CBP Not Likely to Adjust Bond Formula for Participants in Partnership Programs (Like ISA)
During the May 6, 2009 Departmental Advisory Committee on Commercial Operations of U.S. Customs and Border Protection and Related Homeland Security Functions (COAC) meeting, CBP officials stated that they are not likely to adjust the continuous bond formula based on participation in a CBP partnership program, such as the Importer Self Assessment (ISA) program.
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(CBP has received several requests over the years to reduce bond amounts and has itself questioned why companies that are low risk should be treated the same as all other importers. In 2008, it formed a working group to consider whether a highly-compliant importer that is a participant in Customs-Trade Partnership Against Terrorism (C-TPAT) and ISA programs should be subject to reduced bond amounts.
In addition, the COAC Bond Subcommittee conducted a survey in 2008 to see if importers would be in favor of a reduced bond amount as a reward for participation in the ISA program. While almost all importers were in favor of a bond reduction, many felt that it was not a strong incentive or reward for participation in a CBP partnership program.)
CBP is Looking at Other Bond-Related Benefits for ISA Members
Although CBP is not likely to adjust the continuous bond formula based on participation in partnership programs, it is looking at certain other bond-related benefits for ISA members which were recommended by importers, the COAC bond subcommittee and others. The requested bond-related benefits are:
further reduction of audit frequency;
further reduction in intensive exam frequency. (The COAC bond subcommittee notes that the elimination of just one or two intensive exams per year could provide savings in excess of those accruing from a bond reduction);
additional mitigation on liquidated damages and penalties;
more lenient prior disclosure requirements
dollar-for-dollar credits for future liquidated damages and penalties (i.e., a "get out of jail free" card, modeled after the successful Carrier and Super-Carrier Agreement programs); and
reduction in bond sufficiency reviews from monthly to semi-annual or annual reviews.
(See ITT's Online Archives or 02/26/09 news, 09022615, for BP summary of the COAC bond subcommittee's report.
See ITT's Online Archives or 02/17/09 news, 09021750 2, for BP summary announcing the availability of this report, and other documents from the November 2008 COAC meeting.
See ITT's Online Archives or 01/30/09 news, 09013035 2, for BP summary of the meeting minutes for the November COAC meeting.
See ITT's Online Archives or 05/22/08 news, 08052205, for BP summary of COAC officials discussing bond improvements at the May 2008 COAC meeting, including lower bonds for highly-compliant importers.)