Roanoke Trade - ISF Updates

Latest Update: Effective October 1, 2014, LA/LB Seaport to Modify Enforcement Posture on ISF No-File Shipments
September 30, 2014

Per CBP CSMS #14-000520, effective October 1, 2014 the LA/LB Seaport will modify their enforcement posture for ISF no-file shipments. Per the statement, “CBP will continue to place manifest holds on all cargo (full container loads and consolidated loads) that does not have an ISF on file, 72 hours before vessel arrival at the LA/LB Seaport. CBP will manually monitor the existing holds to ensure the ISF information has been filed.” (Emphasis added. Previous policy used 48 hours prior to vessel arrival as the trigger.) Additionally, based on the ISF information filed, CBP will determine if additional enforcement measures are in order. This could include assessment of Liquidated Damages against those who have a history of failing to file required ISF information.

Roanoke strives to bring you the most recent, up-to-date information regarding ISF enforcement. Should you have any questions, we invite you to contact Dave Jordan at dave.jordan@roanokegroup.com.

August 11, 2014: CBP New York/Newark Pipeline re Updated Enforcement Strategy

CBP’s New York/Newark port issued its informational pipeline 14-024-NWK on August 4, 2014 advising they will immediately begin a “three strike” policy to enforce ISF violations. Refer to our July 14 posting for CBP’s sample violation letter.

July 23, 2014: CBP San Francisco to Focus on ISF-10 Enforcement

CBP’s San Francisco port issued a notice on July 15 advising they will focus on ISF-10 enforcement for importers without the required ISF. CBP’s notice #728-14-11 can be found here.

July 14, 2014: ISF Sample Warning Letter Violations

CBP has released a sample warning letter that it may use when notifying ISF importers of violations, consistent with their current “three strike policy.” The sample letter can be found here. This letter is intended to make importers aware of compliance issues pertaining to ISF filings, providing them an opportunity to correct issues and avoid liquidated damage claims for recurring errors. Roanoke Trade encourages ISF importers to work closely with their customs brokers on ISF filings to assist with mitigating ISF exposures.

July 2, 2014: ISF – What’s New, What’s Not

It’s been seven weeks since CBP’s internal memo to seaports resuming limited liquidated damage (LD) enforcement on ISFs. NCBFAA and the International Trade Surety Association (ITSA) requested a copy of the directive but CBP has declined to provide it. CBP maintains that an FAQ Addendum posted to their website sets forth the pertinent elements of the directive.

Regarding the resumed enforcement phase:

CBP has adopted a “three strikes” policy. Ports must undertake “informed compliance” outreaches to importers via phone, email, or letter for the first three (nationwide) violations. LD cases may be forthcoming beginning with the fourth violation. The three strikes threshold applies regardless of the number of shipments received annually. NCBFAA and ITSA have (thus far, to no avail) objected to this as imposing an impractical and disproportionate standard of performance upon importers with large numbers of entries annually.
Ports continue to have “local discretion” on enforcement.
NCBFAA and ITSA have urged CBP to advise filers on both LD notices and “strike” outreaches. CBP has agreed to provide LD copies to filers but has declined to contact filers on outreaches.
The enforcement focus continues to be timeliness/non-filing vs. ISF content.
Vessel departure information remains spotty. Surety portal ISF records continue to lack VDM information over three quarters of the time.
ISF records provided to sureties contain many unexplained and ostensibly faulty bondholder references. CBP has been advised but has not yet furnished a substantive response.

Trade groups have commented upon increased incidence of ISF holds at certain ports in recent weeks. To date, our sureties have received no new ISF LD claims. We will provide further updates when claims resume and there is information of a material nature to report.

June 16, 2014: ISF Enforcement Update

Effective May 13, 2014, and continuing for one year, Customs and Border Protection (CBP) announced an amendment to its Importer Security Filing (ISF) Enforcement Strategy. As a follow-up measure, CBP issued an ensuing FAQ document which is an extension of the one-year review period that began July 9, 2013.

CBP has modified its approach pertinent to the enforcement of ISF-10 filings. Ports will now implement enforcement actions for the most severe violations, such as ISFs that are significantly late or have gone missing. Tardiness is relative to the length of ocean voyage to the U.S., but the focus is also on the degree to which the late or missing filing impedes targeting, screening and other security measures.

Ports will give no less than three warnings to an ISF Importer in violation prior to issuing liquidated damages. CBP will endeavor to issue notice of liquidated damages within six months of the violation, but they will continue to retain the full six-year statutory limit. Ports will decide whether liquidated damages or cargo holds are a more effective approach and use of limited resources.

