Expeditors International of Washington, Inc. ($EXPD)

All right. Good morning and good afternoon to everyone, and thank you for taking time out of your day to join our Customs Bonds: What Importers Need to Know webinar. With everything that is going on in the trade landscape recently, I'm sure this webinar will give you a lot of insight and helpful information. We'll wait just another moment for everyone to join and then we'll get started. If you guys are just joining, I just wanted to say thank you for joining our webinar today. We'll just wait a few more seconds for everyone to get settled in and then we'll get started. All right. Again, thank you, everyone, for joining our Customs Bonds webinar today. My name is Sarah Maas, and I am the Midwest regional Sales Operations and Marketing contact based in Minneapolis, and I'll be your webinar host for today. Before we begin, I do want to cover a couple of items to note. This webinar will be about 1 hour, and we'll have about 45 minutes of information presented, and then we'll have 10 to 15 minutes at the end for Q&A. [Operator Instructions] And then we want you to review our short webinar disclaimer. And if any of you have joined our customs market updates recently, I'm sure you're familiar with those disclaimer. And we just wanted to make note that all of the information that is presented today is accurate as of right now at this moment. And we are recording the webinar today, and you'll receive a pop-up notification alerting you that the recording has started in just a moment. And then later this afternoon, you'll receive an e-mail, which includes a short survey that we would like you to complete with your feedback. And then after you complete the survey, there will be a landing page link that will take you to a website with the presentation, the recording from today as well as a couple of additional resource links for your reference. All right. So I will get the recording started. So here's the agenda for today's webinar. And then I'd like to introduce our speakers for today. Roma Sereke is the Custom Bonds Program Manager for U.S. Customs here at Expeditors, and she is based at our corporate headquarters in Seattle. And then we have Cara Lemire, who is our Regional Trade Compliance Manager for the Midwest and she is based in our St. Louis office. And one last reminder, all questions should go into the Q&A window. And with that, I'll turn it over to Cara.

