CBP's Planned e-STB System Would Remove Bond Approval from Ports

An ongoing effort by CBP toward centralization of single transaction bond (STB) processing would eventually mean CBP ports would no longer be responsible for the manual review and approval of STBs, said Bruce Ingalls, director of the Revenue Divisions in the CBP Office of Administration. Ingalls and others discussed the planned changes during a National Customs Brokers and Forwarders Association of America Webinar on Dec. 12. The update would allow the agency to better protect revenue through improved enforcement of STB requirements before cargo release, he said. The new system will allow STBs to be electronically transmitted to CBP as part of the entry process through the Automated Commercial Environment (ACE), the agency previously said in June while outlining the idea at the Port of Boston (see 13070120).

The e-STB system "will limit who can push STB data electronically to CBP" and "brokers will not be able to push bonds to CBP unless the sureties or surety agents grant that authority to the brokers," the presentation said. The agency will revise its regulations so that the individual who pushes the bond -- the surety, surety agent or broker -- will be responsible for its accuracy, it said. This is hoped to lessen the amount of litigation the agency is involved in over inaccurate STBs. CBP "wants out of the business of having to look at a bond, looking for signatures, stamps and correct spelling of names," said Ingalls. The new system is also hoped "create uniform procedures at all ports, cracking down on port shopping and enabling more consistent monitoring by CBP," the agency said.

The bond will be accepted once it passes through automated data validations, said CBP. As a result, CBP ports will not have to manually review STBs and Office of Administration staff "will shift from administrative activity to more analytical functions," the presentation said. These changes would "in no way" limit CBP officers' authority to examine cargo or require an STB when something is entered on a continuous bond, said Ingalls. The new system would also allow "sureties’ financial systems to interface directly with CBP systems to push STB data electronically to CBP, which eliminates duplication of effort and risks for manual data entry errors in creating and submitting paper STBs," the agency said. CBP hopes to have completed development of e-STB and then begin development of eBond for continuous bonds by May 7, aiming for full deployment by January 2015, said CBP.

The full scope of changes to bond processing remains in flux, said John Everett, a branch chief in the ACE business office. For instance, it remains unclear whether Importer Security Filing bonds will eventually be affected, he said. "We are still working on the scope of everything we are going to do," he said. Management within the ACE Business Office is now looking at that issue, so CBP does not have a "clear answer for that right now," said Everett.

The automated data validation of e-STBs within ACE will check to make certain that all necessary data is provided, said Everett. If a submission is found to be lacking something, it "will be rejected back to the surety" and the "surety will then determine if this is correctable information on their behalf," he said. "If so, they can correct the bond data" and resubmit, but if not the surety will notify the filer, who would then have to start again the submission process, said Everett. After an e-STB is approved, CBP will notify the surety and the filer once the entry is successfully completed in ACE, said CBP. The automation means the trade can file the bond at any time, it said.

Currently handled at the port level, the STB process has some issues, including the acceptance of bonds that contain errors and should be rejected, a report from the Department of Homeland Security’s Office of Inspector General in a 2011 said (see 11080314)]. That report was among the driving forces for the centralization efforts, said Ingalls. The current system also limits CBP's ability to answer questions from Congress or the Treasury Department on "collection efforts" and "where we are seeing write-offs" occur, a major concern for CBP, said Ingalls. Similar to a continuous bond, a centralized system would also allow the CBP Revenue office to "do all the up front work" so that CBP officers can focus more on the cargo rather than the bond aspect, Ingalls said. The update is also a way for CBP to catch up to the customs broker and surety systems that are more advanced than CBP's current system, he said.

Work at CBP headquarters on the STB updates began with meetings between the Offices of Administration, Field Operations, International Trade and Congressional Affairs in March, he said. The agency then in June began visiting ports in order to solicit feedback from CBP officers, the trade and other import/export personnel. CBP is now in the process of additional trade outreach activities to engage the industry through several venues, he said. Also ongoing is the work between the Office of Administration and ACE Business Office to refine the scope of the planned e-STB to "develop user stories and plan development," he said. Development is slated to begin in February with full development coming in May, he said.

The new process is going to allow for the expansion of Remote Location Processing if CBP changes its policy of excluding entries that require a STB, said Chip Brown, managing director of Regulatory Compliance for FedEx Trade Networks Transport & Brokerage and the co-chairman of the Trade Support Network eBond subcommittee. "That's a big one for the brokers," he said. The standard data set for bond issuance is still in discussion and there's ongoing discussion between software developers, sureties and CBP, noted Brown. How they will reach a decision as to a standard for data requirements is "an interesting question," but it's hoped that the broker will be sending the current ABI data required for the bond and "not necessarily entire entry summary data set," he said.

Email ITTNews@warren-news.com for a copy of CBP's presentation.