The Quest
August 2011 - Issue 71
Inside this issue:
CBP updates 301 bond form

New bill proposed to fight fraud in trucking

Ways to red-flag fraud, by Andrew Spector, Esq.

New report identifies cargo theft trends

China proposes increase in FMC optional bond rider

Updates on liquidated damages for Periodic Monthly Statement

CBP updates mitigation guidelines for advance cargo information violations

U.S. government urges companies to strengthen Internet security
Trucking associations ask NHTSA to examine truck crashworthiness standards


CBP updates 301 bond form
In July 2011, U.S. Customs and Border Protection (CBP) issued an update to its 301 form, the multipurpose document used to issue Customs Bonds. To view the updated form, visit http://forms.cbp.gov/pdf/CBP_Form_301.pdf

CBP will continue accepting existing versions of the 301 bond form until Jan. 1, 2012. Avalon is proactively updating our Web Merlin™ secure Internet portal and printed bond forms to provide for use of the new bond document on Monday, Dec. 5, 2011. Avalon will send an email reminder to all Web Merlin users prior to implementing the new bond form in our software. We are also coordinating with various ABI vendors to ensure the new 301 bond will begin to issue on Monday, Dec. 5.

We have been working closely with CBP’s Revenue Division to answer any questions our clients have about the new bond form and are building business rules in Web Merlin to continue to proactively avoid bond rejections. Avalon has consistently maintained rejection rates well below the industry averages reported by CBP.

While Avalon will continue to provide paper bond forms for those customers that need them, we encourage you to “go green” and use our Web Merlin software to issue and manage all single transaction, ISF and continuous bonds seamlessly in one system. We currently enjoy a 0% rejection rate on ISF bonds and are the surety test pilot for eSTB in ACE.

As first reported in our July 29, 2010 Special Quest, the various ports have been rejecting single transaction bonds (STBs) for not being in compliance with current regulations. Since then, the Department of Homeland Security has issued an OIG report that stated CBP did not have adequate controls over the STB process. Web Merlin has been updated to issue bonds in compliance with STB regulations and can help you avoid costly and time sensitive rejections at the port level.

Alternatively, we can work with your ABI vendor to implement a PDF bond solution rather than a pin-fed bond form and/or integrate your ABI with our Web Merlin software. If you have any questions about updating the new bond form within your ABI system, please contact your local Avalon representative or our IT Department at helpdesk@avalonrisk.com or (847) 700-8150. 

The most significant update to the new 301 bond form is the addition of Activity Codes, as the previous form only included Activity Codes 1 through 10. Going forward, the following Activity Codes can also be bonded on the updated 301 form vs. a separate bond form that was previously required by CBP:

  • Activity Code 11: Airport Security Bond – Part 113, Appendix A. CBP will soon issue a Federal Register notice to allow this bond to be issued on a continuous basis.
  • Activity Code 12: International Trade Commission (ITC) Exclusion Bond – Part 113, Appendix B.
  • Activity Code 14: In-Bond Export Consolidation Bond (IBEC bond required in Port of Miami).
  • Activity Code 15: Intellectual Property Rights (IPR).
  • Activity Code 16: Importer Security Filing (ISF) – Part 113, Appendix D. After our bond forms are updated in Web Merlin on Dec. 5, brokers will continue to issue a separate ISF-D bond as they do now (unless filing a unified entry) and the bond will issue on the new 301 form and automatically email to the ISF inbox as currently performed by Web Merlin.

Other changes include a new Co-Principal Addendum Form 301A that must be used if more than one co-principal is to be included on the bond. On Dec. 5, Web Merlin will also be updated with this new addendum rider. This form can be found at http://forms.cbp.gov/pdf/cbp_form_301a.pdf

Avalon has always taken a hands-on approach to understanding CBP regulations and keeping our bond program as easy and efficient as possible. To help you avoid bond rejections, our CBU is also available to review bond application packages prior to filing them with the Revenue Division.

For more information, please contact your local Avalon office or Andriana Davis at (847) 700-8087 or at adavis@avalonrisk.com. A list of our offices may be found at www.avalonrisk.com.

Avalon Risk Management
150 Northwest Point Boulevard | 4th Floor | Elk Grove Village, IL 60007
Phone: (847) 700-8100 | Fax: (847) 700-8116



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