Okay. Thank You very much, Sarah. Appreciate that. Well, thanks, everyone, for joining us today. We really appreciate your time. We know it's a very busy time in the industry right now. And I'm going to kick us off with talking about the trade remedy landscape, mostly IEEPA. We're going to talk through the current events that have been happening. They're changing rather quickly. And I'm going to start off here by talking about key takeaways from the Supreme Court's decision. So on February 20, the Supreme Court, 6-3 said that IEEPA doesn't allow for the imposition of tariffs and that all tariffs under IEEPA are considered invalid. So that's not just the reciprocal tariffs, not just the fentanyl tariffs. That also include tariffs that were specifically for IEEPA on Brazil and IEEPA that was used to put tariffs on India. So those actually were removed a little bit or removed in early February, but this did not impact the collection of tariffs under Section 301 or 232. So everything is still business as usual with 301 and 232. So customs issues what's called a CSMS message saying that they were going to stop collecting IEEPA duties effective 12:00 a.m. on February 24. And that's where that left all of us, okay? So essentially, here are all the tariffs that are being collected. And really, it's this list of IEEPA duties that's on the right that were removed. All right. So of course, we left off with the Supreme Court's decision. It was made and then IEEPA tariffs stopped. And simultaneously, we started with the Section 122 tariffs the next day. So this is just a screenshot of those two CSMS messages I was talking about that shows activity that we saw from a customs perspective. So on the left, we have where the IEEPA tariffs were ending. And then on the right, we have where the 122 was starting. And the one thing that we try to do all the time in our webinars is make sure that we give you these source documentations, so that you can go take a look at this information on your own as well, okay? And you'll see those throughout our presentation today, and I'll do my best to call those out to you. So this is what is on a lot of people's minds right now. I know that I have gotten lots of questions on, "Hey, what are the potential for IEEPA duty refunds? What's happening? Where are we at?." All right. So I want to talk about last week. So last week was very, very eventful. So we had the CIT or the Court of International Trade. They issued a very interesting order. So we're going to start by jumping into this one a little bit. So this was issued by Judge Eaton on Wednesday, and it was a case between Atmus Filtration and the United States. So Judge Eaton in his order essentially says that all importers of record are subject to IEEPA duties being refunded, and they get the benefit of the Supreme Court's decision under the Learning Resources case, okay? So the Learning Resources case -- was the case that went to the Supreme Court. He also goes on to explain, okay, in this order, why he has the authority to make this order and why it's not a universal injunction. So essentially, there's some language in there about how he's not overstepping the Court of International Trade and has this authority. It says also that he's been assigned to all the IEEPA cases of the Court of International Trade. So this will be uniform in application. And he clearly -- very clearly at the end here, directs customs to liquidate the unliquidated entries without IEEPA duties and then re-liquidate entries that are not yet finalized to remove the IEEPA duties. Again, we have the source document here, and this is one that we do really encourage to go read. It's pretty short. It's two pages. It's well worth your time to read because you can really see what the judge is trying to do here. And so that was Wednesday, right? So then here comes Thursday. So then on Thursday, there was an amendment to the order, and this was also issued by Judge Eaton. So this amendment didn't change anything that was issued the day before. In this amendment, he is essentially saying, here are some other reasons why I have the authority to issue what I did the previous day. So he is anticipating the arguments that the government might make in the future so that he amends that previous order. So the relief stayed the same, meaning that in terms of all importers, they should get the benefit and should get their money back for IEEPA. So in this amendment, he's just saying, "Hey, let me clarify a few things here." And then we also have a source document on this one if you'd like to read that too. Okay? So that was Wednesday and Thursday, okay, very eventful week. And you might have thought we were going to be done for the week. But no, more so happened. On Friday last week, even more fun happened. So this is when we start to see the government's response and conversations about implementation. And so we're going to take a further look into this. First of all, what we saw on Friday that came out. This was from U.S. Customs and Border protection, specifically Brandon Lord, and he is the Executive Director of Trade programs. So he has the authority to speak on this topic. So this document is about 13 pages long. It's a little bit longer, okay. We're going to go through a kind of highlight Seven key highlights for you, okay? And then we've got the source document here, and this is also one that's a pretty good read. So let's take a look at what Brandon Lord said in this document and what our takeaway should be. Number one, he talks about the magnitude of the situation. And there have been so many numbers reported about IEEPA in the news. I know I have seen lots of numbers floated around there. Most of them are on -- so here are some actual numbers that came from CBP, if we really want to start dissecting this, okay? So this document talks about that there was $166 billion collected for IEEPA. That is 53.17 million entries and around 20 million of those entries are still unliquidated. It also talks about how a large percentage of these are informal entries. I'm going to talk about that -- those a little bit more in a bit. Okay. And takeaway number two, he gets into the mechanics of how liquidation works and how it functions. So that Friday, okay, when this announcement came out, he talked about that morning at 2 a.m. Customs liquidated over 700,000 entries and about half of those had IEEPA duties on them. He's like, "Hey, at 2 a.m. Friday -- 2:00 am the next Friday, this is going to keep happening and happening." And he says there's really no way to stop it. So customs liquidate entries on Friday, and it's