Customs Bond Insufficiency in 2026: Why CBP Sent the Letter, and When a Bond Can Come Down

A bond insufficiency notice means CBP has re-run its formula on your last 12 months of duties, taxes, and fees and decided your continuous bond is too small. Under 19 CFR 113.13(c), you then have 15 days to fix it, and until you do, CBP can require cash deposits or single transaction bonds on your entries. As of October 27, 2026, 2026 tariffs are moving that formula both ways. Forced-labor Section 301 duties and Section 232 duties push required bond amounts up for the importers they hit. IEEPA duties ended in February and are rolling out of the 12-month window, which pulls the number down for others. This guide explains how CBP decides a bond is insufficient, how to respond to a notice, and when you might be able to lower a bond instead.

For definitions, see our customs bonds guide. For premiums and sureties, see what a customs bond costs. This piece is about the notice itself.

How CBP Decides Your Bond Is Too Small

The regulation sets the process and leaves the formula to guidance. 19 CFR 113.13(b) lists the factors CBP weighs, such as your payment record, the value and nature of your goods, and your liquidated damages history. 113.13(c) says CBP "will periodically review each bond on file to determine whether the bond is adequate to protect the revenue." The regulation has no percentage in it.

The percentage comes from CBP guidance. For decades that guidance was CBP Directive 3510-004 (1991), which used 10% of duties, taxes, and fees paid during the calendar year before the application. In February 2024, CBP marked that directive "For Internal Use Only." It replaced it for the public with A Guide for the Public: How CBP Sets Bond Amounts (Publication #3569-0224). CBP's own summary of changes points out the rewording. The guide sets the importer's continuous bond at:

"$50,000 or 10% of the total estimated duties, taxes, and fees in the previous 12-month period, whichever is greater"

The result is rounded up in $10,000 steps to $100,000, then in $100,000 steps. CBP calls this the "Reviewer formula." Its "Analytical formula" adds delinquent bills and unpaid debit vouchers on top, and some entry types, including type 11 informal entries, warehouse withdrawals and drawback, don't count at all. Our bond cost guide works through that arithmetic, so we won't repeat it here.

Two details in that wording matter in 2026:

• "Previous 12-month period." The window is rolling. It is not your bond year and not the calendar year. It moves forward every month, so old months drop off as new ones come in.
• "Estimated." The base is what was deposited when the entry summary was filed. It is not what CBP finally assesses at liquidation.

CBP doesn't wait for your renewal date to check either. Its 2018 message on the subject (CSMS #18-000664) says the Revenue Division "conducts sufficiency review for all active Activity Code Type 1 continuous bonds on a monthly basis." Under the guide, the Director of the Office of Finance, Revenue Division (OF-RD) is the only one who issues a notice of continuous bond insufficiency.

What Is in Your 12-Month Window as of October 27, 2026

This is where 2026 gets unusual. Over the year, three different tariff programs have run on most imports, one after the other, each with its own dates:

As of October 27, 2026, your trailing 12-month window runs back to late October 2025. That means it still holds about four months of IEEPA-era deposits, all five months of the Section 122 surcharge, and about three months of forced-labor Section 301 duties. Each month that passes swaps out one old month for one new one. The last IEEPA-era entries leave the window around February 24, 2027. The Section 122 months leave between February and July 2027.

Whether that moves your bond up or down depends on what you import.

Pulling down. Suppose your IEEPA duty rates were higher than what replaced them. Then every month that rolls off is a heavy month swapped for a lighter one, and your trailing total falls.

Pushing up. Now suppose your goods carried little or no IEEPA duty but do carry the forced-labor Section 301 duty. Your trailing total rises every month until July 2027, when the window holds a full year of it. The same goes if Section 232 duties reached more of your products during the year, or if your volume grew. One interaction to keep straight: the forced-labor action exempts steel, aluminum and copper articles, aluminum and steel derivatives, and several other categories, including passenger vehicles, certain vehicle parts and wood products (Annex I, U.S. note 52(f) of the USTR notice). For a given product, the two programs generally don't stack. Our forced-labor tariffs page covers the exemptions, and the 2026 tariff stacking guide shows how the layers add up on an entry.

Two hypothetical importers

These numbers are invented to show the mechanics. They are our arithmetic, not CBP data, and we've rounded to whole months.

Importer A: the bond can come down. Estimated duties, taxes, and fees ran $90,000 a month under IEEPA, $55,000 a month under the Section 122 surcharge, and $50,000 a month under forced-labor 301.

• At the IEEPA peak, 12 months × $90,000 = $1,080,000. 10% is $108,000. That's above $100,000, so it rounds up to the next $100,000 step: a $200,000 bond.
• For the window ending October 2026 (November 2025 through October 2026), it's 4 × $90,000 + 5 × $55,000 + 3 × $50,000 = $785,000. 10% is $78,500, so an $80,000 bond.

