Global Update

10+2 Initiative Means Delays, Expenses for Small Businesses

Importing product into the United States just became more complicated and costly due to a new U.S. Customs and Border Protection (CBP) regulation. The Importer Security Filing (ISF), which is commonly known as the “10+2” initiative (because it requires importers to supply 10 pieces of data and shipping companies another two items), marks the first time importers are required to communicate with the CBP regarding incoming shipments.

All importers—from those bringing in one container a year to those importing products weekly—are equally liable under this new rule, which took effect January 26, 2009, and mandates that importers or their designated agents supply the required data electronically at a minimum of 24 hours before the products are loaded onto ships in the overseas port.

Penalties for incomplete or non-compliance are steep—$5,000 per incident as well as possible no-load orders. The CBP is delaying enforcement for one year in order to allow companies time to implement compliant systems.

Information required includes 1) importer of record number; 2) consignee number; 3) seller (owner) name/address; 4) buyer (owner) name/address; 5) ship-to party; 6) manufacturer (supplier) name/address; 7) country of origin; 8) Commodity Harmonized Tariff Schedule number (must be submitted 24 hours prior to the product being loaded onto the ship); 9) container stuffing location; 10) consolidator name/address.

The 10+2 initiative has been developed as part of CBP’s ongoing strategy to assess and identify high-risk shipments so as to prevent smuggling and ensure cargo safety and security.

In response to industry and lawmakers' concerns over the probable increased costs and delays to importers as a result of the rule, and the uncertainty of whether importers can supply the data in the required timeframe, the CBP agreed to keep the comment period open through the end of July 2009.

SEMA, as part of a coalition of businesses, has called for a longer comment period to document compliance issues that arise as companies begin to meet the 10+2 requirements. While the CBP has said that it is delaying penalties for one year, it has provided itself with the legal wiggle room to impose them sooner based on “lack of effort” on the part of importers.

Specifically, the interim rule notes that the CBP will “show restraint in enforcing the rule, taking into account difficulties that importers may face in complying with the rule, so long as importers are making satisfactory progress toward compliance and are making a good-faith effort to comply with the rule to the extent of their current ability.”

Additional information on 10+2 is available by contacting Linda Spencer at