We are providing an update on recent discussions with U.S. Customs and Border Protection (CBP) regarding bond sufficiency reviews, CAPE processing, and the impact of IEEPA duty removals.
The Core Issue
Certain bonds initially identified as insufficient in the last several months are now appearing sufficient in ASI/ABI records, after CAPE declarations remove IEEPA duties from affected entries. This has created discrepancies between CBP insufficiency notices and current account data that is visible to the trade.
CBP Clarifications
- Estimated duties are the values originally submitted by the trade on an entry summary.
- Ascertained duties reflect CBP’s updated determination after adjustments (e.g., IEEPA refunds) and represent the final liability at liquidation.
- Updated ABI/ASI data reflects these revised ascertained amounts, which may differ from original filings that contain estimated amounts.
Bond Sufficiency Calculation
CBP has confirmed that their bond sufficiency computation still relies on 10% of estimated duties, taxes and fees as outlined in section 6.4.1.1 of A Guide for the Public: How CBP Sets Bond Amounts | U.S. Customs and Border Protection.
- CBP may still deem a bond insufficient based on original estimated duty values as IEEPA removals are not currently contemplated.
- CBP has acknowledged the issue and is evaluating whether additional guidance should be issued to explain how sufficiency reviews are computed and how certain entry summary changes may or may not impact the bond sufficiency calculation.
- CBP is also internally discussing whether any adjustment may be appropriate for analytical review formulas. No definitive change has been made at this time.
The Importance of Entry Versions
CBP has provided additional detail on how entry summary versions affect this analysis:
- Major versions of an entry summary (e.g., 1.00, 2.00, 3.00) contain the estimated duties, taxes, and fees transmitted by the trade at initial filing. These estimated amounts are the values referenced in CBP’s current bond sufficiency calculation guidance.
- Minor versions of an entry summary may be created when CBP or the trade updates an entry summary after initial filing (e.g. 1.01, 2.01, 2.02). CAPE processing that removes IEEPA duties can create a new minor version of the entry summary.
- Minor versions resulting from CAPE processing generally reflect what is called updated ascertained duties, taxes, and fees, not a revised set of original estimated amounts.
- Ascertained amounts may change over time as CBP makes adjustments to an entry. At liquidation, the ascertained amount on the most current version of the entry summary is used to compute any bill or refund.
- Because ACE/ASI, ABI records, and surety reports may reflect the later ascertained amounts, they may not align with CBP insufficiency notices that are still based on the original estimated duties under current policy.
Impact on Avalon and Other Current Data Sources
CBP has confirmed to the industry that the data provided to the sureties contains ascertained data reflecting IEEPA refunds, not estimated data. As a result, calculations in our sufficiency reports and calculators may show lower exposure. This may have the effect of understating bond limit needs when compared with the estimated-duty values CBP is currently using for sufficiency review. A similar mismatch may appear if clients rely only on ACE data or ABI records after CAPE processing has removed IEEPA duties.
Avalon is actively working on creating additional visibility so our reporting can better align with how CBP is currently reviewing sufficiency. We will advise clients once that functionality is available.
Practical Takeaway for Importers and Brokers
- Be sure you are reviewing estimated duties, taxes and fees from the Major Entry Summary.
- Avoid proactively decreasing bond limits based solely on IEEPA refunds or other post-entry adjustments as this may result in additional insufficiencies and unnecessary bond stacking liability.
- Continue to evaluate bond sufficiency conservatively using CBP’s current estimated-duty approach, especially where insufficient notices have been issued or where a bond is close to saturation.
We will continue to engage with CBP and provide updates as additional guidance or policy changes are issued. Reach out to your local Avalon representative with questions about a specific bond or insufficiency notice.