WORLD TRADE  
ORGANIZATION  G/ADP/N/1/USA/1/Suppl.8
G/SCM/N/1/USA/1/Suppl.8 29 April 2009 
 
(09-2051) 
Committee on Anti-Dumping Practices  
Committee on Subsidies and Countervailing Measures Original:   English 
 
 
 
NOTIFICATION OF LAWS AND REGULATIONS  
UNDER ARTICLES 18.5 AND 32.6 OF THE AGREEMENTS  
 
UNITED STATES 
 
Supplement  
   The following communication, dated 17 April 2009, is being circulated at the request of the 
Delegation of the United States. 
 
_______________ 
 
  Pursuant to Article 32.6 of the Agreemen t on Subsidies and Countervailing Measures and 
Article 18.5 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs 
and Trade 1994, the United States hereby notifies:  
(1) The Enhanced Bonding Requirement for Certain Shrimp Importers, 
74 Fed. Reg. 14,809 (April 1, 2009); 
 
(2) Monetary Guidelines for Setting Bond Amounts for Importations Subject to Enhanced 
Bonding Requirements, 71 Fed. Reg. 62,276 (Oct. 24, 2006); 
 (3) Current Bond Formulas; 
 
(4) Clarification to July 9, 2004 Amended Monetary Guidelines for Setting Bond 
Amounts for Special Categories of Mercha ndise Subject to Antidumping and/or 
Countervailing Duty Cases (August 2005);  and 
 (5) Amendment to Bond Directive 99-3510-004 for Certain Merchandise Subject to 
Antidumping/Countervailing Duty Cases (July 9, 2004). 
  The attached documents set forth the guidelines for determining bond amounts for importations involving elevated collection risks.    
 G/ADP/N/1/USA/1/Suppl.8 
G/SCM/N/1/USA/1/Suppl.8 Page 2 
 
 
  ATTACHMENT 1 
 
 Federal Register:  April 1, 2009 (Volume 74, Number 61)] 
[Notices]  
[Page 14809-14812] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr01ap09-64]   
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DEPARTMENT OF HOMELAND SECURITY 
 Customs and Border Protection 
 
[Docket No.  USCBP-2008-0112]   Enhanced Bonding Requirement for Certain Shrimp Importers 
 
AGENCY:   U.S. Customs and Border Protecti on, Department of Homeland Security. 
 ACTION:   General notice. 
 
--------------------------------------------------------------------------------------------------------------------------- 
 SUMMARY:   This notice ends the designation of shri mp subject to antidumping or countervailing 
duty orders as a special category or covered case s ubject to an enhanced bonding requirement (EBR).  
A recent World Trade Organization (WTO) Appellate Body Report held that the application of this 
requirement to shrimp from Thailand and India was inconsistent with U.S. WTO obligations.  In 
response to this report, Customs and Border Prot ection (CBP) is ending the designation of shrimp 
subject to antidumping or countervailing duty orders  as a special category or covered case subject to 
the EBR.  The shrimp importers affected by this requirement may request termination of any existing continuous bonds pursuant to 19 CFR 113.27(a) and submit a new bond application pursuant 
to 19 CFR 113.12(b). 
 DATES:  Effective Date:  The notice is effective on April 1, 2009. 
 FOR FURTHER INFORMATION CONTACT:   David Genovese, AD/CVD & Revenue Policy & 
Programs Division, Trade Policy and Progr ams, Office of International Trade, 
David.Genovese@dhs.gov
, (202) 863-6092. 
 
SUPPLEMENTARY INFORMATION: 
 Background 
 
 A key U.S. Customs and Border Protection (CBP) mission is to collect all import duties determined to be due to the United States.  Under CBP statutes and regulations, release of merchandise prior to the determination of all duti es that may be owed is ordinarily permitted, 
provided the importer posts a bond or other security to  insure payment of duties and compliance with 
other applicable laws and regulations.  The fina l assessment of duties occurs at liquidation of the 
entry.  G/ADP/N/1/USA/1/Suppl.8 
 G/SCM/N/1/USA/1/Suppl.8  Page 3 
 
 
   The United States maintains a retrospectiv e antidumping and countervailing duty system.  
The retrospective system means that in the case of goods subject to antidumping or countervailing 
(AD/CV) duties, the actual rates of AD/CV duties owed  are calculated after the entry is made, in an 
assessment review conducted by the Department of Commerce (DOC).  There is a delay between 
entry and final duty collection, and the United States  requires that a security be provided.  When an 
importer requests an assessment review of an AD/ CV duty order, the amount of the duty that is 
ultimately assessed, based on the final AD/CV dut y rate, sometimes does not correspond to the 
amount of security posted.  
 CBP follows instructions fro m the DOC.  The DOC determines  the actual AD/CV duty rates 
owed on merchandise subject to an AD/CV duty order.  CBP assesses the duties owed on specific entries upon liquidation, pursuant to DOC instructions  as to the final rates.  However, CBP has found 
that many importers subject to AD/CV duties fail to pay the additional duties determined to be due at 
liquidation.  As a result, because defaults on AD/CV duty supplemental bills have increased 
significantly, CBP conducted an internal polic y review of revenue protection strategies. 
 
CBP's Enhanced Bonding Requirement (EBR) 
 
 In response to importers' increasing failure to pay additional duties determined to be due at 
liquidation, CBP reconsidered the general bond form ula which provides that the minimum continuous 
bond may be in an amount equal to the greater of $50, 000 or ten percent of the amount of the previous 
year's duties, taxes and fees.  In order to address the growing collection problem, CBP issued four documents.  "Amendment to Bond Directiv e 99-3510-004 for Certain Merchandise Subject to 
Antidumping/Countervailing Cases,'' July 9, 2004;  "Current Bond Formulas,'' January 25, 2005;  
"Clarification to July 9, 2004 Amended Moneta ry Guidelines for Setting Bond Amounts for Special 
Categories of Merchandise Subject to Antidum ping and/or Countervailing Duty Cases,'' 
August 10, 2005;  and Monetary Guidelines for Setting Bond Amounts for Importations Subject to 
Enhanced Bonding Requirements, 71 FR 62276 (Octobe r 24, 2006) (all four documents are referred 
to collectively as the Amended Customs Bond Directive).   CBP applied the Amended Customs Bond Di rective to merchandise subject to the 
first antidumping orders involving agriculture and aquaculture merchandise imposed after the 
issuance of the July 2004 Amen dment to the Bond Guidelines.
1  Known as the enhanced bonding 
requirement (EBR), CBP required that continuous bond amounts for importers of shrimp subject to 
AD/CV duty orders be increased to the rate establis hed in the final AD/CV duty order, multiplied by 
the value of the importer's entries of the subject merchandise in the previous 12-month period. 
 
World Trade Organization Disputes Regarding EBR 
 
 On April 24, 2006, Thailand requested consultati ons with respect to certain issues relating to 
the imposition of antidumping measures on shrimp from Thailand, including the application of the 
                                                      
1 Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty 
Order:  Certain Frozen Warmwater Shrimp from Brazil, 70 FR 5143 (Feb. 1, 2005);  Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order:  Certain Frozen Warmwater 
Shrimp from Thailand, 70 FR 5145 (Feb. 1, 2005);  Notice of Amended Final Determination of Sales at Less 
Than Fair Value and Antidumping Duty Order:  Certain Frozen Warmwater Shrimp from India, 70 FR 5147 (Feb. 1, 2005);  Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping 
Duty Order:  Certain Frozen Warmwater Shrimp from People's Republic of China, 70 FR 5149 (Feb. 1, 2005);  
Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order:  Certain Frozen Warmwater Shrimp from the Socialist Republic of Vietnam, 70 FR 5152 (Feb. 1, 2005);  and 
Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order:  
Certain Frozen Warmwater Shrimp from Ecuador, 70 FR 5156 (Feb. 1, 2005). G/ADP/N/1/USA/1/Suppl.8 
G/SCM/N/1/USA/1/Suppl.8 Page 4 
 
 
  EBR to importers of shrimp from Thailand.  Th ailand requested the establishment of a dispute 
settlement panel on September 15, 2006, and the World Trade Organization (WTO) Dispute 
Settlement Body (DSB) establishe d a panel on October 26, 2006. 
 
