As your Custom Broker Expert, I mentioned on previous published article “How to save $5,000.00 on your next importation” that for every ocean importation beginning January 26, 2009, ten data elements must be transmitted within 24 hours prior to lading container into the vessel with destination to any port in the USA.

If any changes occur in the original transmission or more accurate information has become available, updates can be done prior to the goods arriving within the limits of the destination port in the USA, but only in two elements.

A violation will trigger a penalty for; failure to file ISF, late filing or inaccurate data.  Any of these will carry a potential $5,000.00 penalty.  In the case of not file, CBP will withhold release or transfer the goods until ISF requirements has been fulfill.

Fortunately, there are guidelines that will assist in the mitigation of these penalties.

First violation for late filing or inaccurate ISF or an inaccurate ISF updates, claim may be canceled upon payment of an amount between $1,000.00 and $2,000.00, depending on factors and if enforcement goals were not compromised.

Subsequent violations, claim may be canceled upon payment of an amount of not less of $2,500.00, if enforcement goals were not compromised.

No relief will be granted if CBP determines that law enforcement goals were compromised by the violation.

Factors: Mitigating and aggravating.

Mitigating factors

• Early implementation and participation during flexible enforcement period.
• Small percentage of violations.
• C-TPAT certified member under Tier 2 or Tier 3 criteria.
• Remedial action i.e. procedures to prevent future occurrences.
• Factors outside ISF Importer’s control.
• Inaccurate data received from another party.

Aggravating Factors

• Lack of Cooperation
• Evidence of smuggling or attempt to circumvent the law
• Multiple errors on the ISF
• Rising error rate.

As your Custom Broker Expert, there are simple steps you can take to reduce your exposure.

• Early adoption
• Implementation of procedures
• C-TPAT participation

The writer, Francisco Ramirez Jr. is the Managing Partner of Automated Customs Experts Group, Inc. in San Diego, CA. He is also in the process of publishing his first book of most frequent importing mistakes.  This will assist importers in developing procedures to avoid potential penalties.  You can contact Francisco Ramirez Jr at 619-710-4920 or framirez@acelogisticsgroup.com

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Since January 26, 2009 all ocean cargo bound for the United States are subject to an importer security filing requirement 24 hours prior to loading of the cargo container in the foreign port.   This additional cargo information will assist CBP to screen and asses’ potential risks.

All importers and ocean carriers are required to provide U.S. Customs and Border Protection CBP with this advance notification for all ocean vessel shipments inbound to the United States. The new 10+2 importer will place the burden of compliance onto the importers and ocean carriers.  Obviously this will impact the logistics of your supply chain. The importer will be solely responsible and liable for filing ten data elements in the importer security filing ISF.  Importers may hire a third party (U.S. Customs Broker or Freight Forwarder) having access to U.S. Customs Automated Broker Interface  (ABI) or Automated Manifest System (AMS) and with a duly authorized Power of Attorney to file the ISF on their behalf.    It is important to know that only Customs Brokers are bound by privacy requirements thru the Code of Federal regulations.

For Shipments with a U.S. destination (includes FTZ (Foreign Trade Zone) and IT (In-Transit)) the ten data elements required by importers report:

1. Manufacturer (or supplier) name and address
2. Seller (or owner) name and address
3. Buyer (or owner) name and address
4. Ship to name and address
5. Container stuffing location
6. Consolidator (container stuffer) name and address
7. Importer of record or Foreign Trade Zone applicant ID number
8. Consignee number(s)
9. Country of origin
10. Commodity Harmonized Tariff Schedule of the United States (HTSUS) number

For Transit of Foreign Cargo covering freight remaining on board the vessel (FROB), Immediate Exports (IE) and Transportation and Exportations (T & E), the five data elements required to report:

- Booking Party
- Foreign port of unlading
- Place of delivery
- Ship to party
- Commodity HTSUS number (minimum 6 digit level)

CBP has allowed a one-year period of “Flexible Enforcement” and thru informed compliance to smooth the learning curve for  importers and carriers  adapt to the new 10+2 regulations without the threat of fines. Unfortunately this one year period will be expiring on January 26, 2010.  Shipments which do not comply with ISF requirements are subject to a $5,000 penalty per occurrence.
To prepare for any potential fines, we strongly suggest that first consult your custom broker expert or logistics service provider  and consider implementing procedures that specifically address the ISF requirements. There are several ways to accomplished these requirement but your must make sure that it is address properly, taking into account the culture of your company.  Finally monitor compliance with ISF requirements.

