Customs is currently working on an overhaul to Customs bonds and how they will be filed. We are dedicating this newsletter to Customs new eBond filing system and what it will mean to our broker and principal clients.
What is eBond?
eBond, short for Electronic Bond, is the new process Customs will be using to process single transaction and continuous bonds. Instead of sending a paper bond to Customs, as we do today, bonds will be filed electronically with Customs, vastly reducing the approval time by Customs.
Our office has had countless meetings with Customs on eBond and we are working with Customs to ensure the deployment of eBond will be a smooth and painless experience as possible. As one of Customs oldest partners in the development of eBond we have a deep understanding of how eBond will affect the trade community.
When does eBond take effect?
Customs has advised that they plan to have ebond deployed on January 3, 2015, with fulll implentation by November 2015. Customs plans to introduce eBond with single transaction bonds (please see the sidebar) but then quickly incorporate continuous bonds into the process. We do not have a specific launch date for continuous bonds.
How are my office and my client impacted by the eBond process?
Many of the changes eBond will bring will not directly impact principals or insurance agent/brokers as the new eBond will mostly impact the method in which bonds are filed and processed by Customs. Although the principal is not directly affected by this new process, the principal will be gaining a great benefit from Customs moving to this new process.
How is the eBond process different than the current process for continuous bonds?
The goal of this new process is to be faster and more streamlined for the processing of the bonds by Customs.
Currently, the filing of a continuous bond with Customs includes the filing of many signed documents, including a 301 bond form, a 5106 form, letter of application etc. Once these forms are filed with Customs, Customs will then input the bond into their system. Currently it takes Customs about 5 to 10 business days to input a bond from the date the bond is filed. Once the bond is input by Customs, a Customs bond number is assigned as verification that the bond has been entered into the Customs database.
Under the new process the bond filer, (C. A. Shea for the bonds placed with our office), will electronically submit the bond information to U.S. Customs for the requested bond in lieu of sending a package of bond forms. Upon Customs’ receipt of this electronic information the Customs computer will be updated to include the newly requested bond. Once the Customs data is updated, a Customs bond number will automatically be produced as verification that the bond has been entered into the Customs database. This processing by Customs will take a matter of minutes in lieu of the 5 to 10 business days it currently takes Customs to input the bond.
Can my client still file bonds with the traditional bond forms using the existing system?
Customs has indicated that they will still accept the traditional bond forms and continue to process bonds filed using the current bond filing process.
While Customs will still accept the traditional bond forms in the future, it will be our office’s recommendation to any principal to utilize the eBond process based on the fast processing of the eBond in lieu of the long processing time for the current filing process.
What changes can my office expect in the future when requesting and obtaining a continuous bond for my client once eBond takes effect?
There will be very little changes your office will need to be aware of in the future as the eBond process will mostly impact the method in which bonds are filed and processed by Customs. However with these eBond changes, there will most likely be new bond forms that would be required by the surety to allow the filer to electronically file the bond data to Customs. Our office is working with the surety companies we represent to perfect a new set of forms that will make the requesting and filing of a bond as simple as possible without removing the principal’s awareness and approval of what exactly is being filed on their behalf with Customs. As we work to perfect these forms in the future, our office will be sure to explain any changes that your office may see to the bond forms.
When can I expect updates regarding the eBond Process?
As stated above, our office has had countless meetings with Customs on the eBond process and we are constantly working with Customs regarding this process to help make sure the change in process a smooth one for all parties involved. Rest assured that if there are any substantive changes made to the information provided in this newsletter, our office will be sure to notify your office.
As we get closer to the implementation of the eBond process, our office will continue to include updated information in each newsletter sent.
The questions above are just some of the general questions our office has received regarding the eBond process. If you have any questions or concerns regarding the eBond process please feel free to contact our bond department at (908) 879-0990.