James J. Boyle & Co.

Industry News

Importer Security Filing and Additional Carrier Requirements

Date: April 21, 2008

On January 2, 2008, U.S. Customs and Border Protection (CBP) published a Notice of Proposed Rulemaking in the Federal Register that proposed to require importers and carriers to submit additional information pertaining to cargo shipped by vessel before it is brought to the United States. The objective of the proposed regulations is to improve the ability of CBP to identify high-risk shipments in order to prevent the smuggling of terrorist weapons and ensure cargo safety and security. The proposed regulations are specifically intended to fulfill the requirements of section 203 of the Security and Accountability for Every (SAFE) Port Act of 2006 and section 343(a) of the Trade Act of 2002, as amended by the Maritime Transportation Security Act of 2002.

Under the proposed regulations, commonly referred to as "10+2", importers (or their agents) would be required to submit an "Importer Security Filing" consisting of 10 data elements and vessel carriers would be required to submit 2 sets of data elements. The following is a summary of the data elements and requirements under the proposed rule:

Importer Security Filing (ISF)

The 10 data elements that would be required to be transmitted by importers (or their agents) for cargo other than foreign cargo remaining on board (FROB), immediate exportation (IE) shipments and transportation and exportation (T&E) shipments consist of the following:

Manufacturer (or supplier) name and address. Name and address of the entity that last manufactures, assembles, produces, or grows the commodity or name and address of the supplier of the finished goods in the country from which the goods are leaving. In the alternative, the name and address of the manufacturer (or supplier) that is currently required by the import laws, rules and regulations of the United States (i.e., entry procedures) may be provided (this is the information that is used to created the existing manufacturer identification (MID) number for entry purposes).
Seller name and address. Name and address of the last known entity by whom the goods are sold or agreed to be sold. If the goods are to be imported otherwise than in pursuance of a purchase, the name and address of the owner of the goods must be provided.
Buyer name and address. Name and address of the last known entity to whom the goods are sold or agreed to be sold. If the goods are to be imported otherwise than in pursuance of a purchase, the name and address of the owner of the goods must be provided.
Ship to name and address. Name and address of the first deliver-to party scheduled to physically receive the goods after the goods have been released from Customs' custody.
Container stuffing location. Name and address(es) of the physical location(s) where the goods were stuffed into the container. For break-bulk shipments, the name and address(es) of the physical locations(s) where the goods were made "ship ready" must be provided.
Consolidator (stuffer) name and address. Name and address of the party who stuffed the container or arranged for the stuffing of the container. For break bulk shipments, the name and address of the party who made the goods "ship ready" or the party who arranged for the goods to be made "ship ready" must be provided.
Importer of record number/FTZ applicant identification number. The importer of record number is the Internal Revenue Service (IRS) number, Employer Identification Number (EIN), Social Security Number (SSN), or CBP assigned number of the entity liable for payment of all duties and responsible for meeting all statutory and regulatory requirements incurred as a result of importation. This is the same importer number as reported on CBP Form 3461. For goods intended to be delivered to an FTZ, the IRS number, EIN, SSN, or CBP assigned number of the party filing the FTZ documentation with CBP must be provided.
Consignee number(s). IRS number, EIN, SSN, or CBP assigned number of the individual(s) or firm(s) in the United States on whose account the merchandise is shipped. This element is the same as the "consignee number" on the CBP Form 3461.
Country of origin. Country of manufacture, production, or growth of the article, based upon the import laws, rules and regulations of the United States. This element is the same as the "country of origin" on CBP form 3461.
Commodity Harmonized Tariff Schedule (HTS) number at 6 digit level. Duty/statistical reporting number under which the article is classified in the Harmonized Tariff Schedule of the U.S. The HTS number is required to be provided to the 6 digit level. The HTS number may be provided up to the 10 digit level. This element is the same as the "H.S. number" on CBP Form 3461 and can only be used for entry purposes if it is provided at the 10 digit level or greater.

For shipments consisting entirely of FROB, IE or T&E merchandise, the ISF would consist of five data elements needed to enhance the security of the maritime environment. The data elements are as follows:

Booking party name and address. Name and address of the party who is paying for the transportation of the goods.
Foreign port of unlading. Port code for the foreign port of unlading at the intended final destination.
Place of delivery. City code for the place of delivery.
Ship to name and address. Name and address of the first deliver-to party scheduled to physically receive the goods after the goods have been released from Customs custody.
Commodity HTSUS number. Duty/statistical reporting number under which the article is classified in the HTSUS. The HTSUS number must be provided to the 6 digit level.

