Despite the looming deadline, it’s still a work in progress.By Peter Buxbaum, AJOTThe grace period on the enforcement of the 10+2 regulation is about to expire. Beginning January 26, 2010, U.S. Customs and Border Protection will start to impose penalties on importers who fail to file timely and accurate Importer Security Filings. The upcoming January deadline comes a year after 10+2 first entered on the books. Importers were supposed to be filing ISFs beginning in January 2009. Penalties to be levied in 2010 are supposed to be commensurate with the level of earlier compliance. In other words, importers who have complied or shown improvement in compliance with 10+2 since January 2009 will be treated more leniently if they fall short next year as compared to those whose efforts have been laggard to date. But figuring out exactly who’s been naughty and who’s been nice is easier said than done, according to David Katzman, director of regulatory compliance at C.H. Powell Co., the Boston-based national freight forwarder and customs broker. The regulation in question requires that importers collect and submit to CBP, in an Importers Security Filing (ISF), twelve data elements in connection with import shipments. Ten data elements which provide descriptive information in shipments are due 24 hours prior to vessel loading. This information includes the identity and location of the manufacturer, seller, and buyer; the eventual destination; the container stuffing location and the stuffer’s identity; the identities of the importer of record and the consignee; the country of origin of the goods; and the Commodity Harmonized Tariff Schedule number. Two message sets to be provided by the ocean carrier are due within 48 hours of vessel departure, including the vessel stow plan and any container status messages. “For non-compliant importers, if you didn’t file an ISF, it is conceivable your goods could be seized and not allowed entry until you go through an entire process,” said Katzman, “Five-thousand dollar penalties can be assessed against importers if no ISF has been filed. Customs’ nuclear option is to seize goods when they get here and that creates a very slow clearance process.” For importers who have procrastinated in implementing 10+2 compliance processes within their companies, and there are such, “that would be a pretty good hit over the head,” Katzman added. Technically, importers should have started filing ISFs beginning January 26, 2009. “But Customs has taken the approach they want to see improvements in compliance,” said Katzman. “If an importer didn’t start filing right away, Customs would want to see a report card showing the importer is attempting to comply. They don’t expect 100 percent compliance, but if they see steady improvement, they will consider that as a mitigating factor when applying penalties.” The reason for the potential difficulty in assessing proportional penalties, explained Katzman, stems from the fact that the importer of record, who is responsible for filing Customs entry and release documents and who is ultimately liable for compliance with import regulations, may not be the same entity as the “ISF importer,” who files the security document. Both of these, furthermore, may be different from the actual importer. “Some importers are not interested in doing all of this compliance work, so they may have the foreign supplier become the importer of record,” said Katzman. “These are all technical terms and they don’t always mean the same thing. The ISF importer,” which is a new term invented for the purposes of 10+2 compliance, “could be one of a few different parties.” One way to generate an accurate record of ISF compliance would be to match up ISF filings with entry and release documents which are filed once the shipments have landed. Unfortunately, Customs has no way of doing that right now, according to Katzman. “The only thing that matches an ISF to an entry document would be a bill of lading,” he said, “and that could also