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Importer Security Filing and Additional Carrier Requirements

“10+2” Trade Outreach WebinarSpring 2010

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Today’s Presentation on “10+2”

Overview of the ISF Requirements

Program Update

Enforcement Strategy

Top ISF Issues

Q & A Session Los Angeles - Long Beach Seaport

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What is the Security Filing?

Carrier Requirements:Vessel Stow Plans required for arriving vessels with containers.

Container Status Messages required for containers arriving via vessel.

The Security Filing, commonly known as the “10+2” initiative, is a Customs and Border Protection (CBP) regulation that requires importers and vessel operating carriers to provide additional advance trade data to for non-bulk cargo shipments arriving into the United States by vessel.

Importer Requirements: U.S. Bound Cargo: requires the electronic filing of an Importer Security

Filing (ISF) comprised of 10 data elements (a.k.a., “ISF-10”).

Transit Cargo: requires the electronic filing of an ISF comprised of 5 data elements (a.k.a., “ISF-5”).

Importer Security Filing (ISF) Importer The party required to submit the Importer Security Filing (ISF) is

the party causing the goods to enter the limits of a port in the United States. This party is known as the “ISF Importer”. Could be the owner, purchaser, consignee, or agent (e.g. customs

broker).

The ISF Importer, as a business decision, may designate an authorized agent to file the Importer Security Filing on the ISF Importer’s behalf. If an agent is used for ISF purposes, a power of attorney (POA) is

required.

The ISF Importer is ultimately responsible for the timely, accurate and complete submission of the ISF filing.

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ISF-10 Data Elements“U.S.-bound” Cargo (3461 Entries, IT, FTZ)

1. Importer of Record Number 2. Consignee Number 3. Seller (Owner) name/address 4. Buyer (Owner) name/address

5. Ship to Party 6. Manufacturer (Supplier) name/address 7. Country of Origin 8. Commodity HTS-6

9. Container Stuffing Location 10. Consolidator (Stuffer) name/address

11. Bill of Lading Number (house or reg.) 12. ISF Importer

CBP Form 3461CBP Form 3461

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ISF ImporterImporter of Record #Consignee #Buyer (Owner)Ship To Party

From Order to Delivery

Manufacturer (Supplier)Seller (Owner)ISF ImporterShip To Party

Container Stuffing LocationManufacturer (Supplier)Consolidator (Stuffer)ISF ImporterSeller (Owner) Purchase Order

Ship To PartyConsolidator (Stuffer)Container Stuffing Location

Invoice

The ISF-10 is due 24 hours prior to vessel lading

Overseas Factory/Warehouse Shipper/Carrier Distribution Center

Importer/RetailerVendor/Supplier

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ISF Filing Requirements

All ISF filings are to be done electronically via the vessel Automated Manifest System (AMS) or the Automated Broker Interface (ABI)

ISFs cannot be done at the Port of Entry (i.e., Custom House) on a walk-in basis

There is no paper form (e.g., 3461)

Bonds are required to cover most ISF transactions

ISF Filing Options

CBP has begun development of an internet-based web portal to accept ISF filings Importers must pre-register their importer ID numbers with CBP (i.e., IRS#

or SSN#) Registration of the importer ID number can be done in person at a local Port

of Entry or by a licensed customs broker via the use of CBP Form 5106 Portal will be available no earlier than August 2010 Use of the portal will probably be limited to no more than two (2) ISF filings

per day, with a maximum of twelve (12) per year

In addition, some service providers allow self-filers indirect access to CBP systems via the internet

Contact a CBP Client Representative at 571-468-5500 to discuss self-filing options

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“10+2” Interim Final Rule

Effective Date: The interim final rule (IFR) took effect on January 26, 2009 (60 days after the publication date) and allowed for certain “flexibilities”: Timing of transmission for 2 of the 10 ISF data elements

Range of responses for 4 of the 10 ISF data elements

All other requirements in this rule were adopted as a final rule.

Compliance (Enforcement) Date: January 26, 2010 The IFR “flexibilities” will stay in effect until the structured review is

completed and a decision on keeping, modifying or removing them is made by DHS, OMB and other executive branch agencies.

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Structured Review and Flexible Filing CBP monitors all ISF submissions for timeliness, accuracy and

completeness.

On the basis of information obtained during the structured review and public comments, DHS will undertake an analysis of the elements subject to flexibilities.

Analyze Flexible Range of Responses (FR) Elements Ship to Party Manufacturer (Supplier) name/address Country of Origin Commodity HTS-6

Analyze Flexible Timing (FT) Elements Container Stuffing Location Consolidator (Stuffer) name/address

Only 2% of all filings claim to use the

“flexible filing” option

If you choose to use a “flexible option”, you

MUST amend your filing with a “CT”

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40’ Container

NEW SECURITY FILING DATA BED LINEN 630210 CN MFR/Supl. XINJIANG TOP BEDDING PRODUCTS Seller XINJIANG TOP BEDDING PRODUCTS

Stuffing Location XINJIANG, CN Buyer BE & D IMPORT INC (PHX., AZ)Consolidator XYZ LOGISTICS Importer BE & D IMPORT INC (PHX., AZ)Ship To Name/Add. THE TRANSFER WHSE (L.B., CA) Consignee BE & D IMPORT INC (PHX., AZ)

ISF Data Improves Targeting Capabilities

Source Description HTS C/O Role Party BILL OF LADING SHEET N/A N/A Shipper XYZ LOGISTICS

Consignee ABC TRUCKING

What’s in the box?