Additional proposed Importer Security Filing requirements:

The manufacturer (or supplier) name and address, country of origin, and commodity HTSUS number must be linked to one another at the line item level.
The ISF is required to be filed at the lowest bill of lading level (i.e., at the house bill of lading level, if applicable).
One ISF may be filed for multiple bills of lading; however, the manufacturer (or supplier) name and address, country of origin, and commodity HTSUS number must be linked to one another at the line item level.
The importer would be allowed to designate an authorized agent to submit the ISF on its behalf; however, the importer is ultimately responsible for the timely, accurate, and complete submission of the ISF. The authorized agent may be a licensed Customs broker or a foreign freight forwarder.
One party must aggregate and submit all required ISF data elements to Customs.
The importer may elect to submit four ISF data elements (the IRS number, consignee number, country of origin, and commodity HTSUS number at the 10 digit level) as part of the entry/entry summary filing and the ISF filing on the same electronic transmission. In this case the importer must self-file or have the data filed by a licensed Customs broker.
If there are changes to the information or more accurate information becomes available after the ISF has been filed and before the goods arrive within the limits of a U.S. port, the party who filed the ISF is required to update the ISF filing.

Time Frame for Submitting the Importer Security Filing

For cargo other than foreign cargo remaining on board (FROB), CBP is proposing to require importers (or their agents) to transmit an ISF to CBP no later than 24 hours before cargo is laden on board a vessel destined to the U.S.

For FROB, the ISF would not be required 24 hours prior to lading as FROB is frequently laden on board a vessel on a last-minute decision by the carrier. Instead, the ISF for FROB would be required any time prior to lading.

Bulk and Break Bulk Cargo

Under the proposed regulations, importers of bulk cargo are exempt from ISF and additional carrier requirements when the goods are exempt from the requirement that the carrier file the cargo declaration 24 hours prior to loading (24 hour rule).

For break bulk cargo, an ISF is required and must be filed 24 hours prior to arrival in the U.S.

Additional Carrier Requirements

CBP is proposing to require carriers to submit 2 sets of data elements as follows:

Vessel stow plan. The vessel stow plan will be used to transmit information about the physical location of cargo loaded aboard the vessel as well as standard information about the vessel and each container or unit of break bulk cargo on the vessel. This information enhances the security of the maritime environment.
Container Status Messages. Container status messages report terminal container movements (e.g., loading and discharging the vessel) and changes in the status of containers (e.g., empty or full)

Time Frame for Submitting the Additional Carrier Requirements

The vessel stow plan must be submitted to CBP no later than 48 hours following departure of the vessel from the last foreign port. For voyages less than 48 hours, the vessel stow plan must be submitted prior to the vessel's arrival at the first port in the United States.

CBP-Approved Electronic Interchange System for Transmission of Importer Security Filing and Additional Carrier Data Elements

Currently the approved electronic interchange systems for transmission of the ISF data elements to CBP are the Automated Broker Interface (ABI) and the Vessel Automated Manifest System (AMS). CBP will publish a notice in the Federal Register should an alternative or additional electronic interchange system be approved in the future.

Liquidated Damages for Failure to Comply with Importer Security Filing and Additional Carrier Requirements

CBP is proposing to amend the basic importation and entry bond conditions to allow for the assessment of liquidated damages equal to the value of the imported merchandise involved if the importer fails to meet the ISF requirements.

The proposed regulations would amend the international carrier bond conditions to allow for liquidated damages of $50,000 for each vessel arrival if the carrier fails to comply with the vessel stow plan requirements. If the carrier fails to comply with the proposed container status message requirements, liquidated damages will be $5,000 for each violation with a maximum of $100,000 per vessel arrival.

Effective Date of the Importer Security Filing and Additional Carrier Requirements; Phase-in Enforcement Process

The public comment period for the proposed rule ended on March 18, 2008. CBP is currently reviewing the comments received and is expected to publish the final rule sometime in summer of 2008. The Importer Security Filing and Additional Carrier Requirements will go into effect on the date of publication of the final rule in the Federal Register.

CBP plans to adopt a phase-in enforcement process similar to the process utilized when the 24-Hour Rule and Trade Act regulations were implemented. Following the effective date of the rule, CBP stated it may take an "informed compliance" approach whereby they will work with the trade throughout the phase-in enforcement process to ensure informed compliance. The phase-in period is expected to be one year from the effective date of the regulations.

James J. Boyle & Co. to Provide Importer Security Filing Services

James J. Boyle & Co. will have the necessary programming in place to provide complete importer security filing services to our clients for a nominal fee. We are prepared to pro-actively work with our clients to coordinate and ensure a smooth implementation process.

Federal Register Notice

The Federal Register notice containing additional information and details concerning the proposed regulations may be obtained at the following link:

http://edocket.access.gpo.gov/2008/pdf/E7-25306.pdf

Should you have any questions or concerns regarding the proposed Importer Security Filing and Additional Carrier Requirements, please contact your James J. Boyle & Co. account representative.

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