CBP Drops Risk-Based Bonding ANPRM, Will Instead Use Existing Framework

CBP no longer plans to move forward with an advance notice of proposed rulemaking (ANPRM) on risk-based bonding that had been under discussion by the agency, but it still plans to implement risk-based bonding “by leveraging existing authorities and completing several initiatives,” it said in a document released ahead of the Commercial Customs Operations Advisory Committee (COAC) meeting scheduled for June 23.

The agency decided in May not to proceed with a draft ANPRM, “in part due to the complexity of the framework in determining” if an additional risk-based single transaction bond (STB) would be required for entries subject to antidumping and countervailing duties, “and in what amount.”

As of December, CBP had planned to issue an ANPRM before the end of 2020, then proceed with two rulemakings to first require STBs for AD/CVD entries from new importers, then to apply risk-based formulas to continuous bonds for all entry types and priority trade issues (see 2012170053 and 1912050044).

Instead, CBP will update its “internal guidance and procedures to better define when to consider use of Single Transaction Bonds (using the existing formula/process) to protect revenue, particularly because of AD/CVD concerns,” and will fully automate continuous bond sufficiency checks, CBP said in the document, a “government issue paper” that says it was submitted by Shari McCann of CBP’s commercial operations, revenue and entry division.

CBP also will publish a proposed rule to incorporate its eBond program in its regulations at 19 CFR part 113, and will “update eBond functionality from a test to a requirement, eliminate the majority of paper bond processing, and ensure bonds are on file,” the document said. Another component of risk-based bonding is the agency’s recent decision to “no longer permit persons suspended or debarred by CBP (or another Federal agency, as applicable) to use a continuous bond to secure customs activities,” as announced by CBP May 21 (see 2105240049).

CBP already identified seven importers of record affected by that new policy on suspension and debarment, according to a separate document prepared by the COAC’s Intelligent Enforcement Subcommittee ahead of the June 23 meeting. Affected importers will still be permitted to use STBs or cash. “When an importer’s suspension and/or debarment terminates which will be updated in the SAM database real time, sureties may file a new continuous bond to resume Customs activities,” the subcommittee said.

According to the subcommittee report, its Bond Working Group previously recommended in 2016 that CBP’s current bond sufficiency formulas already take into account the priority trade issues CBP is required to account for in its risk-based bonding initiative under the Trade Facilitation and Trade Enforcement Act of 2015.

The subcommittee also said that “CBP also has a policy in place that can require additional STBs for high-risk shipments of AD/CVD and can consider enforcing this more routinely.” According to the subcommittee, “to this end, CBP will conduct internal training with Port Offices and Centers of Excellence and Expertise on its existing authority to request additional bonding and when this can be exercised under current statutes, laws, regulations, directives, and policy provisions.”

Meanwhile, the Bond Working Group has completed its review of CBP’s monetary guidelines for setting bond amounts. “CBP will proceed to review internally and hopes to publish by year end,” the subcommittee report said. Among the policies incorporated into the monetary guidelines is that single transaction bonds involving partner government agencies with hold authority “can be based at three times the value of the line level valuation and three times the value is not required when goods are disclaimed,” the report said. “CBP is also working on a PGA Disclaim Handbook that will help solidify policy on these issues.”