Non Intrusive Inspection (NII) X-Ray Image OnlyNII Image and Manifest Data

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What Are “Casings”?

ISF Data Improves Cargo Identification

Bullet Casings

Pipe Casings

Gear Casings Motor Casings

Computer Casings

Bomb Casings

Tire CasingsSausage Casings

HTS 1601.00

HTS 9306.30

HTS 7304.20

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“10+2” Program Update

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ISF-10s “By the Numbers” January 26, 2010 – May 2, 2010

Importers (IOR #s):

2,453,200Total Submissions:

Total Accepted:

Total Rejected:

2,372,907

80,293 3%

97%

123,000+

Filers: 2,226

79%

19%

<1%

Adds:

Replaces:

Deletes:

Note: Do NOT send in a “REPLACE” to simply force an ISF-Bill match message!

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Top Five Error Messages ISF-10 Errors from January 26, 2010 – April 25, 2010

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ISF Progress Reports In production since May 10, 2009

Registration is Required

Reports are on a Monthly Cycle

Reports Cover 122,251 ISF Importers

We Offer .pdf, .csv, and .xls Formats

Four Types Currently in Production: Importer by Filer Reports (most common) - Over 1,105 ISF Filers are

registered Filer Summary Report C-TPAT Importer Reports (Tier 3, 2) C-TPAT Importer Transactional Reports (Tier 3)

Importer Security Filing (ISF) Progress Reports

1. ISF10 Submission Volume:

C-TPAT Benefits of “10+2”

Earlier Decision Making C-TPAT entities are reliably identified prior to vessel lading

Based on Importer of Record Number on the ISF No longer tied solely to entry data (24 hours or more prior to arrival)

Better Decision Making Tangible C-TPAT benefits are applied much further upstream

Receive targeting credit based upon their tier status

Stabilization of Automated Hold Process Immediate Transportation (IT) in-bond risk assessments are more stable

Validation of Supply Chain Security Reviews New Entities and Locations Identified and/or Verified

Container Stuffing Location Consolidator (Stuffer) name/address

Customs - Trade Partnership Against Terrorism

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“10+2” Enforcement Strategy

CBP’s Vessel Stow Plan Module Used to identify unmanifested containers

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ISF Enforcement Strategy The full compliance (enforcement) date for the “10+2” requirements commenced on January 26, 2010, thus ending a 12-month delayed enforcement period in which CBP provided extensive outreach to educate the trade community on the new requirements. CBP will:

Apply a measured, commonsense approach to enforcement

Exercise the least amount of force necessary to obtain full compliance

Evaluate non-compliance on a case-by-case basis

Continue to provide outreach and guidance to the trade

X

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Enforcement Measures Informed Compliance Efforts

Public outreach (incl. webinars, meetings, ISF Progress Reports)

Informal and formal notification (e.g., warning letters)

Mid-level Compliance Measures Domestic NII examination manifest holds

Domestic physical examinations

Re-evaluation and possible reduction of C-TPAT status

Strictest Enforcement Measures ISF Jail (i.e., lengthier manifest holds)

Liquidated Damages

Suspension or Revocation of C-TPAT Status

Do Not Load or Do Not Discharge Orders

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“10+2” Challenges

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Top ISF Issues IdentifiedHow does CBP measure ISF “Timeliness”?

The regulation states 24 hours prior to lading (Legal)

CBP will measure by the Vessel Departure Date minus 24 hours (Practical)

Which bill of lading number do I use? Must use the lowest bill of lading transmitted in AMS (house or regular)

Contact your shipper

New ABI query functionality will help

CBP allows for the bill of lading number to be updated on the ISF

I can’t get a bond because I missed the filing deadline CBP is considering creating a Type 13 “Late ISF” coded transaction

Importers are acknowledging that they violated the regulations

Will probably not be available for longer than one (1) year

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Top ISF Issues IdentifiedI didn’t receive the ISF “Bill on File” match message.

This is common; especially when the ISF filing precedes the filing of the customs manifest (i.e., bill info).

Make sure you (or your agent) annotated the correct bill type on the ISF. Regular Bill – This bill type is also referred to as an “Ocean" or “Simple Bill”

and is issued by a Carrier. There are no underlying house bills.

House Bill – Typically issued by a NVOCC (sometimes referred to as an automated freight forwarder). A house bill of lading always falls under a carrier’s Master bill of lading.

ISFs cannot be filed against Master Bills

Do NOT Send in a “REPLACE” to force an ISF-Bill Match message

Do I need to file 24 Hours prior to lading of the feeder or mother vessel?

The ISF is due 24 hours prior to lading of the mother vessel

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Available Resources Go to: www.cbp.gov

Copy of the Interim Final Rule

ISF PowerPoint Presentation

General Frequently Asked Questions (FAQs) Document

Copy of the Regulatory Assessment

Implementation Guides (Technical File Formats)

Mitigation Guidelines

News Releases

Outreach Schedule

Security_Filing_General@cbp.dhs.gov

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Questions?

Security_Filing_General@cbp.dhs.gov

“10+2” Contacts

Richard Di Nucci, Director, Cargo Control Division

John Jurgutis, Branch Chief, ISF & Vessel Manifest

Stephen Silvestri, Branch Chief, Air & Rail Manifest

Craig Clark, Program Manager, ISF

Joseph Martella, Program Manager, New York Field Office

www.cbp.gov