Conditional Termination and New Bond Request Procedures
Effective immediately, requests to terminate and replace continuous bonds which meet all the conditions listed at the bottom of this message may be processed as follows:
The principal may specifically request that CBP forebear from implementing the termination on the Primary Termination Date and instead implement the termination on the date before the Replacement Bond is ready to be made effective ("Conditional Termination Date"), i.e., usually a later date than the Primary Termination Date, in the event that the Replacement Bond cannot be made effective on the day after the Primary Termination Date (as specified in the termination request or determined by Regulation).
Current operational limitations will not always allow CBP to unset or override a termination after it has been input into the system (i.e., the Automated Commercial Environment - "ACE" - bond module). Therefore, principals will probably be compelled to continue to utilize single transaction bonds in many instances.
CBP will investigate the possibility of rendering the ACE bond module more flexible to address the problems of 'gaps' in continuous bond coverage as a result of terminate and replace requests. This would include the ability to allow CBP to unset or override a Primary Termination Date and replace it with a Conditional Termination Date under any circumstance.
Those concerned with the problems that could arise from a 'gap' in continuous bond coverage should endeavor to submit a Replacement Bond as far in advance as possible of the termination date of the Terminated Bond. This will not eliminate the possibility of those problems arising, but this will reduce the frequency and impact of such problems. As indicated above, CBP will employ the conditional request solution whenever possible, but it does not expect it to be possible in many instances.
CBP will employ this conditional request solution whenever possible if specifically requested by the Trade in accordance with the conditions listed below.
- The termination and replacement bond must be filed together in a single submission to the Surety Bonds & Accounts Team (SBAT), and that submission must include a specific request from the surety to forebear from implementing the termination (as described above).
- The existing bond cannot be the subject of an active bond sufficiency letter issued by CBP.
- The 'final' termination date and the new, Replacement bond effective date must be consecutive calendar days.
Questions about this posting should be directed to the SBAT via email to firstname.lastname@example.org.