CBP 301 Bond Form – Guidance and Information for ...© 2011 Roanoke Trade Services, Inc. Page 3...
Transcript of CBP 301 Bond Form – Guidance and Information for ...© 2011 Roanoke Trade Services, Inc. Page 3...
Page 1© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
CBP 301 Bond Form –Guidance and Information for
Completing Correctly!
Roanoke Trade Services, Inc. presents
Presenter:Kathleen Dorman, Bond Manager
Page 2© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Welcome NTCBFFA
Page 3© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
• Kathleen Dorman, Roanoke Trade’s Bond Manager -Houston office
• Sheila Skipper, Regional Vice President, manages Roanoke Trade’s Houston and Miami offices
• Roanoke Trade writes customs bonds and marine cargo insurance
• Member of Munich Re Group and affiliate of Watkins Syndicate at Lloyd’s of London
• 11 US locations and resources worldwide
• Providing transportation-related insurance solutions since 1935
Welcome…a Little About Us!
Page 4© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Customs Bond FormCBP 301 “101”
Page 5© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
So What’s the Big Deal?
U.S. Customs and Border Protection (CBP) Headquarters Office recently provided field offices with guidelines on proper completion of single transaction bond (STB), with instructions for increased review and scrutiny by local CBP ports
U.S. CUSTOMS & BORDER PROTECTION File: PH-OFO-09-13TRADE INFORMATION NOTICE Date: July 27, 2009
Page 6© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
It May Become a Bigger Deal!
• CBP has “noticed numerous single transaction bonds (STBs) that are not in compliance...”
• In addition to requesting corrected STBs, CBP advised:
– Tracking instances of non-compliance
– Repeat violations will result in issuance of warning letters and possible penalty action
U.S. CUSTOMS & BORDER PROTECTION Pipeline 10-18APort of Chicago - Pipeline Date: October 5, 2010
Page 7© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Customs Bonds
What is a customs bond?– Required by law/regulation
– Guarantees:
• Payment of duties/taxes/fees
• Compliance with law/regulations applicable to goods or activities
– Parties are:
• USA (CBP) = obligee
• Importer or other party promising to pay/perform = principal
• T-Listed insurance company who will pay if principal does not = surety
Page 8© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Customs Bonds
So, since a customs bond – PROTECTS THE REVENUE OF THE UNITED STATES
and
– ASSURES COMPLIANCE with any pertinent law, regulation or instruction
then
– Information on bond can affect both CBP’s ability to collect, as well as surety’s ability to subrogate because customs bonds are NOT insurance; they’re an alternative to posting “CASH” with CBP (Cash-in-Lieu of Bond)
Our discussion will focus on preparing Import bonds, both Single Transaction (STB) and Continuous Bonds (CTB)
Page 9© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
CBP 301 Bond Form
American Alternative Insurance Corporation(A Delaware Corporation)555 College Road EastPrinceton, NJ 08540-6616
036
Page 10© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Completing the Bond
4 digit port codePort code:
Entry dateDate of transaction:
Transaction entry number; complete only for STB — must match entry number on CBP 3461 & CBP 7501
Identification of transaction:
Mark with X
Line out Continuous Bond and Effective date below Single Transaction Bond selection
Single Transaction Bond:
Execution date (signed) by either principal or AIF Execution Date:
Section I - Single Transaction Bonds
X
02/01/2011
5301QQQ-12345678 02/01/2011
Page 11© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Completing the Bond
All Continuous Bonds = Port code 9900 but do not show on bond, per Revenue Division
Port code:
Date bond coverage begins
Old rule = bond must be filed 10 business days in advance of effective date. NOW new CTBs can generally be processed in 5 business days.
