CBP set to roll out additional carrier requirements of 10+2 in July

In early July, the United States Customs and Border Protection (CBP) will commence implementation of the liquidated damages phase of the Import Security Filing, which is commonly known as 10+2.

10+2 requires importers and carriers to electronically submit additional information on cargo at least 24 hours before ocean freight is loaded onto a vessel bound for the U.S. This additional information requires importers to provide 10 data elements and vessel carriers to provide 2 data elements on containers and their cargo to United States Customs and Border Protection (CBP), adding to the information available to CBP and improving its ability to identify containers that may pose a risk for terrorism for additional scrutiny like scanning or physical inspection, according to an October 2009 report by the GAO on Supply Chain Security.

“The Importer Security Filing and Additional Carrier Requirements are part of CBP’s layered enforcement strategy,” said Acting Commissioner Thomas S. Winkowski in a statement. “CBP works collaboratively and collectively with the other agencies and the trade to maintain the highest level of security and safety for our nation while facilitating legitimate trade.”

CBP added that effective July 9 it may issue liquidated damages—a penalty secured by a bond—of $5,000 per violation for the submission of an inaccurate, incomplete or untimely filing. And it added that if goods for which an ISF has not been filed arrive in the U.S., CBP may withhold the release or transfer of the cargo. What’s more, for carrier violations of the vessel stow plan requirement, CBP said it may refuse to grant a permit to unlade for the merchandise, with noncompliant cargo potentially being subject to further inspection on arrival.

A cargo security trade expert told LM this mandate has been long overdue.

“For many [shippers], it may be a rude awakening as I have seen many ‘slack off’ with ISF compliance, including brokers and forwarders who became less and less ‘accurate’ with managing the ISF process as CBP was really not enforcing it yet,” said Albert Saphir, president of Bradenton, Fla.-based ABS Consulting. “But finally those ‘responsible’ importers that spent a lot of time and effort (money) on creating a good and compliant ISF program will receive the benefit they deserve when those importers not compliant will finally need to ‘get with the program’ or face significant monetary penalties.  Fair is fair.”

Saphir said he is convinced CBP will take a careful and measured approach to penalties, and he does not expect an avalanche of penalties but a steady flow of well “qualified” and “deserving” penalties on importers that simply fail to play by the rules.

Earlier this year, the National Industrial Transportation League (NITL) cited customs and international trade law firm Sandler/Travis’s reporting in its Daily Report that “CBP is expected to issue by the end of May a proposed rule that would make various changes to increase the accuracy and reliability of the advance information submitted under the importer security filing, or ‘10 + 2 rule.”

It added that while fines for non-compliance were set at $5,000 per incident, Sandler/Travis said that CBP has not strongly required full compliance and that the proposed rule could set forth the agency’s intention to do so and establish standards under which full compliance could take place.

ISF went live in January 2010, following a January 2009 interim final rule, which included a delayed enforcement date (of January 26, 2010) 12 months after the interim final rule took effect. During this one-year period, CBP said it would “show restraint in enforcing the rule…and 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.”