Importer Security Filing (10 + 2)

1. Importer Security Filing (10 + 2) “One of the biggest challenges the U.S. importing community has ever faced.” Presenters: Marc TorrenceVice President, Import Operations ~ CHB, CCS (615) 885-0020 ext 414 mtorrence@valexander.com David SwettVice President & CIO ~ CCS, MCSE, MCDBA (615) 885-0020 ext 425 dswett@valexander.com Ray McGuireV. Alexander ISF Project Manager (443) 722-7257 rmcguire@valexander.com

2. Importer Security Filing • Effective January 26, 2009, CBP will require importers to electronically transmit 10 data elements latest 24 hours prior to the loading of ocean containers (and break bulk cargo) at the foreign port.

3. Importer Security Filing Effective January 26, 2009, CBP will require importers to electronically transmit 10 data elements latest 24 hours prior to the loading of ocean containers (and break bulk cargo) at the foreign port. Under this new rule, completely fulfilling your obligations as an importer will require many fundamental changes to the way you currently conduct business!

4. ISF - An Importer Responsibility • The ISF Importer is defined as “the party causing the goods to arrive within the limits of a port in the United States”. • The importer or their appointed agent is responsible for the filing. The importer is ultimately responsible for the timeliness and accuracy of the filing. • Importers must have cooperation from all suppliers (Sellers).

5. The ISF Data Elements Advance Trade Data Required To Be Filed by the Importer 1. Manufacturer (or supplier) name and address: The manufacturer is defined as the entity that last manufacturers, assembles, produces, or grows the commodity or name and address of the supplier of the finished goods in the country from which the goods are leaving. 2. Seller name and address: This is the name and address of the last known entity by whom the goods are sold or agreed to be sold. If non-purchase then the name and address of the owner of the goods. 3. Container stuffing location: Name and address of the physical location(s) where the goods were stuffed into the container. For break bulk cargo, report the name and address of the physical location where the goods were made “ship ready”.

6. The ISF Data Elements Advance Trade Data Required To Be Filed by the Importer 4.  Consolidator name and address: Name and Address which is the name and address of the party who stuffed the container or arranged for the stuffing. For break bulk cargo, report the name and address of the physical location where the goods were made “ship ready” or who arranged for the goods to be made “ship ready”. 5.  Buyer name and address: name and address of the last known entity to whom the goods are sold or agreed to be sold. If non-purchase then the name and address of the owner of the goods. 6.  Ship to name and address: name and address of the first deliver-to party scheduled to physically receive the goods after they have been released from customs custody.

7. The ISF Data Elements Advance Trade Data Required To Be Filed by the Importer 7.  Importer of record number: This should be the IRS, EIN, SSN or CBP assigned number of the entity liable for payment of all duties and responsible for meeting all statutory and regulatory requirements incurred as a result of importation. For goods intended to be delivered to a FTZ, report the IRS, EIN, SSN or CBP assigned number of the party filing the FTZ documentation. 8.  Consignee number: represents the IRS, EIN, SSN or CBP assigned number of the individuals or firms in the United States on whose account the merchandise is shipped. 9.  Country of origin of the goods: Required for each invoice line: defined as the Country of manufacturer, production, or growth of the article based upon the import laws, rules and regulations of the United States. 10. Commodity HTS number: Required to 6-digit for each line item: reflects the Duty or statistical (tariff) number under which the article is classified in the Harmonized Tariff Schedule of the United States (HTSUS). The HTSUS number is required at the six digit level at a minimum. Generally the number is the same for all countries at the six digit level. CBP will allow submission of the harmonized number at the 10 digit level.

8. Some Frequently Asked Questions • Can the supplier, a forwarder or the Customs Broker take responsibility an ISF transaction? • No. While it is allowable for another party properly bonded and under power of attorney to file the ISF, the importer is always and ultimately responsible for timely and accurate ISF filings. • Exactly how early must my supplier submit the ISF information to the ISF filer? • The ISF information should be sent to the ISF filer latest 48 to 72 hours before the cargo is loaded on a U.S.-bound vessel.

9. Some Frequently Asked Questions • What if I don’t know the exact manufacturer information? Manufacturer or Supplier is considered to be: • Name and address of the entity that last manufactures, assembles, produces, or grows the commodity • Or, name and address of the supplier of the finished goods in the country from which the goods are leaving. • In the alternative, if the actual manufacturer is not known, the name and address of the manufacturer (or supplier) that is currently required by the import laws, rules and regulations of the United States (i.e., entry procedures) may be provided (this is the information that is used to create the existing manufacturer identification (MID) number for entry purposes).   CBP’s instructions for creating the MID state that the manufacturer should be construed to refer to the invoicing party.

