CBP Posts Current Bond Formulas For Calculating Activity Code 1 Continuous Bonds

CBP states that this notice amends CBP Directives 099 3510-004 (Monetary Guidelines for Setting Bond Amounts) and 099 3510-005 (Bond Sufficiency), and that a new comprehensive CBP Directive will be issued at a later date.

(In addition, CBP is expected to reexamine this notice for clarity and may issue an amended version. See note 2 below.)

Bond Formulas Based on Previous12 Months (Not Previous Calendar Year)

CBP's notice indicates that in the past, the time period used to calculate bond amounts was the previous calendar year. However, CBP now indicates that the time period used to calculate bond amounts is the previous 12 months.

Reviewers and Analytical Bond Formulas

CBP sources state that the Reviewers and Analytical bond formulas are to be used for merchandise other than agriculture/aquaculture merchandise that is subject to an antidumping (AD) and/or countervailing (CV) case.

The Reviewers bond formula is used when the importer is not subject to the Analytical bond formula.

The Analytical bond formula is used when the importer has delinquent bills, not protested and over 120 days, or denied protest; unpaid debit vouchers; and/or bills paid by the surety.

These two bond formulas are:

Reviewers (1).The formula for calculating the bond amount for reviewers is the total of duties, taxes, and fees for the previous 12 months 10%.

This formula results in the bond amount (rounded up by increments of $10,000 up to $100,000 and then by increments of $100,000) or a minimum bond amount of $50,000².

Analytical (2). The formula for calculating the bond amount for analytical is as follows:

Bond Formulas for Agriculture/Aquaculture Merchandise Subject to AD/CV Cases

For agriculture/aquaculture merchandise subject to an AD or CV case, the bond formulas listed in the table below are to be used:

AD/CVD Order (3)- at the time of the International Trade Administration's (ITA's) duty order (see (3) below);

AD/CVD Preliminary with history (4)- after an ITA preliminary determination and the importer has a "history" (see (4) below); or

AD/CVD Preliminary with no history (5)- after an ITA preliminary determination and the importer has no "history" (see (5) below).

CBP adds that the current bond formulas are now being administered by the Revenue Division for all bonds that are reviewed or processed by the Bond Team. In addition, the Reviewers and Analytical formulas are based on "current CBP Directive (amended)," and the bond formulas for agriculture/aquaculture merchandise that is subject to an AD and/or CV case(s) are based on "current CBP Directive (amended) for agriculture/aquaculture merchandise."

¹In the past, the formula for calculating a bond amount was the total of duties, taxes, and fees for the previous calendar year 10%. This formula would result in the bond amount (rounded up or down by increments of $10,000 up to $100,000 and then by increments of $100,000) or a minimum bond amount of $50,000².

²In CBP's notice, this phrase reads "minimum bond amount or $50,000 (rounded up ["or down" when referring to CBP's past formula] by increments of $10,000 up to $100,000 and then by increments of $100,000)."

However, CBP sources state that this language will be re-examined for clarity and an amended notice may be issued. (Instead of CBP's language, BP substituted other language that seems more accurate; any future revised CBP language may in fact be different.)

(See ITT's Online Archives or 07/13/04 news, 04071305, for BP summary of CBP's July 2004 amendment to Directive 099 3510-004 regarding continuous bonds for importers of agriculture/aquaculture merchandise subject to AD/CV cases.)

CBP's "Current Bond Formulas" notice available at http://www.cbp.gov/linkhandler/cgov/import/communications_to_industry/pilot_program/current_bond.ctt/current_bond.doc

Directive 099-3510-004, entitled Monetary Guidelines for Setting Bond Amounts (dated 07/23/91) available at http://www.cbp.gov/linkhandler/cgov/toolbox/legal/directives/3510-004.ctt/3510-004.txt

Directive 099 3510-005, entitled Bond Sufficiency (dated 05/17/93) available at http://www.cbp.gov/linkhandler/cgov/toolbox/legal/directives/3510-005.ctt/3510-005.txt

BP Note

CBP sources indicate that if an importer of agriculture/aquaculture merchandise subject to an AD or CV case(s) has delinquent bills, not protested and over 120 days, or denied protest; unpaid debit vouchers; and/or bills paid by the surety, these exact amount(s) would be included when calculating the bond amount.