser, consignee, or agent such as a licensed customs broker. The ISF Importer is also liable for any penalties resulting from late, inaccurate, or incomplete filings.
It’s important to note that the ISF Importer may not necessarily be the same as the Importer of Record (IOR). The IOR is the entity legally responsible for paying duties, taxes, and fees on the imported goods, and ensuring compliance with all customs regulations. However, in many cases, the ISF Importer and the IOR are the same.
Bill of Lading
The Bill of Lading (BOL) is a critical document in international trade. It serves as a contract between the shipper and the carrier, a receipt for the goods, and evidence of title. In the context of ISF, the BOL number is one of the data elements that must be provided.
There are two types of BOLs relevant to ISF: the Master BOL (MBL) and the House BOL (HBL). The MBL is issued by the main carrier (the shipping line), while the HBL is issued by a Non-Vessel Operating Common Carrier (NVOCC) or freight forwarder. Both numbers may be required for ISF filing, depending on the shipment’s structure.
ISF Filing Data Elements
As mentioned earlier, the ISF requires 10 data elements from the importer and 2 from the carrier. Each of these elements plays a crucial role in providing CBP with enough information to assess the risk level of the cargo and decide whether further inspection is necessary.
Understanding these data elements is key to ensuring accurate and timely ISF filing. Below, we delve into each of these elements, explaining their significance and what kind of information they should contain.
Importer Data Elements
The 10 importer data elements required for ISF are:
- Seller – the entity selling the goods to the importer.
- Buyer – the entity purchasing the goods, if different from the importer.
- Importer of Record number – the IRS number, EIN, SSN, or CBP assigned number of the importer.
- Consignee number – the IRS number, EIN, SSN, or CBP assigned number of the consignee.
- Manufacturer (or supplier) – the entity that last manufactures, assembles, produces, or grows the commodity.
- Ship to party – the entity to whom the goods are being shipped.
- Country of origin – the country where the goods were manufactured, produced, grown, or assembled.
- Commodity Harmonized System code – the HTSUS number (at least 6 digits) that identifies the imported goods.
- Container stuffing location – the physical location(s) where the goods were stuffed into the container.
- Consolidator – the party who stuffed the container or arranged for stuffing.
These elements provide a comprehensive picture of the transaction, from the parties involved to the details of the goods being imported. They allow CBP to trace the goods’ journey from origin to destination and identify any potential risks or irregularities.
Carrier Data Elements
The carrier is responsible for providing the following 2 data elements:
- Vessel stow plan – a detailed plan showing where each container is stowed on the vessel.
- Container status messages – reports on the movement and status of the container, from the time it’s empty until it’s loaded onto the vessel.
These elements give CBP visibility into the physical handling and movement of the cargo. They help CBP track the container’s whereabouts and ensure that it hasn’t been tampered with during transit.
ISF Filing Process
The ISF filing process involves several steps, from gathering the necessary data to submitting the ISF to CBP. It’s a time-sensitive process that requires careful attention to detail to avoid errors and penalties.
Here, we outline the typical steps in the ISF filing process and provide some insights into each one.
Data Collection
The first step in the ISF filing process is to collect all the necessary data. This involves coordinating with various parties, including the seller, buyer, manufacturer, ship to party, and consolidator. It’s crucial to ensure that all data is accurate and complete, as errors can lead to penalties and delays.
Some of the data, such as the BOL number and the vessel stow plan, may not be available until shortly before the cargo is loaded onto the vessel. Therefore, it’s important to stay in close communication with the carrier and other parties to obtain this information as soon as it’s available.
ISF Preparation and Submission
Once all the data has been collected, the ISF can be prepared for submission. This is typically done using an electronic system that communicates directly with CBP’s Automated Commercial Environment (ACE) system.
The ISF must be submitted at least 24 hours before the cargo is loaded onto the vessel at the foreign port. Once submitted, CBP will send a confirmation receipt, which should be kept as proof of filing.
ISF Amendment and Cancellation
If any of the ISF data changes after submission, an amendment must be filed with CBP. This can be done at any time before the cargo arrives at the first U.S. port. However, certain data elements, such as the BOL number and the ship to party, cannot be changed once the cargo has been loaded onto the vessel.
In some cases, the ISF may need to be cancelled. This can be done if the cargo is not loaded onto the vessel, the cargo is exported or destroyed, or the ISF was filed in error. Cancellation requests must be made in writing to CBP.
ISF Enforcement and Penalties
CBP takes ISF compliance very seriously and has the authority to enforce penalties for violations. These can range from monetary fines to increased inspections and cargo holds, which can cause significant delays and additional costs.
In this section, we discuss the types of penalties that can be imposed and how to avoid them.
ISF Penalties
CBP can impose a penalty of $5,000 per violation for late, inaccurate, or incomplete ISF filings. This can be broken down into a $2,000 penalty for late filing, a $2,000 penalty for inaccurate filing, and a $1,000 penalty for incomplete filing. In addition, CBP can hold the cargo at the port until the ISF is filed correctly and the penalty is paid.
It’s important to note that each shipment is considered a separate violation. Therefore, if multiple shipments are included in one ISF, each one could be subject to a separate penalty.
Avoiding Penalties
The best way to avoid ISF penalties is to ensure that the ISF is filed accurately and on time. This requires careful data collection, thorough review of the ISF before submission, and prompt amendment if any data changes.
Working with a licensed customs broker can also help avoid penalties. Customs brokers are experts in customs regulations and procedures, and they can handle the ISF filing process on your behalf. They can also provide valuable advice and guidance on compliance issues.
Conclusion
Understanding the terms and definitions associated with ISF filing is crucial for anyone involved in importing goods into the United States. By familiarizing yourself with these concepts, you can navigate the complexities of customs entry more effectively and ensure compliance with all relevant regulations.
Remember, ISF filing is a critical part of the import process, and failure to comply can result in significant penalties and delays. Therefore, it’s important to take the time to understand the requirements and procedures, and to seek professional help if needed.