Effective date:
Mark with X
Line out Single Transaction Bond and Identification of transaction above Continuous Bond selection
Continuous bond:
Execution date (signed) by either principal or AIF Execution Date:
Section I - Continuous Bonds
X
02/01/2011
02/15/2011
Page 12© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Completing the Bond
Section II – Activity Code (Bond Type) and Amount
• Mark appropriate Activity Code with X, only one activity code marked per bond
• Insert bond amount required by CBP (Customs Directive 3510-004, Monetary Guidelines for Setting Bond Amounts, July 23, 1991: Bond amount should be set at one times entered value plus duties, fees and taxes, OR three times entered value for merchandise submitted with other agency requirements if risk/threat to public health and safety)
• Line out areas in Section II not used and not already lined out
X $2,344
Page 13© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Completing the Bond
• Only for listing trade names and/or unincorporated divisions permitted to use bond. Division’s “HQ” generally listed in principal section with importer number ending in suffix “00”. Suffixes for divisions can be numeric or alpha characters but can not include letters “I”, “O” or “Z”
• Total number of trade names or unincorporated divisions listed in Section III must be entered - if none, mark zero (0)
• List additional trade names or unincorporated divisions on back of bond if all do not fit on front of bond
Section III – Unincorporated Divisions / Trade Names
12-11111111 02
13-11111111 03
XYZ Importing Company
ABC Clothing Corporation
2
Page 14© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Completing the Bond
Section III – Unincorporated Divisions / Trade Names
• Section III continued on back of bond
• Additional unincorporated divisions / trade names listed on back of bond
• Back of bond REQUIRED but can be blank
Page 15© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Completing the Bond
Witnesses (back of bond)– Only necessary when signed as individual or partner
– If broker signs on behalf of importer, section does not need to be completed
Page 16© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Completing the Bond
ABC Corporation of America(A Delaware Corporation)9 Main StreetHuntsville, AL 30325
American Alternative Insurance Corporation(A Delaware Corporation)555 College Road EastPrinceton, NJ 08540-6616
95-133456800
036
Matthew L. Zehner 005-72-3503
Principal, Co-Principal and Surety Information –bottom half of bond
Page 17© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Completing the Bond
Principal Section - Name, Address and Importer Number
– Principal’s full legal name (certain abbreviations are allowed as CBP limits number of characters)
ABC Corporation of America(A Delaware Corporation)9 Main StreetHuntsville, AL 30325
95-133456800ABC Corporation of America(A Delaware Corporation)9 Main StreetHuntsville, AL 30325
95-133456800
Page 18© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Principal Names
Sole Proprietor’s complete name: John Smith DBA Smith Furniture Company
Incorrect: Smith Furniture Company------------------------------------------------------------------------------------------------------------------------------Partnership - Incorrect: S & J Imports
If a limited partnership: S & J Imports LP(A Partnership)
If a general partnership: S & J Imports(A Partnership comprised of John Smith & David Jones)
If principal’s business type is Limited Partnership, provide copy of complete Partnership agreement to CBP with CTB------------------------------------------------------------------------------------------------------------------------------Corporation’s complete name: S & J Imports LLC OR S & J Imports Inc.
(a California LLC) OR (A California Corporation)
Incorrect: S & J Imports
LLCs may be designated as either corporation or partnership, depending on how they pay their taxes (need to ask although some LLCs indicate this by checking the corporation or partnership box on POA or application)
Page 19© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Completing the Bond
Principal Section – Signature Box
• Authorized signature of principal -– Customs broker may sign as Attorney-in-Fact under POA;,
signature must read: Joan Doe, ABC Broker, Attorney-in-Fact– All information must STAY inside box, NO ENCROACHING – If 301 signed by bond principal, signature must be of officer of
company (President, CEO, CFO, or VP) or owner. Signature line should read: “John Doe, President, ABC Importers, Importer of Record”
ABC Corporation of America(A Delaware Corporation)9 Main StreetHuntsville, AL 30325
-
95-133456800-95 133456800ABC Corporation of America(A Delaware Corporation)9 Main StreetHunstville, AL 30325 Joan Doe, ABC Broker, Attorney-in-Fact
