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Importer Self-Assessment (ISA)

CBP launches Broker-Known Importer Program (BKIP)

Wednesday, May 20th, 2015

US Customs and Border Protection logoUS Customs recently announced, in CSMS #15-000275, the implementation of the Broker-Known Importer Program (BKIP), an initiative proposed by the National Customs Brokers & Forwarders Association of America (NCBFFA).

The program allows a licensed customs broker to inform CBP, via the filing of an electronic entry,  that the importer listed on the entry is known to the broker, and that the broker has advised the importer of their compliance responsibilities under Customs regulations.  In addition, the broker will have verified the importer’s grasp of its obligations in areas such as entry declarations, ADD/CVD, IPR, valuation and preference programs, through a questionnaire.

CBP will use this information for purposes of cargo risk segmentation.  When a broker identifies an importer who is exercising reasonable care in connection with their imports by checking the BKIP indicator flag on an entry, Customs may adjust that importer’s risk profile in CBP’s targeting system accordingly, even if the importer is not part of the Trusted Trader programs — C-TPAT or ISA. (The BKIP indicator flag for entries has already been deployed as part of ACE.)

BKIP is a voluntary program for both brokers and importers.

BKIP Benefits:

  • New platform for brokers and importers to discuss compliance obligations
  • Potential to increase broker entry accuracy
  • Increased compliance knowledge for importer staff
  • Improved cargo targeting by CBP at time of cargo arrival
  • More information to CBP about importer from a trusted source

Helpful Links

 

 

 

CBP launches Trusted Trader program test

Thursday, June 26th, 2014


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US Customs has launched a test of its Trusted Trader initiative, “a new program that will streamline the process through which importers can establish to CBP that they strive to secure their supply chains and strengthen their internal controls for compliance with … existing [customs] laws.”

Working in conjunction with the CPSC and FDA, CBP plans to use the Trusted Trader program to unify the current C-TPAT and ISA programs.  (Non-participating companies will still have the option to participate exclusively in C-TPAT and apply to the ISA program).  In addition, the Trusted Trader program will leverage the expertise of Customs’s CEEs “to manage trusted trader accounts from an industry perspective.”

CBP lists numerous benefits of the Trusted Trader program, including:

  • All the incentives provided by the C-TPAT and ISA programs
  • Reduced FDA targeting/examination risk score
  • Potential for penalty offsets in penalty mitigation decisions
  • Additional benefits if participating in Reconciliation Prototype program
  • Exemptions from on-site visits from Drawback Specialists
  • And much more

The Trusted Trader test is expected to last for 18 months, and the application process is now open.

See last week’s Federal Register announcement for more details.

American Shipper: C-TPAT, ISA benefits questioned

Friday, September 6th, 2013

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In the August 2013 print edition of American Shipper, the magazine highlighted its Import Operations and Compliance Benchmark Study which was released in May.  In particular, the focus was on the results of one part of the study — a survey of over 100 shippers on the effectiveness of US Customs’ C-TPAT and ISA programs.

Unfortunately, the results were not particularly positive.

As for C-TPAT:

  • 11% – Receiving all promised benefits of C-TPAT
  • 29% – Receiving some, but not all, of the expected benefits of C-TPAT
  • 7% – Receiving less than expected benefits of C-TPAT
  • 20% – Receiving no benefit from C-TPAT
  • 33% – Uncertain if C-TPAT is effective

As for ISA, “a third of respondents say they derive no benefit from the program, and nearly one half say they are uncertain of its benefits.”

The study is available here (registration required).

 

 

Beyond the Border — improvements for US/Canada trade

Tuesday, December 18th, 2012

Canada is the United States’ largest trading partner, with billions of dollars in goods crossing the border annually.  Last year, the United States and Canada agreed to implement the Beyond the Border Action Plan, which is intended to expedite trade between the two countries while enhancing border security.

