The Importer Security Filing (ISF) began in January 2009 with a one-year introductory phase-in period. Full enforcement began in January 2010, but Customs and Border Protection (CBP) maintained a flexible and measured enforcement stance.
Penalty guidelines were published in July 2009, but Customs held off doing anything until July 2013 when they announced they would begin full enforcement for real and start issuing liquidated damages against ISF importers and carriers for non-compliance.
Liquidated damages (essentially penalties backed up by a Customs bond) are being issued, but the ports must submit the cases to CBP for review first. This will be the procedure at least until mid-2014. HQ has rejected multiple cases from the ports, but has issued penalties against egregious ISF offenders.
Liquidated damages for ISF start at $5000 for failure to file an ISF; $5000 for late ISF; $5000 for inaccurate ISF; $5000 for an incomplete ISF; and $5000 for failure to withdraw an ISF. The maximum liquidated damages per ISF filing is $10,000. ISF Filing Requirements: Best Practices Now that Customs is in full enforcement mode with real liquidated damages for real money, we recommend the following best practices for your ISF program:
Don’t wait until the last minute: ISF must be filed at least 24 hours prior to vessel departure. File the ISF as soon as you are able. Make sure to get the information to the filer no later than 72 hours prior to sailing. This will allow time for holidays and weekends.
Use a template: Save time and reduce your likelihood for errors by using a template. If you don’t have one, use our Import Security Filing ISF Template.
Hold your suppliers responsible: Build language into your vendor manuals, purchase orders, contracts, letters of credit, etc., with your ISF expectations to hold your suppliers accountable for providing the ISF data and providing it timely. If you receive a penalty for a late ISF, make sure you have a clause that will require the supplier to take responsibility for the cost if they are at fault.
Use a continuous bond: A Customs continuous entry bond will cover both the ISF and the Customs entry. If you do not have a continuous bond, you will need a separate ISF bond for each filing. If the ISF is late, the surety company will likely ask for collateral of $5000 to secure the bond.
Don’t be afraid to amend your ISF filing: Update the ISF if you need to amend any information. Do not sacrifice a timely ISF by deleting it and refiling late. ISFs can be updated at any point up to the time the cargo arrives in the U.S.
Get a bill of lading (B/L) match: Make sure you get a bill of lading match at least 24 hours prior to cargo arrival. If you get an “AMS Bill Not on File” message, do not resend the ISF to try to force a match. Do double-check the bill of lading number to be sure it is correct and is the lowest level bill number on file in Automated Manifest System (AMS). If it is, the match will occur once the carrier files the manifest. If the vessel sails and a couple of days later you still don’t have a match, then you should contact your supplier to verify the bill of lading information.
Monitor your monthly ISF progress report: The party filing your ISF receives these reports through their Automated Commercial Environment (ACE) portal and should be forwarding them to you. The reports detail the number and types of errors occurring as well as your ISF on time percentage.