As part of the U.S. SAFE Port Act of 2006, CBP has now been charged with the responsibility to implement a program to require the electronic transmission of additional data elements to improve high-risk targeting of such goods. The new program is called “10+2” because it requires the importer to provide 10 data elements and the carrier to provide 2. These additional data elements must also be reported at least 24-hours before the cargo is laden aboard the vessel. The importer’s portion is called an Importers Security Filing (ISF).
Earlier this year, CBP filed a Proposed Notice of Rulemaking which described the program as they envision it and asked for comments from the trade community. As expected, a substantial number of responses were received. CBP is continuing to review and consider those comments and anticipates publishing their Final Notice of Rulemaking. CBP also published the anticipated transaction data sets so computer system service providers could get a head start on programming initiatives, and our system has been updated to accommodate the ISF filing requirements.
Current best estimate is that 10+2 will become effective January 1, 2009, but that enforcement in all but the most egregious cases will be phased in over a 12-month period.
Also, although it has not yet been confirmed, it appears CBP will be allowing anyone to file the ISF on an importer’s behalf as long as they hold the importer’s power of attorney and have a bond that includes 10+2 provisions.
The importer’s data elements are:
1. The manufacturer’s or supplier’s name and address
2. The seller’s name and address
3. The buyer’s name and address
4. The name and address of the “Ship to” party
5. The name and address of the container stuffing location
6. The consolidator’s name and address
7. The U.S. Importer of Record’s name and address
8. The U.S. Ultimate Consignee’s name and address
9. The country of origin of the merchandise
10. The Harmonized Tariff Number of the goods to at least the 6-digit level
Items 1, 9 and 10 must be supplied on a line item basis.
The current provisions say that if goods arrive by vessel in the US without the ISF having been transmitted and accepted at least 24-hours prior to loading at origin, the importer will be assessed liquidated damages equal to the value of the goods. It’s unclear at what point those liquidated damages would be payable. Also, there are currently no provisions allowing mitigation of that amount although we believe CBP will eventually permit some level of mitigation.
The current provisions do not pertain to goods loaded on vessels that, themselves, do not arrive in the U.S. In other words, goods destined for the U.S. aboard vessels that arrive in Canada, with those goods then moving to the U.S. via rail or truck, are not subject to 10+2. However, we look for CBP to start including those goods in 10+2 sometime in the foreseeable future.
Lastly, when the ISF is being reported, there are of course other data elements that need to be provided so as to tie the ISF to a particular shipment being reported by the carrier under their 2 data elements in 10+2. CPB has not specified those elements, but a reading of the draft data elements suggests they will be some combination of the master bill of lading number, house bill of lading number, container number, vessel name and voyage number. The vessel name here is the vessel that brings the goods to the U.S. So, where feeder/mother vessel systems are employed, it’s the name of the mother vessel that must be declared.
It should be remembered that filing the ISF is a separate and distinct activity, independent of the Entry/Entry Summary filings. (It may be possible to take some of the data elements from the Entry/Entry Summary programs, but they would still be reported separately as an ISF declaration.) Although CBP will provide an ISF acceptance number to the filer, there is no current requirement that the acceptance number even be included in the Entry/Entry Summary filings. Neither is there anything in the proposed regulations suggesting failure to timely file the ISF will in any way keep the goods from being released by CBP as along as a valid Entry/Entry Summary is filed. 10+2 is just a new and additional requirement importers must meet in order to legally import goods by vessel.
On their face, none of the data elements are particularly ominous. Most of them are already available and are being used in the Entry/Entry Summary preparation. However, timing will now become critical. It will be necessary for the filer to have all ISF information sufficiently in advance of the vessel’s departure to allow for accurate and timely processing. So obtaining the information from vendors and freight providers/handlers early enough in the transaction will become increasingly critical. And the more complicated the commercial invoice(s), the more time that will be needed to do the HTSUS portion. Additionally, the proposed regulations require additional ISF filings to correct or amend any changed or erroneous information that was included in the original filing. So a procedure must be coordinated with vendors and freight/providers/handlers to identify changes and provide them promptly to you or your ISF filer.
We are finalizing the impact of this program on the import process and what additional charges might be necessary if we are to do the ISF filings your behalf.
We will keep you advised as this important matter progresses, but if you have any questions, feel free to contact your Account Executive or Key Account Manager.