10+2
update: Mitigation guidelines posted
Piracy update: Attacks still persist
United
States and Japan align cargo security programs
U.S. government works toward
improving safety
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10+2 update:
Mitigation guidelines posted
U.S. Customs and Border Protection (CBP)
issued mitigation guidelines for violations of the Importer
Security Filing (ISF, “10+2”) regulation, which may be
viewed
here.
The 10+2 rule requires importers to submit 10 pieces of
advance shipping data 24 hours prior to loading at a foreign
port, and ocean carriers to provide two sets of information.
CBP outlined five situations which may initiate liquidated
damages for an ISF importer:
- Failure to file an ISF – In addition to liquidated
damages, CBP will withhold the release or transfer of
the cargo until the agency reviews the required ISF
information.
-
Late submission of an ISF –
liquidated damages will be issued for $5,000.
-
Inaccurate submission of an ISF
– liquidated damages will be issued for $5,000.
-
Inaccurate updates – liquidated
damages will be issued for $5,000.
-
Failure to withdraw a filing –
liquidated damages will be issued for $5,000.
Mitigating factors
CBP may cancel the liquidated damages claim upon payment
of $1,000 or $2,000 for the first violation, based on
mitigating factors. For the second and subsequent
violations, CBP may cancel the liquidated damages case after
the payment of $2,500. CBP outlined six mitigating factors
to determine the cancellation of liquidated damages cases:
-
Evidence of progress in
implementing ISF compliance during the phase-in period.
-
A small number of violations
compared to total ISFs.
-
C-TPAT Tiers 2 and 3 importers
will receive consideration for up to 50 percent of the
normal mitigation amount.
-
The importer has demonstrated
that remedial actions have been taken to address the
circumstances surrounding the violation.
-
Inaccurate filings
from circumstances
beyond the importer’s control, such as vessel diversions
from weather.
-
Receiving incorrect information
from another party in the supply chain, if this
information is found to be incorrect at a date later
than allowed under the correction timeline. Under
certain circumstances, the liquidated damages may be
canceled without payment.
CBP also provided four aggravating
factors: lack of cooperation with CBP, smuggling attempts or
other laws broken in the shipment, multiple errors on the
ISF and a rising error rate on overall ISFs.
Carriers
For carriers failing to issue a vessel stow plan, a
claim for liquidated damages may be issued for $50,000. The
amount may be canceled upon payment between $5,000 and
$25,000 depending on mitigating or aggravating factors.
Claims for liquidated damages for failure to file a
container status message (CSM), late CSMs and inaccurate
CSMs may be assessed for a maximum of $100,000 per vessel
arrival. The amount may be mitigated to $1,000 or $2,000.
Bond guidelines have still not been released and are
expected to be issued in a few weeks. Avalon is committed to
supporting the concerns of customs brokers and critical
logistics providers affected by 10+2. We continue to
communicate with major associations of customs brokers,
freight forwarders and Foreign-Trade Zones to ensure our
understanding of clients’ concerns. We are a leading
provider of U.S. Customs bonds and other surety and
insurance products for customs brokers and transportation
providers.
Consider an action plan for penalties
Our Regulatory Defense program provides defense costs
for fines and penalties assessed against your company by
various government agencies, including CBP. While Regulatory
Defense does not pay the actual penalty, significant legal
expenses are often incurred to defend and mitigate the fine.
Regulatory Defense appoints a legal expert for advice and to
assist in mitigation and pays all legal fees in full. Avalon
also offers Regulatory Defense to importers and exporters
through their customs broker or freight forwarder, in
combination with their Import Bond and/or Cargo Insurance
program. Marketing support is also available from Avalon to
assist you in promoting Regulatory Defense to your export
and import clients. |
