[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 546-547]

 

                        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



[[Page 547]]



other Customs bonds only to the extent 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]