1 RBNA/ITR3 | 11/17/2009 | © 2009 Robert Bosch LLC and affiliates. All rights reserved. Update on...

1 RBNA/ITR3 | 11/17/2009 | © 2009 Robert Bosch LLC and affiliates. All rights reserved.

Update on theImporter Security Filing

ITA/GC

Arthur O’MearaRobert Bosch

LLC

Wanda SampleAvalon Risk Management

November 18, 2009

2

Update: The Importer Security Filing, or 10+2

RBNA/ITR3 | 11/17/2009 | © 2009 Robert Bosch LLC and affiliates. All rights reserved.

Contents Overview

Current and Newly Required Data Elements

Top Five Error Message From CBP

Mitigation Guidelines

Update on ISF Bond Requirements

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Overview US Customs and Border Protection’s (CBP’s) Advanced Data

Project, or “10+2” For all shipments arriving into the US via ocean…

The importer must supply 10 newly required data elements and…

The carrier must supply 2 newly required data elements…

To be transmitted to CBP…

No later than 24 hours before loading onto the ship.

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Newly Required Security Filing Data: the “10”

24 Hours Prior to Lading

1. Seller (Owner) name/address

2. Buyer (Owner) name/address

3. Importer of record number

4. Consignee number

5. Manufacturer (Supplier) name/address

6. Ship to Party

7. Country of Origin

8. Commodity USHTS-6

9. Container Stuffing location

10. Consolidator name/address

1. Stow Plan Data2. Container Status Message (CSM)

Data

Entry number & type Entry – district & port Filer code Importer of record number Ultimate consignee number Surety number Filing date & time Importing carrier Vessel name Country of origin Exporting country Exporting date Foreign port of arrival Estimated arrival date Entry/Customs value HTSUSA (10 digit) Manufacturer ID

Currently Required Entry Data (import clearance)

Currently Required Manifest Data (24 hours prior to lading)

Bill of lading number Foreign port before vessel departs for

U.S. Carrier SCAC Carrier assigned voyage number Date of arrival at first U.S. port U.S. port of unlading Quantity Unit of measure of quantity First foreign place of receipt Commodity description

(description/HTS-6) Commodity weight Shipper name Shipper address Consignee name Consignee address Vessel name Vessel country Vessel number Foreign port of lading Hazmat code Container numbers Seal numbers Date of departure from foreign port Time of departure from foreign port

Current and Newly Required Data Elements

the “+2” data elements from steamship lines

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Top Five Error Messages from CBP1. Duplicate ISF Transaction2. Invalid ISF Transaction Number3. Invalid HTS Number4. Missing Entity Identifier5. Invalid Country Code

A single ISF may contain multiple errors

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Mitigation Guidelines It is a violation to:

1. Fail to submit an ISF (when one is required);2. Submit a late ISF;3. Submit an inaccurate ISF;4. Submit an inaccurate update;

1. (1st inaccurate update only)5. Fail to withdraw an ISF.

No liquidated damages if no bond is in place CBP will disallow clearance/unlading Ms. Sample will discuss bonds

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Mitigation Guidelines Mitigating factors

Importer’s efforts in 2009 and progress in 2010 Small % of violations C-TPAT Tier 2 or 3

Up to 50% mitigation of the normal mitigated amount

Demonstrated remedial actions to address circumstances surrounding the violation

Circumstances beyond importer’s control Reliance on accuracy of business partner (vendor…).

Normally, can only be claimed once No mitigation if law enforcement goals were compromised by the importer

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Mitigation Guidelines Aggravating factors

Lack of cooperation with CBP Evidence of smuggling Recurring, multiple errors on one ISF Rising error %

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Mitigation Guidelines Liquidated Damages Amounts:

First violation for: Late ISF or Inaccurate ISF or Inaccurate update, then

Liquidated damages will be cancelled upon payment of $1000-$2000

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Mitigation Guidelines Liquidated Damages Amounts:

Second violation for: Late ISF or Inaccurate ISF or Inaccurate update, then

Liquidated damages will be cancelled upon payment of $2500

Additional Statutory Penalties for serious or repetitive violations

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Mitigation Guidelines Summary It is a violation to:

Fail to submit an ISF (when one is required);

Submit a late ISF; Submit an inaccurate ISF; Submit an inaccurate

update; (1st inaccurate update

only)

Fail to withdraw an ISF.

