June 21, 2008

Overview

The Importer Security Filing (ISF) initiative, also known as 10+2, is right around the corner.

Based on the proposed rule by Customs and Border Protection (CBP), U.S. importers must submit required security data electronically to CBP 24 hours prior to loading ocean containers on vessels destined for the U.S.

For additional information on ISF requirements, please visit the following web site: http://www.cbp.gov/xp/cgov/newsroom/news_releases/archives/2008_news_releases/jan_2008/01022008.xml

As your ISF agent, UPS will capture ISF information in a simple, compliant, and timely manner from both internal and external sources. Additionally, our solution will share data between our transportation and brokerage systems, submit data to CBP, and provide accurate and timely client visibility, messaging, and reporting.

Below are the fourth in a series of questions and answers to help familiarize you with ISF.

Frequently Asked Questions

Cost

1. Will there be extra charges to the carriers which would then be passed on to their customers for filing the required information to Customs?

Since the importer is responsible for the filing and required to have a relationship with the filing agent, we assume the charges for the filing will become part of the ocean freight invoice, customs clearance, or a separate invoice altogether.

2. To what extent does this affect Trade Direct accounts?

Trade Direct accounts typically have many “ship to” parties; all names and address of those “ship to” parties for ocean shipments will need to be available to the importer’s agent for the purpose of ISF filing.

3. We use UPS-SCS for all of our ocean shipments and our brokerage, so expect that UPS-SCS will also be handling the ISF filing on our behalf. Because the ISF filing and the entry are two separate transactions, has UPS-SCS determined what additional fees will apply? If so, how much?

Pricing for ISF submission will be determined once the final rule is published by CBP, and we've finalized our systems and processes.

4. Regarding changes in bond regulations, it appears importers will need to increase their bond amount. Is there a standard recommended percentage of increase?

CBP hasn’t finalized bond amount requirements at this point.

Miscellaneous

5. Do you know about the qualifications for the AEO and/or Partners in Protection? If you get qualified for one, does that pretty much ensure qualification for others?

Qualifications for AEO can be found at:
http://ec.europa.eu/taxation_customs/resources/documents/customs/policy_issues/customs_security/AEO_guidelines_en.pdf

Qualifications for Partners in Protection can be found at:
http://www.cbsa-asfc.gc.ca/security-securite/pip-pep/mod-eng.html

At this point, security programs are exclusive by country, with on-going effort to establish mutual recognition.

6. Will we be able to file the entry summary at the same time as the Importer Security Filing (ISF)?

Eventually the possibility will exist; however, CBP has stated that during the initiation of the program this functionality will not be available. A timeline for completion was not provided.

7. Have you seen any "best practices" developed by other companies re the 10 + 2 requirements that can be shared with your import customers?

While we’re not aware of importers developing best practices at this point, we feel the best practice will be for the importer to provide as many of the ISF data elements as possible at the time the purchase order is placed with the seller:
• Buyer (or owner) name and address
• Ship to name and address
• Importer of record number/foreign trade zone (FTZ) applicant identification number
• Consignee number(s)
• Commodity HTSUS number (6-digit level required, 10-digit level optional)

- The seller to provide that data as well as additional data below to the forwarder at time of booking request:
• Manufacturer (or supplier) name and address
• Seller (or owner) name and address
• Container stuffing location
• Consolidator (stuffer) name and address
• Country of origin

- The forwarder will then provide final data elements and transfer to the submitting agent:
• Master bill of lading number (MBL)
• House bill of lading (HBL)
• Vessel name
• Lloyd’s code
• SCAC codes
• Container number