 On June 6, 2006, India requested consultations with respect to certain issues relating to the 
Amended Customs Bond Directive and the EBR.  In dia alleged that the United States had imposed on 
importers a requirement to maintain a continuous  entry bond in the amount of the anti-dumping duty 
margin multiplied by the value of imports of subj ect shrimp imported by the importer in the preceding 
year, and that this action breached several provisi ons of the General Agreement on Tariffs and Trade 
1994 (GATT 1994), the WTO Agreement on Implementati on of Article VI of the General Agreement 
on Tariffs and Trade 1994 (AD Agreement), and the Agreement on Subsidies and Countervailing 
Measures (SCM Agreement).  India requested the establishment of a pane l on October 13, 2006, and 
the DSB established a panel on November 21, 2006.  
 The panels circulated the reports in both di sputes on February 29, 2008.  Among other things, 
the panels found that the EBR as applied to im porters of shrimp from Thailand and India was a 
"specific action against dumping'' inconsistent with Article 18.1 of the AD Agreement and was 
inconsistent with the Ad Note to paragraphs 2 and 3 of GATT 1994 Article VI because it did not 
constitute "reasonable'' security.
2  Thailand and India disagreed with several of the panels' findings 
with respect to the additional bond requirement and appealed those findings on April 17, 2008.3  The 
United States cross-appealed one aspect of those findings on April 29, 2008.4 
  The Appellate Body report was issued on July 16, 2008.
5  The Appellate Body agreed with 
the panels in finding that the Amended Customs Bond  Directive was not "as such'' inconsistent with 
the AD Agreement or the SCM Agreement.  Id. at paras. 270, 275.  The Appellate Body found that 
the panels properly concluded that the EBR as applie d to importers of shrimp  from Thailand and India 
did not constitute reasonable security.  The Panel and Appellate Body reports  were adopted by the 
DSB on August 1, 2008.  On August 29, 2008, the United States indicated that it intended to comply with the recommendations and findings of the DSB.  
Notice of Proposed Modification 
 
 On January 12, 2009, CBP published a notice in the Federal Register (74 FR 1224) that 
proposed to end the designation of shrimp covere d by antidumping or countervailing duty orders as a 
special category or covered case subject to the re quirement of additional bond amounts, to comply 
with the recommendations of the DSB.  The notice also proposed that shrimp importers may request 
termination of existing continuous bonds pursuant to 19 CFR 113.27(a) and submit a new continuous 
bond application pursuant to 19 CFR 113.12(b).  The notice of proposed modification solicited comments from the public, and the comment period closed on February 11, 2009.  
                                                     
 
2 Panel Report, United States – Measures Relating to Shrimp from Thailand , WT/DS343/R, adopted 
August 1, 2008. 
3 Annexes I and II to WTO Appellate Body Report, United States – Measures Relating to Shrimp from 
Thailand  and United States – Customs Bond Directive for Merchandise Subject to Anti-Dumping/Countervailing 
Duties , WT/DS343/AB/R and WT/DS345/AB/R, adopted August 1, 2008.  (WTO AB Report.) 
4 Annexes III and IV to WTO AB Report. 
5 WTO AB Report.  G/ADP/N/1/USA/1/Suppl.8 
 G/SCM/N/1/USA/1/Suppl.8  Page 5 
 
 
  Discussion of Comments 
 
 Twelve parties responded to the solicitati on of comments in the notice of proposed 
modification.  A description of the comments contained in the submission and CBP's analysis is set 
forth below. 
  Comment :  One commenter argues that CBP should devise a bonding mechanism for imports 
of shrimp and other agriculture and aquaculture products subject to antidumping or countervailing 
duties that will provide additional assurance that all such duties will be collected, that it should 
explain how any new bonding mechanism addresses "t he large and increasing'' amount of uncollected 
or uncollectible duties, and that it must "imple ment any new bonding mechanism prospectively only, 
as required by law.'' The commenter notes that revenue  loss continues to be an issue with agriculture 
and aquaculture products subject to AD/CV duty orders including shrimp and therefore CBP's 
concerns that led to the EBR were appropriate. 
 
 The commenter further contends that CBP's  proposal to no longer require the EBR with 
respect to shrimp importers rewards and further en courages the refusal by certain importers to abide 
by their legal requirements.  The commenter states th at as CBP is well aware from its past efforts to 
enforce the trade laws and collect duties owed, for many agriculture/aquaculture products (and, 
separately, non-agriculture/aquaculture products of Chinese origin), the companies that become the 
importer of record for such goods frequently have little intent, much less ability, to pay duties above 
the deposit rate.   The commenter requests that CBP immediatel y withdraw its proposal to terminate the 
designation of shrimp covered by AD/CV orders as a special category or covered case subject to the 
requirement of additional bond amounts.  Instead, the commenter recommends that CBP issue a 
proposal and/or seek comments on amending the EBR in order to both comply with the WTO's Appellate Body report and address th e under-collection of AD/CV duties. 
  Another commenter states that CBP should use the proposal as an opportunity to include an individual importer risk assessment into its bond anal ysis.  The commenter asserts that the "one size 
fits all'' EBR policy based on a sector or category wide risk assessment usurps the core factors of 
objective risk analysis and imposes a severe stra in on the balance sheets of otherwise healthy 
companies.  The commenter contends that a bond b ased on an assessment for individual importers is 
not only good Federal policy, but also a necessary analysis for defense of CBP's actions before 
reviewing panels of the WTO.  The commenter furt her contends that a transparent system supported 
by substantial evidence is essential to  an effective EBR.  The commen ter maintains that the tools are 
present for CBP to give proper emphasis to compan ies with proven track records and solid balance 
sheets.   CBP's Response :  Although CBP is no longer designating shrimp subject to antidumping or 
countervailing duty orders as a special category or covered case subject to the EBR, CBP is not 
abandoning its duty to protect revenue or its requireme nt of sufficient security.  In its report, the WTO 
Appellate Body concluded that the United States could impose "reasonable security'' on entries made 
after the imposition of an antidumping duty order and before the final assessment of antidumping 
duties, but that the EBR, as applied to importers of shrimp from Thailand and India was not "reasonable security''.  Consistent with that find ing, CBP is ending the designation of shrimp as a 
covered case or special category subject to the EBR. 
  As for the other commenter's suggestions for possible methods for future bonding requirements, CBP continues to explore options to  protect revenue and address issues of uncollected 
AD/CV duties, consistent with U.S. international obligations. G/ADP/N/1/USA/1/Suppl.8 
G/SCM/N/1/USA/1/Suppl.8 Page 6 
 
 
   Comment :  Several commenters support the withdraw al of the designation of shrimp under the 
EBR, but argue that it should apply retroactively to all entries of subject merchandise covered by 
bonds calculated using the EBR, and not just to entri es made on or after the effective date of the final 
notice. 
 