Digital signature image here
Page 20© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Completing the Bond
Co-Principals
• In order to list more than one principal on a CTB, the companies must be related and same business type
• Companies listed as co-principals are separate legal entities and will always have different tax ID numbers as opposed to trade names and unincorporated divisions which have same importer number but different suffixes
• If more than two co-principals, co-principal addendum must be used to list additional subsidiaries (it’s an extension of bond form)
• Customs broker must have separate POA for each subsidiary that’s a separate legal entity (different importer numbers – different legal entities)
ABC Corporation of America(A Delaware Corporation)9 Main StreetHunstville, AL 30325
ABC Corporation of America(A California Corporation)456 Grapevine LaneLos Angeles, CA 90210
95-1334568
Joan Doe, ABC Broker, Attorney-in-Fact
Joan Doe, ABC Broker, Attorney-in-Fact
95-2234568
Digital signature image here
Digital signature image here
Page 21© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Completing the Bond
Surety Section (usually pre-printed on bond)
– Complete name and address of surety and surety code
– Surety agent’s name, signature and social security number should be at bottom of form
American Alternative Insurance Corporation(A Delaware Corporation)555 College Road EastPrinceton, NJ 08540-6616
036
Matthew L. Zehner 005-72-3503
Page 22© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Completing the Bond
Most common errors?• Principal Information (Full legal name, address, state of
incorporation…)
• Broker’s AIF signature must include individual signer’s name, company (CHB) name and AIF
• Information must fit within signature box and not encroach into any other areas or data!
• Facsimile signatures permitted
• Broker A / Broker B
Page 23© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Broker A / Broker B
• No consensus, policy varies?
• CBP says “…there has been some confusion in the trade over the issuance of STBs by out-port customs brokers. An STB is customs business and entry specific and therefore can only be issued by a customs broker permitted in the port of entry.” See copy of HQ Ruling 115336
Page 24© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Determining Bond Amounts
• Determined by CBP Directive 3510-004, not by surety!
• Customs’ website www.cbp.gov excellent resource for staying current as there have been changes in monetary guidelines for determining bond amounts
Page 25© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Import Bond Amounts
• Single Transaction Bond
• Generally, a single transaction, Activity Code 1, Importer or Broker bond (for consumption entry, immediate delivery, to cover articles entered or withdrawn from warehouse, etc.) will be executed in an amount NOT LESS THAN TOTAL ENTERED VALUE PLUS ALL DUTIES, TAXES AND FEES which apply. All taxes and special duties must be included in computation (excise taxes, antidumping, countervailing duties, etc.)
− Example: Value of shipment = $1,000,000 + Duties = $3,000 + Fees = $400
– STB Amount for this shipment = $1,003,400
Page 26© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Import Bond Amounts - STB
• Unconditionally duty-free– If not subject to quota visa or other agency requirements, bond
may be reduced to 10% of total entered value– Unconditionally duty-free = free of duty without specific conditions
• Examples: Paintings, books or articles duty-free regardless of country or origin
– Returned American goods are NOT unconditionally duty-free– No prior approval needed; contact Commodity Team if questions– Minimum bond amount: no less than $100 per 19 CFR 113.13(a);
provide add slip showing calculations
• Conditionally duty-free– Conditionally duty-free articles do not meet guidelines for 10%
bond amount• Examples: GSP, NAFTZ, antiques, articles duty-free depending on
country of origin
Page 27© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Import Bond Amounts – STB
• Other Agency Requirements– Merchandise subject to other agency requirements due to public
health and safety require bond in amount not less than three (3)times total entered value of merchandise
• Food and Drug Administration (FDA) – all• Environmental Protection Agency (EPA) – all• Bureau of Alcohol, Tobacco, Firearms & Explosives (BATFE) -
alcoholic beverages and distilled spirits only• Consumer Product Safety Commission (CPSC) – toys and fireworks
if sample by CBP for CPSC testing• Department of Agriculture, Agricultural Marketing Service (AMS) –
subject to marketing orders• Federal Communications Commission (FCC) – all• Toxic Substances Control Act (TOSCA) – all
• Flammable Fabrics – three times total entered value
Page 28© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Import Bond Amounts - STB
