ISF Enforcement
Recap
A Surety Perspective
Presented by:
Jason Palumbo
Account Executive
September 18, 2013
Liquidated Damages
• LD enforcement phase officially began July 9
– Limited LD activity to date
– Major concern to importers, brokers, & sureties is poor
compliance rate
• CBP policy is to withhold release until ISF filing
– I.e., to get out of “ISF Jail” an ISF must be filed (late)
Some Disturbing Numbers
• As of September 6, “compliance rate” was just over 90%
– Eight weeks earlier, it was said to be around 80%
• These CBP numbers measure only filing/non-filing of
ISFs on shipments requiring them:
– Late file percentage unknown
“Timely” = vessel departure minus 24 hours
– Faulty data percentage unknown
Temporary Enforcement Phase
• Until mid-2014 or later, HQ is to approve all LD claims
prior to mailing to importer & surety
– CSMS giving 30 days notice to be transmitted prior to
end of HQ review requirement
• Exact form of next phase unclear
• Eventually, issuance of LD for late ISFs to become
“automatic” (similar to current process on late filing of
7501s)
What to Expect if No ISF Filed
• In general, ISF holds
– No release until an ISF filed +
– NII or intensive exam +
– Possible LD (since ISF filing will be late)
• Expectations similar if ISF is filed just before arrival
What Not to Expect
• Uniform port-to-port handling
– Due to variable volumes/resources, CBP HQ will not
dictate “operations policy” to ports
– This will affect:
LD issuance
Frequency of holds
Frequency of NIIs, intensive exams
Release of consolidated containers – partial compliance
Don’t Expect…
• No-load messages
– CBP is clearly viewing this as a rare step to be taken
only when “national security threat” is foreseen
• General increase to Activity Code 1 continuous bond
amounts
– But selective increases for specific non-compliant
importers is a possibility consistent with current
Revenue Division practice
Also Deemed Rare…
•
Long case issuance delays/large LD backlogs
– The “six year distraction”
All bond originated liabilities are subject to 28 U.S.C. §
2415
– ISF: Statute essentially starts at due date
– Other LD: Essentially starts at 5955A date
– Supplemental duties: Statute essentially runs from
liquidation
– HQ wants LD assessed timely (within 30 – 60 days)
Ready to File but Late – What to Do?
• Sureties will probably require collateral to do an ISF STB,
but there are other possibilities
• Activity Code 1 (also 2, 3, or 4) continuous bond on file
as of ISF due date
• ISF Submission Type 5 (late ISF-10 with no bond)/Type 6
(late ISF-5 with no bond)
• Worst thing to do – not file the ISF
Lingering Concerns
•
5955A inconsistencies
– Delays of up to two weeks in mailing
– Inadequate information
 To date, notices have not shown ISF numbers or filer IDs
•
Data inadequacies (ASI)
– No ISF number
– No B/L number
– No Filer ID
Mitigation…The Big Question Mark
• July 2009 Mitigation Guidelines specify:
– Minimum assessment (after mitigation) for first
violation - $1,000
– Minimum for any subsequent violation - $2,500
– Additional relief available if importer C-TPAT certified
• Interim final rule (November 2008): “…mitigation will be
the exception and not the rule….”
Questions??