 Supporters of retroactive application of the proposal contend that because the WTO Appellate 
Body upheld the panel's findings that the EBR is in consistent with WTO agreements, compliance with 
the WTO's rulings would preclude CBP from conti nuing to treat pre-existing EBR-calculated bonds 
as valid and enforceable security after the date of  implementation or from taking any future action to 
make a claim against the bonds.  Consequently, co mmenters in support of the retroactive application 
of the proposal argue that in order to comply with the WTO reports, CBP must not only stop applying the EBR to imports of subject shrimp going forward, but must also "cancel'' (as one commenter describes it) or "retroactively eliminate'' (as a nother commenter argues), bonds to which the EBR has 
been applied and replace them with bonds based on th e standard bond formula of 10% of the previous 
year's duties, taxes, and fees, or $50,000, whichever is greater.  Supporters assert that retroactively 
applying the proposal is necessary to address sure ty collateral requirements which have burdened 
importers' credit lines, causing significant economic harm.   One supporter of the retroactive application of the proposal cites to National Fisheries 
Institute, Inc. v. United States Bureau of Cust oms and Border Protection (465 F. Supp. 2d 1300, 
1335-36 (Ct. Int'l Trade 2006)) (National Fisheries) to argue that CBP has authority to do this, and 
claim that this authority has been recognized by the courts.   One commenter argues that canceling the bonds to which the EBR was applied would not be 
retroactive because the United States would be ag reeing to make no future claims against the 
EBR-calculated bonds. 
  One commenter urges CBP to automatically terminate all existing continuous bonds and 
institute new bonds at the minimum required obligati on rather than require individual importers to 
submit individual termination requests in order to e xpedite U.S. compliance with rulings of the DSB. 
 
 Another commenter argues that allowing impor ters to terminate existing continuous bonds 
would risk CBP's ability to fully collect duties owed.   CBP's Response :  CBP is ending the designation of frozen warmwater shrimp subject to 
AD/CV duties as a special category or covered case for purposes of the EBR, and is providing 
importers with an opportunity to request that existing bonds be terminated pursuant to 19 CFR 
113.27(a) and submit a new continuous bond application pursuant to 19 CFR 113.12(b).  These actions bring the United States into compliance wi th the recommendations and rulings of the DSB 
regarding the EBR.  The effective date is the publication date of this notice. 
  CBP disagrees with the commenters' statem ent that CBP must apply the proposal 
retroactively.  When a bond is terminated, no fu rther obligations arisi ng from post-termination 
customs transactions may be charged against th e bond.  See 19 CFR 113.27(c);  see also HQ 211485 
(May 12, 1980).  The principal (in this case, th e importer) and the surety remain liable for the 
obligations incurred before the date the bond was te rminated.  See 19 CFR 113.3.  Termination of the 
bond does not alter the obligations charged agai nst the bond before it was terminated, but does 
prevent any obligations arisi ng from post-termination customs transactions from being charged 
against the bond.  See 19 CFR 113.27(c);  see also HQ 211485 (May 12, 1980).   CBP has determined that it will permit impor ters to terminate EBR-calculated bonds.  The 
only legal authority commenters cite for the pro position that CBP could "cancel'' or otherwise  G/ADP/N/1/USA/1/Suppl.8 
 G/SCM/N/1/USA/1/Suppl.8  Page 7 
 
 
  retroactively apply the policy is the decision of the U.S. Court of International Trade in National 
Fisheries.  However, the court made no such fi nding in that case, nor did it order cancellation or 
"retroactive elimination'' of bonds.  National Fish eries at 1335-1336.  Moreover, bonds are contracts 
between principals and sureties, and are thus contra cts between private parties.  CBP is reluctant to 
interfere in that relationship.  See Custom s Bond Structure, Revision, 49 FR 41152, 41155 
(October 19, 1984).  In addition, the existence of two bonds covering the same period could pose legal 
confusion.  If different sureties issued the bonds, each would raise the other as a defense in a 
collection action, posing serious risk to the agency 's ability to collect duties lawfully owed through 
court action.  Furthermore, canceling an existi ng bond and replacing it with another bond with a 
different limit of liability (either lower or higher) and with retroactive effect  is contrary to sound 
administrative practice.  There are approximately 140,000 bonds currently on file with CBP.  The possibility that each and every one of these bonds  may be reconsidered and liability reassessed 
anytime after execution would cause administrative chao s.  Finally, to avoid confusion, termination 
will not occur automatically and importers must re quest termination pursuant to 19 CFR 113.27(a). 
 
 CBP requires bonds to protect revenue and assu re compliance with any provision of law, 
regulation, or instruction the agen cy is authorized to enforce.  See 19 U.S.C. 1623.  CBP is also 
required to collect debts aggressively.  See 31 U.S.C.  3711 and 31 CFR 901.1.  In order to fulfill its 
mandate and also facilitate trade, CBP does not retroactively raise or lower bond security amounts 
that cover past customs transactions.  When CBP determines that an existing bond does not provide 
sufficient security, the principal is only required to terminate the existing bond and obtain a new bond 
with additional security for future importations.  The obligation of the earlier bond for the earlier time 
period remains in place.  See 19 CFR 113.3.   It is incorrect to state that if the United Stat es were to agree to make no future claims against 
the EBR-calculated bonds, then the cancellation of the bonds would not be retro active.  Cancelling the 
bonds would be retroactive because the bonds secure cu stoms transactions, which are, in this case, 
entries already made into the United States.  As discussed in the Background section of this notice, 
even though the actual amount of AD/CV duties ow ed may be determined at a later date, the 
obligation is incurred and security is posted at the time of entry.  Finally, the U.S. Court of International Trade in National Fisheries did not orde r CBP to cancel the bonds at issue in that case, 
and therefore does not support the commenters' ar gument that CBP should cancel the EBR-calculated 
bonds.  National Fisheries at 1335-1336.   Therefore, on or after the publication of this notice, an importer with a current bond that was 
calculated using the EBR may request termination pur suant to 19 CFR 113.27(a), such that no further 
obligations would be charged agai nst that bond.  For existing bonds, CBP will enforce the bonds up to 
the date of termination, which will be no earlie r than the effective date of this notice. 
  Comment :  Some commenters recommend that even though the proposal indicates that it 
applies to shrimp imports from all of the countries subject to an AD order, to avoid confusion, CBP 
should specifically state this in the final notice and list the individual countries. 
 
 Another commenter asserts that the proposal should only apply to India and Thailand because 
the WTO dispute was initiated by these countries and therefore, the recommendation only applies to those countries and not Brazil, China, and Vietnam.  The commenter states that continuing to apply 
the EBR to Brazil, China, and Vietnam would help to offset any revenue loss on those cases.  The 
commenter also states that discontinuing application to those countries would be contrary to CBP's 
commitment to Congress to address the issue of non-collection of AD duties and is irrational, unwarranted, and a clear perversion of CBP's mission to collect all import duties determined to be due 
to the United States.  G/ADP/N/1/USA/1/Suppl.8 
G/SCM/N/1/USA/1/Suppl.8 Page 8 
 
 
   CBP's Response :  Based on a careful evaluation of the WTO reports and available evidence, 
CBP has decided to end the designation of shrimp subject to AD/CV duty orders as a special category 
or covered case subject to the requirement of add itional bond amounts for all countries.  For a list of 
orders currently covering shrimp, see footnote 1 of this document. 
 
Conclusion 
 
 After analysis of the comments and further re view of the matter, CBP has decided to end the 
designation of shrimp covered by antidumping or countervailing duty orders as a special category or 
covered case subject to the requirement of additi onal bond amounts.  Shrimp importers may request 
termination of existing continuous bonds pursuant to 19 CFR 113.27(a) and submit a new continuous 
bond application pursuant to 19 CFR 113.12(b).  The requirements for submitting a new bond 
application pursuant to 19 CFR 113.12 ar e available on the CBP Web site at 
http://www.cbp.gov/xp/cgov/trade/priority_tra de/revenue/bonds/pilot _program/news_develop/
 under 
the "Policy and Procedures'' section. 
  Dated:  March 27, 2009. 
Jayson P. Ahern, 
Acting Commissioner, Customs and Border Protection. 
[FR Doc. E9-7281 Filed 3-31-09;  8:45 am] 
BILLING CODE 9110-06-P 
  G/ADP/N/1/USA/1/Suppl.8 
 G/SCM/N/1/USA/1/Suppl.8  Page 9 
 
 
  ATTACHMENT 2 
 
[Federal Register:  October 24, 2006 (Volume 71, Number 205)] [Notices] 
[Page 62276-62278] 
From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr24oc06-65]  [[Page 62276]] 
 
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DEPARTMENT OF HOMELAND SECURITY 
 
Bureau of Customs and Border Protection 
 [USCBP-2006-0119]    
Monetary Guidelines for Setting Bond Amounts for Importations Subject to Enhanced Bonding 
Requirements  
AGENCY:   Customs and Border Protection, Department of Homeland Security. 
 
