HK Importers, Inc. (HKI) has a continuous basic importation and entry bond in the amount of $200,000.00 with Total Country Surety. HKI is a client of Best CHB (Best). Best has a continuous basic importation and entry bond with Thrift Surety in the amount of $200,000.00. Best filed entry on January 13, 2026, on behalf of HKI, with HKI listed as the importer of record, for a shipment of wooden chairs with an entered value of $40,000.00. The shipment was released on the same day. Best scheduled the duties, taxes and fees owed on the shipment for ACH payment to CBP nine business days after the date of entry. Best also prepared the entry summary information for transmission to CBP. Due to a computer error at Best, the entry summary information was not transmitted, nor was the payment made. CBP issued a liquidated damages demand in the amount of $100.00 for the failure to file the entry summary information. Which of the following statements is FALSE ?
How to get there
Start with which bond secured this entry. HKI was the importer of record and has its own continuous basic importation bond with Total Country Surety. The obligations on that bond run to the principal and surety:
19 CFR 113.62(a)(1)(i)… the obligors (principal and surety, jointly and severally) agree to: (i) Deposit, within the time prescribed by law or regulation, any duties, taxes, and charges imposed, or estimated to be due …
19 CFR 142.12(b) and 142.15(142.12(b)) … the entry summary documentation shall be filed, with estimated duties attached, within 10 working days after the time of entry. (142.15) If the entry summary documentation is not filed timely, the port director shall make an immediate demand for liquidated damages … When the transaction has been charged against a continuous bond, the demand shall be for the amount that would have been demanded if the merchandise had been released under a single entry bond.
The liquidated damages run against the bond the entry was charged to: HKI's. Best acted only as HKI's agent. Its computer error may matter between Best and its client, and under Part 111 for broker discipline, but it doesn't make Best the party liable on HKI's bond. So A is the FALSE statement.
The other statements
B) HKI is liable as importer of record: true. HKI is the principal on the bond securing the entry.
C) A demand on Total Country Surety if unpaid: true in substance. The surety is jointly and severally liable with HKI, so CBP can pursue it if the principal doesn't pay or petition for relief.
D) Thrift Surety has legal responsibility: CBP's key treats this as true. Our note: none of the provisions the key cites (§§ 113.62(a)(1)(i), 142.12(b), 141.101(a), 142.15) explains why Best's surety would be responsible for HKI's entry. We can't confirm the reasoning from those sources. A candidate who chose D on exam day would have a reasonable basis for an appeal argument.
Trap!"The broker caused it, so the broker pays" is intuitive but wrong for bond liability. Customs liability follows the importer of record and the bond. A broker's errors are handled through client agreements and broker-penalty rules, not by moving bond liability onto the broker.
Sources: 19 CFR 113.62(a)(1)(i); 142.12(b); 142.15; 141.101(a) (eCFR).
CBP answer key: Answer A · 19 CFR 113.62(a)(1)(i); 19 CFR 142.12(b); 19 CFR 141.101(a); 19 CFR 142.15Source: CBP past exams ↗