• Quota / Visa– Bond in amount not less than three (3) times
total entered value of merchandise required for all merchandise subject to quota/visa requirements
• Combination of Merchandise– If entry includes combination of merchandise
falling into multiple categories, Port Director may apply different bond amount calculations to merchandise in each category to arrive at final bond amount
Page 29© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Import Bond Amounts - STB
• Permanent Exhibit Bond– Covers articles for exhibitions
– Bond amount equal to estimated duties, as determined at time of entry
– If free of duty, bond liability amount small include one times the Merchandise Processing Fee/MPF or $100 (whichever greater)
• Trade Fair Bond– Bond liability amount fixed to amount Port Director deems necessary
• Temporary Importation under Bond– Bond liability amount fixed to amount Port Director deems necessary to protect
revenue, but not less than amount equal to double estimated duties
– Samples used for taking orders, motion picture advertising films, professional equipment, tools of trade and repair components for professional equipment, bond amount shall be 110 percent (110%) of the estimated duties
– Computations considered for all taxes and special duties (Example: excise taxes, antidumping, countervailing duties, etc. applicable)
Page 30© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Import Bond Amounts - CTBs
• Continuous Bonds
– Minimum bond amount is $50,000, nearest to 10% of duties, taxes and fees paid during last 12 months, subject to one of the following two formulas:
1. If Duties, Taxes and Fees $0 - $1,000,000 – Take 10% and round up to nearest $10,000
Example:
Total Value = $400,000
Total Duties = 0 (duty free commodity)
Total Fees = $2,000
DTF < $1,000,000 so bond amount written in multiples of $10,000, rounded UP to nearest $10,000.
So CTB Amount = $50,000 (CTBs capacity = $500,000)
Page 31© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Import Bond Amounts - CTBs
• Continuous Bonds (continued)
2. If Duties, Taxes and Fees Over $1,000,000 - round up to nearest $100,000
Example:
Total Value = $22,400,000
Total Duties = $1,990,000
Total Fees = $20,000
Total DTF = $2,010,000 ($1,990,000 + $20,000 = $2,010,000)
DTF > $1,000,000 so bond amount written in multiples of $100,000, rounded UP to nearest $100,000
So, CTB Amount should be $300,000 (CTBs capacity is $3 Million in DTF)
Page 32© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Hot Topics
Page 33© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Importer Issues
CTBs can be rendered Insufficient for:• Outstanding debt issues
• Failure to comply with Formal Demand to Increase Bond
• Bad address
• Use of an invalid importer number
• Failure to provide any required bond paperwork
• Failure to comply with rejection of termination request
• Failure to ANNUALLY deposit the required cash-in-lieu of surety for a CTB obtained under 19 CFR 113.40
• Failure to comply with specific mandates/requests
Page 34© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Industry Changes
Changes in bond industry and international trade impact importers and intermediaries
– CBP demands on surety have doubled over a five year period—this is NOT counting 10+2
– Closer scrutiny by sureties and reinsurers watching their AGGREGATE liability (total exposure, all bond amounts combined)
– Very few reinsurers willing to write surety business
• Surety buying insurance to limit/spread risk
• Fewer still willing to write customs bond reinsurance
– Numerous customs bond providers have exited customs bond business
• Long claims “tail” (4 – 7 years)
• Insurers looking for better use of capacity and ROI
– Many corporate bankruptcies
Page 35© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
• Many bonding companies use automated online bond issuance programs. If the principal information is entered correctly the first time, many potential errors can be eliminated.
• Bond Manual and Bond Amount Guidelines available online
• Customs bond riders, CBP 301 application and other bond related forms as fillable templates are available through FastBond or from Customer Support section of www.roanoketrade.com
• Never hesitate to contact Roanoke Trade’s experienced staff
Need Assistance?
Page 36© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
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About Roanoke Trade
Based in 11 US Cities with a Network of Agents and Service Companies Worldwide
Over 75 years experience in managing the risks associatedwith global trade and transportation
1-800-ROANOKEwww.roanoketrade.com | [email protected]
Page 37© 2011 Roanoke Trade Services, Inc.
CBP 301 Bond Form –Guidance and Information for Completing Correctly!
Questions