CBP Refutes Rumors on 10+2 Liquidated Damages Claims, Etc.

CBP Still Not Expected to Issue Claims for Liquidated Damages Until Summer

At both events, CBP officials indicated that, contrary to rumors, CBP has not yet issued any claims for 10+2 liquidated damages. The officials noted that liquidated damages claims from the ports are still supposed to come through CBP Headquarters and that CBP still plans for that process not start until summer 2010.

(CBP has previously stated that it would not be issuing any liquidated damages for ISF issues during the first quarter beginning January 26, 2010. When it moves into the second quarter, if CBP sees repeated incidents of no ISFs being filed and no response from the importer, CBP may issue a claim for liquidated damages. During the third and fourth quarters, CBP stated that it will take a much stronger enforcement approach, including the issuance of liquidated damages on a more regular basis.

CBP has also previously stated that the field will initiate claims for ISF liquidated damages, but all claims will be processed through Headquarters for the first year or so until the ports have had time to adjust.)

CBP’s Main Focus is Still on Non-Filers

CBP officials at the NCBFAA conference stated that CBP is still focusing on the most problematic 10+2 issues (i.e., non-filers). CBP was expected to start sending out letters to “problem filers” in mid-April. As time goes on, CBP will take more vigorous action against those not filing. The official noted that treatment of cargo is at the port’s discretion.

CBP is Reviewing Port Actions Against Non-Filers

In response to a question at the COAC Subcommittee meeting as to what CBP does for non-filing of ISFs, the CBP official stated that some of the ports (New Orleans, Boston, Newark) are taking action in such cases and it is up to the ports to decide whether to hold the shipment or do a non-intrusive inspection (NII). CBP HQ is also reviewing the actions taken in the Automated Targeting System (ATS).

CBP Satisfied with 10+2 Compliance to Date

At the Subcommittee meeting, the official stated that CBP is satisfied with ISF compliance to date and noted that overall 10+2 compliance is around 90% and exceeding that in some ports; and timeliness is generally 80-85%, but some days it exceeds 90%.

Possible Benefits for Highly Compliant ISF Importers/Filers Discussed

The Subcommittee also discussed possible benefits to ISF importers/filers who are highly compliant. During the discussion, various benefits were discussed, including:

• elevating compliant C-TPAT Tier 1 and Tier 2 importers to Tier 3
• streamlining the C-TPAT application process for highly compliant small to medium sized importers
• penalty mitigation

6 Year Statute of Limitations for ISF Liquidated Damages Being Reviewed

CBP’s 10+2 frequently asked questions document states “pursuant to 28 USC 2415, the statute of limitations for ISF liquidated damages is six years from the date of the breach of the bond. CBP will not limit its authority to enforce the ISF requirements.”

Importers and sureties have expressed concern about the ISF finalization length and the ISF Subcommittee is providing feedback to CBP on this issue. At the meeting, the Subcommittee discussed its draft document on ISF finalization, which the Subcommittee planned to send to the full COAC.

(See ITT’s Online Archives or 04/19/10 news, (Ref: 10041905), for BP summary of recent COAC ISF Subcommittee meetings.

See ITT”s Online Archives or 02/04/10 news, (Ref: 10020410), for BP summary of the enforcement section of CBP’s 10+2 FAQs.

See ITT’s Online Archives or 01/25/10 news, (Ref: 10012505), for previous BP summary on CBP’s plans for graduated 10+2 enforcement.)

Minutes (posted 04/27/10) available at http://www.cbp.gov/linkhandler/cgov/trade/trade_outreach/coac/subcommittee_activities/isf/april16_minutes.ctt/april16_minutes.doc