The published Section 122 cutoff settles the rate on later covered entries, while Activity Code 1 sizing will still draw on qualifying preceding-period duty data.
For customs bond purposes, qualifying Section 122 duties remain in the preceding-12-month data until later review periods move past them. A reduction request therefore begins with two source files. The entry data establishes the surcharge on each transaction, and the reviewer data establishes the security requirement.
Greer's testimony may add useful assumptions to the forward forecast. The operative duty still comes from a legal and customs instrument, and the current security requirement comes from the bond record.
Proclamation 11012 imposed the Section 122 surcharge for 150 days and directed the relevant Harmonized Tariff Schedule modifications to continue through one minute after midnight EDT on July 24. It also treats the surcharge as a regular customs duty. CBP's implementation message applies heading 9903.03.01 to covered articles entered for consumption or withdrawn from warehouse for consumption during the prescribed period.
Congress could extend the surcharge by statute, and the President could expressly suspend, modify, or terminate it earlier. As of July 20, the published cutoff remains the operative customs instruction.
For a later covered entry, removal of the Section 122 line changes the duty deposited on that transaction. The existing continuous bond keeps its stated amount until the applicable termination and replacement process changes it. Its sufficiency remains subject to CBP's security framework.
The CBP bond guide begins the Activity Code 1 reviewer formula with the greater of $50,000 or ten percent of estimated duties, taxes, and fees in the preceding 12-month period. It then applies prescribed increments and, when relevant, analytical additions for unpaid obligations. Because the proclamation classifies the surcharge as a regular customs duty, Section 122 amounts associated with entry types included in the reviewer can appear in that historical data. That conclusion is an inference from the two official rules. CBP has issued no separate Section 122 bond formula.
The prescribed increments matter when management asks for an exact reduction date. From $50,000 through $100,000, the guide rounds to the next $10,000 increment. Above $100,000, it rounds to the next $100,000 increment. A declining historical base may therefore leave the indicated bond amount unchanged until it crosses the next band. The calculation should show both the unrounded formula and the bond amount produced after CBP's increment rule.
The Section 122 instruction turns on entry for consumption or withdrawal from warehouse for consumption. Vessel departure, cargo arrival, purchase order, invoice date, and the Senate hearing sit outside that rule. Start by identifying the transaction population on each side of the published cutoff.
The bond reviewer then narrows the population. CBP's guide excludes specified entry types from the Activity Code 1 calculation, including listed warehouse withdrawal entries. A shipment can therefore fall within the surcharge instruction while its entry type remains outside the reviewer.
A defensible workbook starts at the entry line. Record the date and time used to apply heading 9903.03.01, test the product and country exclusions, and identify any other Chapter 99 treatment. Then map each transaction to the entry types included in CBP's reviewer. The result should tie the assessed Section 122 amount to the included reviewer population without importing shipment dates that play no role in the legal cutoff.
Keep one row for each entry-summary line with its entry number, importer number, entry type, filer, summary date, payment date, Section 122 heading and amount, bond number, and bond period. Preserve the raw ACE extract beside the working file. Reconcile the included and excluded subtotals to the source data before applying the formula. This row-level trail makes later period updates possible without reopening the product-scope analysis.
Keep refund and litigation analysis in its own workstream. Expiration leaves liquidation, refund entitlement, and pending cases unresolved. The Traverse Analysis of the CEA's Trade Act Section 122 paper and court argument addressed the public defense and court record. The present file concerns adequate security for customs activity after the collection window changes.
CBP's public formula uses the greater of $50,000 or ten percent of estimated duties, taxes, and fees in the preceding 12 months. The floor limits the effect for smaller importers. If ten percent of the included historical amount remains below $50,000, the basic calculation stays at the minimum. An importer already above the floor can remain in a higher band after the tariff cutoff because recent Section 122 duties may still be present in the data under review.