10. ISF – Steps To Compliance Importers must act now to ensure that they: 1. Demonstrate a sincere effort to comply during     the implementation period 2. Use the implementation period to perfect the     ISF process with suppliers 3. Prevent eventual supply chain disruptions as a     result of lack of effort 4. Avoid post-implementation period penalties

11. ISF – Important Dates January 26, 2009 – Filing must begin The Importer must file as much information as available The filing must be made “timely” – should be filed latest 24 hours before loading on vessel – must be amended latest 24 hours before arrival at the first U.S. port

12. ISF – Important Dates January 26, 2009 – Filing must begin The Importer must file as much information as available The filing must be made “timely” – should be filed latest 24 hours before loading on vessel – must be amended latest 24 hours before arrival at the first U.S. port CBP will accept late filings or filings where some information was originally not exactly known CBP will be identifying repeat violators to “work with them” January 26, 2010 – Filing must be on-time and accurate

13. The Customs Bond Issue • ISF filings must be covered one of five types of authorized customs surety bonds: • Basic Importation and Entry Bond §113.62 (single-entry or continuous) • Basic Custodial Bond §113.63 • International Carrier Bond §113.64 • Foreign Trade Zone Operator Bond §113.73 • New “Importer Security Filing Bond” Appendix D §113. • Beginning January 26, 2010, CBP may assess liquidated damages for ISF violations against the filer’s bond in the amount of $5,000 per violation.

14. ISF Impact To Business– Challenges ISF conflicts with established trade processes ISF conflicts with current importing processes ISF changes responsibilities on both sides of the transaction

15. ISF Impact To Business– Responsibilities ISF conflicts with established trade processes ISF conflicts with current importing processes ISF changes responsibilities on both sides of the transaction The Importer is responsible for timely and accurate filing The Seller is responsible for supplying new information much earlier than before V. Alexander is responsible to accept Seller information, assign the proper classification to the products, submit ISF for Importer, provide visibility to all partners, and document the process

16. ISF Impact To Business – VNET Solutions ISF conflicts with established trade processes ISF conflicts with current importing processes ISF changes responsibilities on both sides of the transaction The Importer is responsible for timely and accurate filing The Seller is responsible for supplying new information much earlier than before V. Alexander is responsible to accept Seller information, assign the proper classification to the products, submit ISF for Importer, provide visibility to all partners, and document the process V. Alexander then transmits directly to the Customs ISF system – not through a clearing house or other intermediary.

17. VNET – ISF Made Easy! V. Alexander began research & programming immediately following release of the NPRM To minimize the impact or disruption to your business, we have been monitoring the development and rollout of CBP’s ISF program and have created and tested a system within our VNET to accurately capture and file the required information. Our system is ready and transmitting data to Customs.  We have added and trained the necessary staff to ensure the ISF data your supplier (Seller) enters is quickly reviewed and submitted. You and your Sellers will be able to access our ISF portal and enter or update information 24/7 from anywhere in the world via a secure Internet connection.

18. VNET – ISF Made Easy! Basic Steps to ISF Success • View the V. Alexander VNET ISF Portal webinar • Importer enters basic Seller information to create seller account • Email is sent to seller from VNET • Seller must logon and complete profile • Importer verifies / validates entered information • Seller must enter shipment information (Importer may set switch)

19. VNET – ISF Made Easy!

20. VNET – ISF Made Easy! 1.  Importer logs on to VNET, updates company and contact information, and inputs basic supplier (Seller) information.

21. VNET – ISF Made Easy! 1.  Importer logs on to VNET, updates company and contact information, and inputs basic supplier (Seller) information. 2.  An email is automatically sent to all suppliers entered, requesting they log in to VNET to complete or update the “Seller” data.

22. VNET – ISF Made Easy! 1.  Importer logs on to VNET, updates company and contact information, and inputs basic supplier (Seller) information. 2.  An email is automatically sent to all suppliers entered, requesting they log in to VNET to complete or update the “Seller” data. 3.  “Sellers” update their company and contact information, and container loading information.

23. VNET – ISF Made Easy! 4. When “Sellers” have an order ready they log in to VNET, enter a minimal amount of shipment data, and upload scanned documents.

24. VNET – ISF Made Easy! 4. When “Sellers” have an order ready they log in to VNET, enter a minimal amount of shipment data, and upload scanned documents. 5. Your V. Alexander team member is automatically alerted, reviews the entered information for accuracy, classifies the products, and transmits the ISF to CBP.

25. VNET – ISF Made Easy! 6. VNET distributes “Ok To Load” message in system and sends email to “Seller”. 4. When “Sellers” have an order ready they log in to VNET, enter a minimal amount of shipment data, and upload scanned documents. 5. Your V. Alexander team member is automatically alerted, reviews the entered information for accuracy, classifies the products, and transmits the ISF to CBP.

26. ISF - Recap • Effective January 26, 2009 importers must begin electronically filing ISF information for all ocean shipments entering, or even just transiting the USA, including Free Trade Zones (FTZ). • Completely fulfilling this obligation will require changes to the way Importers conduct business. • Importers need quick and full cooperation from all suppliers. Foreign purchasing agreements may need to be revised to require supplier (“Seller”) support for data collection. • Some required information may currently only be available from commercial or shipment documents. • ISF filings will be secured by surety bonds. Importers must ensure they possess an appropriate bond.

27. ISF - Recap • Logon to the V. Alexander ISF Portal and verify your information • Enter basic supplier information to create “Seller” account • Alert all your suppliers to complete their set-up in VNET and follow-up with any delinquent suppliers. • Supplier must logon and complete “Seller” profile • Importer verifies / validates entered information • Seller must enter shipment information latest 24 hours before cargo is loaded onto vessel.

28. Questions and Comments

29. Contacts for Questions Memphis Nashville Dallas Knoxville – Frances Gutt – (901) 795-7761 – fgutt@valexander.com – Marc Torrence – (615) 885-0020 ext 414 – mtorrence@valexander.com – Rick Walker – (865) 970-7461 – rwalker@valexander.com Or email questions to isf@valexander.com