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Importer Security Filing (ISF) has been in effect for months. We are almost half way through the trial period and over 48,000 importers are filing. Even though the numbers are increasing there are companies out there that are subject to this regulation that are not filing ISF. If you are one of those companies it is time to face reality and start filing. Those companies who choose to neglect this regulation will feel the pain come January 2010.
Here is a series of good reasons why you should be concerned if you are a maritime importer and have not yet addressed Importer Security Filing:
o First, to implement ISF a number of changes or new procedures may be necessary within your supply chain to gather all ten (10) of the data elements you are required to provide (actually it’s eleven (11) data elements with the requirement to provide the bill of lading number). And of course with change comes the need for intensive communication, training, testing and debugging.
o As with most US import laws and regulations, the importer of record owns 100% of the liability for filing a timely and accurate Importer Security Filing. This liability cannot be absolved or otherwise abdicated, even if you have an agent file on your behalf. You may have recourse in a civil proceeding against that agent, but in the eyes of CBP the importer owns all of the liability and penalties that may be assessed. In fact it is the importer of record´s surety bond that assures and guarantees the payment of potential penalties.
o And speaking of penalties, a sensitive and sometimes painful subject for some importers, CBP and Congress are deadly serious about ISF infractions or errors once full enforcement of the rule begins in January 2010. As this went to press, the Importer Security Filing mitigation guidelines had not been issued, they are expected to be released any day. But from all indications, both publicly and privately, CBP is being pretty hard-nosed about the enforcement phase and mistakes or untimely filings after January 26, 2010 will cost $5,000 each. Furthermore, unless it is just posturing, citing their opinion that the trade has had adequate time to make the necessary adjustments, CBP has publicly advised that they are unwilling to push out or consider a further delay in the enforcement period.
o We are already nearly half way through the enforcement moratorium and the retail peak season lies just ahead. Before you know it January will be upon us and you do not want to be caught in the last minute rush to implement.
o CBP (aka the “Government”) is keeping track of your Importer Security Filing Performance, or as the case may be lack thereof. The first series of 100 ISF Performance reports were released by CBP to the trade the week of May 4th. More reports are expected any day now. The report contains three areas of interest; your company´s Submission Volume, Rejection Error Frequency and Timeliness Performance. Companies interested in receiving their report should read CBP Message CSMS #09-000161 dated April 6, 2009, and follow the instructions contained therein. According to CBP early adaptors are likely to receive special consideration during the mitigation process if errors resulting in penalty actions occur after the enforcement date. Those companies who adopt late will be at the mercy of the Fines, Penalties and Forfeiture Officer.
o Lastly, if you are holding out on Importer Security Filing implementation because you think at the last moment it will be repealed, significantly diluted or otherwise delayed, the likelihood of such actions at this juncture are virtually nonexistent in my humble opinion. This initiative or regulation has a “national security tag” on it which affords it special deference within the government and makes it almost invincible. ISF is yet one more layer of CBP’s multi-layered supply chain security strategy.
Many importers, given the serious nature of the penalties and liability, are electing to prepare and file the Importer Security Filing directly. Moreover, absorbing new fees (ranging from a low of $35 to a high of $150) is a bitter pill to swallow during these difficult economic times. Internet-based Importer Security Filing solutions, make direct-filing an ISF simple and very cost effective. An ISF can literally be filed in a matter of seconds and takes only two screens to complete. Direct-filing makes sense because it is the importer who will generally gather the necessary ISF information, and it is also the importer who is liable for timely and accurate filing. And, because filing an Importer Security Filing is not considered to be “customs business” by CBP, direct-filing importers do not need to worry about obtaining a CBP Filer Code, and there are no permits or licenses necessary.