The Department of Homeland Security’s Customs and Border Protection’s (CBP) controversial Importer Security Filing (ISF) rule — the so-called “10+2” rule for importers and carriers of ocean cargo — went into effect on January 26, 2009 after President Obama’s Administration decided to let it proceed despite a general freeze on regulatory activity. This rule requires importers and ocean carriers to submit additional shipping information on container and break-bulk cargo to CBP through approved electronic means.1
This rule implements the Security and Accountability for Every Port Act of 2006 (SAFE Port Act) that requires the Secretary of Homeland Security to promulgate regulations to require the electronic transmission of additional data elements for improved high-risk targeting of cargo prior to the loading of vessels in foreign seaports.
Carriers of cargo destined for the United States are now required to submit 2 additional data elements – (1) a vessel stow plan and (2) container status messages (CSM). The vessel stow plan must be submitted no later than 48 hours after the carrier’s departure from the last foreign port (or prior to arrival at the first U.S. port for voyages less than 48 hours in duration) and must include the following standard information:
- for each vessel: vessel name; vessel operator; and voyage number
- for each container: container operator; equipment number; equipment size and type; stow position; hazmat code, if applicable; port of lading; and port of discharge.
CSMs are required daily for certain events – i.e., when booking for a container is confirmed, when a terminal gate inspection has occurred, when a container arrives or departs a facility, etc. Carriers are exempt from these requirements for bulk and break bulk cargo under certain circumstances.
Importers of shipments of goods entering the United States and goods delivered to a foreign trade zone are now required to transmit an Importer Security Filing containing the 10 following data elements no later than 24 hours before cargo is laden aboard a vessel destined for the United States (for last minute decisions, the information must be submitted prior to lading): (a) seller; (b) buyer; (c) importer of record; (d) consignee number(s); (e) manufacturer (or supplier); (f) ship to party; (g) country of origin; (h) commodity HTSUS2 number; (i) container stuffing location; and (j) consolidator (stuffer).3
By CBP’s own estimates, this rule is expected to impose annualized costs on the industry of $890 million to $6.6 billion from 2009 to 2018. However, acknowledging the burdens imposed by this rule, CBP has noted that the rule will be subject to only “restrained” and flexible enforcement during the first year of implementation. CBP will look to whether importers are making satisfactory progress toward compliance and are making a good faith effort to comply to the extent of their current ability.
Further, CBP is providing flexibility for certain aspects of the Importer Security Filings: (i) the importer must submit the container stuffing location and consolidator elements as early as possible and no later than 24 hours prior to arrival in a U.S. port (or upon lading at the foreign port if that is later than 24 hours prior to arrival in a U.S. port); and (ii) importers can provide a range of acceptable responses, based on facts available at the time, for the manufacturer (or supplier), ship to party, country of origin, and commodity HTSUS number elements.4 CBP invites comments on these flexible items by June 1, 2009.
Please contact your SGR counsel or one of the authors if you have questions about compliance issues for CBP’s 10+2 rule or other homeland security, customs/trade, or regulatory issues.
The treatment of bulk and break bulk cargo differs between carriers and importers. For carriers, if the vessel is exclusively carrying bulk or break bulk cargo, there is no reporting requirement. For importers, if the carrier is exempted from reporting bulk cargo, so also is the importer. For break bulk cargo, if the cargo is exempt for carriers, the importer’s time to report is relaxed to 24 hours before arrival in the United States. ↩
HTSUS is the Harmonized Tariff Schedule of the United States. ↩
However, for shipments consisting entirely of foreign cargo remaining on board and shipments intended to be transported as immediate exportation or transportation & exportation in-bond shipments, importers must submit the following 5 data elements to CBP: (1) booking party; (2) foreign port of unlading; (3) place of delivery; (4) ship to party; and (5) commodity HTSUS number. ↩
This information must be updated as soon as more accurate or precise information is available and no later than 24 hours prior to arrival at a U.S. port (or upon lading at the foreign port if that is later than 24 hours prior to arrival at a U.S. port). ↩