CBP Posts Another "Latest News and Developments" on Processing Bond Applications

(See ITT's Online Archives or 10/07/05 and 10/13/05 news, 05100720 and 05101315, for BP's two-part series of summaries on CBP's September 16, 2005 version of CBP's "Latest News and Developments" guidance document.)

Time Frames for Processing Bond Applications

CBP states that 10-12 business days should be allowed for the Bond Team to process error-free bond applications. In an effort to improve performance, additional resources have been made available to the Bond Team in recent weeks. As a result, CBP states that in the short-term, filers may experience some variation in the order in which bond applications are processed.

Weekly Updates on Estimated Processing Times for Bond Applications

Beginning Monday, November 28, 2005 CBP states that the Revenue Division will post current information about estimated processing times for bond applications at "http://www.cbp.gov/xp/cgov/import/communications_to_trade/pilot_program/."

This information will be posted under the heading "Bond Processing Statistics", and it will be updated every Monday. Bond filers should query this information on a regular basis and refrain from making any status inquiries when the date of submission of the application is after the date(s) currently being processed. Bond filers should also utilize ABI queries on a regular basis as the primary mechanism to learn of continuous bond approvals.

CBP's most recent version of these statistics provides weekly statistics for the period from November 21, 2005 through December 5, 2005.

Revenue Division Will Process All Terminations of Type 1 Continuous Bonds

CBP states that effective immediately, the Revenue Division will process all terminations of type 1 continuous bonds regardless of where the bond was originally established. CBP had previously required that termination requests be submitted at least 30 days prior to the desired termination effective date. This requirement has been eliminated. However, CBP states that the regulatory requirements regarding termination effective dates that are contained in 19 CFR 113.27 should be noted.

According to CBP, a copy of the valid power of attorney must be submitted with the termination request, when that request is signed by a party acting on behalf of the principal, or it is subject to rejection. This change will increase the number of terminations processed by the Revenue Division; however, it is expected that it will also eliminate a significant amount of administrative work for the Bond Team and increase the timeliness of bond approvals.

Revenue Division Will Only Process Bond Riders if Applicable Continuous Type 1 Bond is on File

CBP states that the Revenue Division will process bond riders only if the applicable continuous type 1 bond is currently on file with its office. When the filer is uncertain as to whether a particular bond file has been transferred to the Revenue Division, the filer may always submit the rider to the Port where the bond was originally established. That Port will forward the bond rider to our office (or advise the bond filer to do so) if necessary for processing. A copy of the valid power of attorney should be submitted with all bond rider requests when the rider is signed by a party acting on behalf of the principal. Failure to provide the power of attorney will delay processing of the bond rider.

Centralization of Bond Processing Discussed at Recent COAC Meeting

On December 1, 2005, CBP officials discussed the centralization of bond processing with the Departmental Advisory Committee on Commercial Operations of U.S. Customs and Border Protection and Related Functions (COAC). During this meeting, CBP sources stated that the processing of bonds is divided into three functions:

Processing of new bond applications, which CBP sources state is supposed to be completed within 5 days of receipt;

Processing of bond applications that were previously rejected, which CBP sources state is supposed to be completed within 10 days of receipt; and

Sending notification of bond approval to principal sureties.

Application volume increasing and processors have been added. According to CBP sources, the volume of bond applications is now at 6,000 per month, which is a large increase. CBP sources also noted that there are now 38 bond processors (up from 17).

CBP working to eliminate processing backlog by December 31, 2005. CBP sources indicated that CBP is still working through a backlog. CBP sources indicate that while CBP is current on the processing of new bond applications, there is currently a 13-day backlog for processing bond applications that were previously rejected. In addition, there is also a 22-day backlog for notifying principal sureties of bond approval. CBP sources state that the goal is to have all backlogs eliminated by December 31, 2005.

CBP sources explained that the processing of previously rejected bond applications is the most difficult of the above-described duties. Currently, 20% of all bond applications are rejected (down from 40%).

COAC creates subcommittee on bond processing. CBP sources noted that the National Customs Brokers and Forwarders Association of America (NCBFAA) has been working with CBP in an advisory capacity with regard to bond processing. An NCBFAA representative attending the COAC meeting noted that bond processing has gotten better and the process is taking a more reasonable amount of time. The members of COAC approved a proposal put forward by the NCBFAA representative that an advisory subcommittee be created through COAC in order to discuss ideas for further improving the process. This representative stated that the subcommittee should be composed of sureties and brokers, among others.

Latest News and Developments (dated 11/28/05) available at http://www.cbp.gov/xp/cgov/import/communications_to_trade/pilot_program/latest_news_and_developments/.