Source: International Trade Today. As of June 25, CBP was in 2nd Phase of ISF Enforcement

Transcription

1 Source: International Trade Today As of June 25, CBP was in 2nd Phase of ISF Enforcement During the June 25, 2010 meeting of the COAC Importer Security Filing Subcommittee, CBP officials and Subcommittee members discussed various issues, highlights of which include: Ports Had Been Notified of Second Phase As of June 25, CBP stated it had moved into the second phase of its graduated enforcement of ISF, but was not yet in a liquidated damages mode. CBP stated that if there was not an ISF, CBP could use non-intrusive inspection (NII) or other means to address the situation. At the June 25, 2010 meeting, CBP stated that ports will issue a hold, but no claims for liquidated damages. CBP issued a memo to the ports on the second phase and will do the same once CBP moves into the third phase. CBP had been finding acceptable ISF volume and compliance rates (90-92%). (CBP had previously stated that it would not be issuing any liquidated damages for ISF issues during the first quarter beginning January 26, CBP had also stated that when it moved 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. In addition, CBP has 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.) ISF Statute of Limitations Issue under CBP Review COAC s ISF Subcommittee submitted recommendations for shortening the ISF statute of limitations (also referred to as ISF finality) at the May 11, 2010 COAC meeting. A CBP official stated that the issue of ISF finality is under review by the Office of Rulings and Regulations (OR&R). (CBP s position on ISF finality has been that 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. ) A CBP official suggested to the ISF Subcommittee that it would not be completely happy with OR&R s current position on this issue, noting that CBP s concern is protection of the agency for any kind of fraud or negligence. CBP states that it will not limit authority in terms of being able to go back to the filer/importer, but will not come back after the fact to nitpick minor infractions. CBP further stated that OR&R will develop language on ISF finality and liquidated damages which will be included in CBP s mitigation guidelines in the Informed Compliance Publication (ICP) on Fines and Penalties.

2 CBP Has Funding, Completed Most Programming for ISF Data Warehouse At the meeting, a CBP official stated that CBP has been working on a data warehouse concept, has secured additional funding, and has completed a lot of the programming. The data warehouse s portal will allow access to the importer, broker, surety, filer, and carrier and there will be standardized downloadable reports, as well as some ad hoc reports. CBP is expected to provide the Subcommittee with an overview of the data warehouse system at a later date. (In the July 2010 version of its 10+2 FAQ, CBP stated that it is in the process of developing a data warehouse that will allow importers to create and extract reports from CBP; this will include the capability to obtain ISF transactional data. CBP will make every effort to deploy this capability to Tier 3 and Tier 2 C-TPAT importers sometime in the fall of See ITT s Online Archives or 07/16/10 news, , for BP summary.) ISF Portal for SMEs Almost Completed CBP has been working on an ISF portal for small to medium sized enterprises (SMEs). According to CBP, programmers are looking at a few registration flaws and then the portal will be ready. A CBP official notes that the SME portal is 99% complete and user friendly. CBP s Planned Redesign of Web Site Could Improve ISF Visibility CBP is planning a redesign of its Web site ( and the Subcommittee notes that this could be an opportunity to provide feedback not only on improving visibility on ISF content but also on other improvements to the Web site, especially those geared toward helping the small to medium sized entities (SMEs). ISF Benefits Document Awaiting Full COAC Review, Feedback A Subcommittee member has drafted a one page document regarding ISF benefits and it has been circulated to the full COAC for review and feedback. CBP is Updating its Publications to Reflect ISF The Subcommittee also discussed with CBP officials a checklist of ISF publications. During the discussion, a CBP official stated that CBP s Informed Compliance Publication on Fines & Penalties would be updated with respect to ISF penalties and mitigation options once OR&R has completed its review of the ISF finality matter. In addition, CBP s Importing to the U.S. publication will also be updated to include a section on ISF. CBP is also planning ISF audio podcasts. New Importers Brochure is Being Prepared by CBP

3 The Subcommittee provided CBP with feedback on its Tips for New Importer s document, including stating that because the document is geared towards the small to medium sized entities, the language should be as basic as possible. (end of article) Highlights of CBP's Goals From the FY 2011 Budget Request As part of its fiscal year 2011 budget justification document, the Department of Homeland Security listed numerous FY 2011 goals for U.S. Customs and Border Protection. Highlights of those goals for specified activities include: Customs-Trade Partnership Against Terrorism Complete an additional mutual recognition arrangement with a foreign Customs counterpart; Establish an evaluation branch to effectively assess the program's internal policies and procedures, which will ensure C-TPAT members are improving the security of their supply chains in accordance with the security criteria; Expand the analytical capabilities of the program as resources permit to identify trends and specific high risk areas, which need to be validated; Conduct revisits of validated companies to physically confirm that all security deficiencies that were previously identified have been rectified, as resources permit; and Address narcotics breaches involving C-TPAT members along the southwest border by implementing new strategies such as focused outreach sessions to strengthen supply chains originating in Mexico. International Cargo Screening Begin the transition from a physical presence to a virtual presence at CSI ports; and Secure Freight Initiative (SFI) will begin the transition to phase out operations at three of the five current locations and establish a port at Karachi, Pakistan Inspection and Detection Technology Continue working toward 100% scanning for radiation of all sea cargo containers at designated ports of entry by the end of calendar year (CY) 2012 and 100% scanning for radiation of all air cargo at designated airports by the end of CY 2015;

