Earlier this month, United States Customs and Border Protection (CBP) stepped-up enforcement of the Import Security Filing (ISF) rule. Where compliance of the rule used to be voluntary, infractions can now be punished with fines. While this move is meant to shore up a falling compliance rate, the way in which the fines are levied could leave importers liable months after shipments have been received.
The ISF rule requires that cargo information for shipments entering the US be provided 48 hours before the shipment is loaded. The rule went into effect more than four years ago, but this month saw stepped-up enforcement of the rule in the form of penalties. Importers will now be fined $5,000 for any shipment that lacks accurate, timely information about the cargo.
“The reason for this new level of enforcement is that the compliance rate for the ISF rule fell to 60 percent,” said Pat Compres, managing member of Advance Customs Brokers and Consulting. “There was almost 90 percent compliance with the rule at first, but there's now more enforcement because more people aren't doing what they're supposed to. On a day to day basis, about 12 to 15 percent of entries that should have included the ISF information do not include it.” Compres does customs clearings, and through her experience working with importers, she's seen how the rule has affected them. She thinks that enforcement of the ISF rule could be troublesome for some importers.
“At the end of the day, this doesn't affect importers so much because they're doing their work,” she clarifies. “But people who have trouble providing information for shipments are going to have problems.” She noted that fines are sometimes not levied until months after a shipment has arrived and has been liquidated. Being slapped with a $5,000 fine months after everyone has been paid for a shipment could cause problems for an importer. Additionally, carriers, not wanting to run afoul of the rule, could refuse to load a shipment if adequate, timely information is not available. In order to avoid problems, Compres suggests taking a few things into consideration.
“I tell shippers to send the ISF information when the booking is made,” said Compres. “Because there are usually about three days between then and when the cargo is shipped.” Importers should also be aware of situations in which they could be liable for things out of their control. They could negotiate contracts, for example, that stipulate a shipper is liable for any penalties related to mistakes made by the shipper, or they could draw up an agreement where money is held to cover any possible fines until such time as when both parties are no longer at risk for fines. The bottom line is that, because of new enforcement of the ISF rule, importers should do everything in their power to comply with the regulation, and they should take measures to cover their liability for things that are out of their control.
“This is a hard situation for some importers,” said Compres. “Because they have no control over some information, yet they're still responsible for it.”
For more information:
Pat Compres
Advance Customs Brokers and Consulting
Tel: +1 708 476 0700