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Periodic
Monthly Statement
Bond Rider
No Longer Required
Effective at the time the Federal
Register Notice is published Customs Border and Protection (CBP)
will no longer require a bond rider in order to participate
in the Periodic Monthly Statement (PMS). The decision was
made to open participation to the widest number of eligible
participants and to remove perceived barriers to
participate.
CBP still
recognizes the financial risk to sureties on PMS entries and
will take the following actions with respect to this
decision:
·
Notification
of a bond principal’s participation in PMS test will be
provided to the sureties electronically in the daily
download of bond information. Avalon will be reviewing this
information and continue to underwrite PMS risks to ensure
importers meet their monthly duty payment obligations based
on our financial analysis.
·
Any bond
principal who is late with a monthly statement of estimated
duty payment by more than two business days will be notified
by CBP (either electronically or in writing) that it
immediately shall be required to file entry summary
documentation with estimated duties and fees attached before
its merchandise may be released from any Customs port. The
surety will also receive notification of the default so we
can take appropriate action to indemnify the bond.
·
If an
importer defaults on their PMS payment, sureties will be
permitted to terminate bonds in an expedited fashion
provided written notice is made to the bond principal and
CBP. The time frame proposed by CBP is three business days,
but has not yet been finalized since this may still be too
long to avoid unreasonable exposure to sureties. The
expedited time frame may only be used when termination
relates to any issue arising from the participation in the
PMS test or failure to perform obligations arising as a
result of participation in the test.
Avalon is fully committed to your
industry and our Customs Surety program is underwritten by
our sister company, Lincoln General Insurance Company
(Lincoln). Lincoln is rated A- (Excellent) by A.M. Best and
has a Treasury listing of over $16 million to accommodate
any Customs bond request.
Avalon’s
Bond Merlin™ Software will assist you in managing the
new bond centralization requirements, including the ability
to email all bond documents to the National Finance Center (NFC)
for efficient and prompt filing of your bond and PMS Rider.
If you or an importer client wants to participate in PMS, we
encourage you to complete our
Bond Application to
determine if you qualify for our underwriting requirements.
Any premium surcharge for involvement in PMS will be based
on actual expected increased credit risk.
For further information, please contact your local Avalon
office or Gale Lawton, Surety Manager at Avalon’s
corporate headquarters. Gale Lawton can be reached at her
direct line: 847-700-8070 or via email at
glawton@avalonrisk.com. To view a directory of Avalon’s
office locations, please visit our website at
www.avalonrisk.com.
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