on a cue. There's no way to keep it from happening. And number three, he gets into a narrative on informal entries and how they liquidate. And there's going to be a large number that's going to liquidate here on March 16 when they pay on periodic monthly. Because informal entries, they liquidate at the time of payment due to some taxes. So he also talks about, okay, we got this out #4 for you. Why entry by entry refunds are just not practical. So it gives us these little nuggets about the average entry summary. It's about 20.5 lines and that the way the data was presented to customs, there are a lot of situations where it may not be easy to break out the IEEPA duties. He's saying if we try to do this entry by entry, it's going to be like updating 1.6 billion lines of data and take approximately 4.4 million staffing hours. So we're not going to do that and saying, we're not going to be able to do their -- they're not going to be able to do their job. So on this very last bullet, he's essentially telling us what customs is being told their #1 job is right now. So he's saying, if we do this work entry by entry, I'm not going to be able to do my job, which is anti-dumping countervail duty enforcement, transshipment detection, revenue protection, national economic security work. So he's really saying here, I can't do it this way. We need to do it a different way. So another thing that he gets into here, he starts talking about refunds. And it gets into the numbers of how many importers have actually signed up for ACH refund. So customs has an obligation, just like all other government agencies, they have to comply with that executive order from President Trump that says everybody has to convert over to electronic payments at all agencies. So CBP switched over to this on February 6. And he's saying out of these -- over 330,000 importers who need refunds for IEEPA, they're only 6% of those importers have even signed up for ACH refund. So this is a really big deal. So ACH refund is the mechanism for refunds. And people aren't signed up. So he's not even able to issue a refund to the importer if they're not signed up for ACH refund. So that's definitely a problem. Then at the end, okay, he gives a clear list of what his proposed solution is, and this is takeaway #6. He says customs should do importer level refunds in ACE. The first bullet point says the importer files of declaration at ACE that includes a list of entries on which IEEPA duties were paid. A couple of things stand out to me on this. First of all, he's saying the importer, which is interesting. It doesn't say a broker, it says the importer will file a declaration of ACE. So it's kind of two things here, if you're not familiar with it. So the way we interact with customs as an importer, typically, would be to the ACE portal. But ACE, there's also the system that as brokers, we transmit data to them through ABI, and it goes into custom system called ACE. So ACE is the endpoint. Okay. But what we're not sure of here is exactly what this means. Does this mean that the broker is going to have a data set that they're going to send. And then the importer is certifying the data set, we're not quite sure here. There's kind of a lot to unpack. It also says that customs is going to run a series of validations on each entry. But it does confirm too, that those calculations will calculate the duty owed without IEEPA tariffs and also interest. So that's good news for importers. So CBP is going to verify the declaration, it's going to get finalized, it's going to get certified and then the refund is going to happen. One other point or seventh point, and I'm going to read most of this one to you, okay? So CBP is making all possible efforts to have this new ACE functionality ready for use in 45 days. This new process will require minimal submission for importers. It will also minimize errors by ensuring accurate IEEPA refund calculations through system validations and allowing for a refund period for -- excuse me, a review period for CBP to resolve any discrepancies with the importer and to confirm that no other outstanding enforcement issues or no revenue is owed. So they're saying this process will be simpler and more efficient than the existing functionalities and the CBP will provide guidance on how to file, refund declarations and the new system, okay? So we don't quite know what this is going to look like. But what we think they're telling us, okay, is that they're going to look at the entire entry as it liquidates. They're going to make sure they have no other enforcement issues, and they've already told us what they think their mission is, okay, what they're going to be looking for. Okay? So that's all these items here under bullet point number 4. So they've told us what they think their job is. So we don't know how this is all going to be implemented, okay? But we really do think it's probably crazy to think that you're just going to get a check, and there won't be any other things looked at within your entry, okay? So when it goes through this liquidation and refund process, customs are telling us they're going to be looking at other things. All right. So let's move on here, okay? More stuff happened on Friday. So we had a couple of other big things happen. So Judge Eaton, okay, he suspended his original order, okay? So that was the order that came out on Wednesday and then was amended on Thursday. Just suspended it. That's all. So it's not changing anything, okay? So essentially, Judge Eaton is saying, "Hey, based on Brandon Lords document, I got to put a hold on this, okay?" So apparently, this came after a closed door meeting between government parties that are involved, and we also believe it included the plaintiff in the case that went to the Supreme Court. So that one little last nugget here. So on Friday, this also came out at the end of the day from Judge Eaton, okay? He said that there was a huge burden on the taxpayers of the U.S. every day that there is a delay of refunds. And it gets into the math here. For every month, there are $650 million of interest occurring. And if we waited until the end of the year, that's going to be $10 billion of interest that will have occurred. So it is a really huge number. So he says because of that, he wants to see a report from CBP on the progress of their solution that they've outlaid will take 45 days to implement, okay? So he wants to see this by 2:00 p.m. today, okay? So we should all be seeing something coming out today. So as we all kind of wait to see what happens next. There are a few other things that we should be watching out for.

