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05-17-2011 - ISF Liquidated Damages Imminent?

U.S. Customs and Border Protection (CBP) announced their intent to issue liquidated damage claims (i.e. penalties) prior to the end of summer against late or inaccurate Importer Security Filing (ISF) transactions. This represents the first indication of a time line, albeit loose, for the assessment of liquidated damages since the program evolved into enforcement on January 26, 2010.

The ISF final rule went into effect on January 26, 2009 and allowed for a one-year flexible enforcement period as CBP and industry adapted to the program requirements. Despite entering the enforcement environment on January 26, 2010 it was apparent that both CBP and industry required additional time to develop compliant processes and systems. Thus, CBP advised they would “show restraint”and employ “the least punitive measures available to obtain full compliance”. As anticipated, the transition to liquidated damage based enforcement continues to progress and the first initial claims are perhaps imminent.

Liquidated damages will be assessed against non-compliant ISF transactions at $5,000.00 per infraction, not to exceed $10,000.00 per ISF. A comprehensive overview of infractions, mitigating and aggravating factors, as well as mitigation guidelines is here: ISF Liquidated Damages Mitigation Guidelines.pdf

While liquidated damages may be assessed against any ISF violation it has been conveyed that the initial targets are those not filing the ISF or those that are habitually late in filing the ISF. It is not known whether non-compliant ISF Importers will receive warning letters and/or experience delays in the release of their cargo. Finally, CBP stated that they will issue an updated 10+2 frequently asked questions document by the end of the summer.

Additional information pertaining to ISF may be found at: http://www.geosbush.com/readarticle.php?id=14

Geo. S. Bush & Co., Inc. (GSB) is proficient in understanding the ISF program and requirements as well as our ability to file an ISF. Please think of Geo. S. Bush & Co., Inc. as your ISF/supply-chain management partner.  Several factors need to be pre-determined prior to filing an ISF.  To ensure your company is compliant with the ISF requirements, please call (503) 228-6501, and/or email: info@geosbush.com.