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The ISF rule took effect Jan. 26, 2009, but full enforcement was delayed a year while CBP conducted an education, outreach and informed compliance effort with the trade community. With the expiration of this delayed enforcement period on Jan. 26, 2010, importers could now be subject to liquidated damages claims of $5,000, or even “do not load” messages, each time an ISF filing is late or inaccurate.
However, agency officials have indicated that CBP will seek to avoid such penalties for minor ISF filing mistakes and instead pursue what they have termed a “gradual enforcement” approach. Press reports have given varying accounts of this approach, but it is generally expected to include the following elements.
• In the first quarter of 2010 (i.e., until April 1), CBP will not assess liquidated damages or issue DNL (“do not load”) messages for ISF-related violations. Instead, CBP will issue warning letters for late or incomplete filings and work with filers to make corrections. Those not filing ISFs as required will receive warning letters as well but may also be subject to document reviews, non-intrusive inspections or other measures. Officials have stressed, however, that CBP will consider each instance of noncompliance on a case-by-case basis and may issue claims if warranted. In addition, this policy will not limit enforcement actions for non-ISF reasons, such as national security.
• During the second quarter of 2010, CBP will put holds on high-risk, noncompliant cargo shipments but will generally not issue liquidated damages claims or DNL messages, except in the case of egregious ISF violations.
• In the third or fourth quarters of 2010, CBP plans to increase ISF enforcement to include liquidated damages claims, although though these are likely to be focused on repeated and/or serious violations.
CBP’s graduated enforcement approach demonstrates that the agency is sticking to its message during the pre-enforcement regime insofar as wanting to see that ISF importers are making a reasonable effort to comply and are not ignoring the 10+2 requirement altogether, or taking it too lightly. ISF filers that have received warning letters and have not resolved the problems identified can expect to be the first targeted as CBP’s enforcement efforts ramp up.
According to Richard DiNucci, director of the CBP’s Secure Freight Initiative, “The data you submit is being viewed with an enforcement mindset. If it’s not accurate, if it’s not filed at all, or if it’s truly not timely, that’s going to be held against you. This is a baseline for us, so that if it comes to liquidated damages, we’ve got the record to say here’s why we’re doing it.”
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