The Quest
January 2011 - Issue 70
Inside this issue:
ISF enforcement:
Where we are now

Disaster in Japan: Avalon assists in aid, BCP reminder

CBP updates: Bond insufficiency, new address for mailing checks

FMCSA elimination of Cargo Insurance, BMC-32 takes effect March 21
CSA motor carrier
ratings now in force

New ACORD form changes how logistics providers
verify insurance

Revised Incoterm rules
take effect

UAE joins ATA
Carnet system

Claims corner:
Worldwide Coverage



CBP updates: Bond insufficiency, new address for mailing checks
We know the importance of staying current on U.S. Customs and Border Protection (CBP) regulations. Avalon works to keep your business running smoothly with regular updates on CBP's initiatives and programs. We wanted to make you aware of the following:

Bond Insufficiency
CBP recently posted an updated document regarding bond insufficiency procedures to its website. A copy of this posting is available here. In its posting, CBP confirms that continuous bonds may be rendered insufficient for the following reasons:

Insufficiency Reason

Avalon Solution

1. Outstanding debt issues related to any of the entities on the bond (including unpaid bills and debit vouchers).

1. Our Web Merlin™ secure Internet portal has always offered automated e-mail notifications of an insufficient bond amount so you can proactively increase the bond before CBP takes action. Web Merlin calculates the required bond amount based on all current CBP formulas. Outstanding debt issues relate to the “Analytical” bond formula, which is contemplated in Web Merlin.

2. Failure to comply in a timely fashion with a formal demand letter from CBP to increase the bond.

2. In addition to bond insufficiency e-mail notifications, Web Merlin also includes a bond calculator to ensure that continuous bonds are in force for the proper bond amount.

3. Use of an invalid or “non-deliverable” address for the importer.

3. Web Merlin allows the user to seamlessly issue an address change rider and the CBP Form 5106 for any continuous bond.

4. Failure to comply with the rejection of a termination request.

4. Web Merlin has a fully automated bond termination process to avoid rejections.

5. Missing or misplaced bond paperwork.


5. Web Merlin completes and compiles all of the appropriate documents and automatically submits them to CBP.

6. Use of an invalid importer of record number on the bond.

6. Web Merlin automatically verifies that the importer number is provided in a valid format. Our automated query functionality mitigates the risk of an erroneous importer number being transmitted.

7. Failure to provide any required bond paperwork (Reconciliation rider, bond rider for importation into the U.S. Virgin Islands, surety approval for participation in deferred tax payment, etc.).

7. Web Merlin has always prompted the user to specify if the importer enters goods to the U.S. Virgin Islands as well as monitoring other items requiring special attention. When CBP issued an urgent notice to the trade community that bonds without a U.S. Virgin Islands Rider would be rendered insufficient, Avalon’s Centralized Bond Unit (CBU) identified these bonds quickly and issued the riders immediately to avoid any bonds being rendered insufficient.

8. Failure to annually deposit the required cash-in-lieu of surety for a continuous bond obtained under 19 CFR 113.40.

8. Avalon assists customs brokers in selling continuous bonds to importers. We help explain why a bond is beneficial to your customers and can provide supporting marketing materials for your use.

9. Failure to comply with specific mandates/ requests from the Office of Administration.

9. Web Merlin is quickly updated in response to any CBP initiatives. Our CBU also holds regular meetings with CBP to be as proactive as possible.

Avalon has always taken a hands-on approach to bond insufficiency. To help you avoid rejections, our CBU is also available to review bond application packages prior to filing them with the Revenue Division. Through our Web Merlin software and the CBU, Avalon has consistently maintained less than a 3% rejection rate on new continuous and ISF bond filings, well below industry averages that have ranged as high as 17-20%.

New address for mailing checks
When brokers and importers need to submit payments to CBP, their checks must be sent to a new address. Please use the following addresses:

P.O. Box for Mail Delivery:
U.S. Customs and Border Protection
Bill Payments
P.O. Box 530071
Atlanta, GA 30353-0071

Street Address for Courier Delivery:
U.S. Customs and Border Protection
Bank of America
Lockbox Number 530071
1075 Loop Road
Atlanta, GA 30337-6002

As always, Avalon remains committed to providing the highest level of service to our clients and also to keeping you apprised of governmental changes affecting your business. We are a leading provider of U.S. Customs bonds and other surety and insurance products for customs brokers and transportation providers.

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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