CBP Posts Another "Latest News and Developments" on Processing Bond Applications, Etc. (Part III)

(Subscribers should note that the February 13, 2006 version of this document appears to be more comprehensive treatment of bond applications, etc. than previous versions.)

This is Part III of a multi-part series of summaries of CBP's "Latest News and Developments" document and highlights Activity Code 1 continuous bond application packages and bond rejections. Part III builds upon the information summarized in Parts I and II regarding Activity Code 1 continuous bonds.

(See ITT's Online Archives or 02/21/06 and 02/22/06 news, 06022105 and 06022210, for Part I on the processing of new Activity Code 1 continuous bonds by the Revenue Division Bond Team and Part II on bond submissions and inquiries. See ITT's Online Archives or 06/21/05 news, 05062105, for BP summary of CBP's notice announcing that centralized processing for all new Activity Code 1 continuous bonds took effect on June 20, 2005.)

Activity Code 1 Continuous Bond Application Packages

CBP states that a complete bond application package must include the following:

CBP 301 form (front and back) - This form must be fully and accurately completed. It must show the legal designation of any corporate principals & sureties (see note 4 on the back side of the form). Example - "Incorporated in Texas" or "A California corporation".

In addition to a signature, the signature block on the CBP 301 for any principals / co-principals must include the printed name, title, and company affiliation of the person signing. CBP 301 forms that contain printed names or titles in signature blocks that are not being used (ex. co-principal blocks) will not be accepted. Bond filers should update software applications used to generate CBP 301 forms so that all extraneous information is removed from that form.

The surety information on the CBP 301 must include the complete, physical address of the surety. This address should match either the address listed for the surety on the most recent Treasury Department Circular 570 listing (http://www.fms.treas.gov/c570/c570.htmlcertified), or the address currently on file with CBP.

Only one copy (front and back) of the CBP 301 form is needed. For a continuous bond, "port code" and "date of transaction" fields on the CBP 301 should not be completed. The execution date on the CBP 301 form records the date this form was completed - it cannot contain a future date.

Application letter - An application letter must be provided pursuant to 19 CFR 113.12.

This letter must include the signature, printed name and title of the person signing, the date the application letter was completed, the total duties/taxes/fees paid by all companies listed on the bond in the previous 12-month period, and the "I certify" statement. If the importer is new, or has no recent history of imports, then an estimate of the duties/taxes/fees that will be paid over the next 12 months should be provided.

Application letters must list all importer number(s) covered by the contents of that application letter. Any entity listed on the CBP 301 form must be included in the application letter. A formal demand letter from any CBP office to increase the limit of liability on a continuous bond may act as a substitute for the application letter if it is provided as part of the bond submission package to the Revenue Division Bond Team.

CBP 5106 form - A completed CBP 5106 form is required if an importer record listed on the CBP 301 form needs to be added to the CBP database or changed in any way.

Fax cover sheet or email - A cover sheet or email listing the name, phone number, fax number, and email address of a point of contact for the application must be supplied. The 3-digit filer code assigned by CBP should also be shown if a licensed customhouse broker is submitting the bond application package.

Power of attorney - A power of attorney is not required for every bond application submission. However, a copy may be requested at any time if the Revenue Division Bond Team deems necessary. Failure to provide this power of attorney upon request will delay review and approval of the bond.

Activity Code 1 Continuous Bond Rejections

CBP states that to increase productivity, reward filers of compliant bond applications, and raise the overall quality of submissions, the Revenue Division Bond Team has established a special team to handle all bond submissions rejected for correction.

The Reject Team may be reached by leaving a voicemail at (317) 614-4881, or via fax at (317) 298-1042. Emails directed to the Reject Team should be sent to cbp.bondquestions@dhs.gov. CBP urges filers to insure that the email subject line begins with the word "REJECT". CBP also notes that these contact points should be used exclusively for issues related to rejected bond submissions.

Corrections made pursuant to bond application rejections are not reviewed immediately upon receipt. At least 5 business days should be allowed for the Reject Team to review corrections submitted to its office. The Reject Team will not respond to status update requests unless the corrections have been on file with the Reject Team for at least 5 full business days.

The Reject Team will issue a rejection notice no more than two times. Failure to respond to all the requested corrections after the rejection notice has been issued twice will result in withdrawal of the bond application without further notice to the bond filer and/or principal. CBP notes that there is usually a significant delay between the first and second issuance of the reject notice. Bond filers are expected to diligently read and respond completely to bond rejection notices.

As specified above, failure to respond to a rejection notice concerning a bond termination request will result in the continuous bond being rendered insufficient.

Latest News and Developments (dated 02/13/06) available at http://www.cbp.gov/xp/cgov/import/communications_to_trade/pilot_program/latest_news_and_developments/.