Industry News

Importer Security Filing and Additional Carrier Requirements: Interim Final Rule

Date: Dec 3, 2008

On November 25, 2008 U.S. Customs and Border Protection ("CBP") published an interim final rule in the Federal Register that requires importers and carriers to submit additional information pertaining to cargo shipped by vessel before the cargo is brought to the United States. The objective of the new regulations is to improve the ability of CBP to identify high-risk shipments and improve its risk assessment capabilities in order to prevent smuggling and ensure cargo safety and security. The interim final rule specifically fulfills 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.

The effective date of the interim final rule is January 26, 2009. However, given the anticipated changes in business practices and processes that may be required by the trade to comply with the new regulations and to allow sufficient time for the trade to adjust, CBP will show restraint in enforcing the rule, provided importers and vessel carriers are making satisfactory progress toward compliance and are making a good faith effort to comply. This policy will apply to all aspects of the rule and will remain in effect for twelve months after the effective date (i.e. until January 26, 2010).

During the twelve month delayed enforcement period, CBP will work with the trade to assist in implementing the requirements of the rule. CBP intends to conduct outreach programs, provide regional seminars, issue FAQs and postings on the CBP website, make guidance documents available, etc. CBP has stated that it will consider the amount of progress an entity has made in implementing the ISF requirements during the delayed enforcement period as a mitigating factor in any enforcement action following the delayed enforcement period.

Under the new regulations, commonly referred to as "10+2", importers or their appointed agents are required to submit an Importer Security Filing ("ISF") consisting of 10 data elements, while vessel carriers are required to submit 2 data elements. The following is a summary of the data elements and new requirements under the interim final rule.

Importer Security Filing

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

1. Seller. 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. A widely recognized commercially accepted identification number may be provided in lieu of the name and address (for example Dun and Bradstreet Data Universal Numbering System (DUNS) number).
2. Buyer. 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. A widely recognized commercially accepted identification number may be provided in lieu of the name and address (for example Dun and Bradstreet Data Universal Numbering System (DUNS) number).
3. Importer of record number/Foreign trade zone applicant identification number. 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. For goods intended to be delivered to a foreign trade zone (FTZ), the IRS number, EIN, SSN, or CBP assigned number of the party filing the FTZ documentation with CBP must be provided.
4. Consignee number(s). Internal Revenue Service (IRS) number, Employer Identification Number (EIN), Social Security Number (SSN), or CBP assigned number of the individual(s) or firm(s) in the United States on whose account the merchandise is shipped.
5. Manufacturer (or supplier). Name and address of the entity that last manufactures, assembles, produces, or grows the commodity or name and address of the party supplying 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 U.S. (i.e. entry procedures) may be provided (this is the information that is used to create the existing manufacturer identification (MID) number for entry purposes). A widely recognized commercially accepted identification number may be provided in lieu of the name and address (for example Dun and Bradstreet Data Universal Numbering System (DUNS) number).
6. Ship to party. Name and address of the first deliver-to party scheduled to physically receive the goods after the goods have been released from Customs custody. A widely recognized commercially accepted identification number may be provided in lieu of the name and address (for example Dun and Bradstreet Data Universal Numbering System (DUNS) number).
7. Country of origin. Country of manufacture, production, or growth of the article, based upon the import laws, rules and regulations of the U.S.
8. Commodity HTSUS number. Duty/statistical reporting number under which the article is classified in the Harmonized Tariff Schedule of the United States (HTSUS). The HTSUS number must be provided to the six-digit level. The HTSUS number may be provided up to the 10-digit level. This element can only be used for entry purposes if it is provided at the 10-digit level or greater by the importer of record or its licensed Customs broker.
9. Container stuffing location. Name and address(es) of the physical location(s) where the goods were stuffed into the container. For break bulk shipments (cargo that is not containerized, but which is otherwise packaged or bundled), the name and address(es) of the physical location(s) where the goods were made "ship ready" must be provided. "Ship ready" means when cargo is palletized, lashed, wrapped, or otherwise prepared to be laden on a vessel. A widely recognized commercially accepted identification number may be provided in lieu of the name and address (for example Dun and Bradstreet Data Universal Numbering System (DUNS) number).
10. Consolidator (stuffer). Name and address of the party who stuffed the container or arranged for the stuffing of the container. For break bulk shipments (cargo that is not containerized, but which is otherwise packaged or bundled), 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. "Ship ready" means when cargo is palletized, lashed, wrapped, or otherwise prepared to be laden on a vessel. A widely recognized commercially accepted identification number may be provided in lieu of the name and address (for example Dun and Bradstreet Data Universal Numbering System (DUNS) number).

