Monitor Importer Activity
Through our active involvement in NCBFAA, TSN and a Surety Trade Day Meeting with Commissioner Bersin and his Executive Team, Avalon is keenly aware of CBP’s focus on the evolving role of the customs broker. In April of this year, American Shipper posted a follow-up to the NCBFAA Annual Conference advising that a comprehensive review of broker regulations has been underway for more than 18 months. Today, we see the playing field continue to change in many respects for customs brokers with “know-your-customer” regulations being introduced, such as the Fighting for American Industry’s Right (FAIR) to Enforcement Against Duty Evasion Act. The FAIR bill would require customs brokers to obtain and verify importer information to assist in avoiding fraud and duty evasion. Customs brokers who don’t comply could be fined up to $10,000 per violation and/or have their license suspended or revoked.

Also, our June 17, 2011 Special Quest advised that CBP was suspicious of fraudulent importations of honey believed to be transshipped from China to avoid the payment of anti-dumping duties. Without notice to the trade, CBP began requiring single entry bonds in addition to any valid continuous bond on file to secure the duty that might be due if the honey was later found to be from China.

Because of these trends, Avalon has consulted with the trade and is releasing several Web Merlin enhancements tonight to provide customs brokers with greater oversight in managing an importer’s entry activity. Our new features will help brokers comply and reduce their own exposures:

1. Underwriting Holds – Our clients have often asked us to assist in identifying importers that are not meeting their obligations to CBP. Web Merlin will now prompt users if an importer has a “hold” for underwriting reasons, which could mean unpaid claims, a Customs sanction, bankruptcy status, or other reasons that must be resolved for the importer to obtain a bond. In such instances, users will be prompted to contact our Bond Underwriting department for approval. We will likely require a signed indemnity, financial statement and/or full collateral, depending on the circumstances surrounding the underwriting hold.

 

2. Bond Aggregation – A major concern for the trade is allowing importers to obtain large bond aggregations in the millions when the importer does not have the financial means or wherewithal to actually meet duty obligations and/or Customs requirements. Bond aggregation results in higher liquidated damage claims for importers, which in turn is an E&O exposure for customs brokers. Since our February Web Merlin update, we have assisted you in tracking bond aggregations in Web Merlin. Our newest Merlin release will now prompt you to secure approval from the surety when aggregations exceed $1 million.

 

3. Continuous Bond Already on File – In February, we began to provide users with a reminder message if they tried to issue a single entry bond when a valid continuous bond was already on file. If CBP is specifically requiring single entry bonds in addition to a valid continuous bond, there is typically a compliance-related issue, and Avalon should be contacted for prior approval in such instances. Web Merlin will now limit the number of single entry bonds that can be written in addition to a continuous bond without prior approval from Avalon. To obtain approval, brokers can simply contact our Bond Underwriting department or their local Avalon office.

Through these enhanced controls, we work to provide transparency and seamless communication to our customs broker clients to streamline bond issuance and support compliance.

New ISF Bond Grid
Web Merlin now provides an easier interface to manage Single Transaction ISF Bonds and support your compliance with CBP regulations regarding timely bond transmission. Using our new ISF-D Grid, the highlighted orange box in the upper right corner displays your bonds in different statuses. In particular, the "Needs Action" tab easily allows you to identify ISF-D bonds not yet submitted to CBP.

Our Web Merlin portal was designed to support our client, the customs broker. We continue to provide the best and most flexible surety technology in the industry. Our exclusive features support your bond program, including importer fraud protection, automated bond insufficiency notifications, centralized bond filing and tracking, as well as management/entry reports. Web Merlin also provides a single portal to manage all your Customs Bond and Cargo Insurance transactions. Routine business activities are streamlined, with revenue opportunities and efficiencies for you.