ACTION:   General notice;  request for comments. 
 ---------------------------------------------------------------------------------------------------------------------------  SUMMARY:   This Notice serves to provide additional information on the process used to determine 
bond amounts for importations involving elevated coll ection risks and to seek public comment on that 
process.  The process published in this Notice is in effect.  Public comments will assist CBP in 
identifying factors that may further improve the process to ensure the bond amounts protect the 
revenue and facilitate trade.  Afte r consideration of the comments, a revised version of the Monetary 
Guidelines for Setting Bond Amounts Customs Directive 99-3510-004 July 23, 1991 (1991 Monetary 
Guidelines) will be published. 
 DATES:   Comments must be received on or before December 26, 2006. 
 ADDRESSES:   Commenters must submit comments, identified by docket number, by one of the 
following methods:  
 
 Federal eRulemaking Porta l:  http://www.regulations.gov
.  Follow the instructions for 
submitting comments via docket number USCBP-2006-0119.   Mail:  Trade and Commercial Regulations Branch , Office of Regulations and Rulings in the 
Office of International Trade, Bureau of Custom s and Border Protection, 1300 Pennsylvania Avenue, 
NW.  (Mint Annex), Washington, DC 20229.   Instructions :  All submissions received must include the agency name and docket number for 
this Notice.  All comments received will be pos ted without change to http://www.regulations.gov
, 
including any personal information provided.  Fo r detailed instructions on submitting comments, see G/ADP/N/1/USA/1/Suppl.8 
G/SCM/N/1/USA/1/Suppl.8 Page 10 
 
 
  the "Public Participation'' heading of the SUPPLEMENTARY INFORMATION section of this 
document. 
 Docket :  For access to the docket to read backgro und documents or comments received, go to 
http://www.regulations.gov
.  Submitted comments may also be inspected during regular business days 
between the hours of 9 a.m. and 4:30 p.m. at the O ffice of Regulations and Rulings in the Office of 
International Trade, Bureau of Customs and Bo rder Protection, 799 9th Street, NW., 5th Floor, 
Washington, DC.  Arrangements to inspect subm itted comments should be made in advance by 
calling Joseph Clark at (202) 572-8768.  
FOR FURTHER INFORMATION CONTACT:   David Genovese, Office of International Trade at 
David.Genovese@dhs.gov
, Tel:  (202) 863-6020. 
 
SUPPLEMENTARY INFORMATION: 
 
Public Participation 
 
 Interested persons are invited to submit written data, views, or arguments on all aspects of this 
Notice.  CBP also invites comments that relate to the economic, environmental,  or federalism effects 
that might result from this Notice.  Comments that  will provide the most assistance to CBP in 
developing these procedures will reference a specific portion of this Notice, explain the reason for any 
recommended change, and include data, informati on, or authority that support such recommended 
change.  
Background 
  A key CBP mission is to collect all import duties determined to be due to the United States.  
Under customs statutes and regulations release of me rchandise prior to the determination of all duties 
that may be owed is ordinarily permitted, provi ded the importer posts a bond or other security to 
insure payment of duties and compliance with other applicable laws and regul ations.  Estimated duties 
are collected at entry, a bond is posted, and fina l duties await liquidation at a later point in time. 
 
 In the case of antidumping (AD) or c ountervailing duties (CVD) determined by the 
Department of Commerce (DOC) (which administer s the AD/CVD laws in conjunction with the U.S. 
International Trade Commission), the administrati ve and judicial process for determining the 
appropriate rate of duty for AD/CVD merchandise ma y significantly delay the liquidation of an entry 
of AD/CVD merchandise.  At liquidation, CBP foll ows DOC instructions regarding the applicable 
AD/CVD rate.  CBP must collect the duties owed of  whatever nature.  However, importers have 
increasingly failed to pay additional AD/CVD duties de termined to be due at liquidation.  Recent 
defaults for AD/CVD supplemental bills are substantia lly higher than defaults that were the previous 
norm and are unprecedented.  This troubling trend caused an internal policy review of revenue 
protection strategies at CBP.  
 During the review, CBP reconsidered its ge neral continuous bond formula which provides 
that the minimum continuous bond may be in an amount  equal to the greater of $50,000 or ten percent 
of the amount of the previous year's duties, tax es and fees.  In response to the growing collection 
problem, CBP announced an enhanced customs bondi ng requirement for those continuous bonds that 
secure the promise to pay all duties finally determ ined to be due on certain merchandise subject to 
AD/CVD.  Amendment to Bond Directive 99-3510-004 for Certain Merchandise Subject to 
Antidumping Countervailing Duty Cases (July 9,  2004) (July 2004 Am endment to the Bond 
Guidelines);  see also Clarifica tion to the July 9, 2004 Amended Monetary Guidelines for Setting 
Bond Amounts (August 10, 2005) (August 2005 Clarifica tion).  Application of the enhanced bonding  G/ADP/N/1/USA/1/Suppl.8 
 G/SCM/N/1/USA/1/Suppl.8  Page 11 
 
 
  requirement thus far has been limited in scope--having been applied to merchandise subject to the first 
antidumping orders involving aquaculture merchandise imposed after issuance of the July 2004 Amendment to the Bond Guidelines.  Aquaculture is th e industry sector with th e highest share of total 
defaults in recent years. 
 CBP commenced its policy of reviewing the sufficiency of continuous bonds related to 
imports of AD/CVD merchandise with the release of its July 2004 Amendment to the Bond Guidelines.  That document and the August 2005 Clarification were posted on CBP's Web site. 
  The bond guidelines are designed to ensure the amount of the continuous bond reflects a 
reasonable amount necessary to secure against non- payment of any additional revenue ultimately 
legally owed and not paid in cash de posits at entry.  As noted earlier, U.S. laws and regulations afford 
importers the opportunity to post such bonds in orde r to facilitate prompt release of the goods at the 
border without creating an undue burden on impor ters or international trade and commerce. 
 
 CBP includes guidelines on determining sufficient bond amounts in its regulations at 
19 CFR 113.13.  The regulations direct CBP to re view bonds periodically and to notify the principal 
in writing if CBP determines the bond amount is insu fficient to adequately protect the revenue and 
ensure compliance with U.S. laws and regulatio ns.  The principal has 30 days from date of 
notification to remedy the deficiency.  During t hose 30 days, principals have frequently requested 
CBP to adjust its bond determination. 
 
 This Notice seeks public comment on the procedures for setting bond amounts on merchandise subject to increased default risk and, therefore, designated as Special Category 
Merchandise that may be subject to enhanced bon ding requirements.  An explanation of Special 
Category Merchandise appears later in this doc ument under "Procedures for Setting Bond Amount.'' 
History of compliance with customs laws and regula tions, ability to pay, existence of assets available 
as recourse for nonpayment, past payment history, si milarity to previous circumstances giving rise to 
uncollected revenue problems, and ot her relevant factors will be consid ered in determining whether to 
reduce the bond amount otherwise required under th e enhanced bond formula.  Importers will be 
offered the opportunity to submit information on th eir financial condition related to the risk of 
non-collection for that importer and CBP will determine bond amounts based on that information, the 
importer's compliance history and other relevant info rmation available to CBP.  In the absence of a 
submission by the importer, CBP would calculate th e bond amount using the formulas set forth below. 
  This document will be incorporated into th e 1991 Monetary Guidelines and represents the 
comprehensive and exclusive statement of the po licy and processes expressed in the July 2004 
Amendment to the Bond Guide lines, the Bond Formulas post ed on CBP's Web site, and the 
August 2005 Clarification.  After consideration of any comments received, an incorporated policy will 
be published.  
Procedure for Setting Bond Amount 
  In order to provide a consistent bond formula and to ensure the bond amounts protect the 
revenue and facilitate trade, CBP issued bond guideli nes.  Under the August 2005 Clarification, CBP 
indicated that it would designate Special Categor ies of Merchandise and designate Covered Cases 
within those Special Categories.  CBP will continue to evaluate on an industry wide basis those types 
of merchandise where additional bond requirements ma y be needed.  However, because importers are 
only affected when merchandise is subject to di fferent bond requirements, CBP will only designate 
Special Categories, that is, merchandise for wh ich an enhanced bond amount may be required. 
 G/ADP/N/1/USA/1/Suppl.8 
G/SCM/N/1/USA/1/Suppl.8 Page 12 
 
 
  Designation of Special Categories 
 
 Special Categories may be designated when additional bond requirements in the form of greater continuous entry bonds or other security may be required. 
 
