Surety Bond Quarterly - Winter 2014 - (Page 33)

feature U.S. Customs and Border Protection to deploy eBond IN 1988 WhEN I started working in the customs surety industry, I was advised that the customs bond form, consisting of five parts, would become obsolete in a very short time because Customs and Border Protection (CBP) was planning to develop an electronic customs bond filing and acceptance system. That didn't happen. As all Chicago Cubs fans know, we have the philosophy "there's always next year." We can carry that over to electronic customs bonds as we've said the same for over 25 years. The only difference with this year is that we can actually say, "eBond will be deploying next year." In actuality, CBP will be deploying eBond on January 3, 2015. Why eBond - why now? The paper customs bond system is broken. In 2005, CBP improved the continuous bond filing system by centralizing the filing of continuous bonds with the Revenue Division in Indianapolis (previously, all continuous bonds were filed at the local port, subject to the port director's discretion). Centralized filing allowed CBP better oversight of bond sufficiency, reduced the number of execution errors on continuous bonds, and produced a more uniform system. Single transaction bonds (STBs), however, were not centralized, they continue to be filed at the port where the entry transaction is made. In 2011, the Department of Homeland Security Office of Inspector General performed an audit of the single transaction bonds on file with CBP and discovered that 65 percent of the STBs, having an aggregate liability of $8 billion, contained errors serious enough to make them uncollectible in the event of a claim. Think about it: if even 1 percent of those bonds had a claim, the government would BY COLLEEN CLARKE have been unable to collect $80 million! As taxpayers, we should be concerned about the potential for CBP's loss of revenue and its effect on the U.S. economy. It was concluded, based on the audit, that the only way to fix the broken STB system was to centralize the filing of STBs, much as CBP did for continuous bonds. CBP and the surety industry were faced with the monumental task of determining how to centralize the filing of 750,000 to one million STBs annually. During the 12th term of the Advisory Committee on Commercial Operations of Custom and Border Protection (COAC),1 a recommendation was NatioNal assoCiatioN of surety BoNd ProduCers | WWW.NASBP.ORG 33 http://WWW.NASBP.ORG

Table of Contents for the Digital Edition of Surety Bond Quarterly - Winter 2014

NASBP Upcoming Meetings
2014-2015 NASBP Executive Committee
From the CEO: Education is everywhere and in everything we do
Practical Insights: What You Need to Know-Lease Accounting, A new standard is coming
Surety Up North
Training the Next Generation of Surety Talent
EJCDC’s New P3 Document
The Top 10 Things Public Owners Should Know About Surety Bonds
What's a Construction Company's Most Valuable Asset?
NASBP Virtual Seminars
School’s Back!
New NASBP Resource: Information map of advocacy issues
Meetings in Photos
The Importance of Cracking the “WIP” Monthly
U.S. Customs and Border Protection to Deploy eBond
NASBP Outreach Continues Throughout the Year
Index to Advertisers

Surety Bond Quarterly - Winter 2014