CBP Proposes Expanded Definition of Importer for ISF Filings

CBP is considering an expansion to the definition of "importer" under Importer Security Filing (ISF) regulations, the agency said in a notice (here). The proposed changes are meant "to ensure that the party that has the best access to the required information will be the party that is responsible for filing the ISF," the agency said. The proposed changes would "simply shift the legal responsibility in some cases for filing the ISF from one party to another for a subset of the total cargo," though "in the vast majority of cases, there will be no change in who submits the data," CBP said. Comments are due Sept. 6.

The proposal addresses concerns that the current definition of "ISF Importer" contains limitations that do not "reflect commercial reality and, in some cases, designate a party as the ISF Importer even though that party has no commercial interest in the shipment and 6 limited access to the ISF data," the agency said. The regulations ascribe importer status to different parties for "foreign cargo remaining on board (FROB), immediate exportation (IE), and transportation and exportation (T&E) in-bond shipments, and for merchandise being entered into a foreign trade zone (FTZ)," CBP said. Currently, "for FROB cargo, the regulation provides that the ISF Importer is the carrier; for IE and T&E in-bond shipments, and goods to be delivered to an FTZ, the regulation provides that the ISF Importer is the party filing the IE, T&E, or FTZ documentation."

CBP's proposal would add non-vessel operating common carriers to the definition of importer for FROB shipments, it said. "There is still much debate within the shipping community about who should be the ISF importer for FROB shipments," CBP said. That's because NVOCCs are frequently used as intermediaries between the vessel operator and the party shipping the goods, the agency said. In such cases, the vessel operating carrier may not have access to the required ISF data elements "because the NVOCC may not want to share confidential business information with the vessel operating carrier, a potential competitor," it said.

Even when an NVOCC is used, a vessel operating carrier may still be the "ISF Importer" under the proposal, CBP said. "An example would be when an NVOCC books a shipment not initially scheduled to arrive in the United States, but the vessel is diverted to the United States by the vessel operating carrier. If the cargo remains on board the vessel at the U.S. port and is not discharged until it arrives at the originally scheduled foreign destination port, this would create FROB cargo," it said. "In this situation, the vessel operating carrier would be the party that caused the cargo to arrive in the United States and thus the party responsible for filing the ISF."

The proposal would also "expand the definition of ISF Importer for IE and T&E in-bond shipments, and for goods to be delivered to an FTZ, to also include the goods’ owner, purchaser, consignee, or agent such as a licensed customs broker," it said. Currently, the "ISF Importer" in these cases is the filer of the IE or T&E documentation, which causes "confusion because the IE or T&E documentation often is not created until the cargo arrives" in the U.S., CBP said. Expanding the definition to include those parties, as all other shipments not mentioned already do, the ISF filing responsibility will be placed with the party "most likely to have access to the required ISF information and not with a commercially disinterested party," it said. The Department of Homeland Security recently said in its Spring 2016 regulatory agenda that the definition change was in the works (see 1605190046).

Meanwhile, CBP recently discussed further developments on ISF with the National Customs Brokers & Forwarders Association of America's ISF Subcommittee, the trade group said (here). While the ISF regulations operate under an interim final rule, "CBP has determined not to pursue a final Rule" and instead to "consider the interim rule as final," the NCBFAA said. CBP also still plans to issue a proposed rulemaking on ISF-5 (see 1505060013) that will include a pilot program and full ISF-5 enforcement within a year after the pilot ends, NCBFAA said. "An open issue the ISF Committee has had which the [proposal] may address is identifying the 7512 filer as the ISF filer, open to penalty liability," it said.

Although CBP recently ended required headquarters reviews for ISF-related liquidated damages (see 1606170025), individual ports will still have discretion on how to interpret indicators of filing performance, CBP told the NCBFAA during the June 20 meeting. "Even though local ports may not be looking at an importer's overall compliance record, the record can still be used for the petition process when asking for cancelation or mitigation," the group said.