HQ 223421: Use of Multiple Bonds to Secure a Single Vessel Repair Entry; 19 U.S.C. 1623; 19 CFR 113.37(f); 31 CFR 223.11

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 223421

                        October 24, 1991

BON-1-02-CO:R:C:E 223421 PH

CATEGORY:  Bonds

Deputy Assistant Regional Commissioner
Commercial Operations
South Central Region

RE:  Use of Multiple Bonds to Secure a Single Vessel Repair
     Entry; 19 U.S.C. 1623; 19 CFR 113.37(f); 31 CFR 223.11

Dear Sir:

     In your memorandum of August 13, 1991 (File:  VES-13-18-
V:O:CO:L GNS), you requested our advice on the use of multiple
bonds to secure a single vessel repair entry.  Our advice
follows.

FACTS:

     You state that in the case of two recent vessel repair
entries, two single transaction bonds were used for each of the
entries.  You provided copies of the vessel repair entries and
the bonds.  You also provided copies of correspondence from the
representative of the vessel owner or manager.  According to
this correspondence, two bonds were necessary for the respective
entries because no surety with which the vessel owner or manager
does business would write a bond for it in the necessary amount
and the two sureties concerned had refused the request of the
vessel owner or manager to share portions of the same bond.  You
request a ruling on the propriety of this practice.

ISSUE:

     May more than one single transaction bond be used to secure
a single vessel repair entry?

LAW AND ANALYSIS:

     Under section 623, Tariff Act of 1930, as amended (19 U.S.C.
1623), Customs is authorized to prescribe the conditions and
form of any bond required or authorized by law, and provide for
the approval of the sureties on such bond.  The Customs
Regulations governing Customs bonds are found in 19 CFR Part 113.

The statutory and regulatory authority for vessel repair duties,
and for a bond for those duties, are found in 19 U.S.C. 1466 and
19 CFR 4.14 (see, in particular 19 CFR 4.14(b)(1)).

     Customs has a long-standing, consistent practice in this
matter.  We have consistently refused to accept two bonds cover-
ing the same transaction in an effort to avoid any unnecessary
uncertainty as to which surety is liable for a breach.  Enclosed
are copies of two ruling letters (211391, dated November 26,
1980, and 213012, dated November 5, 1981) to this effect.  As we
stated in the 1981 ruling letter, "the Customs Service perceives
no valid reason to change the general policy of not accepting
more than one vessel bond to cover the entry and clearance of one
vessel."

     The policy of refusing to accept two bonds covering one
vessel repair entry is distinguished from the provision in 19 CFR
113.37(f), under which two or more sureties may act as corporate
sureties on the same obligation (i.e., they may act as surety on
one bond, under the conditions in that provision).  The regula-
tions governing surety companies doing business with the United
States (see 31 CFR Part 223) also contain provisions for under-
writing obligations in excess of the underwriting limitations of
a particular surety (31 CFR 223.11).  A copy of 31 CFR Part 223
is enclosed.

HOLDING:

     More than one single transaction bond may not be used to
secure a single vessel repair entry.

                              Sincerely,




                              John Durant, Director
                              Commercial Rulings Division


Enclosures