Customs and Border Protection (CBP) has issued mitigation guidelines for the assessment and cancellation of a liquidated damage claim for failure to comply with 10+2 requirements. CBP Dec. No. 09-26, 43:88 Cust. Bull. & Decs. 30 (July 17, 2008). The guidelines are effective July 17, 2009.

According to CBP the guidelines are to be used for the assessment and cancellation of claims for liquidated damages incurred by importers for failure to provide the required Importer Security Filing ("ISF") within the time period and manner prescribed by the regulations or for providing inaccurate or invalid information.

As a preliminary matter, the guidelines state that where the importer receives information from another party, CBP will take into consideration how, in accordance with ordinary commercial practices, the importer acquired such information, and whether and how the importer is able to verify this information. Where the importer is not reasonably able to verify such information, CPB will permit the party to present such information on the basis of what the party reasonably believes to be true.

In addition to liquidated damages that may be assessed as described below, the failure of an Importer to provide the ISF in the time period and manner prescribed, may result in the issuance of a do not load (DNL) hold. CBP may also withhold release or transfer of cargo until CBP receives the required information and has had the opportunity to review the documentation and conduct any necessary examination.

Generally, a failure to file, a late or inaccurate filing, an inaccurate update or a failure to withdraw an ISF can subject the importer to a claim for liquidated damages in the amount of $5,000.

For a first offense, the liquidated damages claim may reduced to an amount between $1,000 and $2,000, depending on the presence of mitigating or aggravating factors subject to a finding by CBP that law enforcement goals were not compromised by the violation.

If an ISF Importer incurs a subsequent liquidated damages claim for filing a late or inaccurate ISF or an inaccurate ISF update, the liquidated damage claim may be cancelled upon payment of an amount not less than $2,500 as long as CBP determines that law enforcement goals were not compromised.

CBP will consider the following mitigating factors in settling the final assessed claim for liquidated damages:

a) Evidence of progress in the implementation of the ISF requirement during the flexible enforcement period (i.e., January 26, 2009 through January 26, 2010).
b) A small number of violations compared to the number of shipments for which ISF's were required.
c) An ISF Importer that is a certified Tier 2 or Tier 3 C-TPAT member may receive additional mitigation of up to 50 percent of the normal mitigation amount.
d) Demonstrated remedial action has been taken to prevent future violations.
e) ISF information was filed late because of vessel diversion due to factors outside of the importer's control (e.g., due to weather).
f) In the case of an inaccurate filing, the importer acquired the information from another party in accordance with ordinary commercial practices, and can demonstrate that it reasonably believed the information to be true, and it was not reasonably able to verify the information. This is an extraordinary mitigating factor that may warrant cancellation of a claim without payment.

CBP will also take into account the following aggravating factors:

a) Lack of cooperation with CBP or impeding the case.
b) Evidence of smuggling or attempt to introduce or introduction of merchandise contrary to law. This may be considered an extraordinary aggravating factor.
c) Multiple errors on the ISF.
d) There is a rising error rate which is inclusive of deteriorating performance in the transmission of ISF information.