The writer, Francisco Ramirez Jr. is the Managing Partner of Automated Customs Experts Group, Inc. in San Diego, CA. He is also in the process of publishing his first book of most frequent importing mistakes. This will assist importers in developing procedures to avoid potential penalties. You can contact Francisco Ramirez Jr at 619-710-4920 or framirez@acelogisticsgroup.com

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In my opinion as a custom broker the invoice is probably the most important document to import merchandise into any country.   Out of this document Customs officials must determine proper classification of the merchandise, what the value is, perform revenue collection through duties, fulfillment of required information by collecting trade information for statistics purposes (balance of trade), make a risk assessment for security purposes, determination of further inspections and enforcement of regulations from other agencies.
Also your custom broker/agent must classify, valuate, pay duties and transmit information to customs based upon this document. Additionally, the importer must comply with security programs in place by transmitting information prior to loading or stuffing container.

In describing the merchandise, the most relevant information pertaining to the article is much better than a generic description.  This will greatly assist customs officers and customs brokers to correctly determine classification and additional requirements if applicable.
Most countries have adopted the Harmonized Tariff Schedule under the umbrella of the World Customs Organization, such publication has description for all imaginable products.  My suggestion as custom broker expert is that if customs is relying on this system, it will facilitate the interpretation of the description by utilizing the same language.    Another suggestion based in my experience as customs broker is the utilization of incoterms, this will assist customs and your custom broker in correctly determining value of products by adding or deducting charges.   If any other considerations such as discounts, warranties, packing, packaging, royalties or licensing must be also included.

Under 19 Code of Federal Regulations provides customs brokers and importer with the guideline requirement of an invoice. This title also governs Customs duties and does include customs brokers’ activities;

141.86 describes contents of invoices and general requirements
(1) The port of entry to which the merchandise is destined;
(2) The time when, the place where, and the person by whom and the person
to whom the merchandise is sold or agreed to be sold, or if to be imported
otherwise than in pursuance of a purchase, the place from which shipped,
the time when and the person to whom and the person by whom it is shipped;
(3) A detailed description of the merchandise, including the name by which
each item is known, the grade or quality, and the marks, numbers, and symbols
under which sold by the seller or manufacturer to the trade in the country
of exportation, together with the marks and numbers of the packages in
which the merchandise is packed;
(4) The quantities in the weights and measures of the country or place from
which the merchandise is shipped, or in the weights and measures of the United
States;
(5) The purchase price of each item in the currency of the purchase, if the
merchandise is shipped in pursuance of a purchase or an agreement to purchase;
(6) If the merchandise is shipped otherwise than in pursuance of a purchase
or an agreement to purchase, the value for each item, in the currency in which
the transactions are usually made, or, in the absence of such value, the price
in such currency that the manufacturer, seller, shipper, or owner would
have received, or was willing to receive, for such merchandise if sold in
the ordinary course of trade and in the usual wholesale quantities in the country
of exportation;
(7) The kind of currency, whether gold, silver, or paper;
(8) All charges upon the merchandise itemized by name and amount, including
freight, insurance, commission, cases, containers, coverings, and cost
of packing; and if not included above, all charges, costs, and expenses incurred
in bringing the merchandise from alongside the carrier at the port of exportation in the country of exportation and placing it alongside the carrier at the first United States port of entry. The cost of packing, cases, containers, and inland freight to the port of exportation need not be itemized by amount if included in the invoice price, and so identified. Where the required information does not appear on the invoice as originally prepared, it shall be shown on an attachment to the invoice;
(9) All rebates, drawbacks, and bounties, separately itemized, allowed upon
the exportation of the merchandise;
(10) The country of origin of the merchandise; and,
(11) All goods or services furnished for the production of the merchandise
(e.g., assists such as dies, molds, tools, engineering work) not included in the
invoice price. However, goods or services furnished in the United States are
excluded. Annual reports for goods and services, when approved by the port director,
will be accepted as proof that the goods or services were provided.

In some countries customs will not release any shipment when a generic description is utilized.   It will only be release until a better description is provided. This is really important as lean inventory methods are becoming more commonly use and companies does not want to have resources tied in inventories.

In my experience as a customs broker, I am not trying to imply in any way, shape or form that if you follow these guidelines, it will guarantee an immediate release but it will avoid unnecessary delays or additional request for information by customs officials.

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