Cara, I'm sorry to interrupt you. For some reason, the slide deck isn't showing up on the screen. I'm not sure what happened.

Okay. Let me stop sharing and try to reshare. How about that?

I can see the slide deck, Sarah, on my side at least.

Okay. Great. Thank you.

Let's see. I'll try reshare. Hopefully that fixes it. Now it might be, I'm getting an authentic request. So it could be the system blocking us. Sorry, folks.

Right. I'm getting some feedback from the people who have joined, and they said that it's fine. So I think it might just be something on my side. I'm sorry.

All right. Thank you. All right. I'm glad to hope everyone can see it. All right. So the Department of Justice, they have said they're going to have appeal this, okay? So they are basically going to challenge Judge Eaton and his authority to say what he said. So I'm not seeing this yet. We all know that things could be happening while we're here today, so we can all get off on this call or you could be seeing something coming now again. But they're saying they're going to appeal this to the Federal Circuit, which is the CAFC. So this is going to go -- if they do, this is going to go through the same hierarchy that we saw in the learning resources case. They'll go to the CIT, then the CAF, then the Supreme Court. So -- and if they appeal, we don't know if CBP is going to keep working on their 45 day plan. So we have a link in here to Atmus Filtration. And if you go out here, you can see a few things we have highlighted. There was a previous questionnaire from Brandon Lord that he had to answer that was a predecessor to that 13-page document that he wrote. So we just want to point out that there's lots of public information out there that's kind of interesting if you want to take a read, okay? So all of this from an importers' perspective, while it may look promising in terms of getting your IEEPA duties back, there's still a long road, we believe, ahead of us in terms of how those refund procedures are actually going to roll out. okay. So we'll see. We'll all continue to be on standby. So a few things that you can do right now, okay. Actions for today. There are four things that we think that you could do. File a timely protest for those entries that have liquidated, which you've paid IEEPA duties on. This is going to allow you to reserve your right to a refund. So I'm going to flip forward to a little bit more on protests and then flip back here. So the thing about protest is you could actually file it yourself. They can also be filed by a custom broker or an outside party, okay? But this is something you may want to consider doing yourself you can have full control of the matter. Destiny is in your hands, okay? And you want to get these filed as soon as possible. So in order to file them, you do have to have an ACE portal account, and you have to file through the ACE portal protest account. So we've provided links here on how you can do that. It's pretty straightforward. The other thing to keep in mind is that the Centers of Excellence, okay, they're not all operating the same. So we know that ports and centers are not always consistent in how they implement things. okay? We've heard from one center that they're saying, "Hey, you don't have to provide entry summary packets. Please don't put any more than 50 entries on there, okay, give us an excel spreadsheet with some of the information that we have pointed on the slide, okay." But there -- we don't know that it's going to be the same for every center. So we very strongly recommend that before you submit any protest that you call or get in touch with your center so that you understand what their requirements are. You don't want to have your protest rejected because you didn't give them everything they needed or you gave them too many entries. So in order to kind of help with that and you guys may seen this before, if you've been on one of our webinars is that we have some suggested language that you can use to file protest. So I'm not going to read this through to you, but you will get a copy of this presentation and the suggested language will come over to you. Three other things that you can do, okay? Right now, you could positively follow a lawsuit in the court of international trade. We can't recommend to you either way if you should or you shouldn't. This is one of those things that you need to talk to your internal counsel about or speak to a trade attorney about. Number three, sign up for the ACH refunds. We heard what custom said. They can't give you your money if you're not signed up for ACH refunds and then make sure that you're really looking into those entries for which you filed a IEEPA duties on, making sure that you've reviewed those and they are squeaky clean, okay? Because CBP's told us they're going to look at those. All right. So refund check list for you, guys, things to get prepared, okay, ACE portal, know your data, register phrase refunds , being prepared. These are all things that you could do in preparation for potentially IEEPA refunds, okay? So none of these steps, assume refunds are automatic or immediate. We're just saying, hey, let's stay prepared, preserve your rights and avoid preventable delays where you can, while we wait for CBP and the courts to work through implementation. And now I'm going to turn this over to Roma, and she's going to talk to you guys about customs bonds.

