Cargo is normally released only against the original ocean or air bill of lading. When the original is lost, delayed in the mail or held by a bank, the party entitled to the goods can obtain release by posting an Activity Code 7 bond, which protects CBP and the carrier against any liability arising from releasing the merchandise to someone not holding the original document.
The conditions are at 19 CFR § 113.69 (production of bills of lading bond conditions).
Who must post it
- Consignees and importers whose original bill of lading is unavailable at the time of entry.
- Freight forwarders and brokers arranging release on the consignee's behalf.
What the bond guarantees
- Production of the original bill of lading within the time CBP allows.
- Indemnity to CBP and the carrier against claims by any party later presenting the original document.
How CBP sizes it
- Single transaction only.
- The amount is set per shipment at the port of entry, typically by reference to the value of the merchandise.
Practitioner notes
- Carriers frequently require their own letter of indemnity in addition to the customs bond; the two instruments serve different obligees.
- Where the bill of lading is held by a financing bank, the bond does not resolve the underlying commercial dispute.
Frequently asked questions
Is this the same as a carrier's letter of indemnity?
No. The Activity Code 7 bond runs to CBP; a letter of indemnity runs to the carrier. Both may be required.
Can it be continuous?
No. Activity Code 7 is single transaction only.
How quickly can it be issued?
Usually the same business day, because release of the cargo is typically time-critical.
Primary sources
