Bond Execution, Marking Off, Cancellation and Enforcement

Bond Execution

Bond execution is the processing of the security bond through the filling of the bond form; signing; sealing; witnessing; approval and capture in the system for use in Customs transactions.
Bonds are legal documents which must be meticulously prepared & properly executed.
Customs security bonds can be executed in accordance with Sections 106-109 of the EACCMA, 2004.

All bonds must be signed and sealed by properly authorised persons representing the surety and the principal debtor.
Be white in colour and size A4
Be submitted in four copies, each clearly marked; Original, Duplicate, Triplicate and Quadruplicate.
Show full address of the principal; guarantor and their identification numbers
Show total bond amounts in both words and figures
The declared Bond In Force amount be supported by attachments
The signatories to show their full names and ranks
Be executed under relevant regulations as to bond types under the EACCMR, 2010

The forms be signed by authorized signatories who should be either, Directors or Company Secretaries and for officers of ranks below that, authority of the Board be obtained and Power of Attorney given.
To affix revenue stamp on original bond
Signatories to appear physically before a Customs Officer at specified times for confirmation and updating of the specimen signatures
Bonds should not be; transferred to other parties, punctured, perforated, erased or altered.
The executed bond upon approval is captured in the system for use by the importer/clearing agent in readiness for registration of entry/ entries.

Bond Marking Off

Bond marking off is the process by which Customs tracks the balance due on a general bond.
When a Customs Agent registers an entry in the Customs Business system by selecting the relevant general bond which already exists in the system, the system automatically deducts the duty amount from the bond balance. This helps to ensure that all entries that require a bond are actually covered by a sufficient bond.
The Customs Business System will reject entries where the duty at stake is more than the bond balance. In such a case, the Customs Agent is notified that he/she has insufficient bond.

Bond cancellation is the process of bond termination upon completion of the specified Customs transaction(s) within the stipulated time limits. Cancellation of Customs security bonds is provided for under Section 108 of EACCMA, 2004.
To facilitate bond cancellation/discharge, the owner of goods or their appointed clearing agent (the principal) is expected to make an application by filling a bond cancellation form (C29) for processing and acquittal.
The application has to be supported by documentary evidence that the secured goods have been treated as stipulated in the Customs law. Withdrawal will be complete when the letter of discharge is given by Customs to the Guarantor with original copy of the bond so that the Principal is discharged from the obligations of paying premiums.

Bond enforcement is the process of recovery of revenue on the bond in force once the principal flouts any of the conditions of the bond.

Bond enforcement can be effected in the following manner:
- Where the conditions of any bond have not been complied with, the Commissioner may by notice in writing require the person who has given security under it to pay to him or her the amount of the security within fourteen days of the notice; and on failure to comply with the notice, the Commissioner may enforce payment of the security as though it were duty due and unpaid (Section 109 of the EACCMA, 2004);
- When the importer fails to meet the conditions of the bond or defaults, he/she commits an offence for which legal action shall be taken in accordance with the Customs offence compounding procedures (Section 219 of the EACCMA, 2004);
- Seize the goods and have them forfeited to the state (Section 210 of the EACCMA, 2004)