What is ISF?
The importer security filing (ISF) is a requirement by U.S. Customs and Border Protection (CBP), which requires importers to provide detailed cargo information to Customs before goods arrive at U.S. ports. The ISF is designed to improve Customs’ security monitoring of imported goods, ensure that imported merchandise meets security standards, and enhance the prevention of potential threats.
What is the purpose of an ISF filing?
The purpose of the filing is primarily to enhance USA Customs and Border Protection’s (CBP’s) control over imported goods, ensure national security, and improve the transparency and efficiency of international trade. Specifically, the purposes of ISF filings include the following:
Ensure national security
ISF requires importers to provide detailed information about goods and shipments in advance. This enables USA Customs to conduct risk analysis before the goods arrive at USA ports and prevent the entry of goods that may threaten national security.
Improve Logistics Efficiency
Submitting transportation and shipment information about goods in advance can help expedite customs clearance and reduce port congestion and unnecessary delays.
Enhance Regulatory and Compliance
ISF requires importers to provide accurate information to help Customs verify the legitimacy of shipments and ensure they comply with U.S. trade and security regulations.
Supporting Counterterrorism and Preventing Illegal Activity
ISF filings help identify and interdict shipments involved in terrorism, smuggling, or other illegal activities, protecting USA supply chain security.
Reduces Unnecessary Business Risks
Compliant ISF filings reduce importers’ risk by avoiding penalties, stranded shipments, or commercial losses due to inaccurate data or late filings.
What information does ISF require? What is 10+2?
The “10+2” is a key requirement of the Importer Security Filing (ISF) rule developed by USA Customs and Border Protection (CBP) to enhance the security management of imported goods. At its core, it requires importers and carriers to provide critical information about the shipment in advance so that risk assessments and security inspections can be conducted before the shipment arrives at a U.S. port. There are 10 items of cargo information and 2 items of transportation information that need to be provided. Specifically included:
10 items of cargo information:
- Seller Name & Address: Provide the complete legal name and address of the entity selling the goods. This information is crucial for verifying the origin and legitimacy of the shipment.
- Buyer Name & Address: The full legal name and address of the party purchasing the goods. This ensures transparency in the transaction and helps identify the final recipient of the shipment.
- Importer of Record Number/FTZ Applicant ID Number: The identification number (Internal Revenue Service (IRS), Employer Identification (EIN), Social Security (SSN), or CBP-assigned number) of the importer or Foreign Trade Zone applicant, essential for customs clearance and tracking.
- Consignee Number (IRS, EIN, SSN, or CBP-assigned): The identification number of the party who will receive the goods in the U.S. This is distinct from the buyer and is often a freight forwarder or customs broker.
- Manufacturer (or Supplier) Name & Address: Name and address of the entity responsible for the final manufacturing, assembly, production, or growth of the commodity or the supplier of the finished goods in the exporting country.
- Ship-to-Party Name & Address: The location where the goods are ultimately delivered. This might be a warehouse, distribution centre, or the buyer’s premises—name and address of the first party scheduled to receive the goods after customs release. Provide the unlading facility’s name or a FIRMS code for the warehouse/terminal if unknown. An inland distribution centre can also be provided if the exact address is unavailable during filing.
- Country of Origin: The country where the goods were manufactured or produced. This information is used to determine tariffs and trade agreements.
- Commodity HTS Number: The Harmonized Tariff Schedule code (6 digits minimum) classifying the goods. This is essential for calculating duties and taxes. The HTSUS number must be provided to the six-digit level. Alternatively, the filer may provide the HTSUS number to the 10-digit level.
- Container Stuffing Location: The name and address(es) of the physical location(s) where the goods were stuffed into the container must be provided. For break bulk shipments, the name and address(es) of the physical location(s) where the goods were made “ship ready” must also be provided.
- Consolidator (Stuffer) Name & Address: The name and address of the party who stuffed or arranged for stuffing of the container (or made goods “ship ready” for breakbulk). If not applicable (e.g., “factory load” shipments), provide the manufacturer/supplier details. A recognized identification number can be used instead of the name and address.
