Customs Announces Major Change in Antidumping and Countervailing Duty Bond Requirements
On July 9, 2004, U.S. Customs and Border Protection (CBP) announced a major change to its policy for determining continuous bond requirements for imports of agriculture and aquaculture products that are subject to antidumping (AD) or countervailing duty (CVD) cases. This change in policy is likely to result in increased bond requirements for importers of agriculture and aquaculture products, such as garlic, honey, tomatoes, crawfish and shrimp.
Under the current methodology, CBP sets minimum continuous bond amounts based upon 10% of the duties, taxes and fees paid by the importer during the previous year. However, in a number of recent cases the final liquidation rate was significantly higher than the cash deposit rate and the bonds posted by importers were insufficient to protect the revenue when some importers were unable to meet their financial obligations for the increased duty liability.
As a result, CBP will begin reviewing the level of continuous bonds for importers who import agriculture and aquaculture merchandise subject to AD and CVD cases and obtain larger bonds if necessary. Rather than requiring a bond equal to 10% of the duties paid during the prior year, CPB will determine the amount of the bond by multiplying the rate found in the Commerce Department's AD or CVD Order by the importer's value of imports of merchandise subject to the case during the previous year. For example, if an importer imported $1 million worth of products during the previous 12 months and the AD rate for the products was 40%, the importer’s continuous bond amount will be increased by $400,000. Under the previous system, the bond amount would have been only $100,000.
In addition, CBP announced that it will continue to monitor AD and CVD cases for all commodities to determine whether a similar review of bond coverage will be performed.
CBP's Amendment to Bond Directive 99-3510-004 for Certain Merchandise Subject to Antidumping/Countervailing Duty Cases can be found at the following link: www.cbp.gov/xp/cgov/import/add_cvd/07082004.xml.