All right. Sorry, everyone. I'm just trying to find my video camera here, I'm trying but I'm having a hard time. So I'm going to keep it as is. So thank you Cara. My name is Roma Sereke. I've been with Expeditors for 10 years this week, I joined at the Seattle branch processing customs entry and had an opportunity in the risk management group and now back in the customs world, 5 years ago, and I've been managing our custom bond program for the last 2 years. So over the last 5 years, working on bonds. I've seen a lot of changes. And the hardest part about bonds is the underwriting requirement, which I will cover further into the presentation. But our goal really is to towards the end to give you an idea of how the latest changes with IEEPA tariffs will impact your bond as an importer. So first, I would like to start off by doing a bonds 101. For those of you that are familiar with customs bond, I hope this is a refresher for you. And for those of you that are not familiar. I hope you find this informative and useful for the future. So to start off, what is a Customs Bond. A Customs Bond is really set up to protect the revenue of the United States and guarantees compliance with import regulation. It's a 3-party contract between CBP, the surety and the principal, which is the importer. Within this contract, CBP requires the importer to secure a bond so that they can clear their shipments and import into the U.S. And in order to secure a bond, the importer needs to work with a surety. And so what the surety is agreeing to within this 3-party contract is really providing a, I think someone moved the slide. Sorry let's see. Cara, do you still have control over the slides?

I'm not sure what happened. I was trying to get to the chat stuff. So let's see. We'll go back for you here.

