On January 26, 2010, U.S. Customs and Border Protection (CBP) began full enforcement of Importer Security Filing (ISF), also known as 10+2. The new policy requires maritime importers and vessel operating ocean carriers to provide CBP with advance notification for all U.S.-bound ocean vessel cargo. CBP will conduct gradual enforcement of ISF during 2010, with the beginning of new quarter marking a new phase of enforcement.
During the first quarter of 2010, CBP will monitor the flow of ISF filings, including completeness and accuracy of the ISF filings, as well as noting which importers are not filing the 10+2. Importers that are not filing can expect their imports to be subject to deeper scrutiny, with CBP requesting document review, non-intrusive inspections or intensive examinations of the cargo. CBP will notify importers who are not filing and those that have errors in their filing and work with them to bring the imports into compliance.
During the second and third quarters of 2010, ISF enforcement will tighten. CBP intends to delay and hold for examinations those imports that have no associated ISF or those that have serious discrepancies in them. However, with the exception of fraud, smuggling, or terrorism in connection with the ocean imports or egregious violations of ISF requirements, CBP does not intend to penalize or assess liquidated damages for ISF violations during the first three quarters of 2010 or for imports that occurred prior to January 26, 2010.
CBP will begin issuing liquidated damages at the start of a fourth quarter on October 1, 2010. Ports of entry will initiate proposed assessments of liquidated damages, and will forward them on to CBP Headquarters for review. CBP Headquarters making final decisions on damages will ensure uniform enforcement across the country. CBP Headquarters are authorized to approve the proposed assessment or send it back to the originating port recommending that the matter be disposed of in a different way. Those liquidated damage assessments that are approved by CBP headquarters will be forwarded on to importers.
CBP plans to use this method of instituting penalties for at least a year, after which it will either be extended or the ports of entry will be authorized to issue final penalty decisions.
Importers must also note that, beginning 26, 2010, they are required to have a bond as security for the ISF filing.
The bond must be secured 24 hours prior to vessel departure and will terminate when goods enter the port of entry if there is no ISF violation. In case of violations, most penalties will be issued within a year, however, Customs has 6 years to assess a liquidated damages claim.
If an importer elects to secure a continuous bond, it will cover the ISF. Those ISF importers that do not have a continuous bond on file with CBP are required to secure a single entry bond (SEB) in the amount of $10,000, which is the maximum penalty that can be imposed for a late, incomplete, or inaccurate ISF. SEBs should be used by importers with single or infrequent shipments.
The SEB must be created before ISF is transmitted, because the filing requires that bond reference number be included. When the ISF transaction number is received, it must be entered on the SEB and e-mailed in a pdf file to CBP at ISF_Bond@cbp.dhs.gov.
With the exception of surety companies that have stricter rules for late filings or not filing at all, SEBs for timely submission of ISF are readily available. Surety companies require a cash deposit for the full amount of the bond for transactions deemed to be at risk because of late filing of the ISF transmission. Surety companies will hold cash deposits for six years and will refund them to the importer of record when the bond obligation terminates.
More detail on ISF and associated bond requirements can be found in ISF Program's Frequently Asked Questions (FAQs).