If you're an importer, you're familiar with the many regulations and requirements that govern the global movement of goods. One of these requirements is the Importer Security Filing, or ISF. 

ISF filing requirements demand accurate and timely submission of specific information about your cargo before it reaches the U.S. Late submissions can trigger an ISF late filing fee, which can cost you thousands of dollars.

Here's what you need to know to avoid penalties and maintain the uninterrupted flow of your cargo.

What is an ISF?

The Importer Security Filing enhances the security of the supply chain by providing U.S. Customs and Border Protection (CBP) with advance information about the goods being imported before they arrive in the U.S. This allows CBP to assess and manage potential risks associated with the cargo. The ISF filing requirement applies to most cargo arriving by ocean vessel. The ISF is commonly referred to as the "10+2 filing" since it consists of 10 data elements from the importer and two data elements from the carrier.

Here’s the information that must be communicated on the ISF:

From the importer:

• Name and address of the manufacturer or supplier of the goods being imported.
• Name and address of the seller or owner of the goods being imported.
• Name and address of the buyer or owner of the goods being imported.
• Name and address of the entity that will take possession of the goods upon arrival in the U.S.
• The physical location where the cargo was loaded into the container.
• Name and address of the party who loaded the container, if different from the shipper.
• The identification number of the party responsible for the payment of duties and meeting all legal requirements of the importation (Importer of Record number or Foreign Trade Zone applicant).
• The IRS number, EIN or SSN of the consignee, if applicable.
• The country where the goods were manufactured, produced or grown (country of origin).
• The HS Code (Harmonized Tariff Schedule code) noting the exact commodities being imported.

From the carrier:

• Information about how the cargo is stowed on the vessel, including the container numbers, descriptions of the cargo, and their location on the vessel.
• Status updates about containers, such as when they're loaded, discharged or gated out.

If, after the filing is submitted and before the goods enter the limits of a U.S. port, any of the information submitted changes or more accurate information becomes available, you’re required to update the documentation. Similarly, if you no longer intend to import the goods, you must withdraw the ISF and explain why.

Who Is Responsible for Filing the ISF?

The ultimate responsibility for meeting ISF filing requirements falls to the importer. However, in most cases, the ISF is actually filed electronically by the customs broker on behalf of the importer.

The importer completes the customs broker's ISF worksheet, which the broker reviews in preparing the ISF for transmission to CBP. The broker or a designated consignee can act as the legally identified importer in the filing.

When Is an ISF Required?

The quick answer is, ISF filing requirements must be met any time freight enters a U.S. port. Whether the container is received and clears customs, bound for the importer’s company, or it enters a Foreign Trade Zone (FTZ) or a bonded warehouse, it still requires an ISF filing.

“The vessel could call on the U.S. port, but then the container is never discharged, destined for South America,” said Andrew Rozek, president of New Jersey-based freight forwarder I.C.E. Transport. “This is called Freight Remaining on Board (FROB). In such a case, the carrier files five data elements in the ISF, and there is no requirement for an importer to file anything because a U.S. importer does not exist.”

An ISF Preparation Checklist

Here’s what is needed before booking, before loading, and after the ISF filing:

Before booking:

• Identify the Importer of Record (IOR)
• Confirm who will file the ISF
• Identify your customs broker or forwarder

Before cargo loading on a vessel:

• Send required commercial and shipment information
• Confirm seller/buyer/manufacturer information
• Confirm country of origin
• Confirm HS classification
• Confirm consignee and ship-to information
• Confirm IOR or FTZ information
• Submit information early enough for broker review

After filing:

• Confirm ISF acceptance
• Monitor changes to the shipment
• Update information when required
• Confirm canceled shipments are properly withdrawn
• Keep documentation supporting the filing
  
  

What About ISF Violations, Penalties and Costs?

You or your agent (such as a customs broker or freight forwarder) are required to submit ISF information at least 24 hours before your cargo is loaded onto a vessel destined for the U.S.

If the ISF is not filed on time or if it contains inaccurate or incomplete information, CBP can hit you with an ISF late filing fee, or other costly penalties. The exact amount can range from a few hundred to several thousand dollars, depending on the circumstances of the late or incorrect filing. And you as the importer are ultimately responsible for any fees or penalties, regardless of who filed the ISF on your behalf.

In addition to financial penalties, failure to comply with ISF filing requirements could also result in cargo delays, inspections and disruptions to your supply chain.

Here's a breakdown of ISF violations and what they can cost:

The good news is that first-time violators of ISF rules may have their fines reduced to $1,000-$2,000, depending on the mitigating circumstances. “The first offense is always the easiest one to mitigate,” Rozek said. “I've seen it as low as $500, but it depends on the port and on the customs officer you're dealing with.”

In addition, members of the Customs-Trade Partnership Against Terrorism (C-TPAT) will receive up to 50% penalty mitigation.

When Do ISF Filing Requirements Call for Updates?

