Customs Authority Filling out paperwork ISF

Importer Security Filing (ISF): Challenges and tips to streamline the ISF process

Importance and Relevance of ISF

As explained in our previous blog, the Importer Security Filing (ISF) is an important piece of legislation that enables the U.S. Customs and Border Protection (CBP) to detect high-risk cargo in advance based on analysis of the information submitted by importers or their agents, such as a licensed customs broker.

The ISF filings are a relatively new rule or policy that went into law in 2008 and is intended to enhance national security and prevent imports and exports of merchandise that could be detrimental to public health and safety.

Each piece of data is essential in the risk assessment process. For example, information regarding the parties to the transaction can help identify if a sanctioned entity (including private individuals) is involved. Similarly, if the origin commodity and container stuffing location is from a part of the world plagued by high levels of political instability or violence, additional checks will be warranted.

It is, therefore, essential that the stipulated information be provided accurately and on time.

Consequences of non-compliance

The ISF rules address importer(s) or their agents on the importance of filing the necessary data within the prescribed timeframe.

In instances where the information is not shared in time or is inaccurate or incomplete, the CBP’s ability to detect illegal cargo is hindered, thus undermining the purpose for which the legislation was enacted.

Considering the gravity of the potential risks in case such proscribed cargo is not detected by the CBP due to lack of information, the ISF rules also mandate penalties to ensure that importers and customs brokers take this responsibility with the utmost seriousness and comply with the federal requirements in their entirety.

Noncompliance can result in the following consequences:

1) Monetary files: The CBP is authorized to levy fines and enforce $5,000 per violation payments in inaccurate, incomplete, or untimely filing cases.

2) National security compromised: as there is a greater probability of illicit goods entering the country.

3) Consignment can be delayed: The consignment can be held until issues related to compliance are resolved. This will result in accrual of storage charges and commercial losses arising from delays in cargo delivery.

4) Revocation of right to import goods: in case of repeated violations, the entity could revoke its right to import goods to the US.

5) Loss of reputation: instances of noncompliance could result in loss of reputation for the organization.

Challenges in the ISF process

While importers will always aim for 100% compliance with ISF regulations, they generally face some common challenges due to the nature of the international transport process, the diversity of stakeholders, and the disparate sources of information.

These challenges include:

1) Human errors: Employees could make errors while updating the data or miss filing on time.

2) Lack of training: If employees are not aware of the data elements that need to be filed or have not been made aware of the criticality and time-sensitivity of this task, they might not give the task the focus it deserves, resulting in inadvertent errors.

3) Information not received on time: Some pieces of information might not be available at the time of the actual filing, which can result in delayed or incomplete filings

4) Inaccurate data provided: If the data provided is not correct, the inaccuracy will spill over to the ISF filing.

5) Misclassification of commodities: Commodities can be misclassified, either due to lack of knowledge or not exercising due diligence.

6) Numerous data sources: Since data elements will have to be collated from multiple sources, there is a greater probability of errors while collating data.

Tips to avoid these challenges

Some practical measures that can help importers and customs brokers overcome these challenges are explained below:

1) Train staff on process and criticality: Ensure employees are trained well on all ISF requirements, such as shipment information and lading number. Also, they should be made aware of the ramifications of noncompliance.

2) Collaboration between departments and with customs brokers or freight forwarders: Since data has to be collated from multiple parties and then communicated to licensed customs brokers or freight forwarders, all stakeholders must collaborate with each other for a smoother flow of information.

3) Streamline processes and optimize workflows: Given the complexity of ISF, importers need to streamline their processes to ensure that information flows smoothly and that concerned stakeholders have access to appropriate information. 

4) Use technology: Importers and customs brokers can leverage technology to automate the ISF process. Recent technological advances have led to the development of sophisticated logtech services, which can digitize documents, automate workflows, eliminate human errors, and ensure timely submissions.

KlearNow supports Importers and Customs Brokers in ISF and Customs Clearance

In a market surfeited with logtech solutions targeted at various aspects of logistics and international trade, especially ocean cargo imports, KlearNow’s Customs Engine has emerged as the preferred choice for importers, customs brokers, and freight forwarders who are looking to leverage technology to automate their ISF and customs clearance tasks.  

Customs Engine is an AI and ML-powered software that can simplify complex customs clearance activities. It helps address seller(s) and their pain points in the customs clearing process.

Customs Engine can assist with improving staff productivity with pre-entry processing, introducing validation checks for better compliance, and generating operational efficiencies up to 10x.

Satisfied customers who have reaped the benefits of using KlearNow’s products and services have reported accelerated customs clearance procedures.

To schedule a free demo on how KlearNow can help your business, click here.

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