 At least 60 days before new bonding requireme nts take effect, CBP will provide public notice 
of designation of a Special Category in the Customs Bulletin and on the CBP's Web site (http://www.cbp.gov
).  The notice will solicit comment from affected parties and will provide a 
description of the reasons for the Special Category.  Affected parties will have 30 days from the date 
the designation notice is published to submit comments. 
  When conditions no longer exist that warrant the Special Category designation, the designation will be removed and the public will be notified through the Customs Bulletin and the CBP 
Web site. 
 
Criteria for Special Categories 
 
 In considering which merchandise should be  designated Special Category merchandise 
subject to enhanced bond requirements, the following criteria shall be considered: 
 
 1. Previous collection problems concerning the industry involved; 
2. The similarity to previous imports or  industries experiencing uncollected revenue 
problems; 
3. Payment history; 4. Indications that liquidated dut y rates may exceed existing security; 
5. Any other factors that are deemed relevant. 
  All Special Categories will be monitored on a regular basis to determine whether a material change in factors has occurred so that the amount  of the required bond for the Special Categories 
should be adjusted up or down or that the conditi ons that warranted the designations no longer exist. 
 Continuous Bond Formulas for Special Category Merchandise 
 
 CBP will review the sufficiency of bonds c overing Special Category me rchandise.  Importers 
of Special Category merchandise may be required to  obtain larger continuous bonds.  In such 
circumstances, importers will be offered the oppor tunity to submit information on their financial 
condition related to the risk of non-collection fo r that importer, and CBP will determine bond amounts 
based on that information, the importer's compliance history, and other releva nt information available 
to CBP.  In the absence of a submission by the importer, CBP may calculate the bond amount using the formulas determined on the basis of the risk  of non-collection posed by the Special Category 
merchandise.  These formulas may be adjusted in a ccordance with the revenue  risks identified for 
future importations of designated Special Category merchandise. 
 
 For Special Category merchandise which is merchandise subject to AD/CVD, the formulas determined on the basis of the risk of non-coll ection will be based upon the importer's previous 
12 months cumulative import value of merchandise s ubject to the AD/CVD Order and the rate that the 
DOC establishes in its Order or, if the bond amount is established after an administrative review, it 
will be calculated using the rate determined by DOC in the most recent administrative review.  The 
amount of additional coverage will be ca lculated using the following formula: 
  G/ADP/N/1/USA/1/Suppl.8 
 G/SCM/N/1/USA/1/Suppl.8  Page 13 
 
 
   AD/CVD rate established in DOC Order (or the rate established in the most recently 
completed administrative review) x previous 12  months' cumulative import value of subject 
merchandise.  
 For example, if an importer has imported $1 million of the subject AD/CVD merchandise 
during the previous 12 months and the DOC rate is  40%, the importer's continuous bond amount will 
be increased by $400,000.   For new importers with no prior history of imports who import Special Category merchandise 
subject to AD/CVD, the continuous bond will be calculated in accordance with  the following formula: 
 DOC deposit rate in effect on date of entr y x the importer's estimated annual value of 
imported goods subject to the case.   Periodic reviews will be conducted to monitor the sufficiency of the continuous bonds for 
Special Category merchandise.  CBP may adjust the rates in the formulas set forth above to calculate 
different bond amounts as circumstances warrant.  CB P is committed to protecting its ability to collect 
the amount of money determined to be due at li quidation and to requiring c ontinuous bonds in an 
amount reasonably necessary to cover its additional financial risk.   Absent exceptional circumst ances, the above formulas will determine the bond amounts 
where a submission has not been made by the princi pal.  Nothing in this policy affects the CBP's 
authority to require additional security if CBP belie ves that acceptance of a transaction secured by a 
continuous bond would place the revenue in jeopa rdy or otherwise hamper the enforcement of 
customs laws or regulations.  Notice Timing and Adjustment Fa ctors for Individual Importers 
 
 In implementing the bond requirements for imports of Special Category merchandise, CBP 
shall:  (1) Provide the principal subject to the revi sed bond requirements with notice of the new bond 
requirements not less than 30 days before the revised requirements will take effect.  Such 
notice will include a description of the rationale for the new requirements and offer the principal the opportunity to submit information on its financial condition related to the risk of 
non-collection of that principal, which CBP will use along with other information, such as the 
importer's compliance history, to determine bond amounts.  The notice will inform the 
principal that in the absence of a submission by the principal, CBP may calculate the bond 
amount using the formulas determined on the basis of the risk of non-collection for the Special Category merchandise.  The notice will provide examples of additional information 
that might be submitted in support of the form er calculation, how the bond amount would be 
calculated if the formula were applied, and a description of the procedures for responding to 
the notice. 
 
(2) Provide the principal 30 days from the date of the mailing of the notice to respond, including 
by providing evidence of factors that could support a bond amount other than that resulting from the formula.  Such responses may be filed individually or by groups of principals who 
share common characteristics.  Principals who import from the same foreign 
manufacturer/exporter share common characteris tics.  Depending upon available resources 
and workload, CBP shall endeavor to issue deci sions to those who respond within 45 days of 
receipt of a complete, legible response and, in  any event, shall issue decisions within a 
reasonable time.  The new bond requirement will no t take effect with respect to a principal G/ADP/N/1/USA/1/Suppl.8 
G/SCM/N/1/USA/1/Suppl.8 Page 14 
 
 
  until 14 days after the date of CBP's reply to the principal's response.  The reply to the 
principal will include the rationale for the dete rmination.  In the absence of a submission by 
the principal, CBP may calculate the bond amount using the formulas determined on the risk of non-collection posed by the Special Category merchandise as provided in the notice.  The 
bond requirement will take effect with respect to  that principal 30 days after the date of the 
mailing of the notice. 
 (3) Consistent with 19 CFR 113.13(b), consider  the following factors when determining a bond 
amount, other than the amount resulting from the formula, for a principal who has responded 
in accordance with (2) above: 
(a) The prior record of the principal rega rding timely payment of duties, taxes and 
charges with respect to the transactions involving such payments; 
 
(b)  The prior record of the principal in co mplying with CBP demands for redelivery, the 
obligation to hold unexamined merchandise in tact, and other requirements relating to 
enforcement and administration of CBP  and other laws and regulations; 
 
(c) The value and nature of the merchandise i nvolved in the transaction(s) to be secured; 
 (d) The degree and type of supervision th at CBP will exercise over the transaction(s); 
 
(e) The prior record of the principal in honoring bond commitments, including the 
payment of liquidated damages and AD/CVD; 
 (f) Any additional information contained in an y application for a bond, or contained in 
any request for adjustment of the bond amount, including information that provides 
proof of ability to pay such as independently  audited financial st atements, tax returns 
submitted by the principal, availability of assets, including securities in the United States and elsewhere, credit rating, and length of time in business;  and 
 (g) Any other relevant information. 
 
