Bond Insufficiency Notices Are at an All Time High – Don’t Let This Happen to You!

With rising tariffs, U.S. Customs and Border Protection (CBP) is busy sending importers bond insufficiency notices advising them that their existing customs bond no longer covers their obligations. 

What is a Customs Bond

A customs bond, sometimes called a surety or import bond, is a financial guarantee that ensures importers meet CBP regulations and pay all applicable duties, taxes, fines, and penalties related to importing goods into the United States.

The most common type of bond is an import bond, which is required on all commercial shipments of goods valued over $2,500. An import bond is also required for shipments that are subject to other U.S. government agency requirements.

A single transaction bond can be used for a single entry. However, most importers utilize continuous bonds, which self-renew yearly and cover all customs transactions through any port of entry.

Insufficiency Notices on the Rise

CBP reviews the sufficiency of all active continuous import bonds on a monthly basis. If an importer’s bond has exceeded its capacity, CBP will issue a demand for a larger bond in the form of an insufficiency notice. The recent increase in tariffs means increased bond amounts, and many importers are struggling to properly calculate their bonds to keep them current. The number of bond insufficiency notices issued has quadrupled since 2017 and has accelerated recently with the volatile tariff environment. 50% of insufficient bonds are for bonds under $100k.

Chart courtesy of Colleen Clarke, SVP at Roanoke, GTE Conference 2025

Bond Calculations

CBP provides guidance on current bond formulas (10% of the total duties, taxes, and fees (DTF)  paid in the last 12 months or what you anticipate to pay in the next 12 months). The 12-month calculation is based upon the entry summary date – not entry date. However, this calculation isn’t a guarantee to ensure you are covered for the next calendar year. DTFs include AD/CVD, and 201, 232, 301 and IEEPA tariffs. When the DTF’s are $0-$1,000,000 the bond is rounded to the nearest $10,000, whereas when the DTFs are greater than $1,000,000 the bond amounts are rounded to the nearest $100,000. The minimum continuous bond amount is $50,000.

Chart courtesy of Colleen Clarke, SVP at Roanoke, GTE Conference 2025

Sureties Coverage

Sureties are only allowed to issue bonds up to a certain total value; they are capped at 10% of their net assets (also known as a Treasury Limit or T-limit). The list of sureties and total amount of bonds they can issue are listed in Circular 570. Sureties can co-insure if the bond amount is higher than the sureties’ T-limit. The U.S. Bureau of the Fiscal Service keeps an updated List of Certified Companies for surety bonds.

I Received an Insufficiency Notice – Now What?

A bond insufficiency notice is more than just a warning; it means that your current coverage no longer meets regulatory requirements. If not addressed quickly, CBP may suspend your bond, which could halt your shipments at the port.

Once you receive an insufficiency notice, you generally have 30 days to obtain a new bond with a higher amount. It is critical to act quickly after receiving the notice because new bonds cannot always be issued immediately. The insufficiency letter will usually state the minimum increase required; however, importers should not rely on this amount. Always work with a customs expert to properly calculate the appropriate level for your bond to avoid a subsequent insufficiency notice.

Once you have calculated the appropriate amount, you must submit an application for a new bond with CBP. Sureties also recommend importers obtain a new bond for AD/CVD liability.

Diaz Trade Law Can Help You Properly Calculate Your Bond Amount

Diaz Trade Law utilizes ACE reports to review your past transactions and assists importers in predicting the next 12 months of imports, taking into account all relevant factors including changes in tariff rates. Diaz Trade Law also highly recommends that importers advise their brokers and sureties to put them on notice when their bond is over 75% saturated, so they have the time to increase their bond amount before it expires.

Getting this calculation right is key for every importer’s compliance program and can save a lot of time and hassle down the road. Get in touch with us today for assistance: 305-456-3830 or info@diaztradelaw.com.

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