Importers beware! As of Jan. 26, U.S. Customs and Border Protection will begin enforcing new rules that could result in a $5,000 fine per violation. Moreover, failure to comply could delay your shipment.
The Security and Accountability For Every Port Act of 2006, or SAFE Port Act, mandated that Customs create the Importer Security Filing rules in order to reduce the risk that terrorists could smuggle weapons of mass destruction into the U.S. in ocean containers. The ISF, also known as ISF 10+2, requires importers to file 10 pieces of information with Customs for each shipment. The ocean carrier must file the other two items.
Most of the data elements are pretty simple and straightforward, such as the name and address of the seller/owner and buyer/owner. But some can be tricky. For example, one item is the name and address of the manufacturer. That can be complicated if the components are produced by more than one manufacturer, and then assembled by yet another company. Likewise, the country of origin — another of the required data elements — can be tricky, too, if suppliers in two or more countries are involved in the production of the goods.
Other information sought by Customs includes the importer-of-record number, the consignee number, the ship-to party, and the commodity’s six-digit code in the Harmonized Tariff System. The ISF also must include the container stuffing location and the consolidator’s name and address. Those questions can be problematic, too, because your goods may be produced in one location and then shipped to another location where the consolidation is performed.
Fortunately, Customs is allowing some flexibility with regard to those last two items. But they must be filed no later than 24 hours before the vessel arrives at the U.S. port. Importers themselves are not required to do the filing if it’s done by someone else, such as their customs broker or their foreign supplier. However, the ultimate responsibility rests with the importer.
Experienced importers should have fewer compliance problems if they took Customs’ advice and began using the rules after it began flexible enforcement on Jan. 26, 2009. That gave importers and Customs a full year to adjust. However, importers who only recently began conforming with the rules, or who have not yet done so, could find themselves in trouble after Jan. 26, 2010.
“Every indication is that Customs thinks most people will be ready if they have been making any sort of effort toward implementation over the last eight or nine months,” says Karen A. Lobdell, director of trade security and supply-chain services for the law firm Drinker Biddle & Reath L.L.P. Lobdell says there are four types of violations that could result in fines. The most serious is failure to file. In that case, “more than likely your cargo will be subject to ‘do not load’ rules at the foreign port and will not be loaded — or it will be seized when it reaches the port of arrival,” she says.
The other types, in order of seriousness, are late filing; inaccurate information; and failure to withdraw the ISF if you know it to be invalid, such as if the order is canceled or if there is a drastic change in routing. An ISF could be subject to two fines if the filing is both late and contains inaccurate information.
Customs provides answers to frequently asked questions at this link on its Web site: http://www.cbp.gov 
/xp/cgov/trade/cargo_security/carriers/security_filing/. Additional questions may be sent to Security_Filing_