The ISF data elements listed above must be provided for each good listed at the six-digit HTSUS number at the lowest bill of lading level (i.e. at the house bill of lading level, if applicable). 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.

For shipments consisting entirely of FROB, IE, or T&E cargo, the ISF consists of the following five data elements:

1. Booking party name and address. Name and address of the party who initiates the reservation of the cargo space for the shipment. A widely recognized commercially accepted identification number may be provided in lieu of the name and address (for example Dun and Bradstreet Data Universal Numbering System (DUNS) number).
2. Foreign port of unlading. Port code for the foreign port of unlading at the intended final destination.
3. Place of delivery. City code for the place of delivery.
4. Ship to party. Name and address of the first deliver-to party scheduled to physically receive the goods after the goods have been released from Customs custody. A widely recognized commercially accepted identification number may be provided in lieu of the name and address (for example Dun and Bradstreet Data Universal Numbering System (DUNS) number).
5. Commodity HTSUS number. Duty/statistical reporting number under which the article is classified in the Harmonized Tariff Schedule of the United States (HTSUS). The HTSUS number must be provided to the six-digit level. The HTSUS number may be provided up to the 10-digit level.

The ISF data elements listed above must be provided for each good listed at the six-digit HTSUS number at the lowest bill of lading level (i.e. at the house bill of lading level, if applicable).

Additional key requirements under the interim final rule:

• The party who filed the ISF is required to update the ISF filing if there are any changes to the information initially filed or more accurate information becomes available. ISF updates must be accomplished before the cargo arrives within the limits of a port in the United States.
  
• If an ISF is filed and the cargo is no longer intended to be shipped to the United States, the party who filed the ISF must withdraw the ISF and transmit to CBP the reason for the withdrawal.
  
• Unified entry filing option: The ISF importer may elect to submit four ISF data elements (importer of record number, consignee number, country of origin and commodity HTSUS number when provided at the 10-digit level) once for both the ISF and entry/entry summary filing purposes. In this case, the ISF and the entry/entry summary must be self-filed by the importer or filed by a licensed Customs broker in a single electronic transmission to CBP no later than 24 hours prior to lading.
  
• One party must aggregate and submit all required data elements for each individual ISF.
  
• One ISF may be filed for multiple bills of lading; however, the manufacturer (or supplier), country of origin, and commodity HTSUS number data elements must be linked to one another at the line item level.
  
• Response messages containing a unique identification number will be sent to the ISF filer by CBP to acknowledge that the ISF has been received and accepted or rejected.
  
• ISF bond requirements: The ISF importer must possess a basic importation and entry bond under 19 CFR 113.62, a basic custodial bond under 19 CFR 113.63, an international carrier bond under 19 CFR 113.64, a foreign trade zone operator bond under 19 CFR 113.73, or an importer security filing bond under 19 CFR 113 Appendix D. The ISF may be filed under the ISF importer's bond or under the ISF importer's designated agent's bond provided the agent agrees to do so in writing. Customs has stated that
  
• POA requirements: Agents authorized to file the ISF on behalf of ISF importers must retain powers of attorney in English until revoked. The regulations further require that revoked powers of attorney and letters of revocation be retained for a period of five years from the date of revocation. Powers of attorney and letters of revocation must be made available to Customs upon request.
  
• CBP is seeking public comments on six ISF data elements which are subject to flexibility under the interim final rule: Container stuffing location, Consolidator (stuffer), Manufacturer (or supplier), Ship to party, Country of origin, and Commodity HTSUS number. Public comments are due by June 1, 2009.
  
• For in-bond shipments (IE or T&E), permission to divert the in-bond movement to a port other than the listed port of destination or export or to change the in-bond entry to a consumption entry must be obtained from the port director of the port of origin. A complete ISF must be received by CBP before such permission is granted.

