Answer first
Core rule
The principal promises performance and the surety secures that promise to CBP under the bond; liability is governed by the bond and Part 113. A surety's termination of a continuous bond follows the prescribed notice and effective-date rules and generally does not release obligations that attached before termination became effective.
Authority and lookup route
Locate the rule before returning to the facts. Links point to government or official publications.
Reference lookup task
On a blank CBP Form 301, label the principal, surety, activity code, bond type, limit of liability, and effective date. Then use § 113.27 to draw a timeline showing notice, termination effectiveness, a pre-effective-date entry, and a post-effective-date entry.
Route: CBP Form 301 parties and terms → §§ 113.37–113.40 security → § 113.27 termination timeline
Worked example
A surety gives valid notice terminating a continuous bond effective September 30. An entry was made September 20, and another is planned October 2. Does termination erase both?
- 1Verify the notice and effective date under § 113.27.
- 2Place the September 20 entry before the termination effective date and preserve liabilities already attached under the bond.
- 3Place the October 2 entry after termination and require replacement coverage before relying on the old bond.
Conclusion: No. The September 20 transaction is not retroactively released merely by termination. The old continuous bond should not be relied on for the October 2 transaction after termination is effective.
Common traps
- Treating principal and surety as the same legal role.
- Assuming termination retroactively cancels liability on prior covered transactions.
- Using a notice date as the effective termination date without reading § 113.27.
- Assuming any private guarantor or collateral form is automatically acceptable to CBP.