CBP ISF Enforcement Stance Increasingly Clear as Ports Release Protocol

CBP enforcement procedure for Importer Security Filing continues to solidify as a number of major ports have outlined their positions for dealing with ISF violators, said Craig Clark, who manages the ISF program at CBP, during an Oct. 1 webinar. CBP headquarters revised its take on ISF enforcement in May, advising the ports to focus on the more egregious ISF violators (see 14052106) and "significantly late" filing. While CBP left the definition of what is significantly late "intentionally fuzzy" to allow the ports to develop their own definition to reflect differences at the port level, it's safe to consider significantly late as "having provided that ISF at such a time that you negatively impacted CBP's ability to target that cargo," he said.

As ports provide guidance on ISF enforcement, the definition of "significantly late" is becoming increasingly clear. "A lot of these timelines that, say L.A./Long Beach and Seattle and Tacoma, have come out with, if you have crossed that threshold, you can probably rest assured that you are going to be considered significantly late," he said. "Obviously, you need to get it in 24 hours prior to loading, but there's a little bit of flexibility there right now while we're in this continued graduated enforcement phase." The Port of L.A./Long Beach recently updated its enforcement posture to begin issuing liquidated damages and requiring an ISF on file 72 hours -- up from 48 hours -- before arrival (see 14093014). The compliance rate is in the low 90s, an improvement from last year, though Clark said he would like to see it move up to the 94-95 percent range.

Late ISF filers should expect to get a phone call or an email and "almost always" a letter from the port outlining the violation, considered to be one of three warnings now allowed by the agency, Clark said. While the records will be kept at the port level, all ports will be able to see there was a violation, he said. Filers should not see a Do Not Load message for ISF violations alone and any such message would be in error, he said. The agency will stop allowing for three warnings before issuing liquidated damages as of May 13, a year from when the policy was set, he said. Since May last year, CBP headquarters has approved 63 liquidated damages claims for ISF violations, though it's up to the individual port to decide whether to pursue the claims, said Clark.

The ISF reports in the Automated Commercial Environment portal report vessel departure time as 11:59 p.m. because CBP measures the timeliness of the ISF "from the date of sailing, minus 24 hours," without consideration for the time of sailing, to allow for more time to become compliant, he said. In more complicated shipping scenarios, such as mother vessel and feeder vessel relationships, "the best way to think about ISF timing is when the cargo is loaded on the vessel that is coming to the U.S.," he said. For instance, cargo that was loaded onto a vessel at one port in China and continues on to another port in China before going to the U.S., should have an ISF on file 24 hours before loading at the first Chinese port, he said. If that same cargo was transshipped onto a new vessel at the second port in China before coming to the U.S., the timeline is set by the departure from the second port in China, he said.

CBP is still in the process of adjusting the rules for ISF-5s, another data reporting requirement for goods that pass through the U.S., said Clark. The ISF-5 requirement, which is not being enforced through holds or liquidated damages claims, "too narrowly defined, in its original regulation, who was responsible for filing the ISF-5 in certain scenarios," said Clark. As a result, the agency will put out a proposed rulemaking, now being reviewed before official publication, that will better define who is responsible for ISF-5 filing, he said. "It is a substantive enough change" that it will allow for 60 to 90 days for public comment, he said during the webinar, which was hosted by the National Customs Brokers and Forwarders Association of America and Avalon Risk Management.

After CBP reviews the comments submitted in response to the ISF-5 rulemaking, the agency will move forward with a final rule for the ISF regulations, he said. The ISF-5 revisions will be the only change to the ISF regulations, now an interim final rule, said Clark. The proposed rulemaking should be out "soon," with the final rule subsequent to that, he said. Those that have been filing ISF-5s should continue to do so, as it is still required by law despite the lack of CBP enforcement, said Clark. "It's definitely helpful for you to get in a lot of practice, basically, before CBP is going to come out with liquidated damages claims for enforcement." The ISF updates have long been listed among CBP's planned regulatory agenda (see 14052911).