Importer B: the bond goes up, then up again. This importer ran $40,000 a month before the forced-labor action and $60,000 a month after it, on a $50,000 bond.

• For the window ending October 2026, it's 9 × $40,000 + 3 × $60,000 = $540,000. 10% is $54,000, so a $60,000 bond. The $50,000 bond is now short.
• For the window ending July 2027, it's 12 × $60,000 = $720,000. 10% is $72,000, so an $80,000 bond. If B replaces its bond at $60,000 today, it will be short again by spring.

Look at the step above $100,000 in Importer A's numbers. Crossing $100,000 of computed bond moves you from $10,000 steps to $100,000 steps. Dropping back under it can cut the required amount by more than half.

Why a Refund May Not Shrink the Number

Many importers expect their IEEPA refunds to lower their required bond. Be careful with that assumption.

CBP refunds IEEPA duties through CAPE (Consolidated Administration and Processing of Entries), a function in ACE. According to CSMS #68340863, CAPE recalculates the duties owed on an entry summary "as if IEEPA duties were never owed," and refunds the difference with interest. That changes what you finally owe. It does not change what you deposited when you filed.

CBP's guide bases the bond formula on "total estimated duties, taxes, and fees." As of October 27, 2026, we have not found any CBP publication saying refunded IEEPA duties come out of the sufficiency base. Until CBP says so in writing, assume your refunds will not lower your required bond. Plan for the IEEPA months to stop counting when they age out of the 12-month window, not when the refund arrives. If this question decides whether you can lower your bond, ask CBP. The guide directs bond policy questions to the Office of Trade at otbond@cbp.dhs.gov, and CSMS #18-000664 lists the Revenue Division's bond team at bondquestions@cbp.dhs.gov.

For the refund side, see our IEEPA CAPE refund page and how to check your entries' liquidation dates in ACE.

What an Insufficiency Notice Triggers

The notice goes to both you and your surety. 19 CFR 113.13(c) requires CBP to notify the principal and surety in writing, and gives the principal 15 days to correct the deficiency. CBP's guide refers to a "deadline to terminate and replace the continuous bond provided in the insufficiency notice," so read the notice for its own date. Don't count days from when it reached your inbox.

Until the bond is corrected, the regulation allows CBP to require cash deposits or single transaction bonds (STBs) covering your transactions. In practice, that means paying for extra bonds or tying up cash on every entry until the replacement is filed. Under the guide, an STB for an ordinary consumption entry generally has to cover the full entered value plus duties, taxes, and fees.

You can't fix the problem with a second continuous bond. Under 19 CFR 113.12(b), CBP authorizes only one continuous bond per activity for each importer number. The fix is a new bond at the higher amount, with the old one terminated. CBP explained the principle in a 2009 Federal Register notice ending an enhanced bonding requirement for certain shrimp importers: "CBP does not retroactively raise or lower bond security amounts that cover past customs transactions." When a bond is insufficient, "the principal is only required to terminate the existing bond and obtain a new bond with additional security for future importations. The obligation of the earlier bond for the earlier time period remains in place." The same notice says that "termination will not occur automatically and importers must request termination pursuant to 19 CFR 113.27(a)."

Under 113.27, a termination you request takes effect on your requested date, as long as that date is "at least 10 business days after the date CBP receives the request." That timeline matters when your correction deadline is short. Your surety needs to file the new bond and you need to file the termination request, and the two dates have to line up so you are never without coverage.

How to Respond: A Working Checklist

1. Read the notice for its amount and deadline. Note the date CBP gave you to terminate and replace. Tell your surety and your broker the same day.
2. Check CBP's math against your own ACE data. Pull 12 months of entry summaries. Leave out the excluded entry types, such as type 11, warehouse withdrawals and drawback. Total the estimated duties, taxes, and fees and apply the 10% and the rounding. If your number is lower, find out why before you accept theirs.
3. Look for unpaid bills. The Analytical formula adds delinquent bills, and a bill past 210 days counts dollar for dollar. The guide says that if unpaid bills or debit vouchers are paid before the notice's deadline "and the OF-RD is timely notified of the payment(s), OF-RD will recompute the continuous bond amount." Paying a stale bill can be the cheapest fix there is. It is CBP's recompute, though, so file the notice of payment and don't assume the result.
4. Size the replacement forward, not just backward. CSMS #18-000664 tells importers to "forecast their import activities for the next 12 months, to determine if a bond increase beyond the minimum amount will be more appropriate." If you're Importer B, a bond sized only to today's window is a bond you'll replace again in a few months.
5. File the superseding bond and the termination together. Your surety files the new bond. You request termination of the old one with an effective date that is at least 10 business days out and matches the new bond's start date.
6. Compare sureties if you like. A new surety doesn't change what CBP requires, but a replacement bond is a fresh underwriting decision. Our cost guide lists what to compare.