CBP's sufficiency notice says the Office of Finance Revenue Division reviews active Activity Code 1 continuous bonds every month. Earlier duty increases provide the precedent. A higher preceding-period base can bring an insufficiency notice or an early replacement designed to avoid repeated changes and stacking. The present episode begins with a fixed tariff cutoff while the reviewer still uses a trailing period.
The monthly process is a monitoring cadence rather than a promised monthly amendment. 19 CFR 113.13 allows CBP to consider payment history, compliance, merchandise value and nature, prior bond commitments, and other information when it assesses sufficiency. If CBP finds a bond inadequate, it provides written notice to the principal and surety. The principal then has 15 days to remedy the deficiency, and CBP may demand additional security when the revenue is at risk.
Prepare a current-sufficiency page and a forward-sizing page. The current page tests the bond on file against activity already charged to it and the duty data under review. The forward page models the next 12 months. Keeping the pages distinct prevents a low forecast from masking a current deficiency and exposes a known duty increase before it reaches the historical base.
The current page should capture every insufficiency notice, unpaid bill, debit voucher, open bond-period issue, and pending request for additional security. The forward page should name the volume owner, sourcing assumption, duty measure, effective date, and confidence assigned to each scenario. Reviewers can then trace a proposed amount to specific evidence instead of debating a blended number whose inputs are unclear.
Duty payment leaves the bond's stated amount intact. The guide explains that payment of duties or penalties by the principal does not exhaust or reduce the continuous bond. 19 CFR 113.62 also preserves the obligation to pay duties, taxes, and charges finally determined to be due. Finance data confirms the cash deposit, while the bond file identifies the secured transactions and periods that CBP will review.
Consider an importer with $4 million of included duties, taxes, and fees in the period reviewed before the surcharge. The basic ten percent calculation points to $400,000 before CBP's increments and any analytical additions. If included Section 122 duties add $2 million to the relevant historical data, the same simplified calculation points to $600,000.
After the cutoff, the hypothetical $2 million can remain in the historical data even though later covered entries carry no Section 122 surcharge. As CBP advances the preceding-12-month review period, included amounts should begin to roll out according to the dates and data fields used in the reviewer. The public materials provide no transaction-by-transaction anniversary rule. Entry date, entry-summary date, payment date, and Periodic Monthly Statement timing can differ.
Treat the illustration as a sensitivity case. It excludes CBP's rounding rules, entry-type exclusions, unpaid bills, debit vouchers, merchandise risk, changes in volume, and a surety's commercial terms. Reconcile the model to the ACE or Office of Finance Revenue Division data used for the actual review and confirm the timing with the broker and surety before requesting a change.
For each projected review month, show the included duty base, the Section 122 amount expected to remain, other duties entering or leaving the period, the unrounded ten percent result, the prescribed bond band, and the amount currently on file. Label every source date and assumption owner. This view reveals whether a proposed reduction depends on one unsettled date field or still works across a reasonable range of review periods.
The distinction also matters for premium and collateral expectations. CBP sets the public security framework. Sureties assess their own commercial risk. A lower prospective tariff rate can improve the forecast without compelling a particular premium, collateral release, or effective date.
Changing the amount requires the applicable termination and replacement process.
19 CFR 113.27 generally makes a principal-requested termination effective no earlier than 10 business days after CBP receives the request. A surety's prospective termination ordinarily requires 30 days' notice unless CBP accepts a shorter period. No new customs transactions may be charged to a terminated bond, so an appropriate replacement must be effective before later activity occurs. The surety cannot disavow obligations already incurred under the old bond.
Stacking arises because several annual bond periods can remain exposed to the transactions charged to them, while the new bond accepts the later activity. CBP's monthly-review notice tells importers to forecast the next 12 months so that a change above the minimum avoids repeated replacements and additional stacking exposure.
Recent Section 122 amounts may remain in the review data, other duties can keep the required security high, and an undersized replacement can prompt another change. CBP may require cash deposits or single-transaction bonds while an insufficiency is being remedied. The failure then appears at entry, where a shipment waits for acceptable security.
