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CBP requires marine terminals to post bonds for cargo security
Effective January 20, 2007, U.S. marine terminal operators must obtain a bond guaranteeing the payment of penalties for the unauthorized release of
containers flagged for security inspections.
Terminal operators must post bonds with at least a $100,000 limit of liability, with the actual amount of coverage ultimately being decided upon by the
port director. The volume of cargo traffic handled by a terminal operator and past violations of allowing cargo to exit without U.S. Customs and Border
Protection (CBP) authorization will be factors in determining the appropriate bond limit. A port director’s request for a bond limit in excess of
$250,000 will require approval by CBP Headquarters prior to demand.
Ocean carriers also operating terminal facilities that have already provided an international carrier bond will not be required to take out an additional
bond, however it may be reviewed for sufficiency at CBP’s discretion. Operators handling bulk cargo exclusively are also exempt from the additional
bond requirement.
CBP is requiring the bond because of situations where cargo targeted for terrorism or other security reasons has been mistakenly released by operators
from their terminals without CBP authorization or examination, often referred to as “gate outs.” The bond will guarantee the payment of any
civil monetary penalty the terminal operator may incur from the unauthorized release.
If a Marine Terminal Operator has facilities at more than one port, the bond may be filed at any port where the operator has a facility. Separate bonds
will not be required for each facility.
Marine Terminal Operators owned by foreign corporations may not be able to obtain a bond by the deadline. In these cases, provided that the Port Director
has received confirmation from the surety company that the foreign-owned terminal operator has applied for a bond and the delay is caused by the need for
the surety to verify financial information, the Port Director may grant an extension on a case-by-case basis.
CBP urges terminal operators to link to the agency’s Automated Manifest System so the terminal operator can directly view “hold”
messages for inspection rather than rely on the carrier for information about the container's status.
To read the notice, please
click here.
Avalon Risk Management has written more than one million Customs bonds since the company was founded in 1998. Avalon’s Customs surety program is
underwritten by our sister company, Lincoln General Insurance Company. Because both Avalon and Lincoln are wholly owned subsidiaries of Kingsway
Financial Services, you can be assured of our commitment to your industry.
To apply for an MTO bond, please click here:
http://www.avalonrisk.com/documentslibrary/Misc%20Bond%20
Application-All%20Sureties.pdf
For further information, please contact Gale Lawton, Bond Underwriting Manager, or Andriana Davis, Product Manager at Avalon’s corporate headquarters.
Gale Lawton can be reached at 847-700-8070 or via e-mail at glawton@avalonrisk.com. Andriana Davis can be reached at 847-700-8087 or via e-mail at
adavis@avalonrisk.com. Please do not hesitate to contact one of our nine regional offices throughout the U.S. To view a directory of Avalon’s office
locations, please visit our Web site at www.avalonrisk.com.
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