10+2 / Importer Security Filing interim final rule published

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Well, it’s official: U.S. Customs and Border Protection’s (CBP) Importer Security Filing (ISF), formerly known as “10+2″, has been finalized. The interim final ruling was published in the Federal Register yesterday, November 25th, while a press release was issued by CBP on Monday the 24th. Following are several pertinent links from the DHS/CBP websites explaining the ruling:

Official press release from Department of Homeland Security (DHS)

DHS Fact Sheet: New Cargo Security Requirements for Maritime Carriers and Importers

U.S. Customs and Border Protection FAQ

The interim final rule will take effect 60 days after publication, so it has an effective date of January 26, 2009. The good news for the trade community is that CBP will delay compliance to 12 months after the interim rule takes effect. According to the fact sheet linked above, this means:

CBP will show restraint in enforcing the rule. CBP will take into account difficulties that importers may face in complying with the rule as long as importers are making a good faith effort and satisfactory progress toward compliance.

In addition, CBP will conduct a review to determine any specific compliance difficulties that importers and shippers may experience in submitting all 10 data elements 24 hours before lading. The structured review will cover a range of enterprises, from small to large, and will include both integrated and nonintegrated supply chains.

Exactly what “show restraint” means is beyond me, but I imagine it will get fleshed out in the weeks to come. Bottom line, it sounds like CBP is going to take a soft approach during the first year to help get all the importers in line with the requirement. As an importer, hopefully you’ve been considering the pending impact of this regulation for awhile, but if not here are some of your options:

1. DIY: Do-it-Yourself: You’ll need to have a system in place for transmitting the data elements electronically to CBP. You’ll have to coordinate with your overseas suppliers and your transportation service provider to gather the necessary data elements on each and every shipment far enough in advance to transmit the data to CBP at least 24 hrs before the cargo is laden on a vessel. There are various software and systems providers (GT Nexus, LogNet, etc.) out there who have been actively working on an automated solution for importers to be able to gather the necessary data and transmit to CBP directly themselves or via a third party. Which brings me to the next option…..

2. Rely on an “agent”: To the best of my knowledge, there is no set definition for what constitutes an “agent” in CBP’s eyes. An agent can be your licensed customs broker, your freight forwarder / logistics provider, or some other third party. Whoever you use, they will need a current power of attorney and of course must have a system capable of transmitting the data elements to CBP electronically. You’ll need to set up the necessary processes so that your agent can be assured of receiving all the necessary data elements within the time frame needed for transmission 24 hrs before the cargo is laden on a vessel. Remember, too, that the burden for complying lies on the importer, so if and when CBP starts coming down on importers for failing to comply, the damages will be for the importers account, not your agent who screwed up.

If you have no idea what I’m talking about or for those of you who have heard of “10+2″ but would like to learn more, I’ll excerpt the pertinent details from the official links I posted above:

Importer Security Filing (ISF) Overview:

The Importer Security Filing and Additional Carrier Requirements interim final rule will help prevent terrorist weapons from being transported to the United States by requiring both importers and carriers to submit additional cargo information to U.S. Customs and Border Protection (CBP) before the cargo is brought into the United States by vessel.

What are the existing requirements for carriers and importers?

Carriers are currently required to submit advance cargo information for vessels no later than 24 hours before the cargo is laden aboard a vessel at a foreign port. This is commonly referred to as the “24-Hour Rule.” Carriers are not currently required to submit vessel stow plans or container status messages to CBP.

Under existing requirements, importers of record are required to file entry information with CBP within 15 calendar days of the date of arrival of a shipment at a United States port of entry. Inaddition, within 10 working days of the entry of the merchandise, entry summary information must be submitted. Importers are not currently required to submit advance cargo information to CBP.

What are the new requirements for carriers?