4 Continue to conduct thorough testing and evaluation in accordance with ANSI of all non-intrusive inspection (NII) Commercial systems that are acquired before they are accepted and deployed for CBP operations. CBP has been conducting this level of testing on all NII systems to ensure that the vendor's product conforms to contractual requirements; and Deploy 3 high energy replacement systems, 5 additional high energy systems for new/enhanced ports, 2 low energy portal systems for the northern border, 2 low energy mobile systems for commercial airports, and 1 high energy rail system purchased in FY Inspections, Trade, and Travel Facilitation Develop comprehensive information exchange procedures with the U.S. Department of Agriculture (USDA) Animal Plant Health Inspection Service (APHIS) to fully integrate data capture and analysis capabilities for agriculture operations at ports of entry and cargo business processes; Improve risk management and risk analysis activities within agriculture programs. Transition the WHTI program to an Operations and Maintenance mode and achieving performance goals; and Implement a fee for service program for the Electronic System for Travel Authorization (ESTA), as authorized by Congress. Systems for Targeting Incorporate all local and national trade criteria into ATS User Defined Rule functionality; and Support the development, maintenance, and enhancement of ATS targeting for vehicles and risk assessments for passengers in the land environment. National Targeting Center Develop a national Counter Terrorism Response Team (CTR) in an effort to standardize policies, coordination, and reporting requirements for field officers; Develop a CTR field position designated solely for processing individuals of interest to national security and establish a mandatory national CTR training program; Perform targeting for the Port of Karachi; and Continue to expand the emphasis on targeting of shipments of narcotics and precursor chemicals transiting the western hemisphere. Border Security and Control Between Ports of Entry

5 Office of Information and Technology (OIT) will incorporate new methods for improving the integration of inspection results in the process for evaluating targeting concepts, rules, and lookouts; Continue incorporation of other federal government agency data into ATS to ensure real time situational awareness; Integrate additional analytical tools into ATS to improve targeting effectiveness; and OIT will ensure that deployed NII technologies meet the expected operational requirements of CBP. Other International Programs Promote CBP's strategies for post-event security (e.g., Business Resumption/Trade Recovery initiatives); and Strengthen relationships with DHS components, Other Government Agencies (OGAs), and non-government stakeholders with regard to international initiatives. Trusted Traveler Programs Implement bi-lateral international air trusted traveler programs with additional countries; Increase membership in Trusted Traveler programs; Achieve unified fees for all Trusted Traveler programs; and Introduce a secondary biometric check for both identification and exit control. CBP Officials Discuss 10+2 ISF Warning Letters, Finalization, Etc. at February COAC Meeting During the February 25, 2010 Departmental Advisory Committee on Commercial Operations of U.S. Customs and Border Protection and Related Homeland Security Functions (COAC) meeting, CBP officials provided an update on The following are highlights of the CBP-COAC discussions on 10+2: CBP Has Not Started Issuing ISF Warning Letters In January 2010, CBP announced that during the first quarter of its enforcement of 10+2, it would be issuing warning letters and talking to filers (instead of issuing liquidated damages) for ISF issues.

6 A CBP official stated that CBP has not yet started issuing warning letters, and he noted there are certain sensitivities over the issue of who receives a warning letter and for what reason. Various COAC members noted the importance of importers and/or sureties receiving warning letters in addition to filers. Dallas Notice on 10+2 Enforcement for C-TPAT Firms Concerns COAC Members COAC members, while expressing appreciation for CBP's gradual enforcement plans for 10+2, noted concern about a CBP document (issued by Dallas CBP at the end of January 2010) which contained talking points with respect to 10+2 enforcement. According to the CBP Dallas/Fort Worth public notice, at the start of the second quarter of full enforcement, C-TPAT companies that demonstrate low compliance rates will be notified by CBP Headquarters at the executive level (i.e., VP or CEO) that they risk establishing a pattern of non-compliance and may be jeopardizing their C-TPAT status. The public notice further stated that, as CBP moves into the remaining quarters, CBP will consider revoking, suspending, or reducing the C-TPAT status of C-TPAT companies that remain non-compliant. COAC members expressed concern that the trade was not engaged before this policy went out and noted that C-TPAT members should have been advised of the policy. COAC also asked CBP to send something to the C-TPAT members clarifying CBP's position on the ISF-C-TPAT link issue. CBP officials did not respond to COAC's request or concerns. ISF Six Year Statute of Limitations Concerns COAC Member At the meeting, a COAC member addressed the issue of the statute of limitations for ISF liquidated damages. According to that COAC member, since the goal of the ISF is to increase security, initiating a liquidated damages claim five or six years after the shipment has been released doesn't really serve that purpose. (CBP's 10+2 FAQs state that 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. ) The COAC member noted that COAC is going to have further dialogue with CBP on this issue. CBP officials did not respond to this member at the meeting. CBP Addresses Concerns on Format, Detail, Error Codes in Progress Reports According to a CBP official, CBP continues to send out ISF progress reports on a monthly basis and has covered about 900 of the filers. Format. A CBP official stated that CBP has looked at the format of the monthly progress reports in light of the trade's request for more detailed, useful information. The CBP official noted that

