The U.S. Customs and Border Protection (CBP) is a federal law enforcement agency of the U.S. Department of Homeland Security. It is charged with regulating and facilitating international trade, collecting import duties, and enforcing U.S. regulations, including trade, customs, and immigration. One of the key aspects of CBP’s work is the Importer Security Filing (ISF), also known as “10+2”, which is a requirement for vessel carriers bringing goods into the United States. This article will delve into the key terms and definitions related to ISF filing.
Understanding these terms and definitions is crucial for any business or individual involved in importing goods into the U.S. It helps ensure compliance with CBP regulations and can prevent costly fines, penalties, or delays in shipment. This glossary will provide a comprehensive overview of these terms, explaining each in detail to provide a clear understanding of ISF filing requirements.
ISF Filing: An Overview
The Importer Security Filing (ISF) is a requirement by the U.S. CBP for all ocean vessel carriers importing goods into the United States. This filing must be submitted at least 24 hours before the cargo is laden aboard a vessel destined to the U.S. The ISF is designed to help the CBP assess the risk of imported goods and prevent the transportation of high-risk shipments.
The ISF includes information about the importer, the goods being imported, and the parties involved in the transaction. Failure to comply with ISF requirements can result in significant penalties, including monetary fines, increased inspections, and delays in shipment.
ISF Importer
The ISF Importer is the party responsible for ensuring that the ISF is filed correctly and on time. This is typically the goods’ owner, purchaser, consignee, or agent such as a licensed customs broker. The ISF Importer is also responsible for paying any penalties for non-compliance with ISF requirements.
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 responsible for ensuring that goods are imported in accordance with the law, paying the assessed import duties, and taking responsibility if the goods are not legally entered.
Bill of Lading
The Bill of Lading (BOL) is a document issued by a carrier to a shipper, acknowledging that specified goods have been received on board as cargo for conveyance to a named place for delivery. In the context of ISF, the BOL number is one of the key pieces of information that must be included in the filing.
The BOL serves several purposes. It is a receipt for the goods shipped, evidence of the contract of carriage, and a document of title to the goods. It provides all the details needed to process the shipment through customs and deliver it to the final recipient.
Key ISF Data Elements
The ISF consists of 10 data elements that the ISF Importer must provide to the CBP. These elements provide detailed information about the shipment and allow the CBP to assess the risk level of the goods being imported. Understanding these data elements is crucial for ensuring compliance with ISF requirements.
Each data element must be accurate and complete. Providing incorrect or incomplete information can result in penalties and delays in shipment. The following sections will explain each data element in detail.
Seller
The seller is the last known entity by whom the goods have been sold or agreed to be sold. If the goods are to be imported otherwise than in pursuance of a purchase, the seller is the owner of the goods. The seller’s full name and address must be provided in the ISF.
It’s important to note that the seller and the manufacturer may not be the same entity. The seller is the entity that sold the goods to the ISF Importer, while the manufacturer is the entity that produced the goods.
Buyer
The buyer is the last known entity to whom the goods have been sold or agreed to be sold. If the goods are to be imported otherwise than in pursuance of a purchase, the buyer is the owner of the goods. The buyer’s full name and address must be provided in the ISF.
Like the seller, the buyer and the consignee may not be the same entity. The buyer is the entity that purchased the goods from the seller, while the consignee is the entity to whom the goods are being shipped.
Importer of Record Number
The Importer of Record (IOR) number is the identification number of the entity responsible for ensuring that the goods are legally entered into the U.S. This could be the importer’s Internal Revenue Service (IRS) number, Social Security number, or CBP assigned number. The IOR number must be provided in the ISF.
The IOR is responsible for paying the assessed import duties and taking responsibility if the goods are not legally entered. Therefore, the IOR number is a crucial piece of information for the CBP to track and manage imports.
Consignee Number
The consignee number is the identification number of the individual or firm to whom the goods are consigned. This could be the consignee’s IRS number, Social Security number, or CBP assigned number. The consignee number must be provided in the ISF.
The consignee is the entity to whom the goods are being shipped. The consignee number allows the CBP to track the shipment and ensure that the goods are delivered to the correct recipient.
Manufacturer (or Supplier)
The manufacturer or supplier is the last known entity by whom the goods have been produced or supplied, at the time of shipment. The manufacturer’s or supplier’s full name and address must be provided in the ISF.
As mentioned earlier, the manufacturer and the seller may not be the same entity. The manufacturer is the entity that produced the goods, while the seller is the entity that sold the goods to the ISF Importer.
Ship to Party
The ship to party is the first deliver-to party scheduled to physically receive the goods after the goods have been released from customs custody. The ship to party’s full name and address must be provided in the ISF.
The ship to party could be the buyer, the consignee, or another entity. The ship to party’s information allows the CBP to track the shipment and ensure that the goods are delivered to the correct recipient.