So yes. Okay. Back on that first one. So within the third-party contract, the surety is really agreeing that they will be held liable on behalf of the importer up to the full bond amount to CBP. So worst-case scenario, if the importer fails to meet their obligation to CBP, whether they failed to pay duties on an entry that the -- or shipment that they imported or failed to pay on an increased duty bill or liquidated damage bill, CBP would seek payment from the surety and that liability is up to the full bond amount. So there are many different activity codes that an importer can request. But for the sake of time, I'm going to focus on the most commonly requested activity codes. And excuse me, I'm getting over a cold, so I may need to cough occasionally. So the most commonly requested bond is an importer bond and an importer bond there is, sorry, is a type of bond that allows an importer to import merchandise into the United States. And this bond also satisfies the requirements of airport security and ISF filing, a foreign trade zone bond activity Code 4 is a bond required for a foreign trade zone, which is an area under U.S. supervision that is generally considered outside the United States territory. So to operate a foreign trade zone warehouse, the importer would need to request a foreign trade zone bond. Another bond activity code, we typically see requested is a drawback bond activity Code 1A. Duty Drawback -- sorry -- let's see. Can you move -- Duty Drawback. Activity Code 1 is a process where an importer or claimants may recover up to 99% of the duty they have paid on an entry, and they can request 99% of the duties back from CBP, if the entry or the merchandise that was imported was either exported or destroyed. Okay. I don't think I have control over the slides, Cara. I'm trying to go next, but it's not going over. Okay. Type of bonds. So I cover the activity code. So there are 2 types -- 2 different ways that we can request for a bond to be issued through a surety. There's a continuous import -- so for the sake of time also, I will just focus on importer bonds moving forward, just because we don't have a lot of time to cover all of the different activity codes. So for continuous importer bond, this bond covers 12 months -- covers an importer activity for a 12-month period. So the bond calculation that is set by CBP is that this bond is able to support 10% of the duty tax and fees in a 12-month period. So if you have an importer that is expecting to pay 550,000 in duty taxes and fees in a 12-month period, 10% of that would be $55,000. And so then they would need to request a $60,000 bond because bond limits start at $50,000 and then they increase in increments of $10,000. So $50,000, $60,000, $70,000. And then once you reach $100,000, it must increase an increment of $100,000. So $100,000, $200,000, $300,000. So for a single transaction bond, these bond types are issued on a shipment-by-shipment basis and they're calculated by adding up the value of the goods plus all duty fees, all duties, taxes and fees. So for example, if you have a shipment with merchandise value of $100,000 and expected duties taxes and fees is $10,000, then we would need to request a single transaction bond of $110,000. So single transaction bonds are typically not recommended because the commercial invoice value is calculated into the bond amount, which can drastically increase the bond amount required, which then increases the underwriting requirements with the surety. Okay. Next slide, please. All right. So once an importer secures a bond from a surety. This is what the surety would typically provide. They would provide a customs e-bond confirmation. It will have the bond number over on the right-hand side and then the body of the form, it will outline whether this is a single transaction bond, a continues bond and then the activity code. All right. So once an importer has determined the bond amount that they would like to request, we have to go through a bond underwriting process with the surety. So the surety starts off with a bond application. Antidumping questionnaire is the importer is importing products that are subject to antidumping. And then depending on the bond amount, financials will likely be required, financials, including income statement, balance sheet and statement of cash flow. And the surety will ultimately review their bond risk and exposure based on the commodity, has been imported, whether the commodity is subject to anti-dumping, the country of origin, any claims history with CBP. Based on the review of the risk and exposure, the surety could require collateral to approve the bond. So collateral is typically required if the importer has antidumping products -- regularly import anti-dumping products or even any level of antidumping products is high risk for the surety and also if the financials provided are deemed unsupportive of the bond amount requested. And collateral can be provided via letter of credit or cash deposit. And it is generally held until all of the entries filed under that bond period have been fully liquidated, which I will cover more in the next couple of slides. All right. So once a bond is issued, a customs -- continuous importer bond, something we, as the bond broker here at Expeditors and something that importers should be looking at is the bond saturation. We should always be keeping track of the bond saturation. So bond saturation is really when a bond amount or the bond amount that's on file is no longer able to cover 10% of the total duties tax and fees paid to CBP in a 12-month period. So CBP reviews an importer's bond saturation level on first Friday of every month. And they are looking back 12 months to see how much in duties, taxes and fees the importer paid in the last 12 months and if the bond on file supports 10% of that duties, taxes and fees. So for example, if we have a $500,000 bond on file, that $500,000 bond allows an importer to clear up to $5 million in duties, taxes and fees in a rolling 12-month period. By month 10 or month 11, if the importer has already reached or has already paid $5 million in duties tax and fees, that bond would be deemed 100% saturated and CBP would issue the bond -- would deem the bond insufficient and issue a bond insufficiency notice, which then requires that the importer requests a new bond at a higher limit within 30 days from notice. So a bond insufficiency notice. This is an example of what it looks like, I think in the last 12 months, I feel safe saying that 95% of importers probably saw this notice at some point because of all of the additional duties implemented in the last 12 months, it has driven the bond amounts required across the board. So we went from January of 2025. So at Expeditors, we manage about 4,000 importer bonds for our customers. And on January 2025, we had about 4 importers on that list. And by July of 2025, we had over 90 customers on that list. And every month from May until this month, we still have over 50 customers that continue to get hit within sufficiency notice. So it's just a never-ending nightmare, to be honest, because as you know, we kept getting new tariffs implemented last year, which required higher bond amount after a couple of months. So as an importer, if you receive a bond insufficiency notice from CBP, one, the CBP will mail a copy to the importer and then they will also send a copy to the surety that writes your bond. And then the surety will send a copy to the bond broker that manages your bond, and the bond broker should also send that to the importer and also a list of requirements to secure a new bond with the surety. So something that I really want to point out here is that, that amount on the bond insufficiency notice