May 2024 — Question 42
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?
- AThe existing bond contract between Importer and Kitchen Sink must be terminated and a new continuous bond contract created between Importer and Best.
- BThe 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.
- CThe new broker will notify CBP to substitute Best for Kitchen Sink. on Importer’s continuous bond contract.
- DNo 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.✓ CBP's answer
CBP's cited authority
Answer and citations as published in CBP's official answer key for the May 2024 examination.
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