As noted in a recent piece posted on the Government Security News website, Canada recently took a significant step in this regard by expanding its trusted travelers’ expedited border crossing pilot (Free and Secure Trade or FAST) program to a third crossing in Ontario.  Under FAST, participants that are either in Canada’s Partners in Protection (PIP) or Customs Self Assessment (CSA) program to have expedited border crossings.  Previously, expedited service was available only to carriers and shippers who were participants in both programs.  Now, the program is more in alignment with America’s trusted trader programs:  C-TPAT and ISA.

While this is a solid step in the right direction, significant work remains to meet the goals of Beyond the Border.  A recent article in Canada’s Financial Post, “Will the new Can-Am border agreement be a supply-chain headache?”, lays out several concerns.  For example, much effort must be expended to harmonize the two countries’ regulatory schemes for trade.  As pointed out by Joy Nott, president and CEO of the Canadian Association of Importers and Exporters,

[i]f we all live another 300 years, I suppose all regulations would end up being harmonized.  In the interim, it’s still the biggest hurdle to business, irrespective of the sector.  And no sector is exempt from this.

Until that time, as pointed out in the Financial Post article, traders will need to be well-versed in the trade requirements of both the US and Canada.  Ruth Snowden, executive director of the Canadian International Freight Forwarders Association, stated:

Traders will have to have both types of in-house expertise, as well as develop processes and systems to ensure compliance.  That’s getting increasingly difficult because it’s expensive to build the systems, relationships and third-party connectivity needed.

Nevertheless, in addition to the Ontario border crossing pilot, there are glimmers of progress .  For instance, as reported on this blog, CBP just increased the the dollar value of goods that would qualify for “informal entry” processing to $2,500, in a move to harmonize the values for the US and Canada in line with the Beyond the Border initiative.

Customs compliance manuals – tips for importers

Monday, November 7th, 2011

Since a customs compliance manual is evidence of reasonable care under the Customs Modernization Act, an astute importer will maintain such a manual to demonstrate a proactive stance with regard to compliance.  In fact, creation and maintenance of an accurate and up-to-date customs or trade compliance manual can help to mitigate certain types of customs errors and penalties (provided that the steps in the manual are followed).  In addition, a customs compliance manual is typically required for both C-TPAT and ISA program acceptance.

Following are a few tips for maintaining and providing access to a compliance manual.

Internal use

Following best practices, an importer should maintain its compliance manual electronically.  The document is uploaded to the corporate intranet site, a SharePoint site or the like.  For version control purposes, the preferred approach is for the document to be stored in portable document format (PDF), read/view only or otherwise write-protected.

To the extent hard-copy versions of the manual are distributed internally, these manuals should contain a disclaimer, with a print date, that printed versions are for reference only, and that the electronic copy is the control copy (also helps to satisfy ISO9000 controlled document requirements).

Providing manuals to third parties

When US Customs requests a copy of the trade compliance manual, many importers provide a hard copy of the document, neatly arranged in a binder(s), with tabs for easy reference.  Some provide the entire manual, while others provide the specific section of the manual that CBP requests.  It is good practice to include the version control disclaimer mentioned above, so that Customs can see that the importer values the integrity of their compliance documentation.

Depending on the Customs representative’s request, some importers provide – instead of or in addition to the hard copy – a digital version of the manual on a flash drive or a compact drive.  In this case, it is best to ensure that the document on the disc is write-protected.  Most importers shy away from providing Customs with access to a company intranet to view a compliance manual, in order to maintain security of the corporate firewall.

Often, other third parties – usually a customs broker or a customer or supplier – may request a copy of the importer’s customs compliance manual.  As for brokers, since generally they are intimately tied into the import process, it makes sense that each of the broker’s employee handling an account is provided with the importer’s customs compliance manual (following the safeguards discussed above).  Alternatively, an importer may create a broker-specific manual, which the broker will use to create their internal SOP for the importer’s account.

Conversely, when a customer or supplier requests the manual, there may not be a need to provide the manual.  An importer may instead provide a certification that that it is in possession of a manual and adheres to the procedures outlined in the document.  Of course, whether to provide the manual to customers or suppliers may depend on any contractual obligations or the nature of the relationship between the parties.