CBP Clarifies Timing for Continues Bond Insufficiency Corrections
Changes to the CBP's allowed response period for corrections to continuous bonds were clarified by the agency following concerns raised by industry, said the National Customs Brokers & Forwarders Association of America on its website (here). The International Trade Surety Association expressed some worry after CBP issued a final rule on the centralization of the continuous bond program in November (see 1511120010), said the NCBFAA. CBP's revenue division told ITSA that it will continue its practice of using a "buffer" period before actually turning "the bond off."
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
CBP said in the final rule that it "views a 30-day response period as too lengthy to adequately protect the revenue and ensure compliance with applicable law and regulations, and therefore this provision is amended to prescribe a 15-day period." But, the 15-day period "is challenging because the minimum notice time for termination is 15 days, leaving the principal no meaningful opportunity to obtain and file a new bond without a gap in coverage," said the NCBFAA. "Depending on the surety’s risk assessment, additional information may be required to replace the existing bond (e.g., financial statement, indemnity agreement, collateral)."
While the new provision gives the principal 15 days to fix any problems following notification through a demand letter, the revenue division will allow for an additional 15-day buffer period, the division told ITSA. This gives the principal a total of 30 days from demand letter date to remedy the deficiency, said the division. The agency allowed for the same buffer period under the old 30-day deadline, it said.