Several Bonding Issues in ACAS Rules Need Addressing, Sureties Say
CBP needs to give "immediate attention" to multiple unanswered questions related to bonding in the Air Cargo Advance Screening rules, the International Trade Surety Association said in comments filed in response to the ACAS interim rule that took effect in June (see 1806110043). "The Interim rule is silent on the formula to be used to set bond amounts, whether there is a minimum bond amount or whether Single Transaction bonds may be used to secure ACAS obligations, whether multiple penalties may be claimed against the same principal and/or multiple principals on the same transaction," the ITSA said. "We recommend that these issues be addressed immediately with the surety industry and with other stakeholders."
The trade group recommended the use of a $50,000 continuous bond minimum "while authorizing higher amounts under guidelines administered by an appropriate CBP official." ITSA also said penalty claims should be limited to "one claim for any transaction involving a default." The trade group also complained that its calls for industry consultation in 2012 on the ACAS pilot were ignored. Now, during the one-year phase-in period for enforcement, CBP should meet with sureties on bond-setting formulas, mitigation guidelines, and notices of default and liquidated damages to ensure consistency with existing procedures, ITSA said.
CBP's changes to importer, custodial and international carrier bonds "are far too complex and not entirely necessary," the Roanoke Insurance Group said in its comments. "All that are needed are minor wording updates to existing advance cargo requirements in the Importer Bond and International Carrier Bond conditions," the surety said. CBP also should maintain a separation of importer bonds and international carrier bonds, it said. "If these suggestions are not adopted, an entity that operates an airline but also imports, or a customs broker that also files ocean manifest information, would be exposed to claims by CBP against both the Importer Bond and International Carrier Bond for the same violation, because each bond contains compliance obligations," the company said.
Avalon Risk Management, which writes more than 30 percent of customs bonds on file with CBP, also said the ACAS rules add unnecessary complexity by "blending the ACAS requirements" into three bond types. Air Manifest data is currently secured by the [the international carrier bond type]" and "since the ACAS Filing is a subset of the Air Manifest data, this is the most appropriate bond to cover ACAS Filings to avoid additional burden or expense on the trade or the improper assessment of liability to a party other than the ACAS Filer," Avalon said in its comments.
The requirement for updating ACAS data strays from the pilot program processes and creates new problems, FedEx Express said in its comments. "Our system does not currently allow for updates of the ACAS data, but instead provides the most accurate, final data at the time of transmission through ACE for clearance," the company said. "Many shipments have updated information as much as a dozen times prior to that final submission in ACE. The updates can be of a substantial nature or minimal importance, such as the addition of a period or a comma. Currently, we have no method to submit those updates through ACAS, and would further suggest that the ACAS system has no way of updating the system internally by correlating the updated data with the original submission." Such a requirement would require "considerable IT investments by both FedEx and CBP, with minimal benefit," FedEx said. Other commenters raised this issue too (see 1808090020).
FedEx also questioned the need for language in the rule that says "Where the presenting party is not reasonably able to verify such information, CBP will permit the party to electronically present the data on the basis of what that party reasonably believes to be true.” That language "is vague and could be broadly interpreted in the years to come for enforcement purposes," the company said. Such a requirement also differs from the pilot "and would place substantial and undefined requirements on those submitting data that have not existed before, and which would impede our ability to provide the data as early as practicable, crippling the value of this established and successful program," FedEx said.