NCBFAA Files Comments Objecting to Proposed Modification of Bond Regulations
Phone: (212) 973-7722
Phone: (202) 466-0222
|For Immediate Release
Washington, DC: In a letter to Customs and Border Protection (CBP), the National Customs Brokers and Forwarders Association of America (NCBFAA) expressed concern with CBP’s proposal to eliminate a provision that provides the bond principal with 30 days to respond to a written notice of insufficiency. The change is part of a CBP Notice of Proposed Rulemaking (NPRM) entitled "Customs and Border Protection's Bond Program."
This change would permit CBP to deactivate a bond and/or require additional collateralization almost immediately, regardless of the reason for the insufficiency. “CBP and the trade do not work in an environment that allows for instantaneous remedies,” the NCBFAA noted, “and allowing time to respond to notice of insufficiency is needed to deal with many of the challenges attendant to bond related issues.”Because CBP finds insufficiency and inactivates bonds for a variety of reasons including postal service mail delivery problems, it is important to maintain the 30-day time frame, as "insufficiency" does not automatically mean that there is a compliance issue or a threat to the revenue.
More importantly, in the NCBFAA’s view, is the potential disruption such a change could have in the context of the Importer Security Filing (ISF). Prior to ISF, a bond insufficiency notice would only delay the filing of entry for release after the cargo arrived at U.S. terminals. Now, an ISF transaction rejected for not having an active bond on file has a ripple effect that affects the entire supply chain.“The sudden cancellation of a bond from an importer, large or small, opens the door for the possibility of substantial delays and disruptions in the supply chain,” the NCBFAA said, “with inevitable negative impacts on commerce and multiple claims for liquidated damages.”
There are other ways to address CBP’s concern that "...30 days is too long to permit the conditions to continue." The NCBFAA recommends that CBP retain the current 30-day notice period for bond insufficiency and add modifying language such as "... except in exigent circumstances," or place delinquent importers on sanctions that require payment of duties and fees at the time the entry is filed for release.
Headquartered in Washington, DC, the NCBFAA represents nearly 870 member companies with 100,000 employees in international trade - the nation's leading freight forwarders, customs brokers, ocean transportation intermediaries (OTIs), NVOCCs and air cargo agents, serving more than 250,000 importers and exporters. Established in 1897 in New York, NCBFAA is the effective national voice of the industry. Through its various committees, counsel and representatives, the Association maintains a close watch over legislative and regulatory issues that affect its members. It keeps them informed of these and other related issues through its weekly Monday Morning eBriefing and various meetings as well as conferences throughout the year.
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