CBP issued CSMS #16-000499 on June 17, 2016 announcing that (a) Local Customs Ports will now issue Liquidated Damage claims without Headquarters’ review; (b) no longer will Ports issue three warnings before initiating Liquidated Damage claims (i.e. the “three strikes” policy); and, (c) Ports may hold cargo instead of (or in addition to) initiating Liquidated Damage claims.
The maximum liability for ISF filings is $10,000 in liquidated damages. However, CBP will normally assess a liquidated damages penalty of $5,000 per violation for most ISF violations (except for missing ISF’s). The guidelines also state that CBP will consider the presence of mitigating and aggravating factors when determining the final liquidated damages or penalties. Mitigating factors include: evidence of progress in implementing ISF requirements, a small number of violations compared to the number of shipments, Tier 2 or Tier 3 C-TPAT status, and demonstrated remedial action to prevent future violations. Aggravating factors include: lack of cooperation with CBP, evidence of smuggling, multiple errors on the ISF, and a rising error rate. Source: THE INTERNATIONAL LAWYER, Vol 44, No 1 (Spring 2010)