The final rule on the 10 + 2 Importer Security Filing was published in today’s Federal Register notice. It has an effective date of January 26, 2009.
As expected, CBP is providing a one year "informed compliance" period to the trade community and in addition, is seeking public comment on certain aspects of the ISF filing in order to obtain feedback on operational aspects of the rule.
CBP received over 200 comments in response to the preliminary rule and despite requests from various trade organizations and Congress, did not opt to allow a prototype test period.
However, the rule establishes a one year "structured review and enforcement period" which should allow the trade sufficient time to adjust to the new requirements. The rule also states that CBP "will show restraint in enforcing the rule, taking into account difficulties importers may face in complying with the rule, so long as importers are making satisfactory progress towards compliance and making a good faith effort to comply with the rule to the extent of their current ability."
The rule also provides flexibility in regards to certain elements of the ISF.
Two elements, the Container stuffing location and Consolidator’s name and address will be subject to flexibility as to timing. Thus, in instances in which the ISF filer does not have this information 24 hours prior to lading of the container, CBP will allow this information to be provided at a later date, but no later than 24 hours prior to arrival in a U.S. port.
Four elements will be subject to flexibility as to "interpretation". These elements are the Manufacturer (or supplier), Ship to Party, Country of Origin, and Commodity HTSUS number. These elements must still be filed 24 hours prior to lading. However, the rule states that CBP will allow the ISF filer to provide in their initial filing, a "range of acceptable responses based on facts available at the time, in lieu of a single response (which may become known to the importer at a later time)." ISF importers will be required to update their responses once the more precise information becomes available, in no event later than 24 hours prior to arrival at a U.S. port.
Generally, this would be used in instances in which the ISF importer is uncertain of the manufacturer’s identification, or where the goods may be sold in transit (ship to party), or if there is a question on the correct country of origin or HTSUS of a specific item at the time the ISF filing is required.
CBP is seeking comment on the "structured review and flexibility period" as it relates to the 6 elements listed above. They will only accept comments on these elements so that they can determine how significant this information is in relation to the purposes of the 10 + 2 rule and how much of a burden this is on trade community.
Regarding the actual 10 + 2 filing itself, the rule states that the "2" elements, i.e., the vessel stow plan and container status messages must be filed by the actual vessel operator. The vessel stow plan must be filed no later than 48 hours after the vessel has departed from the last foreign port. The container status messages must be filed daily with CBP for "certain events" that may occur during transit. These events are listed in the final rule.
As for the remaining 10 elements, these must be filed by either the importer of the goods or a duly appointed agent of the importer. The 10 elements must be filed through either the CBP ABI or AMS system. Thus if an importer plans to submit the ISF directly, they must be able to transmit through one of these two CBP electronic interchanges. All data must be reported at the lowest bill of lading level.
In most instances, it would be likely easier for an importer to appoint its customs broker as an agent for ISF transmission.
The final rule also allows the ISF filing to also be used for entry/entry summary purposes as there are certain elements which are repetitive of those elements reported in the CF 3461 and 7501.
The final rule has also decreased the proposed liquidated damages amount for failure to comply with the ISF filing from the value of the merchandise to $5,000 for the ISF filing. However, vessel operators who fail to file will face possible liquidated damages in the amount of $50,000.
CBP does state in the rule that they will be reviewing all elements transmitted and they will also be selecting certain importers for "review" to determine whether submission of all 10 data elements 24 hours prior to lading was feasible. The review will cover both small and large enterprises.
CBP plans to hold a number of outreach sessions to work with the trade community within the next few months to ensure that there is complete understanding of the program.
The 10 + 2 elements that must be reported are as follows:
- Manufacturer(or supplier) name and address
- Seller name and address
- Buyer name and address
- Ship to name and address
- Container stuffing location
- Container (stuffer) name and address
- Importer of Number/FTZ Applicant ID number
- Consignee Number
- Country of Origin
- Commodity HTS number (six digit level)
- Vessel stow plan
- Container status messages
Finally, the rule does allow for some exceptions for bulk cargo, FROB cargo, goods moving under either and Immediate Exportation or Transportation and Exportation bond.
The rule itself can be accessed at http://edocket.access.gpo.gov/2008/E8-27048.htm.