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CBP Beginning Next Phase of ISF Enforcement

CBP announced that the next phase of its Importer Security Filing (ISF) enforcement will begin on May 14, 2015. This marks the end of the final one-year limited liquidated damage (LD)/”three strikes” phase of a six-year evolution of ISF enforcement. In summary, here is what will change:

  • CBP Ports, who will continue to have flexibility in their processes, may commence issuing Liquidated Damages without CBP Headquarters review and approval.
  • Ports will no longer be under CBP Headquarters mandate to issue three warning before assessing Liquidated Damages.

The Importer Security Filing (ISF) regulations require carriers and importers to provide to CBP, via a CBP-approved electronic data interchange system, information necessary to enable CBP to identify high-risk shipments to prevent smuggling and ensure cargo safety and security. Importers and carriers must submit specified information before the cargo is brought into the United States by vessel in accordance with specified time frames.

Under the policy introduced on July 9, 2013, CBP port directors enforced the ISF by putting cargo releases on hold. Now however, the Port Directors will issue Liquidated Damage Claims for $5,000 for each late or incomplete ISF while retaining the discretion to enforce ISF by using the cargo holds.

CBP Headquarters advised the CBP Port Directors to focus enforcement actions on the most severe violations (i.e., “significantly late”, or missing ISFs) and to issue ISF Liquidated Damages claims within 6 months of violation. This 6-month window does not absolve CBP of its rights to issue claims up to 6 years per statute (mostly in fraud cases) subject to 28 USC § 2415(a).

“Significantly late” will be defined by the individual ports, and is intended to only apply to those shipments where the ISF filing (or lack thereof) negatively impacted CBP’s ability to effectively assess risk and hold cargo.

ISF filings after arrival are always late and exposed to both liquidated damages claims and ISF holds.

For more information, please contact your local MIQ Logistics representative.