* Vessel Stow Plan: Carriers must transmit the stow plan, via the Automated Manifest system (AMS), secure file transfer protocol or email, so that it is received by CBP no later than 48 hours after the carrier’s departure from the last foreign port. For voyages less than 48 hours, CBP must receive the information prior to the vessel’s arrival at the first port in the U.S. The stow plan must include the vessel name, vessel operator and voyage number. With regard to each container, the vessel stow plan must also include the container operator and the equipment number, equipment size and type, stow position, hazmat code, port of lading and port of discharge.
* Container Status Messages (CSM): CSMs must be submitted to CBP daily for certain events relating to all containers laden with cargo destined for the U.S. by vessel. Carriers must submit a CSM when any of the required events occurs if the carrier creates or collects a CSM in its tracking system reporting that event. For each CMS submitted, the following information must be included: event code being reported, container number, date and time of event being reported, status of the container (empty or full), location where the event took place, and vessel identification associated with the message if the container is associated with a specific vessel. This must be done no later than 24 hours after the message is entered into the carrier’s equipment tracking system.

What are the new requirements for importers?

The interim final rule requires Importer Security Filing (ISF) importers, as defined in the interim final rule, or their agents to provide eight data elements, generally no later than 24 hours before the cargo is laden aboard a vessel destined to the United States, for shipments consisting of goods intended to be entered into the United States and goods intended to be delivered to a foreign trade zone (FTZ). Those data elements include:

* Seller;
* Buyer ;
* Importer of record number / FTZ applicant identification number;
* Consignee number(s);
* Manufacturer (or supplier);
* Ship to party;
* Country of origin ; and
* Commodity Harmonized Tariff Schedule of the United States (HTSUS) number.

The rule provides flexibility for importers with respect to the submission of four of these data elements. In lieu of a single specific response, importers may submit a range of responses for each of the following data elements: manufacturer (or supplier), ship to party, country of origin, and commodity HTSUS number. The ISF must be updated as soon as more accurate or precise data becomes available and no later than 24 hours prior to the ship’s arrival at a U.S. port.

The ISF will also need to include two data elements that 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

In addition, the rule requires that the Importer Security Filing for shipments consisting entirely of foreign cargo remaining on board (FROB) and shipments consisting entirely of goods intended to be transported in-bond as an immediate exportation (IE) or transportation and exportation (T&E), must provide five elements. Importer Security Filings for IE and T&E shipments must be submitted no later than twenty-four hours before the cargo is laden aboard a vessel destined to the United States and Importer Security Filings for FROB must be submitted any time prior to lading. The following five data elements must be submitted for FROB, IE and T&E shipments:

* Booking party;
* Foreign port of unlading;
* Place of delivery;
* Ship to party; and
* Commodity HTSUS number.

How should importers file the ISF?

Electronically:

The current approved electronic data interchange systems for vessel stow plans are vessel Automated Manifest System (AMS), secure file transfer protocol (sFTP), and email. The current approved electronic interchange system for container status messages is sFTP. The current approved electronic data interchange systems for Importer Security Filings are vessel AMS and the Automated Broker Interface (ABI). CBP will publish a notice in the Federal Register if a different or additional electronic data interchange systems are approved.

Who can file the ISF?

The ISF importer or his agent will be responsible for filing the complete, accurate, and timely importer Security Filing. For the purposes of the interim final rule, ISF importer means the party causing goods to arrive within the limits of a port in the United States. For foreign cargo remaining on board, the ISF Importer is construed as the carrier. For immediate exportation (IE) and transportation and exportation (T&E) in-bond shipments, and goods to be delivered to a foreign trade zone (FTZ), the ISF importer is construed as the party filing the IE, T&E, or FTZ documentation with CBP.

If you are a U.S. importer, I strongly recommend you click on the links above and read everything that’s there. Here are some other resources for you from alternate sources:

Tuttle Law

APL – link to the actual text in the Federal Register (lengthy PDF file)

Barnes/Richardson Law Firm

10+2 Community Forum

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SwizStick

About The Author: Co-Contributor

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