[Code of Federal Regulations]
[Title 19, Volume 1]
[Revised as of April 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 19CFR113.38]

[Page 543-544]
 
                        TITLE 19--CUSTOMS DUTIES
 
   CHAPTER I--BUREAU OF CUSTOMS AND BORDER PROTECTION, DEPARTMENT OF 
              HOMELAND SECURITY; DEPARTMENT OF THE TREASURY
 
PART 113_CUSTOMS BONDS--Table of Contents
 
                    Subpart D_Principals and Sureties
 
Sec. 113.38  Delinquent sureties.

    (a) Acceptance as surety when in default as principal on another 
Customs bond. No person shall be accepted as surety on any Customs bond 
while in default as principal on any other Customs bond.
    (b) Acceptance as surety when in default as surety on another 
Customs bond. A surety on a Customs bond which is in default may be 
accepted as surety on other Customs bonds only to the extent

[[Page 544]]

that the surety assets are unencumbered by the default.
    (c)(1) Nonacceptance of bond by port director. A port director may 
refuse to accept a 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 Sec. 177.11 from the Director, 
International Trade Compliance Division, Customs Headquarters.
    (2) Nonacceptance of bond upon instructions by Commissioner. The 
Commissioner may, when he believes the circumstances warrant, issue 
instructions to the port directors that they shall not accept a bond 
secured by an individual or corporate surety when that surety, without 
just cause, is significantly delinquent either in the number of 
outstanding bills or dollar amounts thereof.
    (3) Notice of surety. The appropriate Customs 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 the surety under paragraph (c)(3) of this section, if the appropriate 
Customs officer is still of the opinion bonds secured by the surety 
should not be accepted, written notice of the decision shall be provided 
to the surety in person or by certified mail, return receipt requested, 
at least five days before the date that Customs will no longer accept 
the bonds of the surety. When notice is sent to the surety of the 
decision not to accept the surety's bonds the appropriate Customs 
officer shall notify the Director, International Trade Compliance 
Division, Customs Headquarters. Notice shall be given to the importing 
public by posting a copy of the decision in the customhouse. The 
decision shall also be published 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.

[T.D. 84-213, 49 FR 41171, Oct. 19, 1984, as amended by T.D. 91-77, 56 
FR 46115, Sept. 10, 1991; T.D. 95-77, 60 FR 50020, Sept. 27, 1995; T.D. 
99-27, 64 FR 13675, Mar. 22, 1999; T.D. 99-64, 64 FR 43266, Aug. 10, 
1999]