FAQ's
When Will a Customs Bond Renew?
Each continuous customs bond has an effective date that is selected when the bond is filed, and when the bond takes it effect, it does so as of that date. Technically the bond is valid for the 12 month “bond term” after the bond becomes effective; however, the bond will not automatically terminate with customs at the end of the bond term. A continuous bond self-renews at the one year mark beginning a new 12 month bond term, unless it is terminated by an authorized party. The date of self-renewal is exactly one year after the effective date or the last renewal date. This date is call the “anniversary date.”
If a continuous customs bond is no longer needed, needs to be replaced, or for some other reason the bond should no longer be in effect, a termination notice must be issued. All parties to the bond have the right to issue termination. Typically termination is issued by a licensed customs broker with a power of attorney to conduct customs business on behalf of a bond principal (importer) or by an agent of the surety who issued the bond.
So, if the bond is not terminated before its anniversary date, the bond will self-renew on its anniversary date each year. At renewal, bond premium is due to the surety. Moreover, the surety’s underwriters may also require underwriting information to consider approving the new one year term of the bond.
Underwriting information generally consists of a review of the following:
- A bond principal’s financial and credit history
- Any claims activity/history with CBP
- Information about high-risk commodities such as goods subject to anti-dumping/countervailing duties (ADD/CVD)
When a surety agency or other third party billing service sends an invoice for renewal of the bond to a customs brokerage, it usually goes out several months before the bond is actually set to renew. The invoice serves as a notification of the upcoming bond renewal. The process is designed to ensure the surety company gets paid timely and allows underwriters sufficient opportunity to review the renewal and verify that the bond is in good standing to remain in effect. Keeping their bond in effect is crucial to importer business, and meeting underwriting requirements and paying premium timely is the trick to making the renewal process work.
Related Content You Might Have Interest In
Our Latest Articles
Professional Partnerships
Solutions that Go the Distance.
© 2024 Roanoke Insurance Group Inc. A Munich Re company
