Updated ISF Bond Requirements

Been a while since the last post, but things are just chugging along in ISF-Land!

According to CSMS #11-000130, ISF Bond Requirement edits upon submission that were originally scheduled for 18 June have been delayed until 26 June 2011.  This will convert current “accept with warnings” to “rejects”.

What does this mean?  It means that you must have a bond  sufficient for the transaction on file with CBP or your ISF will now reject.  If you are currently seeing these warning messages, this applies to you!  Getting a reject can delay your shipment.

REMINDER: ISF Transactions Changes Coming

Customs published a friendly reminder in CSMS #11-000019 to advise the trade that effective 23 January 2011, the message formats will change slightly for ISF transmission (for the quantity and other modifications previously reported in the blog here).  In the interim, CBP will provide an accept with warnings to give providers time to update their software to accommodate the change.  There will be a future point (with ample warning) when the warnings will be replaced with rejects.  If you see these warnings next week, be sure to notify your software/service provider so they can make the appropriate changes and avoid rejects in the future (which will have an impact on your compliance statistics!).

Supply and Demand Chain: EU’s ICS update

I saw this article today in Supply and Demand Chain and I thought that it summarized very nicely and neatly the timing requirements and the data elements required for the European Security notification.  The other thing that it did was talk to the selectivity criteria which I’ve repeated here:

EU Risk Analysis

EU customs authorities will perform a risk analysis based on the pre-departure information submitted through ENS. After assessing the data, EU authorities will then either approve or intercede in a shipment’s movement. A shipment may be determined to be one of the following:

• Risk Type A = do not load (only deep sea container traffic)
• Risk Type B = examination of the shipment at the first port of entry
• Risk Type C = examination of the shipment at the port of discharge

Definitely a good thing to watch to see if they flag more shipments in this early stage than the US did.  I have also read in a variety of places that a few countries will be giving a “grace period” for importers before blocking freight (varies by country so check with your forwarder).

American Shipper: ISF One Year Later

This week, American Shipper published a very good article (registration required) on the state of ISF one year after flexible enforcement began last January.  There were some interesting exploration on the 6 year exposure and the potential future developments on data warehouse functionality accessible via ACE.  These data extracts would replace today’s status reports but due to other challenges in the ACE project, probably won’t happen any time soon.

I did find interesting that the compliance rate is up to 90% (from 80% last summer).  There have been some exams at destination but to date not the teeth (i.e., Do not Load or DNL messages at origin) that was originally threatened/promised.  It seems that the kinder, gentler CBP is still getting results.  Of the non-compliant transactions, only 2.5% were based on inaccurate data (which shows that the trade has been good about building validations in the business systems applications to catch these errors before transmitting – always better to catch the errors yourself than get a ding for sure!).

Since CBP is continuing to see improvement with their current outreach and activities, it will be interesting to see how this year will unfold.  The other interesting thing is the 6 year statute of limitations.  CBP has been very flexible and hasn’t gone on any “witch hunts” – I don’t suspect they will.  I get the fear of exposure by the surety guys, but also can appreciate CBP’s position if someone is “going rogue”.  I suspect there will be more discussion on this point as the year progresses.

European ICS (Import Control System) Security Filings now in effect

Happy New Year!

Yes, the Europeans have implemented their version of Security Filing for imports.  This is known as the Import Control System or ICS.

As expected (and promised), the new program went into effect on 1 January 2011.

The big differences between the European and US systems are:

• The filing is expected to be done by the “carrier” (could be 3PL/forwarder if you use one)
• Filings can be undertaken by a 3rd party (read broker or importer) and that party if doing the filing becomes liable for any errors/omissions
• The requirement is for all modes (with slightly different cut-off dates by mode)
• Like the US bound cargo last year, many carriers are adding some time on cut off dates up front for EU bound cargo
• No security filing means no movement – this is a bit more strict out of the box than the US program

I suspect that there will be a few bumps in the proverbial road but the fact that Europe is addressing all modes may show CBP where any pitfalls will be in expanding the ISF program here in the US in the coming years.  I suspect that we may be on that path but would be interesting to see if the teeth that were promised (threatened) actually come out this year.

