CFR Subpart D

CFR Subpart D
in effect

19 C.F.R. § 113.30 Information pertaining to principals and sureties on the bond.

The general information pertaining to the principal and surety which must be given in the body of the bond is set forth in § 113.21.

19 C.F.R. § 113.31 Same party as principal and surety; attorney in fact.

(a) Same party as principal and surety. The same person, partnership, or corporation cannot be both principal and surety on a bond. (b) Attorney in fact for principal or surety. In executing a bond, a person may act as: (1) Attorney in fact for both principal and surety; (2) Surety and attorney in fact for the principal; or (3) Principal and attorney in fact for the surety.

19 C.F.R. § 113.32 Partnerships as principals.

A partnership, including a limited partnership, means any business association recognized as such under the laws of the State where the association is organized. (a) Execution. Partnership bonds must be executed in the firm name, with the name of the member or attorney of the firm executing it appearing immediately below the firm signature. (b) Action of one principal binding on all principals of the partnership. Pursuant to section 495, Tariff Act of 1930, as amended (19 U.S.C. 1495), when a bond is executed by any member of the partnership, the bond will be binding on the other partners in like manner and to the same extent as if such other partners had personally joined in the execution.

19 C.F.R. § 113.33 Corporations as principals.

(a) Name of corporation on the bonds. The name of a corporation executing a CBP bond as a principal, may be printed or placed thereon by means of a rubber stamp or otherwise, followed by the written signature of the authorized officer or attorney. (b) Signature and seal of the corporation on the bond. The bond of a corporate principal must be signed by an authorized officer or attorney of the corporation and the corporate seal must be affixed immediately adjoining the signature of the person executing the bond, as provided for in § 113.25. (c) Bond executed by an officer of corporation. When a bond is executed by an officer of a corporation, a power of attorney will not be required if the person signing the bond on behalf of the corporation is known to the Revenue Division, port director, or drawback office to be the president, vice president, treasurer, or secretary of the corporation. The officer's signature is prima facie evidence of that officer's authority to bind the corporation. When a power of attorney is required, it must conform to the requirements of subpart C, part 141, of this chapter. (d) Bond executed by an attorney in fact. When an attorney in fact executes a bond on behalf of a corporate principal and a power of attorney has not been filed with the Revenue Division (unless exempted from filing by § 141.46 of this chapter), there must be attached a power of attorney executed by an officer of the corporation whose authority to execute the power must be shown as prescribed in paragraph (c) of this section. (e) Subsidiaries as co-principals. The provisions of this section are applicable to each corporate subsidiary which joins its parent corporation by signing the bond as co-principal.

19 C.F.R. § 113.34 Co-principals.

A bond with a co-principal may be used by a person having a distinct legal status (e.g., individual, partnership, corporation) to join another person with the same distinct legal status on the bond. A bond with a co-principal may not be used to join an entity which does not have a distinct legal status (e.g. an unincorporated division of a corporation). However, an entity which does not have a distinct legal status may use another bond if listed on the bond by the principal at the time of execution or by subsequent rider (see § 113.24). A bond with co-principal may not be used to join different legal entities (e.g. an individual and a corporation, a partnership and a corporation).

19 C.F.R. § 113.35 Individual sureties.

(a) Number required. If individuals sign as sureties, there must be two sureties on the bond unless CBP is satisfied that one surety is sufficient to protect the revenue and ensure compliance with the law and regulations. (b) Qualifications to act as surety—(1) Residency and citizenship. Each individual surety on a CBP bond must be both a resident and citizen of the United States. (2) Granting of power of attorney. Any individual, unless prohibited by law, may grant a power of attorney to sign as surety on CBP bonds. Unless the power is unlimited, all persons to whom the power relates must be named. (3) Property requirements. For both single transaction and continuous bonds, each individual surety must have property available as security within the customs territory of the United States. The current market value of the property, less any encumbrance, must be equal to or greater than the amount of the bond. If one individual surety is accepted, the individual surety must have property the value of which, less any encumbrance, is equal to or greater than twice the amount of the bond. (c) Oath and evidence of solvency. Before being accepted as a surety, the individual must: (1) Take an oath on CBP Form 3579, setting forth: (i) The amount of assets over and above all debts and liabilities and such exemptions as may be allowed by law; and (ii) The general description and location of one or more pieces of real estate owned within the customs territory of the United States, and the value thereof, less any encumbrance. (2) Produce such evidence of solvency and financial responsibility as CBP may require. (d) Determination of financial responsibility. An individual will not be accepted as surety on a bond until CBP is satisfied as to the financial responsibility of the individual. CBP may request Immigration and Customs Enforcement (ICE) to conduct an immediate investigation to verify a surety's financial responsibility. (e) Continuancy of financial responsibility. In order to ascertain the continued solvency and financial responsibility of individual sureties, CBP will require a new oath and determine the financial responsibility of each individual surety as prescribed in paragraphs (c) and (d) of this section at least once every six months, and more often if deemed advisable.

