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CBP withdraws enhanced bonding
requirement for shrimp imports from India and Thailand
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CBP withdraws
enhanced bonding requirement for shrimp imports from India
and Thailand
Effective April 1, U.S. Customs and Border
Protection (CBP) is withdrawing its enhanced bonding
requirement (EBR) for shrimp importers subject to
anti-dumping and/or countervailing duty (AD/CVD) orders.
Imported merchandise may generally be released prior to the
determination of final duties that may be owed (including
AD/CVD), provided the importer posts a bond or other
security. Several years ago, CBP found that many importers
subject to AD/CVD failed to pay the additional final duties
and the agency lost millions in revenue, mostly from
agricultural and aquacultural products.
CBP responded by developing an enhanced bonding
requirement to secure the importer’s promise to pay all
duties finally determined for certain merchandise subject to
an AD/CVD order, but this requirement was only applied to
imports of shrimp from India and Thailand.
The two countries filed a complaint with the World Trade
Organization, which ruled that the bond requirement, as
applied to importers of shrimp from Thailand and India was
not “reasonable security.” As a result, CBP is now ending
the designation of shrimp as a covered case or special
category subject to the bonding requirement.
Customs also affirmed that the withdrawal of the EBR is
prospective, not retroactive, stating that:
-
The principal
(importer) and the surety remain liable for the
obligations incurred before the date the bond was
terminated. Termination of the bond does not alter the
obligations charged against the bond before it was
terminated, but does prevent any obligations arising
from post-termination customs transactions from being
charged against the bond.
-
Bonds are
contracts between principals and sureties, and are thus
contracts between private parties. CBP is reluctant to
interfere in that relationship.
-
Canceling an existing
bond and replacing it with another bond with a different
limit of liability and with retroactive effect is
contrary to sound administrative practice.
The ruling may be viewed in its
entirety at
http://edocket.access.gpo.gov/2009/pdf/E9-7281.pdf
Termination of these bonds will not occur automatically and
importers must request termination pursuant to 19 CFR
113.27(a) and submit a new bond application.
Although the ruling may allow
shrimp importers to obtain a lower bond amount, an
anti-dumping and/or countervailing underwriting methodology
is still applicable. Customs brokers must still contact
Avalon for approval to write any AD/CVD bonds. Avalon will
require:
-
A signed
bond application/indemnity
-
Audited
financial statements
- Collateral, in whole or
in part, to consider writing the risk because of the
large aggregation that can result from a series of
single entry and continuous bonds. The ruling does not
affect any previous collateral that the importer may
have posted. The surety must wait 90 days after all
entries under previous bond periods have liquidated in
order to be certain that liability has been
extinguished, as CBP has also advised that this change
will not apply retroactively.
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