How to Avoid US Customs ISF Penalty

U.S. Customs and Border Protection (CBP) published in its CBP Bulletin mitigation guidelines for the Importer Security Filing ISF 10+2 program. According to the guidelines, there are potentially three situations for which liquidated damages may be issued:

- Inaccurate submission of an ISF: CBP will issue a liquidated damages case in the amount of $5,000.
- Late submission of an ISF: CBP will issue a liquidated damages case in the amount of $5,000.
- Failure to withdraw an ISF: CBP will issue a liquidated damages case in the amount of $5,000.

No liquidated damages will be assessed for the failure to file an ISF if no bond is in place. CBP will withhold the release or transfer of goods for which no ISF has been filed until all ISF information is received. CBP will also reserve the right to limit the permit to unlade goods for which no ISF has been filed and, if unladen, those goods may be subject to seizure.

In addition, a list of mitigating and aggravating factors has been published in the guidelines. Mitigating factors include:

- Evidence of progress in implementing ISF compliance during the phase-in period.
- A small number of violations compared to the number of ISFs.
- C-TPAT Tier 3 and Tier 2 importers will receive consideration of up to 50% mitigation for violations.
- The importer has demonstrated that remedial actions have been taken to address the circumstances surrounding the violation.
- Late ISF filings due to circumstances beyond the importer's control.
- Receiving incorrect information from another party or supply chain, if this information is found to be incorrect at a date later than allowed under the correction timeline.

Aggravating factors include:

- Lack of cooperation with CBP.
- Smuggling attempts and other actions contrary to law in association with the shipment.
- Multiple errors on one ISF.
- A rising error rate calculated over all ISFs.

The mitigation guidelines become effective July 17, 2009.

CBP has said that they do not plan to enforce the ISF penalty until early 2010. However, Importers are required to be in compliance to the Importer Security Filing regulations as soon as possible. Filing the Importer Security paperwork requires approved ISF software. There are many ISF software companies providing compliance applications. Not every software solution is the same. Each software company has different real-time features and collaboration capabilities. Be sure to be get an ISF software solution with RDV (Role Dependent View) technology and real-time visibility features.

Nick Matyas is the Vice President of Strategic Initiatives at Freightgate. Freightgate is the world's leading Logistics SaaS Software Solutions provider for global shippers, forwarders, carriers and supply chains. working to effectively manage the complex and demanding information flow in today's worldwide supply chain.

Freightgate's applied technological and industry-specific expertise ensures that you achieve and sustain competitive advantage. Contact Freightgate on the web at http://www.freightgate.com, email sales@freightgate.com or call (714) 799-2833.