Recent changes implemented by US Customs and Border Protection (CBP) as part of its bond centralization program could affect importers who are caught unaware with insufficient bond coverage.
The changes, which have been implemented in 2011, could lead to increased findings by CBP that customs bonds are insufficient, which would halt importations and delay shipments. Changes to the customs bond calculation formulas, which took place in January 2011, could lead to higher customs bond amounts, which in turn could lead to higher potential liability for customs issues as well as higher bond costs.
Some of the highlights are as follows:
- On March 4, 2011, CBP issued a notice on its website providing information on insufficient continuous bonds, including actions it will take against those that are aware of such insufficiency, but continue to use them. CBP lists nine reasons for an insufficiency finding.
- CBP notes that continuous bonds may be rendered insufficient without advance notice.
- Other continuous bonds that the principal is using in combination with their own bond will be re-evaluated and may be rendered insufficient.
- The CBP Revenue Division, in conjunction with the Ports of Entry, may input cargo criteria to preclude immediate release of the principal’s goods.
- CBP states under certain circumstances it could take action against an importer’s importer of record number that would prevent an importer from importing until the bond amount is raised.
- CBP has revised its bond formula coverage, which will result in higher bond costs in many cases.
We recommend that US importers review their customs bonds to determine whether these changes pose any unacceptable risks for their customs transactions.
A more detailed discussion is attached to this Alert.