[Federal Register Volume 77, Number 105 (Thursday, May 31, 2012)]
[Notices]
[Pages 32128-32129]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-13179]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Cancellation of Bond Subject to Enhanced Bonding Requirements 
Upon CBP's Acceptance of Qualified Superseding Bond Application

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security.

ACTION: General notice.

-----------------------------------------------------------------------

SUMMARY: This notice announces that U.S. Customs and Border Protection 
(CBP) will cancel a continuous bond where the liability amount was 
calculated pursuant to enhanced bonding requirements (EBR bond) upon 
the agency's acceptance of a qualified superseding bond application. 
CBP will accept a qualified superseding bond application pursuant to 
this notice only if posted by an importer who was not a litigant in any 
of the National Fisheries Institute, Inc. v. United States Bureau of 
Customs & Border Protection (NFI v. CBP) court cases and who 
establishes, to CBP's satisfaction, that no contingent liability 
remains secured by the predecessor EBR bond and that the EBR bond does 
not cover entries that are subject to a pending protest. The 
superseding bond must also feature a limit of liability that is 
calculated using CBP's current bond formula and must be for the same 
time period covered by the EBR bond. Nothing in this Notice should be 
construed as applying to importers represented by the plaintiffs in the 
NFI litigation noted above, as their relief was granted by the Court.

DATES: A superseding bond application, including supporting 
documentation, must be received by CBP within 90 calendar days from the 
date the related preceding EBR bond becomes eligible under the 
conditions set forth in this Notice.

ADDRESSES: Superseding bond applications, including supporting 
documentation, must be sent either via mail to U.S. Customs and Border 
Protection, Office of Administration, Revenue Division, ATTN: Bond Team 
Intech 1, 6650 Telecom Drive, Indianapolis, IN 46278 or via email to 
[email protected] with a subject line of ``Superseding Bond 
IR.''

FOR FURTHER INFORMATION CONTACT: Kara Welty, Revenue Division, Office 
of Administration, Customs and Border Protection, [email protected], 
Tel. (317) 614-4614.

SUPPLEMENTARY INFORMATION:

Background

I. Enhanced Bonding Requirements

    In 2004, U.S. Customs and Border Protection (CBP) instituted a 
policy of reviewing the sufficiency of continuous bonds where the 
importer's importing activities involved merchandise subject to 
antidumping or countervailing duties (AD/CVD). CBP's review resulted in 
the imposition of enhanced bonding requirements (EBR) on importers of 
shrimp subject to AD/CVD. See 71 FR 62276, dated October 24, 2006.

II. Judicial Review

    The legality of the enhanced bonding formula was challenged in the 
NFI v. CBP cases. See Nat'l Fisheries Inst., Inc. v. CBP, 465 F. 
Supp.2d 1300 (Ct. Int'l Trade 2006); Nat'l Fisheries Inst., Inc. v. 
CBP, 637 F. Supp.2d 1270 (Ct. Int'l Trade 2009); Nat'l Fisheries Inst., 
Inc. v. CBP, 714 F. Supp.2d 1231 (Ct. Int'l Trade 2010); and Nat'l 
Fisheries Inst., Inc. v. CBP, 751 F. Supp.2d 1318 (Ct. Int'l Trade 
2010). See http://www.cit.uscourts.gov/slip_op/Slip_op10/10-120.pdf.
    In Slip Opinion 10-120, the Court granted equitable relief to 
importers who were represented by the plaintiffs in NFI v. CBP (NFI 
Importers) and who had posted bonds calculated using the enhanced 
bonding formula (EBR bond). As a consequence of the court's decision, 
CBP cancelled NFI-Importers' EBR bonds upon their submission of 
replacement superseding bonds.

