COAC Renews Consideration of AD/CV Duty Bond

August 14, 2012 by Tim Warren|Top News

An Advisory Committee On Commercial Operations (COAC) subcommittee has renewed discussion of an AD/CV duty bond as a possible solution to the concerns surrounding the collection of AD/CV duties, said CBP in its Bond Subcommittee report. The report was among a number of documents released in preparation for the Aug. 15 COAC meeting. The CBP Bond report is (here).

The AD/CV duty bond consideration appears to be in response to a recent CBP policy announcement for dealing with AD/CV duty risks. The May 1 CBP memo, which provided guidance on protecting revenue when a port believes a transaction secured through a continuous bond would jeopardize the revenue due to AD/CV duty concerns, has engendered some concerns from the trade community, according to the Trade report on the Bond Subcommittee. The memo advises CBP field officers' requiring single transaction bonds (STBs) in cases where there's AD/CV duty collection concerns. The Trade Bond report is (here). The specific concerns on the memo are:

1) issues surrounding notice to the surety writing the continuous bond,
2) entry type issues,
3) port uniformity, and
4) requiring an STB after release.

(See ITT's Online Archives 12062233 for summary of the memo.)

CBP has heard all of the questions and is currently reviewing the notice and the COAC Bond Subcommittee will work with the COAC AD/CV Duty Subcommittee on the issue to provide more feedback and recommendations,such as a separate ADD bond/activity code, by the next public meeting, the trade report said. Although CBP has rejected this idea in the past, the idea of an AD/CV duty bond has resurfaced in light of the challenges with collecting AD/CV duties, the CBP report said.

According to the AD/CV Duty Subcommittee Trade report, CBP has emphasized that this is not viewed as a new policy or authority but rather an attempt to better use "a tool in the current CBP arsenal to protect revenue under certain particularly high risk circumstances." The AD/CV subcommittee said application of STBs as well as AD/CV duty bonding in general will likely remain a topic of ongoing discussion. The AD/CV Trade report is (here).

(See ITT's Online Archives 12080922 for a list of COAC materials.)

CBP Form 5106 Work Ongoing

CBP continues to work on updating Form 5106 to include additional information, said the reports. CBP is still going through internal discussions and no draft has been released. The COAC Bond Subcommittee and COAC Broker Subcommittee plan to work together with CBP on this form, according to the CBP Bond report. The broker and bond subcommittee will discuss the new Form 5106 data elements and selective punitive measures including their impact on industry and small and medium size enterprises. The Broker Committee Trade report is (here).

(See ITT's Online Archives 12062524 for summary of CBP's plans to revise Form 5106. The Importer ID Input Record (CBP Form 5106) is used to identify entities who wish to import merchandise in to the U.S., act as consignee on an importation when not the importer of record, or otherwise do business with CBP that would involve the payment or refund of duties, taxes, fees or other monies. Each person, business firm, government agency, or other organization that intends to file an import entry must file CBP Form 5106 with the first formal entry or request for services that will result in the issuance of a bill or a refund check upon adjustment of a cash collection. This form must also be filed by or on behalf of the ultimate consignee at the first importation in which the party acting as ultimate consignee is so named.)