New ISF (10+2) rule may be coming in May

Given the fast-paced nature of the logistics and supply chain sectors, it can be challenging at times to keep an eye on every single thing that is happening at any given time.

Today, that thing, for me is the Import Security Filing (ISF), which is also 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.

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.

Considering I have not heard or seen a whole lot regarding ISF/10+2 of late, I thought it might be a good idea to ask someone in the know, Albert Saphir, principal of ABS Consulting, in Bradenton, Florida. What Albert told me was very interesting.

“CBP has stated that a final ISF rule (the current one is still not a final one legally speaking) should be forthcoming this year, and everyone expecting penalties (liquidated damages) to then be enforced by CBP,” he said. “From what I know, CBP has not issued any penalties yet for ISF violations and failures.  In my view this is resulting in many importers and customer brokers (and forwarders) taking a relaxed approach which often means late and inaccurate filings from what I have seen.  Many have stated to me privately that ‘CBP does not care so why should we?’ It is not a good attitude but understandable if ISF is not enforced.

What’s more, he said that CBP made such a big issue about ISF, even codifying benefits for compliant companies (obviously elusive until enforced) that he has been surprised that enforcement has not yet taken place, although this most likely this will finally change in 2013, he said.

An October 2010 report from the Government Accountability Office (GAO) stated that data from the United States Customs and Border Protection (CBP) subsidiary of the Department of Homeland Security found that as of July 2010 roughly 80 percent of U.S.-bound ocean shipments were Import Security Filing—or 10+2—compliant.

While this data is more than two years old, 80 percent compliance is a pretty good number, it seems. But Saphir said at the time that is not the case.

“80 percent cooperation 48 hours before arrival does not seem to be very compliant at least in my view,” said Sapphire. “But it is light years better than where we were a year ago. As to why there are 15-to-20 percent of shipments with no ISF 48 hours prior to arrival is unclear.”

In most cases, other than short sea shipping, vessels in Asia and Europe to U.S. main trade lanes are on the ocean, on average, at least 10-to-20 days, which is a large time gap two days prior to arrival compared to a day prior to sailing, noted Saphir.

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.”