COAC Works on New 301 Bond Guide, CBP to Pilot STB Centralization

Subcommittee Working on New Bond Form Guidelines, STB Centralization, Etc.

COAC reinstated its Bond Subcommittee in September 2011, which then met and prioritized its goals. Highlight of those goals include:

Guidelines for new CBP 301 Form. The Bond Subcommittee is working on draft guidelines for the execution and filing of the new CBP 301 bond form which they expect to complete in mid-December 2011. CBP made the new bond form available in summer 2011 and is requiring it to be used on/after January 1, 2012.

(See ITT’s Online Archives 11081518 for summary of CBP’s announcement on the availability of the new CBP Form 301 (Customs Bond) and that only the new form would be accepted on/after January 1, 2012.

See ITT’s Online Archives 11121566 for reminder on the January 1, 2012 effective date for the new bond form.)

Centralization of STBs. The subcommittee states that its primary goal is to be involved in the development of the centralization of the STB process.

OIG report. In June 2011, the Department of Homeland Security’s Office of the Inspector General issued a report entitled “Efficacy of Customs and Border Protection’s Bonding Process” in which it concluded that CBP does not have adequate controls over the STB process.

Regarding STBs, the OIG recommended that CBP

1. appoint a centralized office with the responsibility for developing and implementing STB policy, reporting on activities, and monitoring results,
2. consider automating the STB process to provide enhanced tracking ability and control over these bonds, and
3. develop formal policies and procedures for the validation, approval, sufficiency, and storage process for STBs.

CBP agreed with the OIG’s recommendations and noted that it:

1. has already begun delineating the roles and responsibilities for STB centralization and will focus on bond administration and policy, which will include risk-based assessments and analysis for determining when an STB should be used as additional security,
2. has incorporated the requirement for bond automation into the ACE Cargo Release requirements, and
3. will review and update its policies for STBs.

According to CBP, it has incorporated bond automation into the ACE Cargo Release requirements, and has set a deadline of May 15, 2012 for centralization of STBs and reviewing and updating its policies for STBs.

The subcommittee will be reviewing the June 2011 OIG report to determine how it can help CBP to achieve the OIG’s other recommendations. (The fourth recommendation made by the OIG was for CBP to develop a risk-based bonding methodology for use on high-risk revenue imports that incorporates continuous bonds and STBs).

(See ITT's Online Archives 11080314 for summary of OIG report.)

Centralization pilot. The subcommittee states that CBP has indicated that an STB centralization pilot will begin fairly soon. The subcommittee emphasizes that it is imperative that the central location for filing STBs be available 24/7 and be sufficiently staffed to monitor the large volume of STBs transaction bonds filed annually.

Work with other COAC subcommittees. As virtually every COAC Subcommittee has a bond issue, cross-subcommittee meetings are planned to ensure that the Bond Subcommittee is involved with any bond related subject within the other subcommittees, including the viability of creating a separate activity code for ADD/CVD transactions.

Changes to mitigation process. CBP has recently taken a stand to change the mitigation process without notice to trade. Several subcommittee members are currently gathering information to determine the facts before pursuing the issue.

Bond Subcommittee executive summary available here

CBP report on Bond Subcommittee available here

DHS OIG report (OIG-11-92) available here.