Country of Origin
The country of origin is the country where the goods were produced, manufactured, or grown. The country of origin must be provided in the ISF.
The country of origin is important for determining duty rates and eligibility for special programs. It also allows the CBP to enforce trade agreements, trade restrictions, and import quotas.
Commodity Harmonized System Code
The Commodity Harmonized System (HS) Code is a standardized numerical method of classifying traded products. It is used by customs authorities around the world to identify products for the purpose of levying duties and taxes. The HS code of the commodity being imported must be provided in the ISF.
The HS code provides a detailed description of the goods, including their composition, function, and use. It allows the CBP to accurately assess duties and taxes, enforce trade regulations, and collect trade statistics.
ISF Filing Process
The ISF filing process involves several steps, from gathering the necessary information to submitting the ISF to the CBP. Understanding this process is crucial for ensuring compliance with ISF requirements and avoiding penalties.
The following sections will explain each step of the ISF filing process in detail, providing a comprehensive guide to successfully filing an ISF.
Gathering Information
The first step in the ISF filing process is gathering the necessary information. This includes all the data elements required for the ISF, such as the seller, buyer, IOR number, consignee number, manufacturer or supplier, ship to party, country of origin, and HS code. This information must be accurate and complete to ensure compliance with ISF requirements.
Gathering this information may involve contacting various parties involved in the transaction, such as the seller, buyer, manufacturer, and carrier. It’s important to start this process well in advance of the shipment date to ensure that all the necessary information is obtained in time for the ISF filing.
Preparing the ISF
Once all the necessary information has been gathered, the next step is preparing the ISF. This involves entering the information into the ISF form in the correct format and order. The ISF form must be filled out accurately and completely to ensure compliance with ISF requirements.
Preparing the ISF can be a complex task, especially for first-time importers or those dealing with a large volume of shipments. Many importers choose to hire a licensed customs broker to handle this task. A customs broker is a professional who is knowledgeable about CBP regulations and can ensure that the ISF is prepared correctly.
Submitting the ISF
The final step in the ISF filing process is submitting the ISF to the CBP. This must be done at least 24 hours before the cargo is laden aboard a vessel destined to the U.S. The ISF can be submitted electronically through the Automated Broker Interface (ABI) or the Automated Manifest System (AMS).
Once the ISF has been submitted, the CBP will review it for completeness and accuracy. If the ISF is accepted, the CBP will issue a confirmation receipt. If the ISF is rejected, the CBP will provide a reason for the rejection, and the ISF Importer will need to correct the error and resubmit the ISF.
Penalties for Non-Compliance
Failure to comply with ISF requirements can result in significant penalties. The CBP can assess penalties of up to $5,000 per violation for late, inaccurate, or incomplete ISF filings. In addition, non-compliant shipments may be subject to increased inspections, resulting in delays in shipment and additional costs.
The following sections will explain the different types of penalties and how to avoid them.
Monetary Penalties
The CBP can assess monetary penalties for non-compliance with ISF requirements. The penalty for a late ISF is $5,000, for an inaccurate ISF is $5,000, and for a failure to file an ISF is $5,000. These penalties can add up quickly, especially for importers dealing with a large volume of shipments.
To avoid monetary penalties, it’s crucial to ensure that the ISF is filed on time, accurately, and completely. This involves gathering the necessary information well in advance of the shipment date, preparing the ISF carefully, and submitting it to the CBP at least 24 hours before the cargo is laden aboard a vessel destined to the U.S.
Increased Inspections
Non-compliant shipments may be subject to increased inspections by the CBP. These inspections can result in delays in shipment, as the goods cannot be released from customs custody until the inspection is complete. In addition, the importer may be responsible for the cost of the inspection, adding to the cost of the shipment.
To avoid increased inspections, it’s important to ensure that the ISF is filed correctly and on time. This allows the CBP to assess the risk level of the goods and process the shipment through customs more quickly and efficiently.
Delays in Shipment
Non-compliant shipments may also be subject to delays in shipment. These delays can be costly, as they can disrupt the importer’s supply chain and result in lost sales or customer dissatisfaction. In addition, the importer may be responsible for any storage fees incurred as a result of the delay.
To avoid delays in shipment, it’s crucial to ensure that the ISF is filed correctly and on time. This allows the CBP to process the shipment through customs more quickly and efficiently, reducing the likelihood of delays.
Conclusion
Understanding the terms and definitions related to ISF filing is crucial for any business or individual involved in importing goods into the U.S. It helps ensure compliance with CBP regulations and can prevent costly fines, penalties, or delays in shipment. This glossary has provided a comprehensive overview of these terms, explaining each in detail to provide a clear understanding of ISF filing requirements.
By following the guidelines outlined in this glossary, importers can successfully navigate the ISF filing process and ensure that their goods are imported into the U.S. in a timely and efficient manner. Whether you’re a first-time importer or an experienced professional, this glossary can serve as a valuable resource for understanding and complying with ISF requirements.