19 C.F.R. § 113.36 Partner acting as surety on behalf of a partner or on behalf of a partnership.

A member of a partnership will not be accepted as an individual surety on a bond executed by the partnership as principal. A partner may be an individual surety for a fellow partner on a bond if (a) the transaction is in an individual capacity and unrelated to the partnership, (b) sufficient unencumbered nonpartnership property is available as security, and (c) the individual qualifies as an individual surety under the provisions of § 113.35 of this part.

19 C.F.R. § 113.37 Corporate sureties.

(a) Lists of corporations and limits of their bonds. Treasury Department Circular 570 contains a list of corporations authorized to act as sureties on bonds, with the amount in which each may be accepted. Unless otherwise directed by the Commissioner of CBP, no corporation will be accepted as surety on a bond if not named in the current Circular as amended by Federal Register notice and no bond may exceed the respective limit stated in the Circular, unless the excess is protected as prescribed in § 223.11, Bureau of the Fiscal Service Regulations (31 CFR 223.11). (b) Name of corporation on the bond. The name of a corporation executing a CBP bond, as a surety, may be printed or placed thereon by means of a rubber stamp or otherwise, followed by the written signature of the authorized officer or attorney. (c) Name of agent or attorney on the bond. The agent or attorney acting for a corporate surety must have stamped, printed, or typed on each bond executed by him, below his signature, his full name as it appears on the bond. (d) Social security or other surety-generated identification number of agent or attorney on the bond. In the appropriate place on each bond executed by the agent or attorney acting for a corporate surety, the agent or attorney must place his/her social security number or other surety-generated 9-digit alphanumeric identification number, as it appears on the corporate surety power of attorney. (e) Signature and seal of the corporation on the bond. A bond executed by a corporate surety must be signed by an authorized officer or attorney of the corporation and the corporate seal must be affixed immediately adjoining the signature of the person executing the bond, as provided for in § 113.25. (f) Two or more corporate sureties as sureties on the same obligation. Two or more corporate sureties may be accepted as sureties on any obligation the amount of which does not exceed the limitations of their aggregate qualifying power as fixed and determined by the Secretary of the Treasury. The amount for which each corporate surety may act as surety in all cases must be within the limitation prescribed by the Secretary, unless the excess is protected as prescribed in § 223.11, Bureau of the Fiscal Service Regulations (31 CFR 223.11). Each corporate surety must limit its liability to a definite specified amount, in terms, upon the face of the bond by attaching the following: (g) Power of attorney for the agent or attorney of the surety. Corporations may execute powers of attorney to act in their behalf in the following manner: (1) Execution and contents. Corporate surety powers of attorney may be submitted to CBP on the CBP Form 5297 and may be scanned and submitted as an email attachment, or submitted by facsimile (fax) or mail. (i) Corporate surety name and number, (ii) Name and address of agent or attorney, and social security number or other surety-generated 9-digit alphanumeric identification number for the agent or attorney. (iii) Port(s) where the agent or attorney is authorized to act, (iv) Date of execution of power of attorney, (v) Seal of the corporate surety, (vi) Signature of any two principal officers of corporation, and (vii) Dollar amount of authorization. (2) Filing. The corporate surety power of attorney executed on CBP Form 5297 must be filed with CBP. The original(s) of the corporate surety power of attorney must be retained at the port where it(they) was(were) filed. (3) Use at port where power of attorney not filed before receipt of computer printout. If the grantee desires to use the power of attorney at a port covered by the power of attorney, other than the one where the power of attorney was filed, before the first computer printout reflecting this power of attorney is received, the CBP Form 5297, must be filed in triplicate (original and two copies), rather than duplicate. The second copy must be validated by CBP and returned to the grantee. The grantee, at the time of filing a bond at a port other than the port where the power of attorney was filed, must provide this validated copy of the power of attorney as proof of the grant of authority. The validity of this copy of the power of attorney will expire when the first computer printout reflecting this power of attorney is received. (4) Term and revocation. Corporate surety powers of attorney will continue in force and effect until revoked. Any surety desiring that a designated agent or attorney be divested of a power of attorney must execute a revocation on CBP Form 5297. The revocation will take effect on the close of business on the date requested provided the corporate surety power of attorney is received 5 days before the date requested; otherwise the revocation will be effective at the close of business 5 days after the request is received at the port office. (5) Change on the power of attorney. (i) No change may be made on the CBP Form 5297 after it has been approved by CBP except the following: (A) Grantee name change; (B) Grantee address change; and (C) The addition of port(s) to the corporate surety power of attorney on file. (ii) To make any other change to the power of attorney two separate CBP Forms 5297 must be submitted, one revoking the previous power of attorney, and one containing a new grant of authority. Corporate Sureties Agreement for Limitation of Liability ____ (name of surety), ____ (surety code), a surety company incorporated under laws of the State of ____, authorized to conduct a surety business in the State of ____, and having its principal place of business at ____ (address), and ____ (names of surety), ____ (surety code), a surety company incorporated under the laws of the State of ____ and having its principal place of business at ____ (address), as sureties, and ____ (name of principal), as principal, are jointly and severally obligated to the United States in the amount of ____ ($ ) on a bond executed on ____ (date of execution) with each surety jointly and severally obligate with the principal in the amounts listed below and no more: ____ (name of surety) ____ ($ ) ____ (name of surety) ____ ($ ) By this agreement the principal and sureties bind themselves and agree that for the purpose of allowing a joint action against any or all of them, and for that purpose only, this agreement and the bond under which they are obligated and which is incorporated by reference into this agreement, shall be treated as the joint and several as well as the several obligation of each of the parties. Signed and sealed this ____________ day of ____________20____ ____Principal ____Surety ____Surety ____Authorized CBP officer

