IMPORTER SECURITY FILING (“ISF”) PENALTY

On January 26, 2009, The U.S Customs and Border Protection issued a rule titled Importer Security Filing (“ISF”) and Additional Carrier Requirements (commonly known as “10+2”) went into effect.

What is an Importer Security Filing (ISF)?

An Importer Security Filing (ISF), also known as “10+2,” is a filing requirement by the CBP that documents importing information and details, as shipments pass from point to point.

What is the purpose of an Importer Security Filing?

The ISF filing allows CBP and the Department of Homeland Security to identify high-risk shipments to prevent smuggling and provide enhanced cargo security and safety.

When do you need to file an Importer Security Filing?

Prior to merchandise arriving by vessel for importation into the United States, the “Importer Security Filing (ISF) Importer,” or their agent (e.g licensed customs broker), must electronically submit certain advance cargo information to CBP in the form of an Importer Security Filing. This requirement only applies to cargo arriving in the United States by ocean vessel; it does not apply to cargo arriving by other modes of transportation (e.g. air).

What does an ISF require?

ISF Importers, or their agent, must provide eight data elements, no later than 24 hours before the cargo is loaded aboard a vessel destined to the United States. 

Those data elements include:

• Seller (or owner) name and address
• Buyer (or owner) name and address
• Importer of record number / forein trade zone (FTZ) applicant identification number
• Consignee number(s)
• Manufacturer (or supplier) name and address
• Ship to party
• Country of origin
• Commodity Harmonized Tariff Schedule of the United States (HTSUS) number 

Two additional data elements must be submitted as early as possible, but no later than 24 hours prior to the ship’s arrival at a U.S. port. 

These data elements are: Container stuffing location and Consolidator

Who is responsible for filing ISFs?

The “Importer Security Filing (ISF) Importer,” or their agent (e.g licensed customs broker), must electronically submit certain advance cargo information to CBP in the form of an Importer Security Filing

Importer Security Filing (ISF) Cost

The cost of filing the ISF will vary on the custom brokers or forwarders. They typically charge a small fee for their service & expertise. However, the ISF filing fee can range between $30 to $50.

ISF Customs Bonds

The ISF Customs Bonds act as a financial agreement that confirms specific data points are provided to CBP in a timely and efficient manner before ever loading the cargo on an ocean vessel. An Importer Security Filing bond is a particular type of customs bond. Customs bonds are categorized into activity codes that are designed to cover more specific usages common in international trade.

ISF Bond

An ISF bond is designated as an “Activity Code 16 – Importer Security Filing (ISF) Bond” by the U.S. Customs and Border Protection. ISF bonds can either be single transaction or continuous bonds, depending on the specific needs of the company. An ISF bond is a financial guarantee that exists between three major parties:

• The Obligee – The U.S. Customs and Border Protection (CBP)
• The Principal – The importer of record (IOR)
• The Surety – The insurance company that underwrites the bond

Single Transaction Bonds

Single Transaction Bonds generally in an amount not less than the total entered value of goods, plus any duties, taxes, and fees associated with it. The amount of any CBP bond must not be less than $100, except when the law or regulation expressly provides that a lesser amount may be taken.

Continuous Bonds

Continuous Bonds do not expire or cancel as long as the party makes the required payment for each renewal. This customs bond can be used for an annual period and covers ongoing shipments within that year.

Customs Bond Value Determination

The value determination is different from a Single Transaction Bond and a Continuous Bond. A Single Transaction Bond is calculated based on the complete value of the goods and taxes and fees associated. A Continuous Bond is calculated based on 12 months of duties, taxes and fees paid on an import transaction.

Fines and Penalties for Late ISF Filing

Failure to comply with the new rule could ultimately result in monetary penalties, increased inspections and delay of cargo.

Late filing. If an ISF Importer submits a late ISF, Port Directors may assess a claim for liquidated damages against the party in the amount of $5,000 per late ISF.

Inaccurate filing. If an ISF Importer submits an inaccurate ISF, Port Directors may assess a claim for liquidated damages against the party in the amount of $5,000 per inaccurate ISF.

If you receive a claim for liquidated damages based on an ISF violation contact an attorney to discuss your legal options.

Customs Lawyer – Abady Law Firm

If you need assistance with filing your Importer Security Filing (ISF) or have questions regarding the requirements, Abady Law Firm is here for you. We specialize in customs focused on international trade. We will help you to navigate through all of the rules and laws that govern the importing of goods to and from foreign countries. Abady Law Firm helps people to navigate international regulations, predict the risk and minimize it beforehand.