IEEPA Refunds and Import Bond Sufficiency- What Importers and Brokers Need to Know

Recent IEEPA duty refunds have created a disconnect between the duty amounts reflected in surety entry data received through the Automated Surety Interface (ASI) and the amounts U.S. Customs and Border Protection (CBP) use to determine bond sufficiency. As a result, importers and customs brokers should take extra care when evaluating bond adequacy.

How IEEPA Refunds Affect Bond Sufficiency

• After an IEEPA refund is processed through CAPE, CBP transmits updated, or ascertained, duty amounts to sureties through ASI.
• However, CBP has confirmed that bond sufficiency reviews continue to be based on 10% of estimated duties, taxes, and fees, not the reduced ascertained amounts.
• Consequently, surety reports, ACE data, and other reporting tools may show lower duty exposure than the amounts CBP uses for bond sufficiency calculations.
• This can create the false impression that a bond is adequate when CBP may still consider it insufficient.

The Importance of Entry Summary Versions

When evaluating bond sufficiency, it is important to understand which entry summary version is being reviewed:

• Major versions (1.00, 2.00, 3.00, etc.) contain the original estimated duties, taxes, and fees or adjusted amounts due to subsequent events (e.g. a PSC) submitted by the customs broker.  The most recent major version of the entry summary are the amounts CBP currently uses for bond sufficiency.
• Minor versions (1.01, 2.01, 2.02, etc.) are created only by CBP when entries are reviewed to determine correct amounts for liquidation review.   Minor versions typically reflect updated ascertained amounts used for liquidation, bills, and refunds, including CAPE processing of IEEPA refunds.

Surety reports are generally based upon the minor version of the entry. As a result, data reflected in surety reports and ACE may not align with CBP insufficiency notices.

Why Monitoring Bond Sufficiency Matters

CBP reviews continuous bonds monthly using a rolling 12-month period. If a bond is deemed insufficient, CBP may require a larger bond.  Failure to replace the bond by the required deadline may result in the continuous bond being rendered insufficient. Insufficiency notices may also lead to:

• Additional underwriting review
• Collateral requests
• Bond stacking and increased costs
• STBs if a continuous bond is not replaced timely

Key Takeaways

• Review estimated duties, taxes, and fees from the most recent y version when assessing bond sufficiency.
• Do not assume IEEPA refunds will immediately reduce bond sufficiency exposure.
• Avoid reducing bond limits based solely on refunded duties.
• Evaluate bond sufficiency conservatively using CBP’s estimated duty methodology.
• Coordinate with your customs broker and surety to ensure all parties are relying on consistent data.

Looking Ahead

Sureties receive duty data reflecting IEEPA-adjusted amounts (ascertained duties), not the original estimated duty amounts used for bond sufficiency reviews. Importers should continue to assess bond sufficiency using CBP’s current methodology. The sufficiency calculations are based on a rolling 12-month period, therefore the impact of IEEPA-related entries will gradually diminish as those transactions age out of the review period.

Bottom Line: While IEEPA refunds may reduce an importer’s final duty liability, CBP currently continues to calculate bond sufficiency using original estimated duty amounts. Importers should monitor bond sufficiency closely and avoid making bond reduction decisions based solely on refunded duty data.

 

Disclaimer: This information is provided as a public service and for general informational purposes only. It should not be construed as legal advice. Readers should consult with appropriate professional advisors regarding the matters addressed herein.