Legal Update on Customs Bonds – CBP Agrees to Replacement of Surety Bonds Covering Shrimp Determined at 100% Anti Dumping Duty Liability

Posted on: April 30th, 2011 • In Bonds

Customs and Border Protection (“CBP”) has recently abandoned its prolonged efforts to overturn a series of decisions in the United States Court of International Trade (“CIT”), in National Fisheries v. United States, which declared enhanced bonding requirements (“EBRs”) applied to surety bonds covering shrimp subject to antidumping duty unlawful.

Under the EBR protocol, CBP required importers subject to any of the outstanding shrimp antidumping orders (the “Orders”) to obtain surety bonds with liability limits equal to 100% of the antidumping duties deposited in the prior 12 month period. Under National Fisheries, however, the CIT required CBP to cease the imposition of the 100% liability limits, both for new and renewal bonds covering importers of shrimp subject to the Orders. Additionally, the CIT took note of the injurious effect to the business operations/liquidity positions of the shrimp importers caused by mounting collateral commitments for extended and multiple bond periods, and ordered CBP to cancel (or to replace with superseding bonds determined under conventional 10% duty guidelines), existing bonds for prior periods for which the entries remain unliquidated.

It was this latter aspect of the CIT decision which generated particular controversy and, ultimately, motivated CBP to mount an effort to seek reconsideration, and to delay implementation of National Fisheries for several years. Currently, with its abandonment of all appeals, CBP is replacing bonds retroactively for those shrimp importers who were parties to National Fisheries. For those shrimp importers not party-plaintiffs in National Fisheries but otherwise identically situated, CBP is continuing to defer replacement of existing EBR-type surety bonds, although there appears to be no legal support for this position. CBP has indicated that this policy is under active review and could be modified in the near future, although no timeline is being provided.

This information has been provided by Edward A. Ackerman of Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt for the benefit of our clients. C.A. Shea has assisted several importers with the filing of superseding bonds pursuant to the CIT decision as referenced above.

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