Before giving a termination instruction, the importer should know the requested effective date, the replacement bond's effective date, the entry activity expected during the interval, and the surety's document requirements. Those dates belong in the decision file.
The sequence should be written before anyone submits the request. Confirm the amount accepted for the replacement, obtain the executed bond, identify the first transaction that will charge against it, and test the principal and importer numbers against the filing. Then align the old bond's termination with the new bond's effective date. A verbal assurance that the replacement is being processed is not evidence of coverage for an entry transmitted during the gap. The file should preserve CBP and surety confirmations together with the broker instruction.
USTR's June record labels the ten or 12.5 percent rates in 60 forced-labor investigations as proposed. Exclude them from the historical bond base.
Keep collected duties in the base column and carry the proposed tariff in a named scenario until USTR issues final action with product scope, effective-date language, and customs implementation. The model should also account for Section 232 duties, antidumping and countervailing duties, ordinary duties, fees, and changes in volume or sourcing. Section 122 is one item leaving the prospective stack after the July 24 cutoff.
Use the official U.S. Senate Finance hearing record and Traverse's U.S. Senate Finance Policy Signal for The President's 2026 Trade Policy Agenda to update the scenario register. Move a measure into the effective case when the required legal action and customs implementation arrive.
For each policy scenario, record the authority, product and country scope, proposed rate, earliest plausible effective date, and the official event that would change its status. Assign an owner to check that event. This keeps hearing language useful without allowing it to enter the bond base prematurely.
Pull the duties, taxes, and fees used for the relevant preceding-12-month view from ACE and reconcile them to every importer number, co-principal, and user on the bond. Tag Section 122 at the entry line, then remove entry types excluded from the reviewer before calculating a tentative amount.
Build a monthly roll-forward using the period and data fields found in the CBP review data. Keep the $50,000 floor and bond increments visible. Add separate fields for unpaid bills and debit vouchers that can affect the analytical formula. Show a precise release date only when the source data supports one.
Run at least three prospective cases. The base case holds current non-Section 122 duties and volume steady. The effective-measures case adds only duties that are final and in force. The policy case carries proposed measures with named assumptions. This lets management see which result comes from recorded customs activity and which depends on a policy event that has not happened.
Match the calculation to the executed CBP Form 301 and the surety file. Record the current amount, effective date, principal, surety, collateral arrangement, and entries charged during each bond period. A group using several brokers should reconcile the full population to ACE because a single broker report can omit duties transmitted by another filer.
Keep a dated decision record with the data extract, formula version, exclusions, forecast assumptions, reviewer correspondence, and approval for the chosen amount. That record will matter if a later monthly review produces a different result or if a business unit asks why collateral was not released at the tariff cutoff. It also lets the team update one assumption without rebuilding the legal and transaction population from scratch.
The completed file should support one of four actions. Leave the bond unchanged when the current amount covers both the reviewer result and the defensible forecast. Increase it through a replacement when actual or forecast exposure exceeds the present amount or CBP has found it insufficient. Request a lower replacement only when the review data supports the decrease, the forward cases remain covered, and the notice periods avoid a gap. Defer a reduction when Section 122 amounts have not yet rolled out of the relevant data, another duty action can keep exposure elevated, or the importer cannot yet reconcile open obligations and effective dates.
By July 24, management should have a reconciled reviewer base, a set of forecast cases, a decision owner, and the earliest feasible replacement date. A reduction case can remain open while the relevant amounts move through CBP's review data. Each monthly refresh should update the evidence, the indicated bond band, and the conditions for action.
That record gives the tariff team, finance, the broker, and the surety the same set of numbers. When the data supports a change, the importer can request it with the notice periods and coverage sequence already resolved. Until then, the existing bond remains a documented decision rather than an assumption tied to the headline date.
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