19 CFR 113.38 – Delinquent sureties
(a) Acceptance as surety when in default as principal on another CBP bond. No person will be accepted as surety on any CBP bond while in default as principal on any other CBP bond.
Terms Used In 19 CFR 113.38
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- CBP: means U. See 19 CFR 101.1
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- port director: means the person who has jurisdiction within the geographical boundaries of their port of entry unless the regulations provide that particular trade functions or determinations are exclusively within the purview of a Center Director or other CBP personnel. See 19 CFR 101.1
(b) Acceptance as surety when in default as surety on another CBP bond. A surety on a CBP bond which is in default may be accepted as surety on other CBP bonds only to the extent that the surety assets are unencumbered by the default.
(c)(1) Nonacceptance of single transaction bond by port director. A port director may refuse to accept a single transaction bond secured by an individual or corporate surety when the surety, without just cause, is significantly delinquent either in the number of outstanding bills or dollar amounts thereof. If the port director believes that a substantial question of law exists as to whether a breach of bond obligation has occurred he should request internal advice under the provisions of § 177.11 from the Executive Director, Regulations and Rulings, Office of International Trade, CBP Headquarters.
(2) Non-acceptance of bond upon instruction by Commissioner of CBP or Director, Revenue Division. The Commissioner of CBP, or the Director, Revenue Division, may issue instructions to CBP officers not to accept a bond secured by an individual or corporate surety who, without just cause, is significantly delinquent with respect to either the number or dollar amounts of outstanding bills.
(3) Notice of surety. The appropriate CBP officer may take the above actions only after the surety has been provided reasonable notice with an opportunity to pay delinquent amounts, provide justification for the failure to pay, or demonstrate the existence of a significant legal issue justifying further delay in payment.
(4) Review and final decision. After a review of any submission made by a surety under paragraph (c)(3) of this section, if an appropriate CBP officer is still of the opinion that bonds secured by the surety should not be accepted, written notice of the decision will be provided to the surety at least five days before the date that CBP will no longer accept the bonds of the surety. Copies of the notice will also be provided to the Executive Director, Regulations and Rulings, Office of International Trade and, if the notice does not originate from the Revenue Director, to the Director, Revenue Director. Notice will be given to the public by publishing the decision in the Customs Bulletin.
(5) Duration of decision. Any decision not to accept a given surety’s bond shall remain in effect for a minimum of five days or until all outstanding delinquencies are resolved, whichever is later.
(6) Actions consistent with requirements. Any action not to accept the bonds of a surety under paragraphs (c) (1) and (2) of this section shall be consistent with the requirements of this section.