November 13, 2008
The Importer Security Filing (ISF) initiative, also known as 10+2, may soon take effect. As your business partner, Customs Brokerage from UPS will be able to file the additional information for you electronically. This will affect ocean freight only.
The proposed regulation will require carriers to submit 2 additional pieces of information (the 2 of the 10+2) in order to enhance the security of the maritime environment. The additional information includes: (1) a vessel stow plan used to transmit information about the physical location of cargo loaded aboard a vessel bound for the U.S; and (2) container status messages, which report container movements and changes in status (e.g., empty or full).
The Importer Security Filing requires the following 10 data elements from the importer or importer's agent (the 10 of the 10 + 2):
- Manufacturer (or supplier) name and address
- Seller (or owner) name and address
- Buyer (or owner) name and address
- Ship-to name and address
- Container stuffing location
- Consolidator (stuffer) name and address
- Importer of record number/foreign trade zone applicant identification number
- Consignee number(s)
- Country of origin, and
- Commodity Harmonized Tariff Schedule number
Based on the proposed rule, U.S. importers must submit the 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
Under the proposed rule, CBP will allow an importer to designate an agent to act on their behalf to submit the ISF. It is our intent to offer our services as an agent for your convenience at a reasonable cost. Our pricing for this service will be determined after CBP issues the final rule later this year, and we've had the opportunity to finalize our systems and processes.
We plan to capture the ISF information in a simple, compliant, and timely manner from both internal and external sources. Additionally, the solution we envision will be able to share data between multiple systems, submit data to CBP, and provide accurate and timely client visibility, messaging, and reporting.
Below is the third in a series of questions and answers to help familiarize you with 10+2.
Frequently Asked Questions
Capture
- What strategy do you have in place for UPS origin staff to support ISF?
UPS is closely evaluating our strategy for ISF. We have engaged our forwarding teams in various countries around the world for input to ensure a smooth implementation. In part, our strategy will depend on the approach ultimately adopted by CBP.
- When the carrier controls movement of the container from the factory to the pier, will ISF acceptance have to be in place before the carrier will pick up the goods?
Having an ISF acceptance in place 24 hours prior to the time the carrier picks up a container to deliver it to the pier will ensure that the importer does not receive a penalty for untimely ISF.
- Will the shipper be required to provide all the required ISF information on the commercial invoice?
Although not required, our anticipation is that shippers will incorporate many of the data elements into the commercial invoice, attach an ISF worksheet, or enter ISF data directly into a Webform. Use of a Webform will relay ISF data most efficiently to the ISF agent.
- What types of services will be provided by an ISF agent?
Services will include data capture, ISF submission, milestone notifications and critical alerts, and reporting.
- Some ISF data elements should either be on our P.O. or our customer profile with UPS - is UPS prepared to be able to capture this information?
UPS is prepared to capture and submit ISF data provided on a purchase order or other commercial documents, as well as from an importer-provided part/item master. However, automation of any ISF data to eliminate manual data entry by UPS will result in beneficial pricing. UPS will be able to receive data from external parties electronically or by data entry into a web-based form.
- Is UPS prepared to capture the container stuffing location and consolidator name and address?
If UPS builds a container, we will capture this information. If UPS does not build the container, this information must be provided to UPS by a party having knowledge of this information.
- What elements are required at the line item level?
The HTS number, the country of origin, and the manufacturer's (or supplier's) name and address must be linked together and reported at the line item level.
- Do the 10 pieces of data have to be on one line in the electronic ISF record?
CBP has issued the draft record layouts for ISF which contain detailed mapping requirements. A final record layout should be available from CBP at the time the final rule is published.
- If a product requires dual classification codes on the consumption entry, which classification do we use for the HTS data element in the ISF submission?
CBP has not provided clear direction on this in their draft ISF data layouts, but we assume it will be possible to file all required tariff numbers for one ISF. CBP requires HTS numbers will be linked by country of origin and manufacturer; however, we are not aware of any limitations on the number of tariffs which can be provided in the ISF record.
- Our shippers currently provide MID codes for their manufacturers for US entry purposes and it may be difficult for us to get the complete name and address of the manufacturer. Can the MID code be provided in the ISF record since it has all the necessary information that is in CBP’s system?
CBP has not provided a definitive reason that MID codes will not be permitted. Our interpretation is CBP does not feel the MID codes provide accurate detailed information and are subject to change. Additionally, CBP realizes MID codes can be easily duplicated which makes it difficult to target specific entities solely based on MID codes.
- Can multiple containers, countries of origin, tariff codes, etc. be included in a single security filing record (on the same bill of lading)?
Yes, the common denominator will be the lowest-level bill of lading.
- What is the "consignee number(s)" that is required for ISF?
CBP defines 'consignee number' as the Internal Revenue Service (IRS) number, Employer Identification Number (EIN), Social Security Number (SSN), or CBP assigned number of the individual(s) or firm(s) in the United States on whose account the merchandise is shipped. This element is the same as the 'consignee number' on CBP Form 3461.
- Who assigns it?
This number is provided by one of various government agencies depending on the type of identifying number assigned to the consignee.
- Who will be responsible for filing ISF for informal entries when the broker acts as the IOR?
The broker won't routinely be acting as the IOR for informal entries. In the event the broker acts as the IOR, we are not certain how CBP will address until the final rule is issued later this year.
- What data can an importer file as an alternative if certain information can't be determined through due diligence?
An example of an alternative data that can be provided is the name and address of the supplier if the manufacturer is not known, though CBP has repeatedly stated that the actual name and address of the manufacturer will be required for textile shipments. In general, CBP expects accurate information to be submitted in the ISF record.
Cost
- Will there be extra charges by my logistics partners for providing required ISF information to our ISF agent?
It is possible that a carrier or forwarder may charge a fee for the service of providing ISF-related data to an ISF agent. In that case, this fee could become included on the ocean freight invoice, customs clearance, or a separate invoice altogether.
- 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. Fees will be assessed based on the level of automation to capture data, the complexity of the transaction, and the degree of validation required.
- 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.
- Will there be a fee associated with the request to file ISF on behalf of the importer?
Yes.
- If so, will this be a part of or separate from the existing brokerage rates in those instances where brokerage rates are bundled with the freight costs?
Fees may be either part of the existing brokerage rates or separate depending on client's requirement.
- How will this fee be calculated?
Fee will be assessed based on the level of automation to capture data, the complexity of the transaction, and the degree of validation required.