Under 19 CFR 113.40, CBP may also accept cash or U.S. obligations in lieu of a surety, in the full bond amount, for no more than one year. That avoids a premium but ties up the whole amount.

When You Might Be Able to Reduce a Bond

Lowering a bond works the same way as raising one. You file a new bond at the lower amount and request termination of the old one. No form specifically asks CBP for a decrease. A smaller bond is just a new bond that has to pass the same monthly sufficiency review as the old one.

So the question to ask is whether a lower bond will pass review now and keep passing for the next 12 months. A reduction is worth a serious look when:

• Your recomputed amount has fallen by at least one rounding step. For Importer A, dropping below $100,000 of computed bond changed the requirement from $200,000 to $80,000. A drop that stays inside the same rounding step changes nothing.
• The heavy months have actually left the window. Count from the dates on your own entries, not from refund dates. IEEPA-era entries keep counting until they age out, so the window fully clears them around February 24, 2027. Section 122 entries clear between February and July 2027.
• Your forward projection agrees. If your forced-labor 301 exposure or volume is rising, a smaller bond today can bring an insufficiency notice next quarter.
• You have no open delinquent bills. They feed the Analytical formula, and they're the first thing a surety will ask about.

Be careful with the downside. If a reduced bond triggers a notice, you're back in the 15-day process, with STBs or cash deposits possible in the meantime. For a borderline importer, keeping the bond a step higher can be cheaper than replacing it twice. Your surety can tell you what that extra step costs in premium.

If you file informal entries, keep one more thing in mind. Type 11 entries are excluded from the computation today. CBP's October 8, 2026 proposal would require a bond on every informal entry, but it is not in effect. We covered it in CBP's low-value shipments proposed rule.

How We Help

Strix does not underwrite bonds, and CBP alone decides whether a bond is sufficient. What we do is the work around that decision:

• Clear. Full-service customs brokerage at $100–$250 per entry. Bond setup is part of onboarding, sized on your real numbers before your first entry.
• Consult. A bond sufficiency review. We rebuild CBP's Reviewer and Analytical formulas from your ACE data, project the next 12 months through the IEEPA, Section 122 and forced-labor 301 rolloff, and tell you whether to hold, raise or reduce your bond and when.
• Comply. Responding to a notice: checking CBP's figure, clearing delinquent bills, and timing the superseding bond and termination so you're never without coverage. Where filed entries need correcting, we handle Post Summary Corrections at $150 per PSC entry (up to 10 lines). PSCs can't be used to claim IEEPA refunds, which go through CAPE.
• Automate. Self-filing at $30 per entry, for importers who want to run their own entries and keep their own eye on the window. You still need your own bond either way.

See every service on our pricing page.

19 CFR 113.13(c) gives the principal 15 days to correct the deficiency once CBP notifies it in writing. The notice itself carries a deadline to terminate and replace the bond, and that is the date to work to. Until the bond is corrected, CBP may require cash deposits or single transaction bonds on your transactions.

Will my IEEPA refund lower the bond amount CBP requires?
Don't count on it. CBP's guide bases the formula on estimated duties, taxes, and fees from the previous 12 months. As of October 27, 2026, we have not found CBP guidance saying CAPE refunds reduce that base. The IEEPA months stop counting when they age out of the 12-month window, which for the last IEEPA entries is around February 24, 2027.

Can I lower my continuous bond now that IEEPA duties have ended?
Possibly, if your trailing 12 months, recomputed with the IEEPA months that remain in the window, falls at least one rounding step below your current bond and your forward projection holds up. You would file a new bond at the lower amount and request termination of the old one under 19 CFR 113.27. The new bond goes through the same monthly sufficiency review.

Does switching to a new surety fix an insufficiency?
Only if the new bond is filed at the amount CBP requires. The insufficiency comes from your duties and bill history, not from your surety. A new surety's bond is one way to file the larger replacement, and it's a reasonable time to compare terms.

Got a Notice, or Wondering If Your Bond Can Come Down?

Send us the notice, or just your last 12 months of entries. A licensed broker will rebuild CBP's numbers, show you what the window looks like through mid-2027, and walk you through raising, holding or reducing your bond, timed so you never lose coverage. Talk to our team.

This article reflects the rules and CBP guidance as of October 27, 2026. Check for newer CBP guidance on bond sufficiency, especially on how refunds are treated, before acting on it.