Importer Security Filing "10+2" Requirements
Meaning & Purpose
Welcome, to TradeMerit e-Newsletter this is the first of 5 educational series being offered on the most talked about topic this year, the Importer Security Filing (ISF) "10+2" rule. Over the next few weeks we will thoroughly explain ISF as it relates to the interpretation of U.S. Customs and Border Protection (CBP) requirements, mitigation guidelines, trade impact and best practices. If you have any questions, please feel free to send them to us and we will respond and include the question in the next e-Newsletter.
This series of e-newsletters will be followed by a Webinar where the critical issues raised by your questions will also be addressed by industry experts.
We hope you enjoy the article(s).
Events Leading Up to Importer Security Filing Requirements
It will probably come as a complete surprise to you, the importer security filing requirements were drafted and agreed to in close partnership with CBP by the Automated Commercial Environment (ACE) Trade Support Network (TSN), Trade Groups & Associations, and the Departmental Advisory Committee on Commercial Operations of Customs and Border Protection (COAC) etc. (collectively referred to as the Trade). It all began following the terrorist attacks on September 11, 2001. The Department of Homeland Security (DHS) was created and part of its mission being to create a multi-layered cargo screening strategy, which would enhance national security while protecting the economic vitality of the United States. In November, 2001 then CBP Commissioner Bonner showcased the CBP and Trade partnership, at its first trade symposium in Washington, DC. Behind the scenes CBP and members of the trade worked diligently on the voluntary Customs-Trade Partnership Against Terrorism (C-TPAT) which was rolled out in 2002.
The Trade Act of 2002 requested additional data elements is provided by the trade which CBP could then use for security and enhanced targeting purposes. The Trade Act also states that "the requirement to provide particular information shall be imposed on the party most likely to have direct knowledge of that information." CBP has defined this to be the "importer". What followed the Trade Act was the 24 Hour Rule, requiring advance electronic information on all cargo shipped to the U.S. before it arrives at the U.S. ports of entry. The Container Security Initiative (CSI) primary function was to push security back into the supply chain. In addition, section 343(a) of the Trade Act of 2002 states that the Secretary of Homeland Security "shall promulgate regulations providing for the transmission…of information pertaining to cargo destined for importation into the United States." All of the many security initiatives which followed September 11 allowed CBP to enhance the Automated Targeting System (ATS) a cargo risk assessment capability through the National Targeting Center.
New Security Legislation Drives Change
The trade community and CBP worked together on the Advance Trade Data Initiative (ATDI) in 2004. This was a voluntary program for companies to share their import data with CBP. The government wanted to know more about what was coming into the country before the goods actually arrived at the port of entry. In 2006, CBP Cargo Task Force discovered that entry data revealed much about shipments being low to high risk. In addition, they found that importers didn’t have complete supply chain visibility and so more steps would be necessary.
The passing of the Security and Accountability for Every Port Act (SAFE Port Act of 2006) "Section 203(b): Requirement. – The Secretary, acting through the Commissioner, shall require the electronic transmission to the Department of additional data elements for improved high-risk targeting, including appropriate elements of entry data. To be provided as advanced information with respect to cargo on vessels at foreign ports." This set the stage and placed in motion a consultative process between CBP and trade to address this section of the SAFE Port Act.
2007-08 brought about the ATDI "10+2" CBP testing of the processes with a few importers and vessel carriers. This was a necessary step as the companies did not generally gather most of the information previously and now were required to share the data with CBP. It was determined importer requirements for U.S. bound cargo are comprised of 10 data elements, transit cargo are 5 data elements and the carriers requirements are the vessel stow plans and container status messages (CSM).
For many months the trade community patiently waited for CBP to come out with the ISF rule. On November 28, 2008 the interim and final rules were published in the Federal Register (Vol.73, No.228)
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... CBP has concluded that the proposed regulations with the modifications discussed in the rule (Docket Number: USCBP 207-0077) should be adopted as follows: regarding the time of transmission for 2 of the 10 Importer Security Filing data elements and regarding the flexible requirements for 4 of the 10 data elements are adopted as an interim final rule. All other requirements in this rule are adopted as a final rule.
The rule became effective on January 26, 2009. CBP delayed the compliance period from the effective date to January 26, 2010 to allow industry to comply with the new requirements.
In summary, importer and carrier must transmit to CBP specific data via CBP approved electronic data interchange system (Automated Manifest System (AMS) or Automated Broker Interface (ABI) before the cargo is brought into the U.S. by vessel. These regulations meet all the requirements of section 203 of SAFE, section 343(a) Trade Act of 2002, as amended by the Maritime Transportation Security Act of 2002.
On July 14, 2009 CBP published in the Federal Register Vol.74 No 133 correcting amendments made to the Interim Final Rule published in the Federal Register on November 25, 2008.
In summary, shipments intended to move "in-bond" for immediate exportation (IE) or transportation and exportation (T&E) ISF-5 data elements timeframes were inadvertently not published on November 25, 2008. On July 14, 2009 the timeframes for IE or T&E in-bond moves were stated as "these data elements would be required no later than 24 hours before the cargo is laden aboard the vessel at the foreign port". In addition, an incorrect statement was made on November 25, 2008 with regards to when the carrier’s obligation to transmit CSMs ends. The July 14, 2009 Federal Register, corrected this error. CBP also corrected their response to a comment about when the ISF must be updated and withdrawal.
ISF Mitigation Guidelines were published in the Customs Bulletin on July 17, 2009 in the CBP Bulletin, July 17, 2009. These guidelines will be used in cases where importers or carriers fail to provide ISF information required under the SAFE Port Act. Next week e-Newsletter series 2 will address the "mitigation guidelines" in their entirety.
There is no doubt that CBP has implemented a comprehensive strategy designed to enhance national security while protecting the economic vitality of the United States. The information now available to CBP via the 24 Hour Rule and Trade Act of 2002, CSI, 10+2, etc can be analyzed through the Automated Targeting System and National Targeting Center – Cargo which can generate CBP's cargo risk assessment prior to vessel loading.
"10+2" Data Requirements and Filing Timeline
Table below identifies the specified ISF data elements, timeframes, data related to flexible enforcement and the time that the data is available to the Importer. In actuality the ISF consists of eleven (11) data elements required to be transmitted electronically to CBP by the importer or its designated agent. There are eight (8) data elements and the Bill of Lading number required 24 hours before loading cargo onto a U.S. bound vessel. In addition, importers are also required to provide two (2) more data elements 24 hours before the vessels arrival at a U.S. port. The ocean carriers are to provide two (2) additional data sets the vessel stow plan and the container status messages (CSM) which complete the security filing requirements known as "ISF 10+2".
In preparing yourselves for ISF it’s recommended that you begin asking questions of your foreign suppliers. The following questions are just a few to get you started:
Have you identified all entities in your supply chain? Have you communicated with these entities the new ISF data requirements and how it will be collected? Is it known what’s being shipped before it is loaded on the vessel for U.S. departure? Have you looked at the different external security filing vendors offering ISF services? Have you perform a cost analysis of the process?
Next Week's e-Newsletter available September 14, 2009
TM e-Newsletter will be devoted next week entirely on the ISF Mitigation Guideline facts and what it all means to you for non-compliance.
Some questions you may be asking yourself?
What are the liabilities and penalties for the following:
Importers failing to provide the required advance electronic information? Failure to provide accurate ISF data? Failure to file ISF timely? |
