CBP Testing Program to Police Bond Insufficiency Statuses

(CSCB)

The following is excerpted from a news release from the National Customs Brokers and Forwarders Association of America, Inc. (NCBFAA).

Under current policy, CBP’s Revenue Division renders continuous bonds insufficient for a variety of reasons. When rendered insufficient, entries are not accepted against that bond. The bond insufficiency status is only discovered when an entry is transmitted using the insufficient bond and the entry is not accepted with an “insufficient bond” message.

This methodology creates a sudden and unexpected disruption to import clearances. Depending on the reason for the insufficiency, an importer may be without a continuous bond for days, requiring the use of single transaction bonds to continue importing until the sufficiency problem is sorted out. Delays in entry processing, additional costs and exposure due to the use of single entry bonds, and storage charges are often the result.

The Revenue Division has set up a test program to help resolve the problem. The Bond Team will post information on continuous bonds scheduled to be rendered insufficient to surety accounts in ACE on the surety’s Business Activity Log (BAL). The posting will give the trade at least ten (10) business days to resolve issues before the bond is rendered insufficient. The BAL posting will explain why the bond may be subject to being rendered insufficient.

[NCBFAA] members should contact their surety bond providers to request that they be notified immediately when the surety receives a posting for a bond that they have placed. Brokers and sureties should review their processes to make sure that the Revenue Division receives a timely reply.

The Revenue Division will accept responses directly from brokers or brokers may elect to work through their surety representatives. The Bond Team has asked that brokers also copy the surety in their responses to the Revenue Division so that the surety does not duplicate the responses. This will also help the surety track responses. Our members should review the instructions on the CBP website for address corrections for this test.

The test will begin on February 3, 2009. The Revenue Division will not commit to permanently adopting this process unless this test yields significant results and a substantial majority of these problems are corrected timely. It is important that [NCBFAA] members participate and respond timely to have this test advance to a regular program and resolve a major problem.