Party Required to File ISF

The party required to file the ISF is the "Importer Security Filing Importer". ISF importer is defined as the party causing goods to arrive within the limits of a port in the United States by vessel. For shipments other than FROB, IE, T&E or FTZ, the cargo's owner, purchaser, consignee, or agent such as a licensed Customs broker is considered the ISF importer. For FROB cargo, the carrier is considered the ISF importer. For IE and T&E in-bond shipments, and goods destined for a FTZ, the party filing the IE, T&E or FTZ documentation is considered the ISF importer.

The ISF importer may designate an agent to file the ISF on its behalf if the agent obtains access to ABI (Automated Broker Interface) or AMS (Automated Manifest System); however, CBP will ultimately hold the ISF importer responsible for the timely, accurate, and complete filing of the ISF.

Time Frame for Submitting the ISF

The time frame for submitting the ISF is as follows:

1. Seller, buyer, importer of record/foreign trade zone applicant identification number, and consignee number(s) data elements: No later than 24 hours before the cargo is laden aboard the vessel at the foreign port.
2. Manufacturer (or supplier), ship to party, country of origin, and commodity HTSUS number data elements: No later than 24 hours before the cargo is laden aboard the vessel at the foreign port.The new regulations allow for flexibility in the filing of these four ISF data elements. If these elements are not known or cannot be verified 24 hours before the cargo is laden aboard the vessel at the foreign port, CBP will allow the ISF importer to file an initial ISF containing a range of acceptable responses based on the best available facts and information at the time. The ISF importer is required to update the initial ISF filing as soon as accurate information is available, but no later than 24 hours prior to arrival of the cargo at a U.S. port.
3. Container stuffing location and consolidator (stuffer) data elements: As early as possible, but no later than 24 hours prior to arrival of the cargo at a U.S. port.
4. For FROB shipments, the ISF must be filed prior to lading of the cargo aboard the vessel at the foreign port.

Bulk and Break Bulk Cargo

Bulk cargo is defined as homogeneous cargo that is stowed loose in the hold and is not enclosed in any container such as a box, bale, bag, cask, or the like. Bulk cargo is composed of either 1.) Free flowing articles such as oil, grain, coal, ore, and the like which can be pumped or run through a chute or handled by dumping; or 2.) Articles that require mechanical handling such as bricks, pig iron, lumber, steel beams, and the like.

ISF importers of bulk cargo are exempt from filing an ISF if such cargo is exempt from the requirement in 19 CFR 4.7 (b)(2) that the carrier file a cargo declaration 24 hours prior to loading at the foreign port (24 hour rule).

Break bulk cargo is defined as cargo that is not containerized, but which is otherwise packaged or bundled.

For break bulk cargo that is exempt from the requirement in 19 CFR 4.7 (b)(2) that the carrier file a cargo declaration 24 hours prior to loading at the foreign port (24 hour rule), ISF importers are exempt from filing an ISF with CBP 24 hours prior to loading of the cargo aboard the vessel at the foreign port. Instead ISF importers of qualifying break bulk cargo meeting this condition are required to file an ISF with CBP 24 hours prior to the arrival of the cargo in the United States. For break bulk cargo that is containerized or non-qualifying, ISF importers are required to file an ISF 24 hours prior to loading aboard the vessel at the foreign port.

Additional Carrier Requirements

The interim final rule requires vessel carriers to submit two sets of data elements which are in addition to existing advance cargo information required under the "24 Hour Rule". For vessels destined to the United States, carriers are required to submit a vessel stow plan and container status messages. This requirement does not apply to carriers for vessels exclusively carrying bulk and break bulk cargo.