19 C.F.R. § 113.38 Delinquent sureties.

(a) Acceptance as surety when in default as principal on another CBP bond. No person will be accepted as surety on any CBP bond while in default as principal on any other CBP bond. (b) Acceptance as surety when in default as surety on another CBP bond. A surety on a CBP bond which is in default may be accepted as surety on other CBP bonds only to the extent that the surety assets are unencumbered by the default. (c)(1) Nonacceptance of single transaction bond by port director. A port director may refuse to accept a single transaction 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 § 177.11 from the Executive Director, Regulations and Rulings, Office of International Trade, CBP Headquarters. (2) Non-acceptance of bond upon instruction by Commissioner of CBP or Director, Revenue Division. The Commissioner of CBP, or the Director, Revenue Division, may issue instructions to CBP officers not to accept a bond secured by an individual or corporate surety who, without just cause, is significantly delinquent with respect to either the number or dollar amounts of outstanding bills. (3) Notice of surety. The appropriate CBP 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 a surety under paragraph (c)(3) of this section, if an appropriate CBP officer is still of the opinion that bonds secured by the surety should not be accepted, written notice of the decision will be provided to the surety at least five days before the date that CBP will no longer accept the bonds of the surety. Copies of the notice will also be provided to the Executive Director, Regulations and Rulings, Office of International Trade and, if the notice does not originate from the Revenue Director, to the Director, Revenue Director. Notice will be given to the public by publishing the decision 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.