There are several situations that require filing amended information for the ISF. Here are some common cases:

• Changes in shipping details: Vessel name, voyage number, or container information can be changed by the carrier after the original ISF is submitted, requiring the filing to be updated with the latest routing details.
• Updated buyer, seller, or consignee information: Changes to the parties involved in the transaction should be reflected in the ISF to keep the filing consistent with the commercial documentation.
• Corrections to manufacturer or country of origin data: New information from the supplier can require corrections to the manufacturer, supplier, or country of origin reported in the original filing.
• Modified HS code: A revised tariff classification can require the ISF to be amended so the HS code matches the most current information.
• Changes in container stuffing location: If the location where the cargo is loaded into the container changes, the ISF should be updated with the new stuffing location.
• Updated consolidator information: Changes to the party responsible for consolidating cargo, particularly in LCL shipments, may require an update to the ISF. On FCL shipments, the CBP considers the consolidator to be the entity that shipped the container.

As noted in the chart above, inaccurate information on either the initial ISF filing or any amendments can result in a $5,000 fine.

According to Rozek, there are instances where the filing becomes late through no fault of the importer. For instance, ocean lines will sometimes put a container on a ship sailing a few days earlier, without prior warning.

“All of a sudden, you have a sailing schedule that's confirmed for one vessel, and the line loads your container on an earlier one,” Rozek said. “Now your ISF is technically late, because it was supposed to be on a vessel sailing three days later. In that case, you as the importer have a pretty good argument in your favor with CBP as to why the filing was late.”

Avoiding ISF Filing Errors

While the ISF filing requirement calls for transmission no later than 24 hours before the cargo is loaded aboard the vessel at the foreign port, CBP's ISF Progress Reports use a different measure to assess timeliness.

CBP initially used the first bill of lading filing date as a “proxy indicator” of ISF timeliness because carriers were required to file bill of lading information at least 24 hours before vessel loading. CBP recognized that many bills of lading are filed several days before the actual loading date. As a result, some ISFs that appeared “untimely” on earlier ISF Progress Reports may actually have met the regulatory deadline.

CBP now uses the vessel departure date minus 24 hours to better assess ISF timeliness in its reporting. The departure date calculation is a measurement tool, while the regulatory deadline remains tied to when the cargo is loaded aboard the vessel.

While 24 hours prior to departure is the requirement, Rozek advises to build in more time if possible. The later the ISF filing, the better the chance of a Customs exam that could delay your shipment.

“We've seen cases with other brokers where the ISF was not filed until a week before arrival and containers were put on hold for an exam,” he said. “In most cases they were released before an exam took place, but some did have to be examined. The longer you wait, the better the chance of a customs exam on top of everything else.”

How Do Transshipments Affect the ISF Filing?

With the increased number of vessel sharing arrangements and reshuffling of carrier alliances, ocean freight routings have become more complex. For example, a shipment might leave the UK, move to Antwerp in Belgium, transfer to another vessel, then move to Freeport in the Bahamas before being loaded onto a vessel bound for the U.S.

A feeder vessel is part of a transshipment when the cargo is transferred to another vessel before continuing toward the U.S.

For the purposes of the ISF filing, the critical deadline is tied to the vessel carrying the cargo toward the United States. Again, CBP regulations call for the ISF filing to be completed at least 24 hours before the cargo is loaded aboard the vessel at the foreign port. For a transshipment, that will mean the U.S.-bound vessel at the intermediate port, rather than the vessel departing the cargo's original port.

That makes the routing important when preparing the ISF. The filer needs to know the planned vessel movements and update the ISF if information changes before the goods enter the U.S. port.

“When you file the ISF you really have to know your routing, and sometimes, the lines don’t even know,” Rozek said. “They throw us for a loop, so we sometimes have to wait on the number of transshipments. We've seen routings change from a planned double transshipment to a single transshipment, requiring an ISF update.”

Essentially, changes to the carrier's routing information create a challenge for the filer or broker when the final vessel information is not available early in the process.

Avoid ISF Filing Problems Before They Become Costly

As you can see, filing a timely, correct ISF is critical to ensuring your cargo reaches its destination without any delay or additional expense. The logistics can get involved, considering what information has to be supplied and when, and how things like routing changes and HS code updates require filing amendments.

If you are involved in importing goods into the U.S. and feel unsure about ISF requirements, deadlines, or the potential consequences of late or inaccurate filing, a knowledgeable freight forwarder will help you ensure compliance.

I.C.E. Transport helps importers manage the documentation and coordination required for international ocean shipments, including ISF filing support. As a licensed Non Vessel Operating Common Carrier (NVOCC), I.C.E. works with importers on shipment routing, house Bills of Lading, and transshipments. When routing or other shipment details change, I.C.E’s experienced team can help determine when an ISF amendment is needed.

To learn more, contact the experts at I.C.E. Transport.