(4) If CBP determines that the principal has a record of compliance with customs laws and 
regulations and that the principal has demonstrat ed an ability to pay, CBP may decide not to 
require an increased bond amount even though the principal imports Special Category merchandise. 
 
 A request for reconsideration may be made  by submitting a new bond application and CBP 
Form 301 at any time after six months from the date of the notice of new bond amount set forth in paragraph (1) above, if no response to CBP's notice was received under paragraph (2).  If the principal 
filed a response under paragraph (2) requesting a bond amount other than that resulting from the 
formula, the principal may request further reconsid eration at any time after six months from the date 
of the decision issued under paragraph (2).  A request for reconsideration of the bond amount based 
on a material error by CBP that affects the bond amount may be made at any time.   At any time after CBP determines a bond amount for a principal below that provided by the 
formula, if the principal fails to remain comp liant with customs laws and regulations, CBP will 
recalculate the principal's bond amount in accordan ce with the formulas outlin ed in this notice. 
  G/ADP/N/1/USA/1/Suppl.8 
 G/SCM/N/1/USA/1/Suppl.8  Page 15 
 
 
  Affected Parties 
 
 This Notice affects only continuous bonds for imports of Special Cate gory merchandise.  This 
Notice does not affect laws and regulations regardi ng cash deposits or other security with respect to 
merchandise subject to AD/CVD proceedings.  CBP  notes those initial deposits and bonds sometimes 
are not sufficient to cover the final assessed duty liab ilities.  Defaults on such additional duty liability 
have increased.   Congress has provided CBP authority to require secu rity in order to ensure the payment of all 
duties determined to be due to the United States,  including any revenue collection gaps between 
estimated duty deposits and final assessed duties that th e importer fails to satisfy.  Please note that this 
Notice does not limit CBP's authority to require additional security under 19 CFR 113.13(d) and the 
requirements of the 1991 Monetary Guidelines rema in in effect consistent with this Notice. 
 
Dated:  October 20, 2006. 
Deborah J. Spero 
Acting Commissioner, Customs and Border Protection. 
[FR Doc.  E6-17885 Filed 10-23-06;  8:45 am] 
BILLING CODE 9111-14-P 
 G/ADP/N/1/USA/1/Suppl.8 
G/SCM/N/1/USA/1/Suppl.8 Page 16 
 
 
  ATTACHMENT 3 
 
Current Bond Formulas 
  
 Listed below are the past and current bond formulas for Activity Code 1 (Importer/Broker) 
continuous bonds.  The current bond formulas ar e now being administered by the Revenue Division 
for all bonds that are reviewed or processed by the Bond Team.  This document amends CBP 
Directives 099 3510-004 and 099 3510- 005.  A new comprehensive CBP Di rective will be issued at a 
later date. 
  Reviewers (1)  
16 
Analytical (2)  17 
AD/CVD Order (3)  18 
AD/CVD Preliminary with history (4)  19 
AD/CVD Preliminary with no history (5)  20 
   Field 
 
Duties, Taxes & Fees x 10%   = 
 
previous calendar year minimum bond amount or $50,000  
(rounded up or down by increments of $10,000 up to $100,000 and then 
by increments of $100,000) 
 Based on past CBP Directive    Reviewers (1)  Revenue Division 
 
Duties, Taxes & Fees x 10%   = 
 
previous 12 months minimum bond amount or $50,000  
(rounded up by increments of $10,000 
up to $100,000 and then by increments of $100,000) 
 Based on current CBP Directive (amended) 
 
  G/ADP/N/1/USA/1/Suppl.8 
 G/SCM/N/1/USA/1/Suppl.8  Page 17 
 
 
  Analytical (2) 
 
  Duties, Taxes & Fees  + (all unpaid bills) x 10%  =
 
     previous 12 months 
  + 
 minimum bond amount or $50,000 
(rounded up by increments of 
$10,000 up to $100,000 and then by 
increments of $100,000) 
$ for $ - delinquent bills  
not protested and over 120 days  
or  
denied protest 
  exact amount 
 + 
  
$ for $ debit vouchers unpaid 
  exact amount 
 + 
  
$ for $ bills paid by surety 
  exact amount
 
 
 total amount   
  (rounded up by increments of 
$10,000 up to $100,000 and then by 
increments of $100,000) 
 Based on current CBP Directive (amended)   A + B C D + + A 
B 
C 
D G/ADP/N/1/USA/1/Suppl.8 
G/SCM/N/1/USA/1/Suppl.8 Page 18 
 
 
  AD/CVD Order (3) 
 
      Duties, Taxes & Fees x 10%  
 
 previous 12 months 
   
+ 
 = minimum bond amount 
or $50,000 (rounded up 
by increments of 
$10,000 up to $100,000 and then by increments of $100,000) 
DOC Order rate  x   value of imports of merchandise 
subject to the case by the importer  
previous 12 months = exact amount
 
  total amount  
  (rounded up by increments of $10,000 up to $100,000 and then by increments of 
$100,000) 
 
Based on current CBP Directive (amended) for agriculture/aquaculture merchandise 
  A + B A 
B  G/ADP/N/1/USA/1/Suppl.8 
 G/SCM/N/1/USA/1/Suppl.8  Page 19 
 
 
  AD/CVD Preliminary with history (4) 
 
      Duties, Taxes & Fees x 10%  
 
 previous 12 months 
    
 
  
+ 
 = minimum 
bond amount 
or $50,000 
(rounded up by increments of $10,000 up to $100,000 
and then by 
increments of $100,000) 
DOC Preliminary rate x   value of imports of merchandise 
subject to the case by the importer  
previous 12 months 
 = exact amount
 
  total amount  
 
 (rounded up by increments of $10,000 up to $100,000 and then by increments of 
$100,000) 
 Based on current CBP Directive (amended) for agriculture/aquaculture merchandise 
 B A 
A + B G/ADP/N/1/USA/1/Suppl.8 
G/SCM/N/1/USA/1/Suppl.8 Page 20 
 
 
  AD/CVD Preliminary with no history (5) 
 
       Duties, Taxes & Fees x 10%  
 
 previous 12 months    
 
    
+ 
 = minimum 
bond amount 
or $50,000 (rounded up by increments of $10,000 
up to $100,000 
and then by increments of $100,000) 
DOC Preliminary rate x estimated annual import value of 
imports of merchandise subject to 
the case by the importer 
 = exact amount
 
  total amount  
  (rounded up by increments of $10,000 up to $100,000 
and then by increments of 
$100,000)  
Based on current CBP Directive (amended) for agriculture/aquaculture merchandise 
 B A 
A + B  G/ADP/N/1/USA/1/Suppl.8 
 G/SCM/N/1/USA/1/Suppl.8  Page 21 
 
 
  ATTACHMENT 4 
 
Clarification to July 9, 2004 Amended Monetary Guidelines for Setting Bond  
Amounts for Special Categories of Merchandise Subject to Antidumping  
and/or Countervailing Duty Cases 
 
Background
 
  Certain recent antidumping cases for agriculture/aquaculture merchandise have resulted in 
considerable increases in duty liab ilities.  In the case of garlic, the duty rate prior to the antidumping 
case was less than 5%, but then rose to 376% at final liquidation.  In addition, crawfish was duty free 
and then rose to 223% with the antidumping case.  This type of substantial increased liability has 
resulted in a number of importers being unable to meet their financial obligations for antidumping 
duty at liquidation.   
 
