January 2009 - Issue 32   

IN THIS ISSUE:

10+2 a/k/a Importer Security Filing (ISF)

Fish & Wildlife Service Changes



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10+2 a/k/a Importer Security Filing (ISF)

The Importer Security Filing (ISF) and Additional Carrier Requirements are often called "10 + 2" because those are the number of data elements that the Importer (10) and Ocean Carrier (2) must transmit to CBP (Customs) for ocean freight that is to laden onto a vessel that will enter a US port.

The first thing to remember is that these regulations apply only to ocean freight on a vessel that will enter a US port. For example, 10+2 would not apply to a shipment imported into the US via rail after moving via an ocean vessel to a Canadian port. Customs has stated that they do not intend to expand these regulations to any other shipping modes.

The interim final rule for 10 + 2 was published by CBP on November 25, 2008, and the rule's effective date is January 26, 2009. This rule is in addition to the current security filing for ocean freight which is known as the "24 hour rule." CBP will "show restraint in enforcing the rule" for at least 12 months after the effective date. This does not mean that the data does not need to be filed timely; it means that Customs will be lenient if there are issues pertaining to the ability to obtain and transmit the information in a timely manner. CBP expects of carriers and importers a "satisfactory progress toward compliance" and "a good faith effort to comply with the rule to the extent of their current ability." Of course, if incorrect or misleading information is transmitted on a regular basis, Customs will not be lenient.

Per CBP, this rule will apply equally to all shipments. Since "the status of a shipment as 'perishable' or 'non-perishable' does not necessarily indicate increased or decreased security risk," there will be no special procedures for agricultural (or any other "perishable") products. Personal effects, carnet, TIB shipments, samples, and trade show displays are not inherently less of a risk than other shipments and will not be exempt from these regulations. Since returned/refused cargo has been out of the exporter and CBP, it will not be exempt from these regulations.


Data Elements:

The "2" elements are the sole responsibility of the "vessel operating carrier," and other than mentioning that they are 1) Vessel Stow Plan and 2) Container Status Messages (CSMs), we will not expand on these elements here.

The "10" elements of the ISF filing apply to all "shipments intended to be entered into the US and shipments intended to be delivered to an FTZ (foreign trade zone)." These are the responsibility of the ISF importer (or the party filing FTZ paperwork), and the ISF importer is defined as "the party causing the goods to enter the limits of a port in the United States." The "10" elements are:
  1. Seller (actual name and street address; DUNS allowed.)
  2. Buyer (actual name and street address; DUNS allowed.)
  3. Importer of Record Number (IRS/EIN)
  4. Consignee Number (IRS/EIN)
  5. Ship to Party (This is not necessarily the same information as element 3 or 4. Per Customs, this element is the "name and address of the first deliver-to party scheduled to physically receive the goods after" Customs release. If the importer of record or consignee is a company's corporate address and if the freight is being delivered to a separate warehouse, then the warehouse address should be given.)
  6. Manufacturer or Supplier (actual name and street address. DUNS allowed, but not MIDS.)
  7. Country of Origin (import country of manufacture/processing)
  8. HTSUS (at least 6 digits)
  9. Container stuffing location
  10. Consolidator (container stuffer)

Elements 1-8 must be filed 24 hours prior to being laden onboard the vessel. Since the information in elements 9-10 might be difficult to confirm, Customs will allow the flexibility of filing those two elements anytime prior to 24 hours before arrival of the vessel at the US port of unlading.

In order to file the ISF information timely, it is imperative that the information/documentation be available to the party who will be filing ISF no later than when the freight is available for pick-up or delivered to the forwarder's dock.

The ISF data will be linked to the customs manifest data via the BL (ocean bill of lading). Since the BL will be transmitted with the rest of the ISF data elements, it can be considered an "11th element." Customs requires the BL information to be sent at the HBL (house bill of lading) level if a HBL has been transmitted to Customs by the carrier/forwarder.

Customs realizes that there may be instances where data changes or more accurate information becomes available after the initial ISF data is filed.

Information in elements 1-4 must be updated if changes occur or more accurate information is available prior to arrival at a US port.

Customs provides flexibility regarding information in elements 5-8 in that they can be initially filed based on the best available information. The information in these elements must be updated as soon as more accurate information is available, but must be no later than 24 hours prior to arrival at a US port.

Operational requirements and processes:

All updates must be filed by the same party who initially transmitted the 10 ISF elements. The ISF importer can file for themselves if they have the capability to transmit data to Customs via an approved electronic interface (AMS or ABI). If the ISF importer does not have that ability, they can authorize a company that does have the ability to transmit the data to Customs as a filing agent. A filing agent must possess a valid POA "in English" from the ISF importer, but the filing of ISF alone does not constitute "customs business." Just as the Importer of Record is ultimately responsible for the import entry information, the ISF importer is ultimately responsible for "timely, accurately, and completely submitting the ISF."

CBP will transmit an electronic acknowledgement only to the filer when the ISF is received. This acknowledgement will include a unique identification number. Any updates must reference this ID number.

Depending upon the information received in the data elements, CBP can put a hold or a Do Not Load (DNL) status upon the shipment. CBP will communicate holds and DNL's as quickly as possible.

Customs entries can be pre-filed at the same time as ISF. If a Customs entry is pre-filed with the ISF data, then the filing agent must be a licensed Customs broker. But there will be no special provisions for pre-filing a Customs entry if the shipment is moving on an IT to an inland port.

