May 09, 2019 | Industry Insights
Increased Duties & Bonds: A Plan of Attack for Customs Brokers
On May 9, 2019, in the Federal Register, the U.S. Trade Representative (USTR) published a notice advising the duty amount on products subject to Section 301 tariffs contained on list 3 will increase to 25% on May 10, 2019. The move to increase the tariff amount from 10% to 25% is a result of stalled negotiations with China since March.
All entries of covered products with BOTH an entry date AND date of export to the U.S. of May 10, 2019 and later, will be subject to the 25% duty, and U.S. Customs and Border Protection (CBP) has updated ABI to reflect the increase.
Managing Bond Sufficiency
It is ultimately the importer’s responsibility to ensure their bond is sufficient under informed compliance requirements. However, customs brokers are strongly encouraged to assist their importing clients to review their bond sufficiency, particularly if the clients are importing products subject to the Section 301 tariffs (and Section 232 and 201 also).
A bond’s sufficiency status is continually measured by CBP on a rolling basis of the prior 12 months of activity. The bond amounts required by CBP are calculated on past activity, but these amounts could be deficient for the future 12 months, especially those subject to increased tariff amounts. This means that if the importer relies on CBP to determine the correct bond amount, they may receive multiple increase demands in a 12 month period, causing delays of bond replacement, additional premium charged, and multiple saturated bond terms, which could complicate the underwriting process. To avoid these obstacles, customs brokers are encouraged to regularly monitor the sufficiency of their clients’ bond amounts.
Roanoke Trade can assist!
Customs brokers can run reports of importer’s past activity through FastBond™ on any bond where they are the broker of record. Additional tools available are the “5 Steps Guide to Managing Bonds Subject to Trade Wars” and a Bond Sufficiency Calculator to determine the proper bond amount.
For additional information and bond requests, please contact your Roanoke bond customer service representative.
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