 In addition to this increase in duty liabilit y in certain cases, the time between entry of 
merchandise subject to antidumping cases and final li quidation is approximately 18 months or more.  
This timeframe is significantly longer than importa tions of other types and therefore poses a greater 
risk to U.S. Customs and Border Protection (CBP) for collection.  In light of these factors, a new 
method for determining the continuous bond amount for certain importers of merchandise subject to 
antidumping or countervailing duty cases is necessary in order to ensure the revenue is adequately 
protected.   CBP conducts reviews to determine if contin uous bond amounts are adequate to ensure 
compliance with CBP laws and regulations (19 CFR 113.13).  The purpose of the bond is to protect 
the revenue and ensure compliance.  CBP has br oad authority under 19 CFR 113.13 to formulate 
guidelines to set the amount of continuous bonds.  CBP has previously issued guidelines for setting continuous bond amounts in CBP Directive 99-3510-004 and amended that directive on July 9, 2004 
to include specific guidelines for bonds c overing certain merchandise subject to 
antidumping/countervailing duty cases.  
 The purpose of this document is to clarify th e bond guidelines issued on July 9, 2004 covering 
certain merchandise subject to antidumping/counte rvailing duty cases.  These bond guidelines are put 
in place to ensure that duties are collected without creating an unnecessarily excessive burden on 
importers or international trade and commerce.  The setting of the bond amount is not an arbitrary 
action but will follow the guidelines set forth in CBP Directive 99-3510-004, the July 9, 2004 
guidelines and this clarification.  The amount of  the continuous bond is intended to reflect a 
reasonable amount necessary to cover the additiona l revenue risk not covered by cash deposits or 
other security.   Under current guidelines, minimum continuous  bond amounts are set at 10 percent of the 
duties, taxes and fees paid by the importer during the previous 12 months.  For 
antidumping/countervailing duty cases, the duty liability is not always reflected in the previous years' 
duty amounts.  This new liability can be significan t and as a result, CBP Directive 99-3510-004 was 
amended on July 9, 2004 and this document provi des further clarification to that amendment. 
  To provide openness and consistency, this clarif ication allows for the consideration of certain 
factors that are relevant for determining duty risk and modifying the amount of the bond required.  All 
relevant factors will be appropriately weighed by CBP when exercising its judgment and discretion in 
setting the bond amounts.  G/ADP/N/1/USA/1/Suppl.8 
G/SCM/N/1/USA/1/Suppl.8 Page 22 
 
 
  Special Categories
 
  While certain types of agriculture and aquacu lture merchandise have recently experienced the 
greatest degree of uncollected antidumping and counte rvailing duty revenue due to the factors cited 
above, these risks are not solely limited to this mercha ndise.  In recognition of this fact, and in order 
to provide a consistent bond formula to other merchandise subject to antidumping and countervailing 
duties, CBP is modifying the bond guidelines as follows.  Designation of Special Categories and Covered Cases 
 
• Special Categories of merchandise ca n be designated where additional bond 
requirements in the form of greater continuous entry bonds or other security, may be required.  (Agriculture/aquaculture merc handise is currently the only merchandise 
designated as a Special Category.) 
 
• The term Covered Cases refers to merchandise within a previously designated Special 
Category where different standards or fo rmulas for determining the bond amount will 
be applied.  (Shrimp covered by an tidumping or countervailing duty cases are the 
only Covered Cases currently designated w ithin the agriculture /aquaculture Special 
Category.) 
 
• When Special Categories or Covered Cases are designated, CBP will provide public 
notice of this designation 60 days before  new bonding requirements take effect.  
Notice will be provided by publication in the Customs Bulletin and by posting on the CBP website (www.cbp.gov
).  The notice will provide a description of the goals of 
the new special category, the responsibilities of the importer/principal, and the 
reasons these designations achieve those goals. 
 
• When conditions no longer exist that warra nt the designation of merchandise or an 
antidumping/countervailing duty case as a Speci al Category or Covered Case, the 
designation will be removed and the public will be notified through the Customs 
Bulletin and the CBP website.   
  In considering which Special Categories or Covered Cases of imports should be subject to 
different bond amount requirements, the following criteria shall at least be considered:  
1. Previous collection problems concerning a specific case or industry involved; 
 2. The similarity to previous cases or industries experiencing uncollected revenue 
problems; 
 3. Whether the merchandise in question had very low duty rates or was duty-free prior 
to initiation of an antidumping or countervailing duty case; 
 4. The projected ability of the industry to pay future duty liabilities;  5. Low capitalization of the industry involved such that new or increased duty liabilities 
create increased risk;   
 6. Whether the industry involved is highly leveraged such that new or increased duty 
liabilities create increased risk;   
  G/ADP/N/1/USA/1/Suppl.8 
 G/SCM/N/1/USA/1/Suppl.8  Page 23 
 
 
  7. Any other factors that are deemed relevant. 
  All Special Categories or Covered Cases will be  periodically monitored to determine whether 
a material change in factors has occurred so th at the amount of the required bond for the Special 
Categories should be adjusted up or down or that the conditions which warranted the designations no 
longer exist.    Continuous Bond Formulas for Special Category Merchandise and Covered Cases
 
 
 CBP will review the bond sufficiency of importe rs/principal bondholders  of Special Category 
and Covered Cases.  Importers of Special Category and Covered Case merchandise subject to antidumping or countervailing duty cases may be require d to obtain larger continuous bonds.  The 
formulas for the initial increase in bond coverage will be determined on the basis of the risk of 
non-collection posed in the circumstances of a Spec ial Category or Covered Case.  These formulas 
may be adjusted in accordance with the revenue risks identified for future designated Special 
Category merchandise and Covered Cases.     The increase in bond coverage will become e ffective when the Department of Commerce 
(DOC) issues its Order on the case.  Using the im porters previous 12 months import value of 
merchandise subject to the case, the continuous bon ds will be increased using the rate that the DOC 
issues at Order (or the rate of the current admini strative review) In fixing the amount of additional 
coverage, the following formula will be used:  
• DOC rate at Order (or the rate of the current administrative review) x previous 
12 months import value of merchandise subject to the case. 
 
 For example, if an importer has imported $1 million of Special Category merchandise during the previous 12 months, and the DOC rate is 40%, the importer's continuous bond amount will be 
increased by $400,000.     If, at any time after DOC issues a preliminary a ffirmative determination in a Special Category 
case, CBP detects sudden changes in declared valu es, claimed country of origin, or declared 
classification, etc., CBP will consider such cha nges to reflect an increased risk.  In such 
circumstances, the importer's continuous bond w ill be increased using the following formula:   
 
• DOC deposit rate in effect on date of entry x previous 12 month import value of 
merchandise subject to the case. 
  The continuous bonds for new im porters with no prior history of  imports of Special Category 
merchandise subject to an antidumping or counter vailing duty case will also be increased, regardless 
of the stage of the case.  The bond amount will be  calculated in accordance with the following 
formula: 
 
• DOC deposit rate in effect on date of entr y x the estimated annual import value of the 
goods subject to the case.   
  Periodic reviews will be conducted to monitor the sufficiency of the continuous bonds for 
Special Category merchandise or Covered Cases s ubject to antidumping and countervailing duty 
cases.  CBP may adjust the rates used in the formulas set forth a bove to calculate different bond 
amounts as circumstances warrant and to address risk s experienced with cases where the DOC deposit 
rate is 0 percent.  CBP is committed to protecting its ability to collect the amount determined to be G/ADP/N/1/USA/1/Suppl.8 
G/SCM/N/1/USA/1/Suppl.8 Page 24 
 
 
  due at liquidation and to requiring continuous bonds  in the amount reasonably necessary to cover that 
additional financial risk.    Notice, Timing and Appeal Factors for Specific Companies
 
 
 In implementing the bond requirements for new designations of Special Categories and 
Covered Cases CBP shall:  
1. Provide the importer/principal subject to the revised bond requirements with notice 
not less than 30 days before the revised requirements will take effect.  Such notice 
will include a description of the rationale  for the new requirements, examples of 
additional information that might lower the amount of the bond, how the new continuous bond amount was calculated, a nd a description of the procedures for 
responding to the notice. 
 
