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.
Here’s the information that must be communicated on the ISF:
From the importer:
From the carrier:
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.
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.
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.”
Here’s what is needed before booking, before loading, and after the ISF filing:
Before booking:
Before cargo loading on a vessel:
After filing:
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:
|
ISF Violation |
Penalty |
Penalty Detail |
|
Failure to file |
Held or seized cargo |
If goods for which an ISF has not been filed arrive in the U.S., CBP will withhold the cargo release until documentation is received, and any necessary examination is conducted. CBP also reserves the right to seize any merchandise. |
|
Late filing |
≤$5,000 |
If you (or your agent) submit a late ISF, CBP can impose an ISF late filing fee up to $5,000. |
|
Inaccurate filing |
≤$5,000 |
If your ISF is inaccurate, CBP can also claim up to $5,000. |
|
Updates or withdrawals |
≤$5,000 |
Submitting an inaccurate ISF update, or failing to withdraw one that’s no longer needed, can cost up to $5,000. |
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.
There are several situations that require filing amended information for the ISF. Here are some common cases:
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.”
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.”
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.
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.