CBP conducts reviews to determine if continuous bond amounts are adequate to ensure compliance with Customs laws and regulations (19CFR 113.13). Difficulties in collecting the antidumping duties assessed at liquidation in recent cases for agriculture/aquaculture merchandise demonstrate why the current monetary guidelines for setting continuous bond liability amounts need to be changed.

Under current guidelines, minimum continuous bond amounts are established at

10 percent of the duties, taxes and fees paid by the importer during the previous year. For new antidumping/countervailing duty cases, the new higher duty liability is not reflected in the previous year’s duty amounts. For example, in a recent antidumping case on garlic, the merchandise had a normal Customs duty rate of less than 5 percent prior to the initiation of the case, but incurred a final liquidation rate of 376 percent. This increased duty liability was not reflected in the continuous bond liabilities for many importers of merchandise subject to this antidumping case. The continuous bonds were insufficient to protect the revenue when some of these importers were unable to meet their financial obligations for this duty liability.

Recent antidumping cases for agriculture/aquaculture merchandise have also resulted in considerable rate increases. In the case of crawfish, the deposit rate for most imports was 91.5 percent but was increased to 201 percent at final liquidation. This type of substantial increased liability has also resulted in a number of importers being unable to meet their financial obligations for antidumping duty at liquidation and again the continuous bonds were insufficient to protect the revenue.

In addition to this increase in duty liability, the time between entry of merchandise subject to antidumping cases and final liquidation can be 18 months or more. This timeframe is significantly longer than importations of other types and therefore poses a greater risk to CBP for collection. All of these factors necessitate that a new method for determining the continuous bond amount for importers of agriculture/aquaculture merchandise subject to antidumping or countervailing duty cases be developed in order to ensure the revenue is adequately protected.

Action:
Effective immediately, the Port Directors will be required to review continuous

bonds for importers who import agriculture/aquaculture merchandise subject to antidumping/countervailing duty cases and obtain larger bonds where necessary. Any increase in bond liability will become effective when the Department of Commerce (DOC) issues its Order on the case. Using the importers previous 12 months import value of merchandise subject to the case, the continuous bonds will be increased using the rate that the DOC issues at Order. To assist the Port Director in fixing the limit of liability amount, the following formula shall be used:

• DOC rate at Order x value of imports of merchandise subject to the case by the importer during the previous year.

For example, if an importer has imported agriculture/aquaculture merchandise subject to the antidumping case with a value of $1 million during the previous 12 months, and the DOC rate is 40 percent, the importer’s continuous bond amount will be increased by $400,000.

If, at any time after DOC issues a preliminary affirmative determination in an agriculture/aquaculture case, CBP detects sudden changes in declared values, claimed country of origin, or declared classification, etc., CBP will consider such changes to reflect an increased risk. In such circumstances, the Port Director shall increase the importer’s continuous bond using the following formula:

• DOC deposit rate in effect on date of entry x value of imports of merchandise subject to the case by the importer during the previous year.

The continuous bonds for new importers with no prior history of imports of agriculture/aquaculture merchandise subject to an antidumping or countervailing duty case will also be increased, regardless of the stage of the case. The bond amount will be increased in accordance with the following formula:

• DOC deposit rate in effect on date of entry x estimated annual import value of the goods subject to the case.

Periodic reviews will be conducted to monitor the sufficiency of the continuous bonds for agriculture/aquaculture merchandise subject to antidumping and countervailing duty cases. The Port Director may adjust the rates used in the formulas set forth above to calculate different bond amounts as circumstances warrant, bearing in mind that among the primary goals of bond sufficiency are ensuring CBP’s ability to collect the antidumping and countervailing duties at liquidation and ensuring that the revenue is protected.

In addition, CBP will continue to monitor antidumping and countervailing duty cases for all commodities. If CBP determines any comparable risk with other commodities, a similar review of bond coverage will be performed.

These new guidelines will be incorporated into the existing bond directives, which are currently being re-written by the National Finance Center. Questions pertaining to these new guidelines should be directed to Bruce Coulliette (bonds) at (202) 927-2148 or Christine Furgason (AD/CVD) at (202) 927-2293.