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Sign inMay2024 · Q42 · Entry & Entry Summary
Changing customs brokers does not rewrite the importer's continuous bond: principal, surety and CBP stay in place
Explain, under BRPD 11.0 (March 2023) Chapter 3, sections 3.3 and 3.4, why an importer that holds a continuous bond contracted with Kitchen Sink Surety keeps that bond unchanged when it terminates its current broker and hires a new broker effective April 15, 2024, before its next shipment due June 1, 2024. The bond is a contract between the principal (the importer, which contracted for it) and the surety (Kitchen Sink, the guarantor), with CBP as the obligee or beneficiary; the customs broker acts as the importer's agent and is not a party to this bond. The new broker's own bond relationship with Best Surety does not by itself substitute Best for Kitchen Sink. Recognize the boundaries: the conclusion is scoped to this broker change on the stated facts, not a claim that a continuous bond can never be terminated, replaced or found insufficient; a continuous bond secures transactions for up to one year and renews automatically for successive one-year periods unless terminated sooner; and the principal must pay all revenue due even above the bond amount, while the surety pays revenue due only up to the bond amount.
What you will learn
Explain, under BRPD 11.0 (March 2023) Chapter 3, sections 3.3 and 3.4, why an importer that holds a continuous bond contracted with Kitchen Sink Surety keeps that bond unchanged when it terminates its current broker and hires a new broker effective April 15, 2024, before its next shipment due June 1, 2024. The bond is a contract between the principal (the importer, which contracted for it) and the surety (Kitchen Sink, the guarantor), with CBP as the obligee or beneficiary; the customs broker acts as the importer's agent and is not a party to this bond. The new broker's own bond relationship with Best Surety does not by itself substitute Best for Kitchen Sink. Recognize the boundaries: the conclusion is scoped to this broker change on the stated facts, not a claim that a continuous bond can never be terminated, replaced or found insufficient; a continuous bond secures transactions for up to one year and renews automatically for successive one-year periods unless terminated sooner; and the principal must pay all revenue due even above the bond amount, while the surety pays revenue due only up to the bond amount.
ACE Entry Summary BRPD (Trade-External) Version 11.0, March 2023, Chapter 3, Section 3.3 Parties to a Bond and Party Responsibilities; ACE BRPD 11.0, March 2023, Chapter 3, Section 3.3 (principal versus surety responsibilities); ACE BRPD 11.0, March 2023, Chapter 3, Section 3.4 Bond Requirement (continuous bond term); ACE BRPD 11.0, March 2023, Chapter 3, Section 3.6 eBond Test Overview (historical transmission context); 19 CFR 113.21(a)(1) Identification of principal and sureties (CFR edition dated 2023-04-01); May 1, 2024 CBLE, question 42 stem (historical original excerpt); May 1, 2024 CBLE official answer key, question 42 · Exam cover (May 1, 2024, CBP Publication 3717-0524) prescribes ACE Entry Summary Business Rules and Process Document (Trade-External) 11.0, March 2023, Chapters 1 through 24, and Title 19 CFR (2023, revised as of April 1, 2023). Sources used: BRPD Version 11.0, March 2023, CBP Publication No. 3125-0323, Chapter 3 (Bonds, 3.1 through 3.14) read in full; official 19 CFR 113.21 XML dated 2023-04-01 read in full. Historical lesson only; no current-law sweep.
Explained using the historical edition for this exam.