Importer Security Filing (ISF) is one of those subjects in international trade that often takes importers by surprise. It seems simple and straightforward, and it is, but it has caught more than a few Canadian importers off guard in the past. On a fundamental level, an ISF filing is simply a Customs and Border Protection (CBP) requirement for ocean shipments. It consists of the details on what goods you have on board a ship, submitted before it ever hits the water. However, it is the who and the how of this process that can be tricky to grasp at first blush, especially when you are looking at what’s involved with ISF for international and Canadian importers. 

So, what is involved in submitting an Importer Security Filing? Who needs to worry about it, and what services can you turn to help you effectively manage it? In this post, we dive into the details of what you need to know so your business won’t get caught unaware when importing via ocean freight. 

What is an Importer Security Filing? 

Fundamentally, an ISF is a CBP requirement for ocean shipments. It is a list of vital information about goods intended to enter a US port. Importantly, it must be sent at least 24 hours before the cargo is loaded onto a vessel bound for the US. 

Unlike most regulations, the ISF is related more to anti-terrorism and smuggling than duties and taxes, and as a result, it is even more important that you follow the letter of the law as closely as possible to avoid penalties. A failure to properly submit an ISF could lead to complications, not the least of which will be significant delays. 

It is worth noting that making an ISF filing requires having a bond in place, and the acquisition of this bond works the same as other financial security bonds. If you have a continuous bond in place, then you can use that. However, if you do not have one, you will need to get a single-entry bond for each entry and the ISF filing. For assistance in identifying which bond makes the most sense for your import or in acquiring a bond, you are encouraged to work closely with a trusted import specialist.

There are two key versions of the ISF: ISF-10 and ISF-5. The ‘10’ and the ‘5,’ in this case, indicate the number of data points required for each version. Beyond that, the difference between ISF-10 and ISF-5 is that ISF-10 is most useful to US importers who intend for their goods to enter the commerce of the US, while ISF-5 is for cargo intended to merely stop at a US port on its way somewhere else. 

The ISF-5

The ISF-5 is the version of the ISF that non-US importers, like Canada, will be most likely concerned with. It is the ISF filing for goods transiting through the continental US, as well as those that are just swapping ships or staying on the boat. At a fundamental level, it deals with shipments that are entering a US port but not leaving Customs’ custody for the duration of their stay. There are three scenarios where the ISF-5 is the required submission over the ISF-10: 

1. Foreign Cargo Remaining on Board (FROB) - The goods are remaining on the ship while other goods are unloaded at a US port. 
2. Immediate Exportation (IE) - The container is unloaded at a US port, but then returned to another vessel to leave the country. 
3. Transportation and Exportation (T&E) - The container is unloaded at a US port and then put on a truck for land travel across the US with the end destination of a land border. 

This version of the ISF has five data points, including: 

1. Booking Party
2. Foreign Port of Unlading. 
3. Place of Delivery
4. Ship to Party
5. Harmonized Schedule Commodity Code 

The ISF-10 or “10+2”

Colloquially, the ISF-10 is sometimes referred to as the ‘10+2’ filing on account of the 10 data points you, as the importer, must provide and the two data points that the carrier must provide for this submission. The 10 points needed for all ocean shipments that are intended to enter the commerce of the US include: 

1. Seller Name and Address
2. Buyer Name and Address
3. Importer of Record Number
4. Consignee Number
5. Manufacturer or Supplier
6. Ship-to Party
7. Country of Origin
8. Commodity Harmonized Tariff Schedule (HS)
9. Container Stuffing Location
10. Consolidator

The carrier required data elements include: 

1. The Vessel Stow Plan
2. Container Status Message

You are encouraged to work closely with a trade advisor when determining the HS Code for either the ISF-10 or ISF-5 to ensure your goods are correctly classified. 

Who are the Responsible Parties? 

This question gets to the nub of why this is an important topic for importers of all shapes and sizes, and it depends on which version of the ISF you are referring to.

The importer is responsible for submitting the ISF-10 accurately. After all, the goods intended for entry into the commerce of the US are being imported by the importer. It stands to reason that correctly identifying them before they reach the port will fall to the importer of those goods. 

When it comes to the ISF-5, the situation is a bit murkier. Carriers and freight forwarders can be responsible for filing the ISF-5, but in practice, it is a mistake to rely on that unless it is agreed upon in no uncertain terms as a stated element of the carrier’s service offering. As a pro tip, be sure to check and make sure that they are going to do the ISF-5 filing when you are making the booking.

Here is an example of what could play out if a proactive approach is not taken.

A Potential Scenario 

Let’s imagine you are importing goods from China to Vancouver, and along the way, the ship you are using to import them is stopping at the Port of Los Angeles. Your goods are not getting off the boat.

In this scenario, there are a few traps that you could potentially fall into, with the most prolific being the assumption that the carrier is solely responsible for the ISF filing. Let’s say you decide to leave it up to them to make the filing without a word spoken to them. You’ve read that it’s their responsibility to do it, so you leave it. 

What you will soon learn is that the penalty for a late or missing ISF-5 can include the following: 

• CBP may issue liquidated damages of $5,000
• CBP may withhold the release or transfer of the cargo. 
• CBP may refuse to grant a permit to unlade for the merchandise.
• And, if such cargo is unladen without permission, it may be subject to seizure.
• Noncompliant cargo could be subject to “do not load” orders at origin or further inspection on arrival.

While it may be technically correct under the letter of the law that the carrier receives these penalties, it is unlikely that your carrier will be the one to take them on, and one way or the other, the monetary costs will, in all likelihood, land at your doorstep. Then, after that, you will need to contend with the fact that your goods are delayed until the matter is resolved, all while incurring all the associated costs of that delay. 

As you can see, inaction is not an advisable path forward. It behooves you to know with certainty who is responsible for filing your ISF-5. If it is included among your carrier’s services, you are still encouraged to check with them as part of your due diligence, ensuring that it is filed correctly, and maintaining a proactive approach throughout this process. Staying on the ball and leaving nothing to chance is the best way to ensure your goods arrive smoothly in Vancouver.  

Of course, if you would prefer to work with a freight forwarder you don’t have to worry about, we have you covered. The best way to avoid having to think too much about what you need to do for your ISF-10 or ISF-5 declarations is to work with a freight forwarding company that you can trust to dot all the ‘i’s and cross all the ‘ts’ - like the team we have here at PCB. Our freight forwarding services are some of the most respected in the industry, and we hang our hat on regulatory compliance. 

When you feel ready to take the next step, we encourage you to explore the brokerage services we offer at PCB Freight Management. We’re standing by to help you get the things you need done so your goods can get where they need to be!