CBP Officials Discuss Bond Improvements at May 2008 COAC Meeting
During the May 9, 2008 meeting of the Departmental Advisory Committee on Commercial Operations of the U.S. Customs and Border Protection and Related Homeland Security Functions (COAC), CBP officials discussed a variety of issues related to customs bonds, highlights of which include:
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Fix for "Gap" Between Bonds
CBP officials discussed the work that is being done by CBP to address certain problems that arise as a result of its bond "terminate and replace" process.
(Problems occur when the termination of an existing continuous bond is not synchronized with the approval of a replacement bond, resulting in a gap in bond coverage (e.g., the old bond is terminated before the new bond is approved).)
CBP officials state that CBP has worked with the trade and has come up with a possible solution for this problem. CBP officials have drafted language that could be incorporated into bond documents (most likely the request for termination), which would allow CBP some flexibility in dealing with the "terminate and replace" problem. CBP officials stated that they are committed to implementing this "fix" by June 30, 2008.
Bond Errors Database for Trade
CBP officials state that they have created an Access database that tracks all bond errors for all filers. Officials noted that they would be willing to share the statistics with the trade.
On May 19, 2008, CBP posted to its Web site statistics derived from that Access database which lists information about bond rejections for April 2008. (See today's ITT, 08052210, for BP summary of CBP's April 2008 bond rejection statistics.)
Lower Bonds for Highly-Compliant Importers
CBP officials state that CBP has formed a working group of senior executives to consider the issue of whether a highly-compliant importer that is a participant in Customs-Trade Partnership Against Terrorism (C-TPAT) and Importer Self Assessment (ISA) programs should be subject to the same bond formula as an importer that has no trade experience and does not participate in such programs. During the working group's initial discussions, a number of issues were raised, including (partial list):
whether lower bonds translate into lower premiums
to what degree does modifying the bond formula increase revenue risk at CBP
what are the administrative burdens associated with creating a preferential bond formula that would require monitoring
(This issue was also raised at the February 2008 COAC meeting. See ITT's Online Archives or 03/25/08 news, 08032505, for BP summary.)
Bond Processing Now Timely
CBP officials noted that while CBP had gotten behind on the processing of bond applications, rejections, and notifications as a result of the implementation of the Automated Commercial Environment (ACE) Entry Summary, Accounts, and Revenue (ESAR) A1, CBP is now meeting or exceeding its bond processing performance goals.