Posted on January 5, 2010 by Peter Quinter

Importer Security Filing or "10+2"

Peter A. Quinter, Florida Customs LawyerAs of January 26, 2010, U.S. Customs and Border Protection (CBP) will require that all importers comply with the Importer Security Filing (ISF), also popularly known as "10 +2" because of the 10 elements required to be provided to CBP relevant to the importer and 2 elements required to be provided to CBP relevant to the carrier.  CBP has announced that as of January 26, 2010, it will also begin to issue penalties of either $5,000 or $10,000 against importers who fail to comply with ISF; something CBP calls its "enforcement phase". Importers who self-file ISF, or their agents, must understand the changes, comply with them, and, when a penalty is issued by CBP, respond in writing to mitigate the penalty.

Fortunately, on January 28, 2010, from 11:00 a.m. to 2:30 p.m., the South Florida Chapter of the Council of Supply Chain Management Professionals (CSCMP), is hosting a seminar entitled "ISF 10+2 Reality Sinks In...What's Next?"  To register or learn more about CSCMP, click on http://www.cscmp-sofl.org/events.shtml. The impressive panel includes customs brokers, importers, carriers, consultants, an attorney, and Richard DiNucci, Director, Secure Freight Initiative, CBP Headquarters. 

As you should know, the ISF is filed via the Automated Broker Interface (ABI) or the Automated Manifest System (AMS), and it is always sent to the Automated Targeting System (ATS) for analysis and review by CBP officials.  Hence, it is obvious that CBP will use the ISF information to target, stop, and examine imported shipments.  Incorrectly or incompletely filing ISF will result in increased delays of imported shipments.  Moreover, CBP has announced that as of January 26, 2010, it will selectively penalize the more severely non-compliant importers, and will only more frequently issue such penalties over time.

On December 24, 2009, CBP amended the Interim Final Rule on November 25, 2008 entitled "Importer Security Filing and Additional Carrier Requirements." See  http://edocket.access.gpo.gov/2009/E9-30570.htm.  The amended rule clarified the ISF Bond Terms for all importers.  Knowing all aspects of this important new rule is necessary for the international trade community.  Click http://www.cscmp-sofl.org/events.shtml to register.  To learn more about the South Florida Chapter of the CSCMP, please contact a member of the Board of Directors at http://www.cscmp-sofl.org/board.shtml.

Happy New Year to all.

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Posted on September 16, 2009 by Peter Quinter

Peter Quinter Goes to Washington to Talk to Congress

The past few days, I have been in Washington, D.C. meeting with several members of the U.S. House of Representatives to discuss issues of vital importance to the international trade community.  As part of the annual Government Affairs Conference (GAC) of the National Customs Brokers and Forwarders Association of America, Inc. (NCBFAA), I met with the highest level of the U.S. Customs and Border Protection, the Federal Maritime Commission, and spent an entire day on Capitol Hill.  The Representatives were interested in, and understood the importance of, international trade and the role of customs brokers and freight forwarders in that process.  We spent a lot of time talking about some of the details of the Trade Enforcement Act of 2009 (H.R. 496) and the Senate version's Customs Facilitation and Trade Enforcement Reauthorization Act of 2009 (S. 1631) which will hopefully re-balance the historical mission of U.S. Customs to regulate trade as much as it is to "secure the border".  We also discussed at length the Export Control Improvement Act (H.R. 3515).  The Food Safety Enhancement Act of 2009 that recently passed the House. (H.R. 2749) and exempts customs brokers from the onerous civil penalty provisions (up to $250,000 for inadvertent violations and $500,000 for knowing violations by importers) will still need to go to conference between the House and Senate versions, so that also was high on our list of priorities.  Just because imported food is determined by the FDA to be adulterated or contaminated and is refused entry into the United States should not result in a penalty against the customs broker who likely never even had possession of or saw the food.

Separately, most interesting was meeting with the Trade Counsel of the House Committee on Ways and Means and Staff Counsel for the Senate Finance Committee who were actually drafting the language to include in the Customs Reauthorization Act. Much discussion centered around Customs' delays in issuing detention notices to importers, Customs officers issuing defective and incomplete notices, delays by Customs in issuing formal Seizure Notices to importers, and the amount of time it sometimes takes Customs in making decisions on Petitions filed by importers, brokers, and lawyers in seizure cases.

In meeting with Robert (Bob) Jacksta, Deputy Assistant Commissioner for the Office of Field Operations, he stated that at this time U.S. Customs had 993 Import Specialists, and 21,000 CBP Officers (formerly called "Inspectors"). He stated there were 200 Importer Self-Assessment (ISA) members.  For C-TPAT, Mr. Jacksta stated there were about 9,400 certified members, which included 4,300 importers, 2,500 carriers, 811 customs brokers, , and 917 foreign manufacturers. Altogether, C-TPAT members comprised 51% of the value of imported merchandise into the United States.

Some very interesting statistics cited by Mr. Jacksta included a 4.6% marine cargo physical examination rate by Customs.  Also, the number of land border crossings by truckers with Mexico and Canada are down about 20% from a year ago.

I have noticed some new terminology recently used by both DHS and CBP officials. Both Daniel Baldwin, Assistant Commissioner, Office of International Trade, and Kimberly Marsho, Director, Office of Trade Relations, used the phrase "management by account".  Mr. Baldwin announced the creation of an Import Product Safety Center located in Washington, D.C., and staffed by CBP and U.S. Consumer Product Safety Commission (CPSC) personnel.  Ms. Marsho stated that the annual Customs Symposium would take place December 8-10, 2009, in Washington, D.C. at the Convention Center, and that an announcement would appear on the CBP website "in a couple of weeks".

Richard DiNucci, Director, Secure Freight Initiative, Office of Field Operations, CBP, who is leading CBP's Importer Security Filing initiative, commonly known as"10+2" or "ISF", reported that the compliance rate for ISF Filing is now over 95%, and that enforcement (i.e. penalties or liquidated damage claims) against importers will be issued starting in January 2010.  Most errors are invalid HTS numbers or invalid country codes. 1/3 of the ISF filers are C-TPAT members.

Finally, Kevin Delli-Colli, Acting Assistant Secretary for Export Enforcement with the Commerce Department's Bureau of Industry and Security, discussed the benefits of filing a voluntary self-disclosure (VSD) with the BIS to avoid the $250,000 penalties assessed against companies and individuals who violate the export controls laws and Export Administration Regulations (EAR) of the United States.  BIS is aggressively pursuing investigations and penalties against companies, and individuals, who do not obtain a license when required, or violate the terms of a license.  BIS penalties are now more often being assessed against international freight forwarders for aiding or abetting the illegal export of merchandise.

In summary, the GAC was an informative and rewarding experience.  The Florida Customs Brokers and Forwarders Association (FCBF), led by President Cari Cossio, and other NCBFAA Chapters from around the country, represented the international trade community well to our Congressional representatives. 

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