There must be a continuous Customs bond associated with the data transmissions. It can be held by either the ISF Importer or their agent. The designated current continuous bonds (importer, custodial, international carrier, FTZ operator) have been amended to include ISF filing, and Customs has created a new continuous "importer security filing bond" to comply with these regulations. Customs does not currently have a provision for a Single Transaction Bonds for ISF filing. "If the ISF importer does not have one of the designated bonds, the party must obtain a bond or designate a bonded agent to file under the agent's bond if the agent agrees in writing." Any penalties/liquidated damages will be guaranteed by the bond that was associated with the data transmission.


International Shipments Routed via the United States:

Since security issues apply to all freight that has been laden onto vessels that enter US ports, there are separate requirements (consisting of only 5 required elements) for shipments that are not intended to be imported into the US. This is for Freight Remaining On Board the ocean vessel (FROB) or intended only for export (IE or T&E shipments). Transmission of these elements would be the responsibility of the carrier for FROB freight and the party filing the inbond documentation for IE / T&E shipments. The 5 elements are:
  1. Booking Agent
  2. Foreign Port of Unlading
  3. Place of Delivery
  4. Ship to Party
  5. HTSUS (6 digits)

These elements are required any time prior to lading onboard the vessel at the foreign port.

Fish & Wildlife Service Changes

The Fish & Wildlife Service has published its final rule regarding "Importation, Exportation, and Transportation of Wildlife; Inspection Fees, Import/Export Licenses, and Import/Export License Exemptions."

The best explanation of the changes in this ruling can be found in the following email sent by F&WS (Contact: Tamara Ward 703/358-2512):

The U.S. Fish and Wildlife Service is increasing inspection fees for import and export of wildlife, and wildlife products, in order to recover more of the costs of inspecting shipments from those who use these services. The Service is also adding new fees for certain types of shipments and eliminating some exemptions from import/export license and inspection fee requirements.

The changes are documented in a final rule that was published December 9 in the Federal Register. The Service will implement the new fees and requirements on January 8, 2009.

"These changes will ensure that those who benefit from wildlife trade pay a fair share of the costs of regulating that trade," said Service Director H. Dale Hall. "The new fee system will help us maintain vital inspection services and treat importers and exporters more equitably."

Most imports and exports of wildlife and wildlife products must be declared and cleared by Service wildlife inspectors. Individuals or companies engaged in commercial wildlife trade must be licensed by the Service and pay inspection fees for their shipments. The current fee structure dates back to 1996 and does not cover the costs of providing inspections. Without a fee increase, the Service will be forced to cut back on inspection services.

Under the new fee schedule, commercial importers and exporters will see fees rise gradually over the next four years, allowing them to gradually adjust to increased costs through 2012. The flat rate "base" inspection fee for a commercial shipment inspected at a designated port (including ports that function as "designated" for particular types of shipments) during normal business hours will increase from $55 to $87 in 2009. This fee will rise incrementally each year thereafter until it reaches $93 in 2012. The Service first outlined these changes in a proposed rule seeking public comment in February 2008; a public meeting was held in April. The Service received 72 comments from industry representatives, trade councils, and other groups.

The 2009 base inspection fee for all shipments imported or exported at other ports will be $136. This fee will also increase by small amounts each year, rising to $145 in 2012. All importers and exporters using ports where Service inspectors are not stationed will also pay travel, transportation, and per diem costs associated with inspection of their shipments.

The new fee structure also provides for overtime fees when shipments are inspected outside of normal business hours. As in the past, the Service will collect overtime fees at all ports from both commercial and non-commercial importers and exporters.

The Service will now charge special "premium" fees for shipments consisting of live wildlife or protected species. Businesses dealing in such wildlife will pay the new premium fees in addition to the appropriate base inspection fee.

Premium fees, however, will also apply to some non-commercial imports and exports involving live specimens or protected species. Importers and exporters will pay premium fees for shipments moving by air, ocean, rail or truck cargo at designated ports and for any import or export of live or protected wildlife at other ports.

In the past, businesses paid most of the inspection fees we collected.

"But many of the more complex and time-consuming inspections our officers conduct involve live wildlife or protected species imported and exported for non-commercial purposes. We're no longer going to ask businesses to subsidize these other inspections," said Service Law Enforcement Chief Benito Perez.

During 2009, the Service will collect a $37 premium fee for imports or exports of live wildlife. A separate $37 premium fee will be charged for imports or exports of species protected under Federal law when a permit is required. Such wildlife includes federally listed endangered or threatened species, migratory birds, marine mammals, injurious species, and wildlife protected under the Convention on International Trade in Endangered Species. If a shipment contains both live wildlife and species protected under Federal law, the importer or exporter will pay two premium fees.

Premium fees will increase each year over the remaining years covered by the fee schedule, rising from $37 in 2009 to $93 in 2012.

The Service is also removing some exemptions that waived license and/or fee requirements for specific businesses. Under the new rules, circuses and animal shows and those dealing in furs from certain captive-bred species must obtain a Service import/export license and pay inspection fees.

Exports of captive-bred bison, emu, and ostrich meat and aqua cultured sturgeon food items will no longer be exempt from inspection fees.

The mission of the U.S. Fish and Wildlife Service is working with others to conserve, protect and enhance fish, wildlife, plants and their habitats for the continuing benefit of the American people. We are both a leader and trusted partner in fish and wildlife conservation, known for our scientific excellence, stewardship of lands and natural resources, dedicated professionals and commitment to public service. For more information on our work and the people who make it happen, visit www.fws.gov.


Please visit the following links for the complete rule:

Text format: http://edocket.access.gpo.gov/2008/E8-29070.htm
PDF format: http://edocket.access.gpo.gov/2008/pdf/E8-29070.pdf


If you have any questions or comments regarding the Compliance eNewsletter,
please contact Paul Codere from the Customs Brokerage Department.
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