CBP Officials Discuss ISF Bond Options

The use of bonds for ISF purposes will be required for ISFs filed on or after January 26, 2010. Bonds for ISF purposes have been accepted by CBP, but not required, during the delayed enforcement period of the 10+2 interim final rule.

(The interim final rule was effective on January 26, 2009; however, it provided a one year delayed enforcement period (until January 26, 2010) to allow the trade to work through various problems and to come into compliance with the requirements.)

The following are highlights of their comments:

Four Options for Establishing ISF Bond Coverage

There are four options for establishing ISF bond coverage:

Appendix D ISF Stand-Alone STB

The Appendix D ISF Stand-Alone STB was created for the sole purpose of satisfying the ISF bonding requirement.

Body of bond must come from Appendix D. The body of the bond will not be a CBP Form 301; rather it will consist of Appendix D language. This language was recently revised. (See ITT's Online Archives or 12/24/09 news, 09122410, for BP summary of CBP revision to Appendix D language.)

That language is a template and should be the "heart" of the Appendix D ISF Stand-Alone STB bond. CBP's Revenue Division will not be extremely rigid, especially at the outset, on the look or cosmetics of the bond, but will be checking to make sure that Appendix D language (as contained in Appendix D to 19 CFR Part 113) does appear in the bond.

$10,000 liability amount. The liability amount of the Appendix D ISF Stand-Alone bond is $10,000.

Bond must contain reference number, ISF transaction number. The bond document must contain a unique bond reference number that is generated by the trade (not assigned by CBP), which serves as an identifier for the bond. The bond document must also contain an ISF transaction number that is generated by CBP (CBP's response to the ISF filer that the ISF information was received and is okay).

Bond document due 12 hours after ISF filing accepted. Within 12 hours after the ISF is accepted by CBP, the bond document must be received by the Revenue Division via email to ISF_Bond@cbp.dhs.gov. In most cases, the only response that the filer will receive from CBP will consist of an auto-reply that comes from that mailbox.

Email submissions should include a subject line with 'unique' transaction identifiers.

CBP may reject bonds for corrections. The Revenue Division's Bond Team may reject these STBs to the filer for correction 'after the fact' that the ISF information has been accepted by CBP.

The Revenue Division will be reviewing these bonds when they are submitted and may reach out to the filer asking for or noting corrections required on the bonds. For the first few months, the Revenue Division will not be taking a hard line at absolutely rejecting the bonds and requiring people to replace them. They are looking at it as much more of an educational period - they want to communicate back to filers why particular bonds are lacking in some area or another.

Unified Filing Option - CBP Form 301 STB

The unified filing option allows the filer to use a STB to cover not only their ISF requirements but also their entry requirements.

CBP Form 301 to be used. For this type of STB, the trade should use CBP Form 301. The bond is to be presented with the entry. There is not a requirement to submit the bond via email as there is with the Appendix D ISF Stand-Alone STB; it needs to accompany the entry.

Bond must contain reference number. Like the Appendix D ISF Stand-Alone STB, the unified bond must contain the unique bond reference number that is generated by trade.

Liability amount is current bond amount $10,000. The liability amount for the unified bond is the existing STB required amount plus $10,000.

Existing CBP Form 301 Continuous Bond (for ISFs or Unified Filings)

The trade also has the option of using their existing CBP Form 301 active activity code 1, 2, 3, or 4 continuous bonds to cover a unified filing (entry and ISF) or just ISF bond requirements. They do not have to do anything new, special, or different with their bonds. Bond riders are not required on the existing bonds.

Appendix D ISF Stand-Alone Continuous Bond

The Appendix D ISF Stand-Alone continuous bond was also created for the sole purpose of satisfying the ISF bonding requirement.

Body of bond must come from Appendix D. Like the ISF Appendix D ISF STB, the body of the bond must contain the Appendix D language. A CBP Form 301 cannot be used.

$50,000 liability amount. The liability amount for this bond is $50,000.

Bond application letter not required. A bond application letter is not required for this continuous bond.

Bonds can be used for ISFs even if have other continuous bond coverage. These bonds can be used for ISFs even if the trade has other active continuous bond coverage. Doing so will not necessarily preclude CBP from making claims against any other 'eligible' continuous bonds.

Bonds must be filed with RD. The ISF Appendix D Stand-Alone continuous bonds must filed with the Revenue Division via email at ISF_Bond@cbp.dhs.gov. The bonds will be processed under same rules/guidelines as activity code 1 submissions to the Bond Team.

(See ITT's Online Archives or 01/20/10 news, 10012005, for BP summary of CBP detailing its 10+2 enforcement approach that begins January 26, 2010.

See ITT's Online Archives or 01/21/10 news, 10012110, for BP summary of CBP officials discussing ISF progress reports, FAQs, etc.

See ITT's Online Archives or 12/23/08 news, 08122310, for the final part of BP's summary on the details of CBP's 10+2 interim final rule, with links to previous parts.

See ITT's Online Archives or 10/15/09 news, 09101530, for the final part of BP's summary of CBP's updated 10+2 FAQs, with links to previous parts.)

Webinar presentation (dated 01/19/10) available via email by sending a request to documents@brokerpower.com