Failure to comply with the Importer Security Filing (ISF) regulations could cause delays and fines that spell financial disaster for unprepared US businesses, says Matt Gersper, founder & president of Global Data Mining.
Gersper says there are three major reasons why business leaders should make sure that their companies are compliant, and each reason has a direct bottom-line impact.
- The risk of significant penalties for non-compliance: According to the ISF regulations, commonly referred to as 10+2, effective January 26th next year, an importer can be fined $5,000 per filing if an ISF is late, incomplete or inaccurate, and up to $10,000 per filing for two or more violations.
- Custom & Border Protection's (CBP's) renewed commitment to trade law enforcement and accurate revenue collection, which is the US government's No.2 strategic goal - ahead of improving national and economic security.
- The impact of supply chain delays: according to a recent study by the National Association of Manufacturers (NAM), the ISF regulation will create a permanent 2.8 day delay in supply chain speed.
Research into the current state of ISF compliance and the impact this regulation has (and will have) on the supply chain reveals that:
- Providing timely ISF data is a challenge for nearly 60% of companies
- Collecting complete ISF data is a struggle for nearly 40%
- Around 20% have problems with the accuracy of the data they provide
These are the very three issues causing penalties to be assessed.
Gersper reckons there are six ways to dramatically improve a company's data management efficiency and significantly boost capacity to achieve ISF compliance.
- The solution should provide a unique and secure website - accessible worldwide - by any authorised user. Control over multi-party collaboration and access levels according to each user's role rests with management.
- The solution should provide a database or portal that becomes the system of record for 10+2 and other customs information about every item enterprise-wide. It should be capable of growth beyond ISF to meet unforeseen future business or government requirements.
- The solution should enable easy upload of data from any system, from any business unit or supplier around the world. It should provide features to normalise data into one company-wide standard, and it should automatically update the database as tariffs change for different countries at different times around the world.
- Since few companies have one single system to manage their entire enterprise, the solution should integrate easily with existing computer systems, and be designed as the enterprise-wide database providing accurate trade data to every system that needs it.
- The solution should leverage best-practice functionality that can boost productivity, including automatic updates since users' last login.
- The solution should provide automatic record keeping of critical data elements, with workflow applications being used to establish enterprise-wide process controls and to measure performance of global trade staff, suppliers or third party service providers.
According to estimates by CBP, it can take a company between sixty and ninety days to ramp up and be filing correctly, although some believe this is a conservative estimate.
Meanwhile, 10+2 can be considered a catalyst to optimise currently inefficient business processes, and ultimately give the company a competitive advantage.