2 items of transport information:
- Vessel Stow Plan: A detailed plan showing the exact location of the cargo on the vessel. This aids in efficient loading and unloading and is crucial for security purposes.
- Container Status Message (CSM): A message indicating the container’s status (e.g., loaded, empty, gate out). This provides real-time updates on the shipment’s progress.
Who is responsible for preparing ISF?
The responsibility for ISF (Importer Security Filing) preparation rests primarily with the importer but, in some cases, may be accomplished with the assistance of an agent. Below is the division of responsibility for ISF preparation and related details:
1. Importer Responsibilities
The importer of record is the party primarily responsible for ISF filing. They must ensure that complete and accurate information is submitted to U.S. Customs and Border Protection (CBP) 24 hours before the cargo is loaded on the vessel. This includes
- Providing 10 of the 10+2 data elements.
- Ensuring the accuracy and timeliness of the information.
What importers need to do:
- Coordinate with suppliers, carriers and other logistics partners to obtain the required data.
- Submit the ISF declaration using compliant software or through a customs broker.
- Update or correct erroneous data promptly (if necessary).
2. Assistance from agents (e.g. customs brokers or logistics companies)
Importers may authorize agents (e.g., customs brokers, freight forwarders, or logistics companies) to submit ISF on their behalf. However, even if the agent acts on the importer’s behalf, the importer remains ultimately responsible.
You may want to know: What is a customs broker? complete guide
The scope of assistance from agents is as follows
- Collect and organize the necessary information.
- Submit the declaration and communicate it to customs on behalf of the importer.
- Ensure that the declaration data complies with CBP regulations.
3. Carrier responsibilities
Although carriers are not responsible for preparing the entire ISF, they are required to provide two transport-related data items from the “10+2”:
- Vessel Stow Plan.
- Container Status Messages (CSM).
The carrier usually submits these data directly to CBP to complete the ISF requirements.
You may want to know: Explanation: What is a freight carrier?
ISF Late Filing Fees and Penalties
ISF (Importer Security Filing) late filing may result in high fines and additional fees imposed by USA Customs and Border Protection (CBP). The following are specific consequences that may result from late filing:
1. ISF late filing penalties
According to CBP regulations, failure to file an ISF on time or filing inaccurate information may result in the following penalties:
- Penalty amount: Up to $5,000 per entry
- Failure to file on time (within 24 hours before the vessel departs the loading port).
- Incomplete or inaccurate information submitted.
- Failure to correct erroneous information.
- Cumulative fines: Up to $10,000 per entry. The penalties may accumulate if multiple violations exist for the same shipment (e.g., late submission and incorrect information).
2. Other potential costs
In addition to fines, late declarations may also result in the following additional costs:
- Demurrage charges: Additional port charges are incurred when the goods are held in the port or cannot be picked up due to late declaration.
- Clearance Delays: Cargo that is randomly inspected or detained affects the supply chain and logistics, resulting in additional handling and storage costs.
- Correction Fees: If incorrect information is submitted and needs to be corrected, the agent or customs broker may charge a correction service fee.
You may want to know: Customs Delay? Here’s How to Get Your Packages stuck in customs!
3. Other impacts of ISF delays
- Cargo Interception or Denial of Entry: CBP may directly refuse entry of goods not declared on time, causing significant commercial losses.
- Damage to the importer’s credit: Late or non-compliance records may affect the importer’s compliance rating and make future customs clearance more difficult.
- Increased inspection: The importer’s future goods may be listed as high-risk by customs, increasing the inspection rate and cost.
4. How do you avoid late declaration penalties?
- Prepare in advance: Coordinate with suppliers, carriers and agents to ensure timely collection and submission of data.
- Use professional services: Authorize an experienced customs broker or logistics company to declare on your behalf.
- Accurate data: Ensure all information is correct and correct any errors promptly.
- Proactive communication: If potential delays or issues are identified, notify CBP or relevant parties as early as possible to reduce risk.
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