CBP flags ‘huge rise’ in cargo reporting monetary penalties
AirCargo Archive Stories #225
Tuesday, 10 September 2013
“Enormous monetary penalties may be issued where cargo reports are not provided in an accurate and timely manner - US$5,000 per late or incorrect report.”
“John Law, who is Freight & Trade Alliance (FTA) Compliance and Litigation Counsel, certainly captured my attention with these words,” says Paul Zalai, FTA director.
In a detailed report, John said US Customs and Border Protection (CBP) is to enforce the “liquidated damages” phase of Importer Security Filing (ISF).
“Enforcement” will be by issuing penalties (via a bond) for the submission of an inaccurate, incomplete or untimely filing. If goods for which an ISF has not been filed arrive in the US, CBP may withhold the release or transfer of the cargo. Additionally, non-compliant cargo could be subject to further inspection on arrival.
The ISF and Additional Carrier Requirements were born out of the Security and Accountability For Every (SAFE) Port Act of 2006. This Act mandates the filing of additional advance data designed to assist CBP to make earlier and more informed targeting decisions, as well as improving CBP’s ability to target high-risk US-bound containerised vessel cargo prior to its arrival in the US. The 10+2 rule has been in effect since January 26, 2009.
This approach is similar to that of the Australian Customs and Border Protection Service (ACBPS), who recently issued letters to industry in reaction to cargo-reporting breaches. ACBPS also warned that (a) further action will be taken in any instances of non-compliance, including the non release of cargo until the ACBPS reporting requirements have been met and (b) sanctions will be imposed as ACBPS deem to be appropriate.
The primary focus of this compliance approach has been as a follow up to Australian Customs Notice 2009/47, which explained the ACBPS definition of “consignor” and “consignee” and associated cargo reporting expectations.
Both the US and Australian Customs administrations are focused on a measured and common sense approach to enforcement, with CBP declaring that its aim is to achieve maximum compliance, with the least amount of disruption to trade and to domestic port operations.
In recent correspondence received by Freight & Trade Alliance (FTA), ACBPS stated that depending on the facts of any case, their response could range from (i) further education and warnings, (ii) administrative action such as the suspension and revocation of licences, (iii) the application of infringement notices or (iv) prosecution. ACBPS has elaborated by explaining that officers consider relevant factors when weighing up their response and treatment options. For example, the significance of the breach, efforts to comply, any relevant remedial or risk mitigation action, compliance history, reliance on ACBPS advice and reasons beyond the person’s control.
It is interesting to note that both Customs administrations are now more rigorously enforcing legislative and policy positions established in 2009. Perhaps it’s nothing more than a coincidence, but this shift in enforcing compliance policy is indicative of a changing operational environment, where commercial practices may need to evolve to meet global statutory requirements. From an industry perspective, increased standardisation of global
Customs reporting requirements will certainly assist in getting the message through to our overseas business partners, freight networks and suppliers.
We watch with interest locally to see how the ACBPS Blueprint for Reform 2013 – 2018 integrates outcomes into a global context.
CBP flags ‘huge rise’ in cargo reporting monetary penalties
AirCargo Archive Stories #225
Tuesday, 10 September 2013
“Enormous monetary penalties may be issued where cargo reports are not provided in an accurate and timely manner - US$5,000 per late or incorrect report.”
“John Law, who is Freight & Trade Alliance (FTA) Compliance and Litigation Counsel, certainly captured my attention with these words,” says Paul Zalai, FTA director.
In a detailed report, John said US Customs and Border Protection (CBP) is to enforce the “liquidated damages” phase of Importer Security Filing (ISF).
“Enforcement” will be by issuing penalties (via a bond) for the submission of an inaccurate, incomplete or untimely filing. If goods for which an ISF has not been filed arrive in the US, CBP may withhold the release or transfer of the cargo. Additionally, non-compliant cargo could be subject to further inspection on arrival.
The ISF and Additional Carrier Requirements were born out of the Security and Accountability For Every (SAFE) Port Act of 2006. This Act mandates the filing of additional advance data designed to assist CBP to make earlier and more informed targeting decisions, as well as improving CBP’s ability to target high-risk US-bound containerised vessel cargo prior to its arrival in the US. The 10+2 rule has been in effect since January 26, 2009.
This approach is similar to that of the Australian Customs and Border Protection Service (ACBPS), who recently issued letters to industry in reaction to cargo-reporting breaches. ACBPS also warned that (a) further action will be taken in any instances of non-compliance, including the non release of cargo until the ACBPS reporting requirements have been met and (b) sanctions will be imposed as ACBPS deem to be appropriate.
The primary focus of this compliance approach has been as a follow up to Australian Customs Notice 2009/47, which explained the ACBPS definition of “consignor” and “consignee” and associated cargo reporting expectations.
Both the US and Australian Customs administrations are focused on a measured and common sense approach to enforcement, with CBP declaring that its aim is to achieve maximum compliance, with the least amount of disruption to trade and to domestic port operations.
In recent correspondence received by Freight & Trade Alliance (FTA), ACBPS stated that depending on the facts of any case, their response could range from (i) further education and warnings, (ii) administrative action such as the suspension and revocation of licences, (iii) the application of infringement notices or (iv) prosecution. ACBPS has elaborated by explaining that officers consider relevant factors when weighing up their response and treatment options. For example, the significance of the breach, efforts to comply, any relevant remedial or risk mitigation action, compliance history, reliance on ACBPS advice and reasons beyond the person’s control.
It is interesting to note that both Customs administrations are now more rigorously enforcing legislative and policy positions established in 2009. Perhaps it’s nothing more than a coincidence, but this shift in enforcing compliance policy is indicative of a changing operational environment, where commercial practices may need to evolve to meet global statutory requirements. From an industry perspective, increased standardisation of global
Customs reporting requirements will certainly assist in getting the message through to our overseas business partners, freight networks and suppliers.
We watch with interest locally to see how the ACBPS Blueprint for Reform 2013 – 2018 integrates outcomes into a global context.