7 CBP is looking at a couple of report variations which it hopes will allow the trade to use the reports to work with filers on errors and rejects. The CBP official further stated that CBP is also looking at an Excel spreadsheet format for the reports to allow greater data manipulation by trade. Transaction level detail. A COAC member expressed satisfaction that CBP has listened to COAC's suggestions regarding transaction-level detail and more user friendly formats for the progress reports. According to a CBP official, C-TPAT Tier 3 members will see additional transaction level information in their progress reports first. A COAC member noted that this level of detail should eventually be made available to all ISF importers. Error code list. In addition, a COAC member thanked CBP for providing the trade with the tools to interpret the progress report data, especially making an error code list available on the CBP Web site. However, one COAC member emphasized that it would like CBP to make the error code list easier to find on CBP's Web site. Incorporation of ISF Information into ACE Sought by Some COAC Members During the meeting, certain COAC members expressed the desire to have CBP look into ways to incorporate ISF information into the Automated Commercial Environment. Continued Outreach to SMEs, Timely FAQ Updates Promised by CBP Officials During the course of discussions with COAC, CBP officials expressed their commitment to continued outreach, especially for small and medium-sized enterprises. A CBP official also noted that CBP has been updating its 10+2 frequently asked questions document more frequently. Updated 10+2 Statistics on Filing, Timeliness of ISFs During the meeting, a CBP official noted that CBP has received over 5.5 million ISFs (from 2,300 ISF filers and from 141,000 unique importer of record numbers). The CBP official also stated that on a monthly report basis, 70-75% of the ISFs are filed timely. CBP Posts Overview of 2009 C-TPAT Accomplishments U.S. Customs and Border Protection has posted an overview of the accomplishments of the Customs-Trade Partnership Against Terrorism (C-TPAT) during According to CBP, highlights of C-TPAT accomplishments during 2009 include strong validation numbers, continued member growth and increased quality assurance.

8 (C-TPAT is a voluntary government-business initiative to build cooperative relationships that strengthen and improve overall international supply chains and U.S. border security. Through C- TPAT, CBP asks businesses to ensure the integrity of their security practices and communicate and verify the security guidelines of their business partners within the supply chain.) Highlights of 2009 C-TPAT Accomplishments The following are highlights of C-TPAT's accomplishments during 2009: Exceeded validation target - exceeded its target of 3,200 validations for the year by conducting 3,420 validations involving 4,131 physical site visits in 75 high risk countries throughout the world. Two thirds of the validations involved formal revalidations (2,244) and the work plan included additional strategies to address risk such as revisiting the original supply chains of certain companies to confirm measures in place, and unannounced visits. This is the first year in C-TPAT's existence in which the number of revalidations surpassed the initial validations. Certified 1,237 new members - certified 1,237 new C-TPAT members in 2009, an increase of 9% from 2008, and growing the total number of companies involved in C-TPAT to 9,617. Suspended, removed 297 members - either suspended or removed a total of 297 members as a result of an incident or failed validation. The number of security incidents decreased by 26% in comparison with 2008; however, the number of failed validations increased by 20% which is attributable in large part to the fact that C-TPAT is holding members to a strict 90 day validation report response timeframe. Adjudicated 51 appeals of suspensions, removal determination - adjudicated 51 cases in which the member appealed the initial suspension/removal determination. Of those 51 appeals, 32 were denied and 19 were approved and the partners were re-instated into C-TPAT. Submitted validation reports in average of 45 days - submitted validation reports to the partner on average within 45 days of the date of validation with an enhanced presentation format. Updated, distributed Best Practices catalog - updated and distributed the Best Practices catalog to all members, which now includes hundreds of new and innovative ways in which members are securing their supply chains. Conducted regional conferences, workshops - conducted a regional specific conference in Buffalo for Northern Border Highway Carriers and several hands-on workshop sessions at strategic ports of entry on the Southern Border.