U.S. Bonded Carrier Issues Are On The Rise? Why?

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1 U.S. Bonded Carrier Issues Are On The Rise? Why?

2 What is a bonded load? In bond shipments refers to imports or export shipments which have not been cleared by customs. In bond shipments to and within the U.S. are shipments not intended to enter the U.S. commerce. In bond shipments is a term applied to the status of merchandise admitted provisionally to the U.S. without payment of duties or applicable taxes. An in bond shipment indicates an origin where the bond is arrived and a destination where the bond again will be arrived or considered cancelled or closed.

3 U.S. Bonded Highway Carrier Can transport cargo that was received from a foreign location (outside of the U.S.) and not customs clearing at the point of arrival and may be for export from the U.S. or customs clearance will occur at another location within the U.S., or a domestic carrier that merely wants to transport imported cargo "IN BOND" from one state to another There does seem to be a larger number of these types of shipments moving especially from the southern border with export to Canada; freight sold from Canadian locations with an ultimate destination to Mexico and all with liability to the carrier who is not aware or not meeting their obligations as a bonded carrier and in some cases may be complicated by 3 rd party logistic providers involvement and lack of direction

4 Your Bond Belongs to You First, your bond belongs to you and should not be associated to a shipment authorized to move without your written authorization. Customs brokers require a power of attorney in order to utilize your bond and this should be restricted to single use only U.S. brokers who may complete paper QP bonds on behalf of an importer/carrier should be provided a one time power of attorney. Carriers should not sign a typical power of attorney signed by an importer & not specific to this shipment only.

5 ACE In-Bond vs. QP ACE In-Bond now allows a carrier to electronically control what in the past has been commonly a paper process In order to complete an ACE In-Bond, a carrier receives from the local U.S. customs port a series on in-bond numbers for their use For carriers crossing the border directly, completing the bond as part of your e-manifest is actioned by selecting shipment type ACE In-bond and answering the additional questions to create the 7512 The bond like a QP bond is opened or arrived when the truck arrives at the border with the associated e-manifest A QP bond is still commonly provided by a customs broker on behalf of the importer or based on a power of attorney on file with the carrier

6 ACE In-Bond vs. QP (continued) A QP bond is still commonly provided by a customs broker on behalf of the importer or based on a power of attorney on file with the carrier A QP bond is still considered a paper or manual process Customs would expect at the port of destination, the carrier will report and request cancellation by CBP of the bond prior to export from the U.S. or at the time freight arrives at the destination port / place indicated on the 7512

7 ACE In-Bond The benefit of having an ACE In-Bond electronically associated or filed includes: - the ability to manage the paper process electronically - the ability to confirm the bond has been opened (arrived) - the ability to send directly an electronic message to arrive at destination within prescribed time frames based on the delivery - no longer being dependent on the driver or customs or the paper documentation - the ability to print the form CBP 7512 and provide as necessary - total control to reduce your potential liability against penalty action

8 ACE In-Bond Screen Print Sample

9 ACE In-Bond Produced CBP Form 7512 How To Print CBP Form 7512

10 ACE In-Bond Messages to be sent to CBP ACE In-Bond Shipment Options ACE In-Bond BOL Late

11 Recent Issues Posting your bond against shipments should be done with care and an understanding of your liability (penalty action for non-compliance is happening way to often). 3 rd party logistic providers or carriers not advising a carrier of the need for the goods to move in-bond until freight is loaded or truck is dispatched Your dispatch and drivers should understand the reporting requirements associated with ensuring a bond is properly closed once opened or arrived and monitoring the bond should include messaging to the driver for reporting to a U.S. CBP prior to exit to Canada (especially if not directly filing the bond). Drivers not following direction for the closure of a bond prior to exit or arrival at the destination where the bond is to be closed

12 What steps can be taken after the fact? Once the goods have left the U.S. without report to CBP some alternative actions: - return back to the U.S. - contact the originator of the bond (with supporting documentation that party may be able to arrive the bond on your behalf). Carriers may be able to receive access to bonds associated to your SCAC code/ bond # but it s complicated and not as easy as may be thought to be - Be prepared for potential penalty action to be received because of not meeting the original requirements - Protest or request mitigation to the penalty issued since they are commonly issued equal to the value of the merchandise

13 Bonded freight leaving Canada Cargo for export is subject to export reporting if the value is over $2, and although the shipper s responsibility to provide a copy of the Canadian Automated Export Declaration (CAED) to the carrier it is the carrier s responsibility to have it prior to the export and departure from Canada This would apply to all goods shipping for example from Canada to Mexico whether moving in-bond through the U.S. or not As part of your in-bond procedures ensuring a CAED is provided as part of paperwork is your responsibility. Minimally a 23 digit export proof of export number should be provided and maintained for your records.

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16 Mark your Calendar! Please join us again on Thursday February 25 th at 2pm ET For our next webinar What We ve Learned since ACI has become Mandatory on January 11. To register, visit BorderConnect s event page, or justin@borderconnect.com for a registration link.