2. The importer/principal will have 30 days fro m the date of the mailing of the notice to 
respond by providing evidence of factors that could alter the amount of the bond.  The new bond requirement will not take effect with respect to that importer/principal 
until 14 days after the importer's/principal's response has been reviewed and the importer/principal has been sent a fina l determination.  The reply to the 
importer/principal will also include a description of the rationale for the 
determination and other pertinent informa tion that may impact the amount of the 
bond. 
 3. In considering the bond requirement for a specific importer who has responded in 
accordance with (2) above, consistent w ith 19 CFR 113.13(b), the following factors 
shall at least be considered: 
 
a. The prior record of the importer in  timely payment of duties, taxes and 
charges with respect to the transacti on(s) involving such payments;   
 
b. The prior record of the importer in complying with CBP demands for 
redelivery, the obligation to hold unexamined merchandise intact, and other requirements relating to enforcement and administration of CBP and other 
laws and regulations; 
 
c. The value and nature of the merchandise involved in the transaction(s) to be 
secured; 
 d. The degree and type of supervis ion that CBP will exercise over the 
transaction(s); 
 
e. The prior record of the importer in honoring bond commitments, including 
the payment of liquidated damages and anti-dumping or countervailing 
duties; 
 f. Any additional information contained in any application for a bond;  and 
 
g. Any other relevant factors (i.e., wh ether the importer can show that it has 
switched to a new source of imports or a shift in the pattern of imports that 
would likely subject the importer to a lower duty liability.  CBP will monitor import volume to ensure the veracity of the shifts of import patterns);  G/ADP/N/1/USA/1/Suppl.8 
 G/SCM/N/1/USA/1/Suppl.8  Page 25 
 
 
  4. After a determination under (1) or (2) is  made, a request for reconsideration of the 
amount of the bond may be made any time after 3 months from the date of CBP's 
final determination.  A request for reconsideration based on a material omission or error that affects the determination of the continuous bond amount may be made at 
any time.  Absent a material omission or error in the final determination of the 
continuous bond amount, the importer/pr incipal will be required to secure a 
continuous bond in the amount set by CBP prio r to the request for reconsideration.  A 
decision on the request for reconsiderati on will be made within 30 days of the 
importer's request.   
 
 This clarification of the amended bond guide lines will affect only the continuous bonds for 
importers of Special Category merchandise or Cove red Cases subject to antidumping/countervailing 
duty cases.  This will not alter the requirements to  post cash deposits (or a single entry bond when 
permitted by DOC) of antidumping duty.  These  amended bond guidelines do not limit CBP's 
authority to require additional security unde r 19 CFR 113.13(d) and the requirements of 
CD 99-3510-004 remain in effect, consistent w ith the provisions of this clarification. 
  G/ADP/N/1/USA/1/Suppl.8 
G/SCM/N/1/USA/1/Suppl.8 Page 26 
 
 
  ATTACHMENT 5 
 
 
Amendment to Bond Directive 99-3510-004 for Certain Merchandise Subject to 
Antidumping/Countervailing Duty Cases  
(07/09/2004) Background: 
  Given the increasing concern regarding the collection of antidumping and countervailing 
duties, the impact of these collections on the am ount of disbursements pursuant to the Continued 
Dumping and Subsidy Offset Act (CDSOA or Byrd Amendment), and continued vigilance by U.S. Customs and Border Protection (CBP) to ensure  collection of all appropriate antidumping and 
countervailing duties, CBP has established ne w guidelines for determining continuous bond 
requirements for importers of agriculture/aqu aculture merchandise subject to antidumping or 
countervailing duty cases.   
  CBP conducts reviews to determine if contin uous bond amounts are adequate to ensure 
compliance with Customs laws and regulations (19CFR 113.13).  Difficulties in collecting the 
antidumping duties assessed at liquidation in recen t cases for agriculture/aquaculture merchandise 
demonstrate why the current monetary guidelines for setting continuous bond liability amounts need 
to be changed.   
  Under current guidelines, minimum continuous bond amounts are established at 10 percent of the duties, taxes and fees paid by the impor ter during the previous year.  For new 
antidumping/countervailing duty cases, the new higher dut y liability is not reflected in the previous 
year's duty amounts.  For example, in a recent antidumping case on garlic, the merchandise had a 
normal Customs duty rate of less than 5 percent prio r to the initiation of the case, but incurred a final 
liquidation rate of 376 percent.  This increased duty liability was not reflected in the continuous bond 
liabilities for many importers of merchandise subject to this antidumping case.  The continuous bonds 
were insufficient to protect the revenue when so me of these importers were unable to meet their 
financial obligations for this duty liability.   
 
 Recent antidumping cases for agriculture/aqu aculture merchandise have also resulted in 
considerable rate increases.  In the case of crawfish, the deposit rate for most imports was 91.5 percent but was increased to 201 percent at final liquidation.  This type of substantial increased 
liability has also resulted in a number of importers be ing unable to meet their financial obligations for 
antidumping duty at liquidation and again the conti nuous bonds were insufficient to protect the 
revenue.     In addition to this increase in duty liability, the time between entry of merchandise subject to 
antidumping cases and final liquidation can be 18 mont hs or more.  This timeframe is significantly 
longer than importations of other types and therefore poses a greater risk to CBP for collection.  All of 
these factors necessitate that a new method for determ ining the continuous bond amount for importers 
of agriculture/aquaculture merchandise subject to antidumping or countervailing duty cases be 
developed in order to ensure the re venue is adequately protected.   
 
Action: 
 
Effective immediately, the Port Directors will be  required to review continuous bonds for importers 
who import agriculture/aquaculture merchandise s ubject to antidumping/countervailing duty cases and 
obtain larger bonds where necessary.  Any increase in  bond liability will become effective when the 
Department of Commerce (DOC) issues its Order on the case.  Using the importers previous  G/ADP/N/1/USA/1/Suppl.8 
 G/SCM/N/1/USA/1/Suppl.8  Page 27 
 
 
  12 months import value of merchandise subject to the case, the continuous bonds will be increased 
using the rate that the DOC issues at Order.  To assi st the Port Director in fixing the limit of liability 
amount, the following formula shall be used:    
• DOC rate at Order x value of imports of merchandise subject to the case by the importer 
during the previous year. 
  For example, if an importer has imported agri culture/aquaculture merchandise subject to the 
antidumping case with a value of $1 million during the previous 12 months, and the DOC rate is 
40 percent, the importer's continuous bo nd amount will be increased by $400,000.   
  If, at any time after DOC issues a preliminary affirmative determination in an agriculture/aquaculture case, CBP detects sudden ch anges in declared values, claimed country of 
origin, or declared classification, etc., CBP will consid er such changes to reflect  an increased risk.  In 
such circumstances, the Port Director shall increase the importer's continuous bond using the 
following formula:    • DOC deposit rate in effect on date of entry x value of imports of merchandise subject to the 
case by the importer during the previous year. 
 
 The continuous bonds for new importers  with no prior history of imports of 
agriculture/aquaculture merchandise subject to an  antidumping or countervailing duty case will also 
be increased, regardless of the stage of the case.  The bond amount will be increased in accordance 
with the following formula:    
• DOC deposit rate in effect on date of en try x estimated annual import value of the goods 
subject to the case. 
  Periodic reviews will be conducted to monitor the sufficiency of the continuous bonds for 
agriculture/aquaculture merchandise subject to an tidumping and countervailing duty cases.  The Port 
Director may adjust the rates used in the formul as set forth above to calculate different bond amounts 
as circumstances warrant, bearing in mind that among the primary goals of bond sufficiency are 
ensuring CBP's ability to collect the antidumping and countervailing duties at liquidation and ensuring that the revenue is protected.     In addition, CBP will continue to monito r antidumping and countervailing duty cases for all 
commodities.  If CBP determines any comparable risk  with other commodities, a similar review of 
bond coverage will be performed.     These new guidelines will be incorporated in to the existing bond directives, which are 
currently being re-written by the National Finan ce Center.  Questions pertaining to these new 
guidelines should be directed to Bruce Coulliette  (bonds) at (202) 927-2148 or Christine Furgason 
(AD/CVD) at (202) 927-2293. 
 
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