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April 2024, question 42

Entry / Entry Summary · Customs bonds

Importer has a contract with Kitchen Sink Surety Co. (Kitchen Sink) for a continuous bond. Importer is terminating its relationship with its current broker and is hiring a new broker effective April 15, 2024, and before its next shipment due June 1, 2024. The new broker does not have an existing relationship with Kitchen Sink but has its bond with Best Surety Co. (Best). What changes will need to be made to Importer’s continuous bond contract with Kitchen Sink when Importer terminates its relationship with its current broker and hires the new broker?

  1. The existing bond contract between Importer and Kitchen Sink must be terminated and a new continuous bond contract created between Importer and Best.
  2. The existing bond contract will need to be converted from a continuous bond to a single transaction bond contract to cover the June 1, 2024 shipment.
  3. The new broker will notify CBP to substitute Best for Kitchen Sink. on Importer’s continuous bond contract.
  4. No changes to the existing bond contract are required and Importer as the principal, Kitchen Sink as the surety, and CBP as the beneficiary will remain intact.
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CBP's answer: D. D: No changes to the existing bond contract are required and Importer as the principal, Kitchen Sink as the surety, and CBP as the beneficiary will remain intact.

The importer's continuous bond is a contract between the importer as principal and its surety, Kitchen Sink. The broker's own bond with Best Surety is a separate matter, so changing brokers changes nothing in the importer's contract, and the parties stay intact (D).

The bond is a contract between two parties: the principal and surety. ACE BRPD Section 3.3

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CBP's key cites: ACE BRPD Chapter 3

Question and key from CBP's April 2024 exam and answer key. The walk-through is ours; quotes are from the pinned editions in the reference viewer (HTSUS 2026 Basic, 19 CFR 2025 edition).