The Importer Security Filing (ISF) and Additional Carrier Requirements (known as "10+2") interim final rule has been in effect for almost one year, yet manufacturers everywhere are still struggling to comply with its provisions. Under 10+2, importers must submit specific data elements to U.S. Customs and Border Protection (CBP) on cargo to be imported by vessel into the United States. CBP is being judicious in its enforcement, with importers that are not fully compliant being given credit for demonstrating progress in efforts to comply with 10+2 or showing a "good-faith" effort. Leniency will extend until the beginning of 2010.
Importers that produce products in whole or in part overseas may face a big challenge collecting all the data needed to complete the 10+2 filing accurately. Clearly, data reliability is an important issue for importers. However, assuming data sources are solid, how can firms move to the next level and generate and file ISFs with CBP in a timely manner?
Firms importing products produced overseas must first answer five key questions to make this determination.
1. How will data be gathered from vendors? Data collection can occur manually, electronically using e-mail, or automatically using an ISF vendor offering designed specifically to help importers comply with 10+2 requirements.
2. Who will prepare the filings? Importers can opt to file themselves or pay a broker/freight forwarder to do it for them. A key factor to be considered in this decision is budget. Broker-developed filings could incur transaction fees ranging from a low of $20 to a high of $50, with each amendment costing $10 to $20 or more. As change is a constant in this process, amended filing costs can add up quickly.
3. How will 10+2 data be transmitted to the customs broker or CBP? There are several ways to transmit information. Firms with an established VPN connection can file with CBP directly. This approach eliminates redundancy; thus, the importer's broker won't be duplicating efforts or transmissions.
4. Should manual or automated methods be used? Time to market-or time to the next phase of production-plus the very short window available for ISF filing makes an automated method virtually mandatory.
5. Which automated solution should be selected? The number of 10+2 solutions seems to grow daily. However, they are not all created equally, and not every solution will meet every company's unique needs. It is important to define requirements, budget and so on. Even still, there are some basic required features:
• Alternative means to input and format data. Look for a solution that allows Excel spreadsheet use, remote direct data entry via the internet, use of standard XML/ASN formats and/or automated building of ISFs from purchase orders and commercial invoices.
• Fully automated ISF generation. Preferably, ISF creation and filing from systems data should be totally automated except in instances where issues, such as missing data elements, arise that necessitate manual actions. The ISF system should be capable of issuing alerts regarding errors or missing information.
• Adaptability. ISF filing requirements and provisions are evolving during the implementation period. Vendor solutions must be flexible enough to accommodate change.
• Filing Fee Minimization. Options do exist that eliminate transaction fees. Shop wisely!
Importers, in particular, would be well served by a Web-based solution where vendors can enter ISF data directly. Look for solutions that offer data review and editing features so your firm can maintain control over the accuracy of data filed with CBP.
Complying with 10+2 requirements is not burdensome once a strategy is put in place. Firms that opt to investigate what is available and invest in a totally automated system will likely fare better financially over the long run.
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