CBP Officials Discuss 10+2 ISF Warning Letters, Finalization, Etc. at February COAC Meeting

During the February 25, 2010 Departmental Advisory Committee on Commercial Operations of U.S. Customs and Border Protection and Related Homeland Security Functions (COAC) meeting, CBP officials provided an update on 10+2.

The following are highlights of the CBP-COAC discussions on 10+2:

CBP Has Not Started Issuing ISF Warning Letters

In January 2010, CBP announced that during the first quarter of its enforcement of 10+2, it would be issuing warning letters and talking to filers (instead of issuing liquidated damages) for ISF issues.

A CBP official stated that CBP has not yet started issuing warning letters, and he noted there are certain sensitivities over the issue of who receives a warning letter and for what reason.

Various COAC members noted the importance of importers and/or sureties receiving warning letters in addition to filers.

Dallas Notice on 10+2 Enforcement for C-TPAT Firms Concerns COAC Members

COAC members, while expressing appreciation for CBP's gradual enforcement plans for 10+2, noted concern about a CBP document (issued by Dallas CBP at the end of January 2010) which contained talking points with respect to 10+2 enforcement.

According to the CBP Dallas/Fort Worth public notice, at the start of the second quarter of full enforcement, C-TPAT companies that demonstrate low compliance rates will be notified by CBP Headquarters at the executive level (i.e., VP or CEO) that they risk establishing a pattern of non-compliance and may be jeopardizing their C-TPAT status. The public notice further stated that, as CBP moves into the remaining quarters, CBP will consider revoking, suspending, or reducing the C-TPAT status of C-TPAT companies that remain non-compliant.

COAC members expressed concern that the trade was not engaged before this policy went out and noted that C-TPAT members should have been advised of the policy. COAC also asked CBP to send something to the C-TPAT members clarifying CBP's position on the ISF-C-TPAT link issue. CBP officials did not respond to COAC's request or concerns.

(See ITT's Online Archives or 02/02/10 news, 100202991, for BP summary of CBP Dallas/Fort Worth's public notice on 10+2 enforcement.)

ISF Six Year Statute of Limitations Concerns COAC Member

At the meeting, a COAC member addressed the issue of the statute of limitations for ISF liquidated damages. According to that COAC member, since the goal of the ISF is to increase security, initiating a liquidated damages claim five or six years after the shipment has been released doesn't really serve that purpose.

(CBP's 10+2 FAQs state that "pursuant to 28 USC 2415, the statute of limitations for ISF liquidated damages is six years from the date of the breach of the bond. CBP will not limit its authority to enforce the ISF requirements.")

The COAC member noted that COAC is going to have further dialogue with CBP on this issue. CBP officials did not respond to this member at the meeting.

(See ITT's Online Archives or 02/03/10 news, 10020305, for BP summary of CBP's 10+2 FAQ's information on the six year statute of limitations for ISF liquidated damages.)

CBP Addresses Concerns on Format, Detail, Error Codes in Progress Reports

According to a CBP official, CBP continues to send out ISF progress reports on a monthly basis and has covered about 900 of the filers.

Format. A CBP official stated that CBP has looked at the format of the monthly progress reports in light of the trade's request for more detailed, useful information. The official noted that CBP is looking at a couple of report variations which it hopes will allow the trade to use the reports to work with filers on errors and rejects. He official further stated that CBP is also looking at an Excel spreadsheet format for the reports to allow greater data manipulation by trade.

Transaction level detail. A COAC member expressed satisfaction that CBP has listened to COAC's suggestions regarding transaction-level detail and more user friendly formats for the progress reports. According to a CBP official, C-TPAT Tier 3 members will see additional transaction level information in their progress reports first. The COAC member noted that this level of detail should eventually be made available to all ISF importers.

Error code list. In addition, a COAC member thanked CBP for providing the trade with the tools to interpret the progress report data, especially making an error code list available on the CBP Web site. However, one COAC member emphasized that it would like CBP to make the error code list easier to find on CBP's Web site.

(See ITT's Online Archives or 12/08/09 news, 09120810, for BP summary of the ISF error code list.)

Incorporation of ISF Information into ACE Sought by Some COAC Members

During the meeting, certain COAC members expressed the desire to have CBP look into ways to incorporate ISF information into the Automated Commercial Environment.

Continued Outreach to SMEs, Timely FAQ Updates Promised by CBP Officials

During the course of discussions with COAC, CBP officials expressed their commitment to continued outreach, especially for small and medium-sized enterprises. A CBP official also noted that CBP has been updating its 10+2 frequently asked questions document more frequently.

Updated 10+2 Statistics on Filing, Timeliness of ISFs

During the meeting, a CBP official noted that CBP has received over 5.5 million ISFs (from 2,300 ISF filers and from 141,000 unique importer of record numbers). The CBP official also stated that on a monthly report basis, 70-75% of the ISFs are filed timely.