The tracking of violations is handled through a centralized database visible throughout CBP’s ports, and it means the three warnings are tallied country-wide, not at each port. Violation visibility enables CBP headquarters to track violations and identify locations and ISF Importers where enhanced compliance outreach is necessary.

Should you have any questions, please submit them via email to Dave Jordan at dave.jordan@roanokegroup.com. Or you may contact your Roanoke service office at 1-800-ROANOKE with questions you may have about ISF bonding or any other bonds or insurance matters.

April 23, 2014: ISF Enforcement Updates

The trade community’s interest in ISF developments remains high. Considering the sweeping impact of this program upon brokers, importers, and others, this is no surprise.

Has there been a great deal of ISF discussion over the past seven months? Yes. Have there been a many substantive changes? Not really. As a follow-up to an ISF enforcement update Roanoke prepared for its clients and colleagues late last summer, we have prepared a brief status report on ISF administration. To access this concise update, click here.

Should you have any questions, please submit them via email to Dave Jordan at dave.jordan@roanoketrade.com so he may respond to you. Or you may contact your Roanoke service office at 1-800-ROANOKE with questions you may have about ISF bonding or any other bonds or insurance matters.

August 28, 2013: Importer Security Filing Update

Despite the good-faith efforts of CBP officials, there continue to be many Importer Security Filing (ISF) related questions on the minds of the international trade community. Roanoke Trade has been extensively involved in the CBP and trade dialog on ISF via its representation in and interaction with COAC, the Customs-Surety Executive Committee, the International Trade Surety Association, the NCBFAA ISF Subcommittee, and a number of other organizations. We would like to share with you knowledge we have gained from those activities but - we wish to do so in a manner that respects your time. To achieve these twin objectives, we have prepared for you a short summary of key CBP feedback along with some brief reporting and commentary on unresolved matters of general concern. Click here to view this informative summary.

It has been over 3 years since CBP has revised the ISF FAQ document on their website and they have indicated that they are planning to release an update within the next month. We will send a notice when this release takes place. Meanwhile, the existing document contains foundational information on the ISF program and process that may be of use to your staff members. You can access this document here.

Should you have any questions, please submit them via email to Dave Jordan at dave.jordan@roanokegroup.com so he may respond to you. Or you may contact your Roanoke Trade service office at 1-800-ROANOKE with questions you may have about ISF bonding or any other bonds or insurance matters.

June 27, 2013: Importer Security Filing Enforcement Progresses

Starting with Importer Security Filings (ISF) due on or after July 9, 2013, US Customs and Border Protection (CBP) will begin to use liquidated damages as an enforcement tool for compliance. For over 3 years, CBP relied on outreach, education, and port examinations for non-compliant ISF Importers.

The information in this notice is based on the CBP ISF Regulations, CBP ISF FAQ's, and public statements CBP has made to media outlets and to trade groups.

ISF liquidated damages arise from the bond contract. Any ISF Importer with certain continuous bonds on file (Activity Codes 1, 2, 3, 4 or 16) automatically agrees to comply with all ISF requirements. Breaches of those requirements results in a claim for liquidated damages of $5,000, subject to $10,000 in total per ISF transaction number. (Caution: the cap is a policy decision by CBP, which can be easily changed without formally rewriting the regulations or statute.)

Ports will be responsible for identifying the ISF violations, and for a while, CBP HQ will review all violations before the port will issue a CBP Form 5955a. A proper ISF is complete, accurate, and timely. Some ports may focus more attention on missing ISFs, while others may see most problems with late or inaccurate ISFs. Any violation of the ISF regulations can result in liquidated damages.

It is CBP's policy to identify ISF violations promptly (within a month of the occurrence). However, workload fluctuations and HQ review may delay the issuance of the CBP Form 5955a. Additionally, CBP is not waiving any of its rights, including the right to pursue violations at any time up to 6 years after the breach of the regulations occurred. Please click here for a full detailed version of this notice.

Roanoke Trade is continuously active in advocating for the international and domestic trade community and finding solutions for our clients to work more effectively. If you have any questions regarding this notice, or any other related subject, please contact us via email or call 1-800-ROANOKE to speak with a service representative.

This information is provided by Roanoke Trade, a division of Roanoke Insurance Group Inc. as a public service and for discussion of the subject in general. It is not to be construed as legal advice. Readers are urged to seek professional guidance from appropriate parties on all matters mentioned above. Insurance and surety risk management solutions for supply chains and transportation have been Roanoke Trade’s focus since 1935. Roanoke Trade is a subsidiary of Münchener Rückversicherungs-Gesellschaft (Munich Re) and an affiliate of Watkins Underwriters at Lloyd’s of London. Roanoke Trade closely follows the ever-changing government policies that affect the movement of goods, and works only with insurance companies financially rated as “A-” (Excellent) or better.