1. Vessel Stow Plan. The vessel stow plan consists of standard information pertaining to the vessel and each container loaded on the vessel.

a. Information pertaining to the vessel:

• Vessel name including international maritime organization (IMO) number
• Vessel operator
• Voyage number

b. Information pertaining to each container:

• Container operator
• Equipment number
• Equipment size and type
• Stow position
• Hazmat code (if applicable)
• Port of lading
• Port of discharge

2. Container Status Messages (CSM). Carriers are required to submit CSMs for certain events related to all containers that contain cargo destined to arrive within the limits of a port in the United States by vessel.

a. Events for which a CSM is required:

• When booking relating to the container is confirmed.
• When a container undergoes a terminal gate inspection.
• When a container arrives or departs a facility. This includes when a container enters or exits a port, container yard, or other facility. Generally these are referred to as "gate-in" and "gate out" messages.
• When a vessel is loaded on or unloaded from a conveyance. This includes vessel, feeder vessel, barge, rail and truck movements. Generally these are referred to as "loaded on" and "unloaded from" messages.
• When a vessel transporting a container departs from or arrives at a port. These events are commonly referred to as "vessel departure" and "vessel arrival" notices.
• When a container undergoes an intra-terminal movement.
• When a container is ordered stuffed or stripped.
• When a container is confirmed stuffed or stripped.
• When a container is stopped for heavy repair.

b. CSMs must contain the following data elements:

• Event code being reported as defined in the ANSI X.12 or UN EDIFACT standards.
  
• Container number
  
• Date and time of the reported event
  
• Status of the container (empty or full)
  
• Location where the event took place
  
• Vessel identification associated with the message if the container is associated with a specific vessel.

Time Frame for Submitting the Additional Carrier Requirements

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

Container status messages must be submitted to CBP no later than 24 hours after the message is entered into the carrier's equipment tracking system.

CBP-Approved Electronic Interchange System for Transmission of ISF and Additional Carrier Requirements

Currently the CBP-approved electronic interchange systems for transmission of the ISF, stow plans, and container status messages are:

ISF: ABI and AMS
Stow plans: AMS, secure file transfer protocol (sFTP), or email
CSMs: sFTP

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 ISF and Additional Carrier Requirements

Under the interim final rule, the basic importation and entry bond conditions, custodial bond conditions, and foreign trade zone operator bond conditions are amended to allow for the assessment of liquidated damages of $5,000 for each violation for failure to comply with all ISF requirements.

The international carrier bond conditions are amended to allow for the assessment of liquidated damages of $5,000 for each violation for failure to comply with all ISF requirements. Liquidated damages of $50,000 for each vessel arrival may be assessed for failure to comply with vessel stow plan requirements. Liquidated damages of $5,000 for each violation to a maximum of $100,000 per vessel arrival may be assessed for failure to comply with container status message requirements.

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

James J. Boyle & Co. will have the capability to provide complete importer security filing services to our clients. To facilitate the ISF filing, the "Importer Security Filing Request to File" document must be completed and provided to a James J. Boyle & Co. account representative no later than three (3) business days (72 hours) prior to loading at origin. For import transactions that consist of more than 10 different items, the Importer Security Filing Request to File document must be provided to us no later than five (5) business days (120 hours) prior to loading at origin.

In lieu of the ISF Request to File document, clients may elect to provide the ISF information on their commercial invoice or on a separate attachment. We request written confirmation from clients should this method be used.

To further enhance and facilitate the ISF filing process, programming is currently being developed for clients to provide us the ISF Request to File information electronically.

Clients may send ISF Request to File documents beginning on January 26, 2009.

If we are requested to submit the Importer Security Filing on your behalf, a nominal ISF fee of $40.00 will be assessed. This base fee includes up to 5 commodity HTSUS numbers based on commercial invoice line/group items. After 5 commodity HTSUS numbers, an additional ISF service fee of $1.50 per commercial invoice line/group item will be assessed.

Should you have any questions or concerns regarding the JJB ISF Request to File document or the service fee, please contact the James J. Boyle & Co. office listed below.

Additional Information and Details

The Federal Register notice containing additional information and details on the Importer Security Filing and Additional Carrier Requirements may be obtained here:

http://edocket.access.gpo.gov/2008/pdf/E8-27048.pdf

The final versions of 11 Importer Security Filing Transaction Sets conforming to the interim final rule may be obtained here:

http://cbp.gov/xp/cgov/trade/automated/automated_systems/sf_transaction_sets/

The information accompanying this webpage contains confidential information. The information is intended only for the use of customers of James J. Boyle & Co. You are hereby notified that any disclosure, copying, distribution or the taking of any action in reliance on the content of this information is strictly prohibited. James J. Boyle & Co. will also not be held accountable for any discrepant information. The service we provide is based on our "Terms and Conditions of Service", which is available upon request.

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