19 C.F.R. § 113.39 Procedure to remove a surety from Treasury Department Circular 570.

If a port director, Fines, Penalties, and Forfeitures Officer, or authorized Revenue Division officer is dissatisfied with a surety company because the company has neglected or refused to pay a valid demand made on the surety company's bond or otherwise has failed to honor an obligation on that bond, the port director, Fines, Penalties, and Forfeitures Officer, or authorized Revenue Division personnel may take the following steps to recommend that the surety company be removed from Treasury Department Circular 570. (a) Report to Headquarters. A port director, Fines, Penalties, and Forfeitures Officer, or authorized Revenue Division officer will send the following evidence to CBP Headquarters, Attention: Executive Director, Regulations and Rulings, Office of International Trade: (1) A copy of the bond in issue; (2) A copy of the entry or other evidence which shows that there was a default on the bond; (3) A copy of all notices, demands or correspondence sent to the surety company requesting the honoring of the bond obligation; (4) A copy of all correspondence from the surety company; and (5) A written report of the facts known to the port director, Fines, Penalties, and Forfeitures Officer, or authorized Revenue Director personnel showing the unsatisfactory performance by the surety company of the bond obligation(s). (b) Review by Headquarters. CBP Headquarters will review submitted evidence and determine whether further action against the surety company is warranted. If it is determined that further action is warranted, a report recommending appropriate action will be submitted to the Fiscal Assistant Secretary, Department of the Treasury, as required by § 223.18(a), Bureau of the Fiscal Service Regulations (31 CFR 223.18(a)). The port director, Fines, Penalties, and Forfeitures Officer, and Director, Revenue Division will be informed in writing of Headquarters action regarding their request for removal of the surety.

19 C.F.R. § 113.40 Acceptance of cash deposits or obligations of the United States in lieu of sureties on bonds.

(a) General provisions. In lieu of sureties on any bond required or authorized by any law, regulation, or instruction which the Secretary of the Treasury, the Secretary of Homeland Security, or the Commissioner of CBP are authorized to enforce, the Director, Revenue Division or, in the case of single transaction bonds, a port director, may accept United States money, United States bonds (except for savings bonds), United States certificates of indebtedness, Treasury notes, or Treasury bills in an amount equal to the face amount of the bond that would be required. The option to deposit cash or U.S. obligations in lieu of sureties is at the option of the importer, and a CBP Form 301 or other CBP-approved bond designating the appropriate activity for the cash deposits or U.S. obligations in lieu of surety must be filed. When cash or obligations in lieu of surety are accepted, it must be for a term of no more than one year. Additional cash deposits or obligations in lieu of surety may be required. (b) Authority to sell United States obligations on default. At the time of deposit with the Director, Revenue Division, of any U.S. obligation (other than U.S. money), the obligor must deliver a duly executed power of attorney and agreement authorizing the Director, Revenue Division, in the case of any default in the performance of any of the conditions of the bond, to sell the obligation so deposited and to apply the proceeds of the sale, in whole or in part, to the satisfaction of any damages, demands, or deficiency arising by reason of default. The format of the power of attorney and agreement, when the obligor is a corporation, is set forth below and must be appropriately modified when the obligor is either an individual or a partnership: (c) Application of United States money or obligations on default. If United States cash or obligations are deposited in lieu of surety on any bond, the appropriate CBP officer is authorized to apply the cash or money received from the deposited obligation to satisfy any damages, demand, or deficiency arising from a default under the bond. Power of Attorney and Agreement (For Corporation) ____, (name of corporation) a corporation duly incorporated under the laws of the State of ____, and having its principal office in the City of ____, State of ____, as authorized by a resolution of the board of directors of the corporation, passed on the ____ day of ____, 20____, a duly certified copy of which is attached, does constitute and appoint ____ (name and official title of bond-approving officer), and his successors in office, as attorney for said corporation, for and in the name of the corporation to collect or to sell, assign, and transfer the securities described as follows: The securities having been deposited by it as security for the performance of the agreements undertaken in a bond with the United States, executed on the date of ________, 20____, the terms and conditions of which are incorporated by reference into this power of attorney and agreement and made a part hereof. The undersigned agrees that in case of any default in the performance of any of the agreements the attorney shall have full power to collect the securities or any part thereof, or to sell, assign, and transfer the securities or any part thereof at public or private sale, without notice, free from any equity of redemption and without appraisement or valuation, notice and right to redeem being waived and to apply the proceeds of the sale or collection in whole or in part to the satisfaction of any obligation arising by reason of default. The undersigned further agrees that the authority granted by this agreement is irrevocable. The corporation for itself, its successors and assigns, ratifies and confirms whatever the attorney shall do by virtue of this agreement. Witnessed, signed, and sealed, this ______ day of ______________ 20____. [Corporate seal.] By ____ Before me, the undersigned, a notary public within and for the County of ____________, in the State of ____________ (or the District of Columbia), personally appeared ________________________ (name and title of officer) and for and in behalf of said ____________________, a corporation, acknowledged the execution of the foregoing power of attorney. Witness my hand and notarial seal this ________ day of ______________, 20____;. [Notarial seal.] Notary Public ____________________

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