• Mitigated fines for:

• Late ISF or• Inaccurate ISF or• Inaccurate ISF

update

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ISF Bonds

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ISF Bonds Bonds will be required on January 26, 2010 “Agents” may use their own Bond for ISF Filing

Agent would also assume liability for ISF Filing Must execute Power-of-Attorney with ISF party Consider transfer of ISF risk through POA and/or contract 85% of ISFs are being filed through licensed Customs Broker

ISF Penalty Exposure $5,000 for single violation up to $10,000 maximum for

multiple Bond liability is six years from commencement, based on

statue CBP to issue liquidated damages within 1 year of violation

ISF Obligations Commence 24 hours before vessel departure Terminate when goods enter the first port of arrivalor in-bond move, if there is no violation

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ISF Bonds Liquidated Damages

Limited by bond amount, consider import vs. ISF liability Cannot be assessed if no bond contract in force CBP will assess penalties retroactively (estimated one

year tail before ISF penalties would be known) CBP can always penalize under 1592D for negligence or

fraud Bond requirements waived for the following transactions:

Type 3 – Household Goods/Personal Effects Type 4 – Government and Military Type 5 – Diplomatic Type 6 – Carnets Type 9 – International Mail

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CBP301 Continuous Bond Acceptable CF301 Bond types include:

Activity Code 1 Import/Broker Bond Activity Code 2 Bonded Custodian Activity Code 3 International Carrier Activity Code 4 Foreign Trade Zone (FTZ)

No change in current bond calculation for ISF use CBP will consider in bond sufficiency reviews Liquidated damages capped by bond amount

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CBP301 Single Transaction Bond Use for unified filing only (entry and ISF)

Less than 3% of all ISF transactions Cannot use for inland clearances or RLF

No change in current bond calculation for ISF use Value plus duty 3 times value if PGA involved

Bond reference number required for ISF ISF transaction number added to bond Cumbersome, paper process

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Appendix D/ISF Continuous Bond Available to separately bond ISF activity if desired or no

C1/C2/C3/C4 bond already in force Minimum required amount of $50,000

CBP tracking ISF activity in bond sufficiency review

Activity Code 16 captured in ACS and ACE

Current Procedures Bond filed with Revenue Division No application required by CBP Trade Names and Unincorporated Divisions allowed Co-Principals allowed

Revenue Division will post FAQ in 2 to 3 weeks

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Appendix D/ISF Single Entry Bond Bond amount will always be $10,000 Activity Code 16 Bond must have ISF transaction number Bond must be filed within 12 hours of receiving the ISF

transaction number Submit bond to [email protected] Subject line include “ISF Transaction Number” only CBP working on receipt to confirm bond has been filed ISF filing date likely the execution date on bond

Be prepared to secure bond in advance of filing ISF Timing is crucial Process is cumbersome and paper intensive

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Conclusion In Summary

January 26, 2010 is not going away, be prepared for Bond Requirements and Full Enforcement

C1 Import Bond provides easy and cost effective means to meet ISF bonding requirements

Consider separate ISF Appendix D Continuous Bond only if high volume importer and ability to limit ISF exposure

ISF bond underwriting: ISF report card and financial statement

Concerns Tail on exposure: untimely notification of ISF penalties with 6

year statute of limitations for CBP to make claim against bond, results in stacking exposures for surety

3% error rate against current ISF volume is significant even with mitigation; many feel error rate is grossly

underestimated CBP ability to manage bond and penalty volume

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Thank You!

1 RBNA/ITR3 | 11/17/2009 | © 2009 Robert Bosch LLC and affiliates. All rights reserved. Update on...

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Transcript of 1 RBNA/ITR3 | 11/17/2009 | © 2009 Robert Bosch LLC and affiliates. All rights reserved. Update on...