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HQ 115193




February 1, 2001

BON-1-02-RR:IT:EC 115193 GEV

CATEGORY: BONDS

John J. Sheppard II
C.A. Shea & Company, Inc.
720 Palisade Avenue
Englewood Cliffs, New Jersey 07632

RE: Bonds; Rider; Importer Number; 19 U.S.C. § 1623

Dear Mr. Sheppard:

This is in response to your letters dated October 25, 2000 and November 1, 2000, requesting a ruling regarding the addition of unincorporated divisions or trade names to a bond. Our ruling on this matter is set forth below.

FACTS:

Your company filed a number of riders to a bond that would add unincorporated divisions or trade names to that bond. Customs refused to accept these riders based on the fact that these unincorporated divisions or trade names have unique importer numbers different from that of the principal.

You disagree with the rejection of these riders and base your position on the following three points: (1) such unincorporated business units, which do not have a separate and distinct legal status from that of the principal corporation, may have separate and unique FEIN numbers from that of the principal corporation; (2) riders filed pursuant to 19 CFR § 113.24 may add any unincorporated unit, division or trade name; and (3) it is unnecessary for a “root” or “primary” importer number (i.e., an importer number ending in 00) to be listed on the bond prior to an importer number with a suffix other than 00 being added.

You further state that inasmuch as the importer number serves to only identify the bond principal and does not necessarily tie a principal company (such as the principal on the bond) to an unincorporated unit, division, or trade name (user), it is unnecessary for the “root” or “primary” importer number to be similar.

ISSUE:

Whether unincorporated divisions or trade names with unique importer numbers may be added to a bond by a rider submitted pursuant to 19 CFR § 113.24(a)(3) when such importer numbers are dissimilar to that of the current principal.

LAW AND ANALYSIS:

Title 19, United States Code, § 1623 sets forth the legal authority for Customs to promulgate regulations pertaining to the issuance and administration of bonds. Those regulations are set forth in Part 113, Customs Regulations (19 CFR Part 113). With specific regard to riders, §§ 113.24(a)(1)(2) and (3) respectively provide that the port director may accept bond riders for the name change of the principal, for an address change, and for the addition and deletion of trade names and unincorporated divisions of a corporate principal.

Upon reviewing this matter, we note that while we are in accord with your statement regarding the second and third of the three points enumerated above which form the basis of your position, we note that in regard to § 113.24(a)(3), a rider must be devoid of any indicia of an unincorporated division or trade name having a separate and distinct legal status from the corporate principal. (See also § 113.21(a)(2)) Consequently, we disagree with the first point you raise and your subsequent statement that it is unnecessary for the “root” or “primary” importer number of the principal to be similar to that of an unincorporated unit, division, or trade name. To the contrary, such numbers must be similar in order to satisfy the criterion provided in § 113.24(a)(3). In this regard we note that the only deviation from the principal’s importer number would be the optional additional identification in the form of a two-digit suffix code authorized pursuant to § 24.5(d)), Customs Regulations (19 CFR § 24.5(d)).

Accordingly, the subject riders filed by your company were properly rejected in view of the fact that the unique importer numbers listed thereon provided no nexus to that of the existing bond principal. These riders contained no information evidencing an association between the unincorporated divisions or trade names listed thereon and the corporate principal.

HOLDING:

Unincorporated divisions or trade names with unique importer numbers may not be added to a bond by a rider submitted pursuant to 19 CFR § 113.24(a)(3) when such importer numbers are dissimilar to that of the current principal. The only authorized deviation from the principal’s importer number would be the optional additional identification in the form of a two-digit suffix code authorized pursuant to § 24.5(d)), Customs Regulations (19 CFR § 24.5(d)).

Sincerely,

Larry L. Burton

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