The U.S government has put stringent measures for goods entering the country to enhance efficiency of the process.
If you are importing goods to the USA, it is always important to know much about ISF.
In this guide, I will explain to you all the fundamental elements surrounding ISF.
You will also know why ISF is necessary when shipping to the USA and how shippers can create ISF documents.
Meaning and Scope of ISF in Shipping
ISF is an abbreviation for Importer Security Filing.
It’s a process, which requires importers or their respective agents to file data electronically with Customs and Border Protection (CBP) for inbound sea vessel shipments.
It is also referred to as “10+2,” described as CBP regulation assigned for ocean cargo imports only.
Essentially, the ISF requires importers to provide 10 data elements to the CBP and two additional documents from the shipping line.
It is required to file the ISF with the U.S CBP 24 hours before sailing from the penultimate origin port.
This data is vital since it enables the CBP and Department of Homeland Security to determine high-risk shipments.
As an importer, you need to send all the necessary data to the United States customs broker before shipping the consignment.
You can create an Importer Security Filing document containing all of the vital information to be passed to various parties.
The Essence of ISF in Shipping
The Importer Security Filing process is a vital undertaking whenever you import goods to the U.S from other parts of the world.
One of the reasons for undertaking this process is to help in detect high-risk shipments.
Most of the time, some goods are always considered harmful as far as health, safety, and environment are concerned.
It thus makes it necessary to ensure such products do not get into the country without any prior certification from relevant bodies.
ISF, therefore, makes it easy to control hazardous materials since it necessitates a prior check.
Another reason for the ISF in shipping is to enable the Department of Homeland Security and CBP to prevent smuggling of goods.
From the information you provide when filing the ISF, the security agents will detect any possibility of smuggling restricted goods.
Ostensibly, ISF gives the Customs and Border Protection a head-up whenever there is a potentially high-risk shipment en route to the U.S.
Therefore, it enhances the overall safety of the U.S borders.
Circumstances under which ISF is needed
Ideally, ISF only affects shipment getting into the U.S via ocean vessels.
It thus implies that cargo entering within the U.S borders through other means of transport such as air freight is not affected.
You will also need to complete the ISF process when importing relatively small cargo.
In essence, the ISF hardly applies to bulk cargo.
Types of ISF Available
ISF requires you to submit electronic digits of ten, two, and five data elements.
All these data elements depend on the specific type of shipment or party filing.
a) 10 + 2 ISF
This refers to a filing with a set of 10 data elements required to conform to the rules and regulations for products imported into the U.S.
The first 10 data elements in this type of filing are your responsibility as the importer.
You must thus file it within 24 hours before cargo is loaded aboard a vessel ready for delivery to the U.S.
The shipper handles the other two data elements containing container status messages and a vessel stow plan.
Similarly, these shipper data elements are also needed within 24 hours before the arrival of the vessel at a specific U.S port.
b) ISF 5
It entails FROB (Foreign cargo remaining on board), I.E, and T&E consignment needs only five data elements.
The data element in this type of filing includes;
- Booking party – Name and address of the entity initiating reservation of cargo space for shipment.
- Foreign port of unlading – Plan K port code is acceptable
- Place of delivery – The foreign location where the shipper’s role in transporting the items ends.
- Ship to party – Name, and address of first deliver to the party planned to physically receive the goods once released from customs custody.
- HTS number – Not necessary to file in the bond filing before ISF
Basics of ISF Filing
When importing to the U.S via ocean freight, it is necessary to compliantly and efficiently to get your imports approved.
Some of the fundamentals you need to know regarding ISF filings include the following;
- All ISF filings are carried out electronically
- Where applicable, corrections or adjustments must be made before the items dock at U.S ports
- The party submitting the ISF filings is the only one that can make the changes
Since inception of ISF in 2009, it has undergone several changes in terms of updates and modifications.
Some of the vital updates since then include the following;
- The leniency method is over. It thus implies that in ISF, you only have three strikes, and you’re out.
In other words, ISF filings into additional filings are now subjected to fines.
- A consignment may be detained for inspection where applicable. The citations that the CBP issues for ISF infractions result in fines.
In case you fail to file or incorrect file your ISF filing, you will have to pay if you obtain a citation.
In many instances, the ISF citations often cost approximately $5000 per violation.
And for every late or incorrect ISF filing, the maximum payable fine is $10 0000.
However, commodity import paperwork and other requirements of the CBP or any government agency can be handled by a licensed customs broker.
Here are some of the vital documents that must always be included;
- A commercial invoice listing the cost of the items, country of origin, and tariff classification.
- A packing list, which outlines all the items you are importing
- A bill of lading listing all the items you are importing in the form of a receipt
- An arrival notice from a licensed U.S agent
Technically, working with a licensed customs broker is the ideal way of making sure your ISF documents are filed correctly.
And this goes a long way in enabling you to avoid unnecessary fines, which apparently tend to be quite costly.
Required Data Elements for ISF
An Importer Security Filing document must contain 10 fields of information filed by the importer or supplier.
These data elements include the following;
1. Seller Name and Address
This refers to the name of the last known entity by whom the products are sold or agreed to be sold.
If you have to import the commodities otherwise than pursuing a purchase, the name and address of the owner of the goods must be provided.
