CBP Provides Additional Guidance for its Pilot Bond Centralization Program, Etc

Under this pilot, which began in September 2003, Type 1 Importer continuous bond information submitted to the Pilot Bond Centralization Team at the National Finance Center (NFC) in Indianapolis, IN is reviewed, processed, and maintained in the automated system.

(Single transaction bonds continue to be processed at the local ports.)

Bond Applications Must be Received 5 Business Days Before Effective Date

CBP states that the Revenue Division is currently requiring that bond applications be received at least five business days before the desired effective date.

Bond Team No Longer Rejecting CBP 5106 Forms for Failure to Complete Box 1

The Bond Team is no longer rejecting CBP 5106 forms (Importer ID Input Record) due to a failure to complete Box 1. The Bond Team will treat presentation of a completed and signed CBP 5106 as a request to update the importer record (as necessary) so that it matches the information indicated on the form.

CBP notes that boxes 18 (printed or typed name and title) and 20 (signature) of the CBP 5106 must be completed as required on the face of the form or the form will be rejected. The CBP 5106 must be completed by a licensed Customs broker, or by an officer of the company.

Widespread Lack of Compliance When CBP 301 (Customs Bond) Changes

According to CBP, the Bond Team has noticed widespread lack of compliance with 19 CFR 113.23 (Changes Made on the Bond). This provision applies whenever there are changes made to the CBP 301 bond document (either before or after it is signed by all parties).

For example, if the effective date has been changed on the CBP 301 (Customs Bond), either a statement or a new bond is required (see 19 CFR 113.23(b) and (c)).

CBP states that bond filers should familiarize themselves with these regulations, especially when responding to rejected bond applications.

Problems with "Terminate and Replace" Scenarios

Another common problem delaying processing of bond applications occurs with "terminate and replace" scenarios. CBP states that when the principal wishes to terminate a valid continuous bond and replace it with a new bond, the following should be noted:

• Allow ample time for CBP to process the request. Bond termination requests and new bond activations can be processed in CBP's system up to 60 days prior to the desired effective date(s).
• The termination request for the current bond must be filed in the Port where that bond is located. A copy of that termination request should be included in the new bond package submitted to the Bond Team. It is the bond filer's responsibility to follow up on the termination request if necessary.
• The ABI/ACS system will not allow any overlap in bond coverage. It should be ensured that the effective date on the new bond is later than the date of termination on the current bond. CBP notes that if the current bond is terminated on a date other than the requested one, it may impact the earliest acceptable effective date on the new bond.
• To minimize the confusion and rejections resulting from "terminate and replace" scenarios, the Bond Team suggests all "terminate and replace" transactions be filed at least 20 days prior to the desired effective date(s).

CBP Updates References in Other Pilot Bond Centralization Program Documents

CBP has also revised the other Pilot Bond Centralization Program documents it has posted to its Web site by replacing references to NFC with references to either Revenue Division or Bond Team. The documents being updated are entitled "Pilot Bond Centralization Program" and "Pilot Bond Centralization Program Contacts".

(See ITT's Online Archives or 12/15/04 news, 04121505, for most recent BP summary on pilot, including a list of participating ports.)

"Latest News and Developments" guidance document (dated 01/26/05) available at http://www.cbp.gov/linkhandler/cgov/import/communications_to_industry/pilot_program/newsdev.ctt/newsdev.doc.

Updated Pilot Bond Centralization Program documents (dated 01/20/05) available at

http://www.cbp.gov/xp/cgov/import/communications_to_industry/pilot_program/.