If you’re an importer of goods that arrive in the United States by ship, you probably already know you’re required to complete an Importer Security Filing (ISF) form and submit it to the Customs and Border Protection (CBP) agency before the vessel carrying your products arrives at a U.S. port. But you might not know what happens if you make a mistake on your filing, especially if you haven’t made one yet. The fines and penalties assessed for ISF filing mistakes are significant, but if you know what the most common mistakes are, you can actively avoid making them.
This is probably the most common ISF filing mistake is the timing. You have to file your ISF form during a specific window or it will be rejected. Unless you’re importing break-bulk items (products that are transported in boxes, bags, crates, barrels, or drums instead of shipping containers), you are required to file an ISF no later than 24 hours before your goods are loaded onto the ship that will carry them to a U.S. port. This regulation is modeled after the 24-Hour Manifest Rule, which requires ocean carriers to file their manifest (what they are carrying) with the CBP at least 24 hours before departing for the U.S.
The CBP considers any ISF filing made prior to “departure minus 24 hours” to be timely. Essentially, this means you have to file your ISF at least 24 hours before the ship carrying your goods leaves port. The CBP will fine importers $5,000 per infraction and/or up to $10,000 per transaction for a late ISF filing.
Ocean Carriers and Bills of Lading
The ocean carriers are required to provide the first bill of lading for the goods on their ship. Many times, they provide the wrong bill of lading number, which won’t match the bill of lading number on an ISF form. This will trigger CBP inspection and possibly detention of the containers on the ship. Missing bill of lading numbers will also cause the CBP to take a close look at what’s on board that ship. To avoid this pitfall, make sure the bill of lading number on your ISF is the correct one before you file and that it matches the one filed by the ocean carrier.
Importer ISF Bond
An overlooked aspect of filing an ISF for imported goods is the importer ISF bond. As an importer, you are required to secure an ISF bond that guarantees the information you provide to the CBP about your cargo is correct and timely. An ISF bond is a type of customs bond that serves as a financial agreement between the importer of record (IOR), the CBP, and the insurance company that underwrites the bond. You can obtain a single ISF bond, which is appropriate if you’re just importing one or two shipments per year, or a continuous bond, which is ideal for importers with multiple shipments throughout a 12-month period.
Filing an ISF can be a hassle, but if it’s not done correctly, the resulting fines and penalties can be even more of a headache. Be sure you’re protecting your investment by properly filing an ISF in a timely manner.