Generally, you can find the name and address of the seller on the commercial invoice.
2. Buyer/Importer Name and Address
This is the name and address of the last known party to whom the commodities are sold or agreed to be sold to.
In case importation of goods is otherwise than in pursuance of purchase, name, and address of the owner of the goods must be provided.
The importer or buyers’ information can also be available on the commercial invoice.
In case the items are sold while the shipment is in transit and buyer’s information changes, the ISF must be amended accordingly.
3. Importer of Record number EIN/IRS Number
This can be described as EIN, IRS number, Social Security number, or Customs assigned importer number.
This number is usually assigned to the entity accountable for payment of all duties incurred during importation.
The entity is also responsible for meeting all regulatory and statutory requirements arising from importation.
4. Consignee Number
This includes the Social Security Number, EIN IRS Number, or Customs assigned imported number of the entity importing the consignment.
It could be an individual or company in the U.S on whose account the merchandise is shipped.
5. Manufacturer/ Supplier Name and Address
This is the name and address of the entity that manufactures, produces, grows, or assembles the product.
It could also be the name and address of the entity supplying finished goods in the country of origin.
You need to understand that for textile products, the customs broker must have the actual manufacturer to facilitate entry purposes.
6. Ship to Party
It contains the names and addresses of the first deliver-to-party planned to physically obtain the products after being released from Customs custody.
There is a notion in customs that this information provides predictability to targeting.
Where ship-to party is unknown, the facility where the items will be delivered can be reported.
If there are numerous delivery stop-offs, then it’s only the first one that shall be reported.
7. Country of Origin
This is merely the country where the goods are manufactured, produced, or grown.
It is the same information declared on the customs entry.
8. Harmonized Tariff Schedule Number
This is a specific tariff number under which the product is categorized in the HTSUS.
The ultimate rule needs six digits, but customs often accept eight digits or, in some instances, the entire 10 digits HTS Number.
In essence, it implies that all products must be pre-classified accordingly.
9. Container Stuffing Location
This entails naming and address of the physical location where items were stuffed into the container before leaving for the U.S.
In case of breakbulk shipments, you must provide the name and address of the physical location where products were declared read-to-ship.
A planned stuffing location is also acceptable, but the ISF must be amended once you establish the actual stuffing location.
Ideally, the broker doesn’t necessarily need to report where a specific container was stuffed.
10. Consolidator
This comprises the name and address of the party responsible for stuffing the container or organized for stuffing of the same.
For break bulk shipments name and address of the entity that declared the items ready-to-ship must be provided.
Additionally, there are +2 data elements, often the responsibility of the steamship line. They include
- Vessel stow plan
- Container status message
Notably, the manufacturer/supplier, country of origin, and HTS number must be interconnected at the ISF line item level.
Customs only allows filing or entry summary concurrent with the ISF.
The Cost of ISF Filing
Generally, the ISF filing fee is usually included as part of customs clearance charge.
It thus means the cost takes care of lodging in compliance with CBP’s 10+2 advance cargo reporting requirements.
In a nutshell, the cost often varies depending on a wide range of prevailing aspects.
ISF Filing Fee Tips
When filing ISF, you need to be thorough with the process.
CBP has the mandate to impose a hefty fine on late filing if you fail to the information at least 24 hours before the shipment is loaded.
Therefore, never hold back on filing because you don’t have the required information.
Understandably, you may update the information right up until the moment the cargo arrives in the U.S.
Another instance is CBP may decide to carry out a thorough inspection of your goods hence increasing the total cost.
The total cost may run into several hundred or, at times, thousands of dollars even for relatively small shipments.
Moreover, any delivery delay may result in additional costs.
Therefore, ensure you include a clause in your supply contract compelling the supplier to take responsibility for the cost if they are at fault.
To avert costly deliveries, ensure your forwarder files for customs entry prior to arrival of a ship at the port.
Also, ensure the entries on the commercial invoice, ocean manifest, and ISF are all identical.
Understanding ISF Bonds
ISF bonds are a guarantee from the surety entity to the U.S government.
This surety outlines the importer’s willingness to faithfully and timely abide by all the stipulations governing importation of goods into U.S.
An ISF bond is not designed to shield the importer nor relieve the importer of any of their rightful obligations.
The surety company, by bonding the importer, assumes similar roles and duties of the importer.
In case the importer fails to honor any condition of the bond, the surety is compelled to do so instead.
Finding a Customs Broker for ISF
Ultimately, it is always advisable to seek assistance or services of a licensed customs broker to help you in ISF process.
There are several ways you can use to find a suitable one. However, the ideal ways you can always use to find reputable customs brokers include the following;
· Online Search
Ideally, the first place to look for a potential customs broker for ISF is on the CBP website on the customs brokers’ page.
This platform lists all the customs brokers certified by CBP.
It also organizes them depending on your desired port of entry in the U.S.
· Referral
You may also find a customs broker through referral.
Most of your business partners and acquaintances have details of the customs brokers always helping them out with ISF needs.
In short:
As you can see, ISF is a relatively fundamental process in international shipping.
Most importantly is to always ensure you file the correct documents within the right timeframe.
Our company is always ready to assist you with all aspects revolving around ISF process.
Feel free to contact us if you need more information, and we will be ready to assist.
