COAC Subcommittee Prepares Comments on Finalization of the ISF, Etc.

Subcommittee is Preparing Comments for CBP on Finalization of the ISF

CBP’s 10+2 frequently asked questions document states that “pursuant to 28 USC 2415, the statute of limitations for ISF liquidated damages is six years from the date of the breach of the bond. CBP will not limit its authority to enforce the ISF requirements.”

Importers and sureties have expressed concern about the ISF finalization length and the ISF Subcommittee is providing feedback to CBP on this issue. At the March 22, 2010 meeting, the Subcommittee discussed its very preliminary draft document on ISF finalization. Highlights of that draft document (as of March 22, 2010) include:

• The statute of limitations for ISF bonds/transactions should be adjusted to reflect the real purpose of the ISF. With the ISF, once the goods subject to the ISF are considered admissible, CBP should not have the ability to issue liquidated damages.
• The following timelines for notice of liquidated damages to be sent to the importer and surety were suggested: (i) for consumption entries, the ISF should be deemed acceptable for timeliness and accuracy 30 days after release of merchandise by CBP; (ii) for carrier filings, the ISF should be deemed acceptable for timeliness and accuracy 30 days after the date of arrival of the vessel; and (iii) for immediate exportation (IE) and transportation and exportation (T&E) shipments, the ISF should be deemed acceptable for timeliness and accuracy 30 days after the exportation of the merchandise.
• If notice is not provided to the importer or surety within the above timeframes, the ISF is considered accepted and no liquidated damages may be issued.

The Subcommittee updated its preliminary draft document based on the feedback received at the March 22, 2010 and March 29, 2010 meetings.

Subcommittee to Recommend Improvements to ISF Progress Reports

The Subcommittee has prepared a draft document with its recommendations for improvements to the ISF progress reports. The Subcommittee was expected to update its draft document based on feedback received from its March 29, 2010 meeting.

The Subcommittee Chair noted that these ISF progress reports should be available to all importers since the ISF is mandatory.

Lack of Consultation on ISF Enforcement for C-TPAT Members Caused Concern

A January 2010 document issued by Dallas CBP stated that at the start of the second quarter of full ISF enforcement, Customs-Trade Partnership Against Terrorism (C-TPAT) companies that demonstrate low compliance rates will be notified by CBP Headquarters at the executive level (i.e., VP or CEO) that they risk establishing a pattern of non-compliance and may be jeopardizing their C-TPAT status. The document further stated that, as CBP moves into the remaining quarters, CBP will consider revoking, suspending, or reducing the C-TPAT status of C-TPAT companies that remain non-compliant.

In response to Subcommittee concerns that CBP had not consulted COAC about this position, CBP stated in the February 16, 2010 meeting that only egregious violations and repeat violations would lead to problems with C-TPAT status, not one or two isolated incidents. CBP was expected to address this issue with C-TPAT members at the March 16, 2010 C-TPAT conference.

Recommendations for 2010 Outreach Efforts

The Subcommittee has created a draft document outlining draft recommendations for outreach efforts in 2010. The recommendations include: (i) automating letters for non-compliant importers; (ii) ongoing outreach provided by brokers/forwarders; (iii) online ISF training; and (iv) target outreach to C-TPAT members.

(See ITT’s Online Archives or 03/02/10 news, (Ref: 10030205), for BP summary of the full COAC committee’s February 25, 2010 meeting, which addressed many of these issues.)

ISF Subcommittee minutes available at http://www.cbp.gov/xp/cgov/trade/trade_outreach/coac/subcommittee_activities/isf/