CBP to begin imposing penalties Jan. 26
By Peter A. Buxbaum, AJOT
The so-called 10+2 regulation has been in the trade horizon for some years, first in the discussion and rulemaking phases and then with its formal enactment in January 2009. Despite its entry on the books, however, U.S. Customs and Border Protection has held off on the formal enforcement of the regulation, with fines and other penalties such as denied entries, for a full year.
That grace period is about to expire, and importers are making the final tweaks to their systems and processes to make sure that they are in compliance. Although importers should have been working on this for some time, industry observers note that there will be a transition in the run-up to January.
“There are always early adopters” of technologies and systems, said Michael Odrzywolski, a product manager for U.S. Customs Brokerage at Livingston International, a logistics provider and customs broker with head offices in Buffalo and Toronto. “There was a lull during the summer, but now everyone else is kicking into gear as we get closer get to January.”
The regulation in question requires that importers collect and submit to CBP, in an Importers Security Filing (ISF), twelve data elements in connection with import shipments. Ten data elements which provide descriptive information in shipments are due 24 hours prior to vessel loading. This information includes the identity and location of the manufacturer, seller, and buyer; the eventual destination; the container stuffing location and the stuffer’s identity; the identities of the importer of record and the consignee; the country of origin of the goods; and the Commodity Harmonized Tariff Schedule number.
Two message sets to be provided by the ocean carrier are due within 48 hours of vessel departure, including the vessel stow plan and any container status messages.
Once enforcement begins, importers will be much more careful to comply with the rule, according to Gary Price, Livingston’s director of U.S. marketing. “I expect that once the regulation is being enforced, we will see an increase number of times importers will be modifying their filings,” he said.
The rule’s requirements present a number of challenges to importers. “One of the biggest problems is coordination between the importer and the carrier,” said Jackson Wood, a corporate business manager at eCustoms, a Buffalo-based provider of trade compliance software. “The importer is responsible for the filing, yet it must rely on the shipping company to provide some of the data.”
“Importers often struggle getting information, especially for unrelated suppliers,” added Price. “They used to collect his information while the vessel was on route. Now the time frame has been moved to prior to vessel loading.”
Some importers don’t have a great deal of visibility about who they are doing business with. “Where some importers run into issues is with overseas companies that have agents here placing orders,” said Paul Kaszubski, managing director for customs compliance at Livingston Consulting. And yet visibility is exactly what CBP is demanding, especially when it comes to receiving favorable treatment as part of programs like the Customs-Trade Partnership Against Terrorism (C-TPAT).
Some larger companies are relying on electronic data interchange (EDI) for the transmission of the ISF to Customs, according to Price. This presupposes that all of the required data is available in electronic format, which is not always the case, and could require the use of specialized EDI service providers.
Alternatives to EDI include the internet portal services provided by both Livingston and eCustoms. Users of the portal are able to log on to the site to enter information pertinent to the ISF.
Portals also allow for collaboration among diverse parties, all of whom must provide information for a common ISF filing. An importer can arrange for overseas supplies to gain access to the site for the purposes of adding IS