CBP Begins Pilot to Test Emailed Demands for Penalties, Liquidated Damages From Sureties

CBP soon will begin a pilot to test electronic issuance for demands on sureties for liquidated damages or penalties, the agency said in a notice released Nov. 9. During the pilot, which will only be open to sureties, CBP will test sending CBP Form 5955A by email, rather than on paper. The pilot will begin Dec. 13, and CBP will begin accepting applications to participate Nov. 13.

Currently, if an importer or other party is liable for a penalty or liquidated damages secured by a CBP bond and fails to pay or petition for relief within 30 days, the Fines, Penalties and Forfeitures office on the port with jurisdiction over the claim will mail CBP Form 5955A to the surety, with payment due within 60 days.

CBP said sureties, trade associations and its own officers have told it that issuance of the form is “time consuming and may not result in timely action on liquidated damages or penalties claims by sureties, prompting the agency to test out automation of the form.

During the pilot, CBP will send Form 5955A to the surety “by email, at the time the document is mailed to the principal on the bond, for claims for liquidated damages or penalties,” the agency said. “Participating sureties will continue to receive a paper copy of the CBP Form 5955A by mail.” The test “will not include any other purpose or type of claim for which the CBP Form 5955A is used, such as a demand for duties, taxes, fees, or charges other than liquidated damages or penalties,” CBP said.

“Should the EIDS test be successful and ultimately be codified under the CBP regulations, CBP anticipates that this data would greatly enhance CBP’s penalty and liquidated damages notification process, reduce risk, and improve compliance operations,” the agency said. “CBP would also anticipate greater visibility into bond claims, which will support better decision-making during and after the case resolution process.”