that CBP request is really only based on the last 12 months and importers should not increase their bond specific to that bond amount listed on CBP's notice because that bond amount is only covering 10% over the last 12 months. It's not forecasting for the next 12 months. So for example, on this notice, this notice was issued on October 7, 2025. And CBP reviewed entries filed, cleared October 1, 2024 through September 30, 2025. So at that time, that bond, the importer had on file was insufficient. But once you request a new bond, you also want to make sure that the new bond is on file and supporter for the next 12 months. So it's best to forecast and review your projections to determine an appropriate bond amount. So bond insufficiency notices lead to bond stacking. So bond stacking is really a situation where it increases the surety's risk and exposure based on multiple bond periods having unliquidated entries. So one unliquidated entry causes open exposure for up to the full bond amount. Yes me, entry liquidation is really the process of CBP reviewing an entry, determining that the correct HTS was used, the correct country of origin was declared and the importer paid the correct amount of duties, tax and fees owed for that entry. And so liquidation is a final step where CBP confirms that they are no longer going to collect additional duties, taxes and fees for that entry. So then they set a liquidation date. And usually, when they set that liquidation day, it's set for 90 days out and then within that 90 days, they still have time to change their mind and extend the liquidation date if they see any reasons to do so. Entries subject to antidumping can take years to liquidate. So these bonds are a bond with antidumping activity creates a higher bond stacking liability for surety. So let's look at some examples. So please excuse my typo here. So it should be 290,000, but it's noted as 280,000. So we have an importer here that requested a $50,000 bond on January 1 of, let's say, 2024. And then they requested a higher bond amount of $60,000 by March. And then by June, their business continues to grow and they need to increase the bond to $80,000 and same situation by September. Their business is growing. And so now they need a new bond of $100,000. So in this case, in a 12-month period, the importer has requested 4 different bond amounts. And so this is a bond stacking of $290,000 that the surety carries. If the importer had forecasted properly or played it safe and said, You know what, let's request the $100,000 bond on January 1, 2024, then the sureties risk and exposure would only be $100,000. But because they continue to increase it throughout the year, that bond stacking exposure increased $290,000 for the surety. And let's look at another example of bond stacking liability on the next slide. Okay. So here's another example. This one is very common and easy to create bond stacking in this case. So this is an importer who secured a $100,000 bond on January 1, 2022 and that bond is good for a 12-month period. So that bond is good until December 30, 2022. And so then the importer continues to renew that bond amount for 3 years. And then January of 2025, they requested a bond increase at time of renewal. So they increased the bond to $500,000. And then again, January 1, 2026, they increased the bond to -- or they renewed the bond of $500,000. So all of the entries filed 2022 through 2023 under the $100,000 bond each bond period, they've all been fully liquidated. The bond period from 2024 still has 15 entries pending liquidation. And the bond period from 2025 has 500 or $500,000 has 300 entries liquidation. And of course, we have the current bond on file. So because there are prior bond periods, one from 2024, for $100,000 and one for $500,000 from 2025 and the current bond amount of $500,000, the sureties bond stacking liability in this case is $1.1 million. So when the surety reviews and importers stacking or risk of an exposure, they're reviewing it based off $1.1 million and not $500,000, which is the bond amount that's on file. So what are the long-term impacts of bond stacking? So bond stacking creates a higher bond exposure for the surety and it increases -- it could potentially increase bond premium and underwriting scrutiny from the surety at time of renewal or when requesting a bond increase. Bond stacking could lead to requests for collateral that would be required to be issued to renew a bond or increase the bond. And then it could also lead to potential operational clearance delay during the renewal process. So because of the bond stacking amount, the surety may take longer to approve a bond renewal or a certain bond increase. And that could create a lapse in bond coverage. So it's really important to be proactive if you do need to increase your bond, requested far more more -- before you need it, really is what I'm trying to say. If you foresee that you will need a higher bond amount in the next couple of months, start that process as soon as you can so that you have that approval ready to go. And also long-term impact of bond stacking associated with antidumping is really a long-term impact because antidumping entries could take years to liquidate. So with the IEEPA tariff that -- the changes announced last last week with IEEPA tariffs no longer being collected and the Section 122 duty being added some questions that we are receiving from customers is how is this change going to impact our bond amount. So if an importer requests a protest to extend liquidation of entries. Please keep in mind that request to extend liquidation is going to create bond stacking, which is what I've outlined here is that if we have entries pending liquidation from prior terms or bond periods, the surety will see that as a risk and exposure and it could lead to potential collateral requests or it could -- well, yes, ultimately, I think worst case scenario is that the surety could request collateral to support your bond renewal or bond increase. Another question we are starting to see is when can I decrease my bond amount now that IEEPA tariffs no longer impacts my, we don't have to pay the duty anymore. So recommendation is to wait at least 12 months to allow the last 12 months of duties, taxes and fees to fall off your report, because CBP looks at the last 12 months of duties, taxes and fees paid. We want to ensure that your bond saturation level, your new duty amount that is being paid moving forward is still supported by the current bond amount and the older duties, taxes and fees paid are able to fall off the report over the next 12 months. So wait at least 12 months and then drain renewal process would be the best time to decrease your bond amount if needed. Okay. So lastly, how does Expeditors fit in this whole bonds world? So I mentioned earlier that the surety provides the importer or the surety provides the bond broker a copy of insufficiency notice from CBP. And that's because most sureties do not work directly with importers. They work with bond brokers typically, customs brokers. So there are multiple parties involved. There's the surety and there's a surety agent. There is a broker, which would be Expeditors and then there is an importer. So that's how we fit in. We manage about 3,800 to 4,000 continuous importer bonds for our customers. And if you do not know who your customs bond broker is, I recommend you look into that so that if you need to request a bond increase or a bond decrease that you know how to reach out to. And also request a report that shows what your current bond saturation level is that way you're aware, where you stand with the current bond limit. But that is all that I have for today, and I will turn it over to Sarah.

