By Santiago A. Cueto

Miami international trade, international trade attorney, international trade lawyer, Miami attorney, Miami lawyer, international attorney, international business attorney, international business lawyer

Last month I received an email from a potential foreign client regarding the Importer Security Filing (ISF) Rule, known in the international shipping industry as the “10+2” Rule.

Specifically, this person wanted to know what the penalties were for failing to comply with the rule’s filing requirements.

I’m not sure whether it was a coincidence or whether the writer knew that the U.S. Customs and Border Protection (CBP) began the liquidated damages phase of ISF enforcement less than one month ago.

Because this is one of many inquires I’ve received since the 10 + 2 Rule was implemented several years ago, I thought it would be a good idea to provide a brief over view of the ISF or 10 + 2 Rule.

What is the “10+2” Rule?

The ISF is commonly referred to as “10+2” because importers or their agents have to electronically submit ten data elements to customs 24 hours prior to vessel departure to the U.S., and ocean carriers have to submit two additional data elements

This additional information is required to assist United States Customs and Border Protection (CBP) in identifying containers that may pose a risk for terrorism.  Any suspicious containers undergo scanning or physical inspection.  

Who is Responsible for Filing?

The ISF importer is required to submit the Importer Security Filing. The ISF is the party causing the goods to arrive by vessel to a U.S. port. Typically the ISF importer is the merchandise owner, purchaser, consignee or agent such as a listed customs broker.

What Must be Filed?

The 10 data elements the importer is required to provide include:

  1. Manufacturer (or supplier) name and address
  2. Seller (or owner) name and address
  3. Buyer (or owner) name and address
  4. Ship-to name and address
  5. Container consolidation location
  6. Consolidator name and address
  7. Importer of record number/foreign trade zone applicant identification number
  8. Consignee number(s)
  9. Country of origin
  10. Commodity Harmonized Tariff Code

The carrier must now provide two additional data elements:

  1. Vessel stow plan
  2. Container status messages

How Will the Rule be Enforced?

Effective last month, CBP began the liquidated damages phase of ISF enforcement.  Penaties include liquidated damages—a penalty secured by a bond—of $5,000 per violation for the submission of an inaccurate, incomplete or untimely filing.

Additionally, CBP may withhold release or transfer of cargo if goods for which an ISF has not been filed arrive in the U.S.

For carrier violations of the vessel stow plan requirement, CBP can subject noncompliant cargo with further inspection on arrival.

Best Practices

While it may seem obvious, the most common problem I see with ISF compliance