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Update - 10+2 Bond Requirement
January 19, 2009

There have been some conflicting reports regarding the status of CBP's 10+2 bond filing requirements. Roanoke Trade and others brought these discrepancies to the attention of CBP in last week's Customs/Surety Executive Committee (C/SEC) meeting, a group formed by CBP in 2001 to facilitate a clear and cooperative business relationship between CBP and participating surety associations. The clarifications received are outlined below in a question and answer format.

If I import using a continuous bond, what do I need to do to meet the bond requirements?
Nothing needs to be done and no rider will be required to be filed with CBP.

When will CBP begin implementing the Importer Security Filing (ISF) bond requirement?
CBP will not be ready for the stand alone ISF bond (Appendix D bond) or the single transaction bond (STB) when the ISF requirements become effective on 1/26/2009. Furthermore, CBP will not hold any continuous customs bond accountable for ISF because their current position is that there will be no claims or ISF liquidated damage enforcement until 1/26/2010. At present, CBP is more concerned with simply obtaining the ISF data; policies and procedures for the ISF bond filing will be finalized later, at a date still undetermined. We expect CBP to provide the trade with additional guidance on the use of STBs and the ISF bond.

Will there be liquidated damages during the 'flexible enforcement' period?
CBP informed us that there will not be ISF liquidated damages during the flexible enforcement period. They stated that it would be contradictory to the interim final rule to issue a claim. Since CBP will not be issuing claims, there is no need to secure a bond to cover ISF until future notice.

The CATAIR has two fields for bond data located in the SF10 record layout called "ISF Importer/Bond Holder" and "ISF Bond Indicator." If CBP is not yet accepting the STB or ISF bond, will CBP monitor these fields when the ISF is transmitted?
While it's fair to assume that no one really knows what will happen the first day the ISF is required, the CBP official at the meeting indicated that the field will not be enforced. The field can be completed, but it will not be reviewed. Furthermore, where a principal may have more than one continuous bond on file for different activity codes (Activity Codes 1, 2, 3 or 4), there is no decision by CBP as to which of the bonds would cover the ISF, or how the principal might designate one activity code over the other.

What are the required bond amounts for the Appendix D ISF bond and the STB securing an ISF?
CBP is currently writing a new bond amount directive for all bonds. At this time, there are no confirmed bond amount requirements.

How is Roanoke Trade assisting CBP with bond requirements for the purposes of the ISF?
A team at Roanoke Trade is working closely with CBP to determine the proper process for filing bonds for ISF. Our goal as always is to work as an advocate for our clients and we will encourage simplicity. Roanoke Trade has and will continue to exchange ideas and proposals with our clients, the trade and CBP in an effort to achieve the best outcome.


Roanoke Trade Services, Inc.
Affiliate of Watkins Underwriters at Lloyd's and a Member of Munich Re
phone: 1-800-ROANOKE