For more information on the cut-offs and other requirements, please check out this document published on the Europa portal.

Exam Code “H7″ and the start of ISF enforcement?

I’ve seen a bit of chatter on a few message boards this week that CBP has held up some cargo because there was no ISF present.  The exam code “H7″ or “No Importer Security Filing” was the reason that was given for the exam.  This is an interesting development, albeit a timid one.

I remember last year the talk of DNL (Do Not Load) messages at Origin and fines galore, but that hasn’t really happened yet.  And with many smaller forwarders using agents overseas, their ability to enforce compliance with their agents has been challenging at best.  Will this be the way CBP starts with a more aggressive set of enforcement measures?  Will they start by flagging all cargo as H7 first and then start to push the stops further upstream once the H7 work increases compliance further?

Should be an interesting 2011 but I guess we will have to wait and see how strict CBP gets.

Happy holidays to one and all!

Another change to the ISF specs: Estimated Quantity

There is another minor tweak to the ISF message layouts coming down to pike according to CSMS #10-000269.  This appears to have been an oversight in the last set of changes on 22 October 2010 to support an estimated quantity.  The changes, to accommodate the unit of measure for this new estimated quantity, are scheduled to be implemented on 23 January to allow sufficient time for the trade community to accommodate the change.

Top Retail Group Exec calls for ISF for Air

With the recent security scares in Dubai and the UK with printer cartridges bound to blow up in cargo holds, a leading Retail Group Executive has suggested that ISF should be extended to air freight.  A large % of inbound air freight does not get screened and there is currently no such ISF program outside of Ocean for US Imports (though Air IS subject to AMS reporting requirements).

Jonathan Gold was speaking at the Coalition of New England Companies for Trade (CONECT)’s Annual Northeast Cargo Symposium in Boston on Nov. 4.  You can read more about it DC Velocity.

I fully support Mr. Gold’s position and to be honest it seems the logical next step just like what happened with the Advanced Manifest System (AMS) – first Ocean then Air and Surface.

We are nearly 1 year in “full enforcement” and 2 years since “flexible enforcement” began and I think that the time is approaching to extend this program to Air instead of selectively banning products or doing some spot inspections in a patch work of disparate programs.

Let’s see if our government can see the logical synergies here and not invent something new and onerous for the trade and the federal security personnel.

WCO announces HS code changes for 2012

Doesn’t it seem like we just went through this?  Well, actually that was back in January 2007!  Yes, it is time for the 5-year changes to the Harmonized Tariff Codes.

The WCO has published a paper describing (at the 6 digit levels) the changes that are being implemented and each WCO member state will make changes to their tariffs accordingly.  As you may remember from the last go around, depending on what you are shipping, this may have a minimal impact to your parts database or a radical one.  There seems to be a lot of changes in Chapter 3 (Fish) and 29 (Chemicals) and then a smattering of other changes throughout the tariff.  It definitely doesn’t seem to be as huge in apparel and other retail areas as the last time but more focus on foodstuffs.

If you do have to make changes to your classifications on a grand(ish) scale, make sure all your service providers or systems (including ISF) get these updates to ensure you maintain the highest levels of Customs Compliance.

Since this is only a year or so away, it would be best to do an analysis to make sure you don’t have to go through such a review/reclassification exercise.  You don’t want to go down to the wire and find that you not only have to reclassify your goods but then you have to distribute to all your providers to ensure you don’t put yourself into an error and thus penalty situation.

The EU, US and other countries have yet to publish the final impact at the 8-10 digit level which we can probably expect sometime mid next year.

New Changes to ISF transaction sets effective 18 Dec 2010

According to CSMS #10-000246, the updates to the ISF messages transmitted to CBP that were published back in July will be going into effect in December.  While the specifications have not been updated yet, the Admin message does provide the scope of the changes. This applies to all 3 major formats (X.12, CATAIR, CAMIR).

The most interesting and notable change is the ISF type changes.  They are swapping the codes for ISF-5 and ISF-10 (interesting) but also adding codes for late filings.  I think this is CBP’s way of trying to better gauge timeliness for statistical purposes (albeit an interesting way of collecting that info!)