new ISF stand-alone bond was
previously created under Appendix D to
Part 113 of the Customs Regulations. CBP
indicates the Appendix D ISF-only bond
will be updated to reflect that the bond
may be filed as either a single
transaction or continuous bond. Single
entry ISF-only bonds will be set at
$10,000 per bond and CBP has not yet
issued guidelines on how the bond amount
would be determined for a single
transaction bond that secures a unified
entry and ISF filing.
The bond amount formula for an ISF-only
continuous bond is still being
considered by CBP. According to a
recent Customs Surety Executive
Committee (CSEC) meeting held on Sept.
16, 2009, CBP officials indicated that
larger importers who choose to file ISFs
under existing continuous bonds may
require a potential adjustment to the
continuous bond amount because of the
additional liability being assumed.
According to CBP officials, the current
rule as drafted contains a provision to
do so. At this point in time, the
Revenue Division has not amended its
guidelines for determining continuous
bond amounts so it remains to be seen
how this will be determined.
Unified
filings under a single entry bond on the
CBP Form 301
For ISF purposes, the use of single entry bonds on the CBP Form 301
is only allowed with unified entry
filings (a combined entry and ISF
filing). Should a single entry bond be
used in a unified filing, the filer must
identify Activity Type 1 (basic
importation), bond type 9 (single
entry), the surety code and the bond
reference number. The bond reference
number is a unique serial number
appearing on the CBP Form 301 and is
used for surety purposes. It should be
noted that this is not the same as the
field marked "Bond Number assigned by
CBP," which is found in the "CBP use
only" block.
In addition, the unique ISF transaction number should be noted in
block 29 of the CBP Form 3461 Customs
entry, upon paper document submission to
CBP for unified entry filings. This will
alert CBP that the single entry bond
covers both the ISF and the entry. CBP
is still considering how the limit of
liability will be set on single entry
bonds filed on the CBP Form 301 for
unified entry filings.
Filing
procedures with an ISF-only single entry
bond
As noted above, the limit of liability for this bond must be
$10,000. CBP requires an electronic copy
of the single entry ISF-only bond to be
created and sent to CBP within 12 hours
of receipt of an accepted filing. The
filer must identify the bond as Activity
Code 99, bond type 9 (single entry), and
include a valid surety code and bond
reference number, which ensures that CBP
will not receive the same bond twice for
multiple transactions. After CBP
receives and accepts the ISF, the filer
will receive a unique ISF transaction
number and must affix a legible copy of
this number (e.g., typed and 12-point
font) onto the bond.
An electronic copy of the bond containing the ISF transaction
number must be created in PDF format and
e-mailed to
ISF_Bond@cbp.dhs.gov within
12 hours of receipt of the unique ISF
transaction number. The subject line of
the e-mail must reference the unique ISF
transaction number (and only the unique
ISF transaction number).
Filing
procedures with an ISF-only continuous
bond filing
Continuous ISF-only bonds must be
submitted to and approved by CBP's
Office of Finance in advance of ISF
filings. Once approved, CBP will record
the bond information within the
Automated Commercial System (ACS) and
issue a unique bond identification
number. The filer must identify Activity
Code 99, bond type 8 (continuous) and
the importer ID number that the bond was
recorded against.
Avalon's Surety Viewpoint
The ISF bond continues to present
additional risk to the surety community
and will be conservatively underwritten
until more clarification can be obtained
from CBP on bond and enforcement
guidelines. Avalon is working closely
with the NCBFAA 10+2 subcommittee to
evaluate the needs of the brokerage
industry, especially for ISF-only single
entry bonds.
At this juncture, the continuous import
bond remains the easiest and most
flexible means for brokers to
accommodate ISF filings and be prepared
for full implementation once the
flexible enforcement period ends on Jan.
26, 2010. At such time, CBP will begin
to assess liquidated damages for
inaccurate or untimely ISF filings up to
$5,000 per filing with a maximum of
$10,000 per filing for multiple
violations. Mitigation guidelines allow
violations to be reduced to $1,000 to
$2,500 for first or subsequent offenses
with C-TPAT members eligible for up to 50
percent reduction of the mitigated
amount. Full details on the mitigation
guidelines are available in
CBP Decision
09-26.
To view CBP's
revised FAQ in full, visit:
http://www.cbp.gov/linkhandler/cgov/trade/cargo_security/carriers/security_filing/
10_2faq.ctt/10_2faq.doc
