4410-012 Bond Sufficiency Actions Against Bonded Carriers

Published CBP guidance; operative status and applicability must be assessed from the retained publisher edition.

CUSTOMS DIRECTIVE
ORIGINATING OFFICE: CO:T:F:F DISTRIBUTION: See signature page
CUSTOMS DIRECTIVE NO. 4410-012
OLD NUMBER: 4400-12A
DATE: DECEMBER 1, 1989
SUBJECT: BOND SUFFICIENCY ACTIONS AGAINST BONDED CARRIERS
1. Purpose
To set forth actions to be taken by Regional Commissioners/Distr ict/Area
Directors in cases in which the amount of delinquent liquidated damages claims
against a bonded carrier exceed the amount of the carrier's custodial bond.
2. Background
In the past, certain bonded carriers have not responded to Customs liquidated
damages claims involving violations of 19 CFR 18.8. This has led to actions to
collect the amounts due from their surety companies. In many cases, the
amounts of claims far exceed the amount of the custodial bond.
The Customs Regulations (19 CFR 113.13(c) and (d)) r equire, Regional
Commissioners and Distr ict Directors to review bond sufficiency on a periodic
basis and to notify the principal in writing of a need for a bond increase if the
bond is not adequate to protect the revenue and to insure compliance with the
law and regulations. Hera Shipping Company v. Harry Carnes (CIT Slip Opinion
86-75) reaffirmed the right of Customs to demand increased bond coverage for
just cause.
As we have taken action against other principals and their sureties for delinquent
claims, we should also take action against bonded carriers.
3. Action
Distr ict/Area Directors should review the liquidated damages claims against a
bonded carrier whose bond is on file in their district using the automated FP&F
system. Any liquidated damages claim which has not been petitioned or paid
within 90 days may be considered a delinquent claim. When the amount of
delinquent claims substantially exceeds the amount of the bond a written notice
should be iss ued to the bonded carrier under 19 CFR 113.13 demanding
increased bond coverage. If the carrier fails to respond satisfactorily to the letter
listi ng the delinquencies and the demand for i ncreased bond coverage, the
district should issue a notice to all other districts using facsimile or ACS E-Mail
informing them that t hey should not acc ept additional liabilities against the

existi ng bond. The Office of Trade Operations in Headquarters should be
notified.
Distr ict/Area Directors who are aware of situations in which the amount of unpaid
or unpetitioned claims exceeds a carrier's bond filed in another district should
bring this matter to the attention of the appropriate District/Area Directors for
action under this directive.
4. Responsibilities
Regional Commissioners are responsible for ensuring that Distr ict/Area Directors
effectively implement this directive. Distr ict/Area Directors should ensure that
their Fines, Penalties, and Forfeitures Officers are aware of the requirements of
this Directive.
5. Effective Date
Since this directive merely states the authority already contained in the Customs
Regulations for action to be taken in cases of bond insufficiency, it should be
implemented immediately.
Acting Commissioner of Customs
Distr ibution:
R-01 All Regional Commissioners
F-01 All District Directors
F-02 All Port Directors
F-10 All PP&F Officers