III. CBP Policy To Permit Cancellation of EBR Bond Upon Acceptance of 
Qualified Superseding Bond

    CBP has now decided to implement a policy whereby the agency will 
accept a qualified superseding bond application that meets the 
conditions described in Section V of this Notice (``superseding'' as 
used in the sense it is used in Slip Op. 10-120, page 6) from any 
importer who posted an EBR bond but who was not an NFI Importer (non-
NFI importer). This policy will be in effect for a period of 90 
calendar days from the date that the related preceding EBR bond no 
longer secures any remaining sum certain or contingent debt (including, 
but not limited to, unliquidated entries (see 19 U.S.C. 1500) and 
matters subject to 19 U.S.C. 1592 involving actual or potential loss of 
revenue. This policy is not applicable to NFI importers whose relief 
was granted by the Court.
    A Non-NFI importer wishing to take advantage of this policy must 
ensure that CBP's Bond Team Intech 1, within the Office of 
Administration's Revenue Division, receives a qualified superseding 
bond application and supporting documentation within this 90 day 
period. The superseding bond application must be accompanied by 
supporting documentation that includes a statement as to the date the 
EBR no longer secured contingent liability, as well as a statement that 
the EBR does not cover entries that are subject to a pending protest 
pursuant to 19 U.S.C. 1514 or related regulations.
    If CBP accepts a qualified superseding bond, CBP will notify the 
non-NFI importer by providing a copy of the

[[Page 32129]]

superseding CBP Form 301 and will cancel (``cancel'' as used in the 
sense it is used in Slip Op. 10-120, at pages 11-13) the related 
preceding EBR bond. The superseding bond will be clearly annotated to 
distinguish it from the preceding EBR bond. An EBR bond is not 
cancelled unless CBP notifies the non-NFI importer that the superseding 
bond has been approved. CBP will return untimely submissions as well as 
those that are incomplete or rejected for any other reason, promptly. 
CBP is not responsible for delays in a non-NFI importer's receipt of a 
returned application.
    As CBP is not a legal party to the contractual relationship between 
a surety and a principal, it is noted that the agency cannot assist in 
matters relating to obtaining a superseding bond.

IV. EBR Bond Conditions

    To qualify for cancellation and replacement by a superseding bond 
pursuant to this policy, an EBR bond:
     Must not secure any remaining sum certain or contingent 
debt (including, but not limited to, unliquidated entries (see 19 
U.S.C. 1500) and matters subject to 19 U.S.C. 1592 involving actual or 
potential loss of revenue); and
     Must not cover entries that are subject to a pending 
protest pursuant to 19 U.S.C. 1514 or related regulations.

V. Superseding Bond Conditions

    Pursuant to this policy, a qualified superseding bond posted by a 
non-NFI importer must meet the following conditions:
     A superseding bond must feature a limit of liability in an 
amount no less than the dollar amount of the continuous importer bond 
that CBP would have accepted had the EBR requirement not existed on the 
bond effective date of the EBR bond. For example, if an EBR bond 
features a face amount of $500,000 but would have featured a face 
amount of $70,000 but for the EBR requirement, then the superseding 
bond must feature a face amount of at least $70,000. A non-NFI importer 
can determine the correct amount of a superseding bond by multiplying 
the total of duties, taxes, and fees paid to CBP, for the twelve-month 
period immediately preceding the effective date of the original EBR, by 
ten (10) percent and rounding up as appropriate.
     A superseding bond must be for the same time period for 
which the related preceding EBR bond was in place. For example, if an 
EBR bond was in effect for a period from March 15, 2004, through April 
1, 2005, then the superseding bond, despite its execution date in 2011, 
must secure entries for March 15, 2004, through April 1, 2005.
     A superseding bond posted pursuant to 19 CFR 113.40 must 
include the posting of cash or other security for each annual period 
that the related EBR bond was in effect.
     A superseding bond application, including supporting 
documentation, must be received by CBP within 90 calendar days from the 
date that the related preceding EBR bond no longer secures any 
remaining sum certain or contingent debt (including, but not limited 
to, unliquidated entries (see 19 U.S.C. 1500) and matters subject to 19 
U.S.C. 1592 involving actual or potential loss of revenue).
     A superseding bond application, and supporting 
documentation, must be sent either via mail to U.S. Customs and Border 
Protection, Office of Administration, Revenue Division, ATTN: Bond Team 
Intech 1, 6650 Telecom Drive, Indianapolis, IN 46278 or via email to 
[email protected] with a subject line of ``Superseding Bond 
IR.''

    Dated: May 25, 2012.
David V. Aguilar,
Acting Commissioner, U.S. Customs and Border Protection.
[FR Doc. 2012-13179 Filed 5-30-12; 8:45 am]
BILLING CODE 9111-14-P