Thank you, Cara. Thank you, Roma. Recording stopped -- the recording. So we do have a couple of questions in the Q&A window. And I know we're coming up on time. So first off, we'll go through some of the questions, and then I will share a couple of quick announcements at the end. So for a company who doesn't have an ACE account and use Expeditors to import their goods, would expeditors file on their behalf or would they need to discuss this directly?

So we would not -- we will not be able to file a protest on an entry that we did not process as a customs broker. So in that situation, the importer would want to file that themselves directly in ACE.

Okay. Thanks, Cara. The next question regarding citations. Can you advise where the 50 entry max comes from?

That came from one of the centers of excellence. We had an importer that had been filing protests directly. They reached out to C for guidance and their particular C gave them that guidance. So our we're saying, "Hey, you should really check with your C to see if there are limits like that in place?" Right? So one C could say it's 50, another C could say 100, another C could say 25. So you want to make sure that you inquire with your C directly before you start filing protests to understand what their requirements are, because they can -- they don't all apply them different the same way. They have discretion.

With the recent Supreme Court IEEPA ruling, have other duties or tariffs previously been ruled and valid? And if so, can you explain the impact on bond requirements?

So the impact on bond requirements. I can't say that other duty tariffs have been deemed that they are not, I guess, that they are not -- I don't think there's any other additional tariffs that CBP or the court has deemed is -- needs to be removed. But the impact of Section 122 duty has -- that's been added will impact the bond amount, depending on the importer whether IEEPA tariffs had impacted them previously then it shouldn't be a significant impact because the duty rate is lower. But if it's an importer that did not have -- that was not impacted by IEEPA tariffs, but now they're impacted by Section 122, it should impact the bond amount because the duty -- the calculation that CBP sets for calculating the bond amount is 10% of the duties, taxes and fees paid. So you want to look at your forecast and see on a monthly basis, what is the duties, taxes and fees that you expect to pay and then request a bond amount that at least covers that 10% for a 12-month period.

You, Roma. Regarding third-party agreements, third-party agreement combines the obligation, the principal? And could you explain what third party?

Third party -- so the 3-party contracts, would be CBP, the surety and then the importer. So the third party, the surety would -- could be so some of the sureties we work with. So there's a surety agent, Avalon, but they work for Southwest Marine Insurance Company. So that would be the surety. So typically, it's an insurance company, that third party.

Is the liquidation of entries the standard process? Or is there something that can be accelerated?

That's a standard process. So typically, an entry would liquidate with customs at about the 314, 315 day mark unless customers choose us to suspend liquidation. We see it suspended for antidumping countervailing duties. They also have the right to suspend it for other reasons besides that. So, but you cannot request it early per se.

All right. And I know that we're coming up on time. So we'll address one more question. And then for those additional questions that we don't get answered live by Cara and Roma, we will be following up with you directly. So don't worry about not getting your questions answered. So for the last question, if we have a protest filed, does it still go off the liquidated status or will protest it liquidated amounts not fall off of the report until they are resolved.

Correct me if I'm wrong, Cara, but they would still remain unliquidated.

Correct. That's what preserves you're right. So if you file a protest, you're asking customers to leave the entry, open, then that's still going to show out on your bond.

Okay. Thank you. All right. So again, thank you, everyone, for attending today's webinar. As you can see up on the screen, this webinar did get approved for continuing education credits. So this is approved for one hour. And then this slide will be included in the presentation on the landing page and I will be sending out a survey link in a little while this afternoon that you'll get -- once you complete the survey, you will get the landing page link. And then I just want to promote our upcoming webinars. We have 2 coming up. One is presented by Onyx and it's Navigating a Shifting Trade Order webinar. And then the next one on February -- or on March 24 is Getting Started With the Customs ACE Portal webinar. So you can click or scan the QR code below and register for these two upcoming months for the rest of the month and then we will be having more webinar registrations ready to go for April. So again, thank you, everyone, for joining, and have a great rest of your day.