31 C.F.R. § 223.17

Acceptance and non-acceptance of bonds

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(a) Acceptance of bonds. A bond underwritten by a certified company on the § 223.16 Department Circular No. 570 list may be presented to any agency-bond approving official for acceptance, and such agency bond-approving official may accept such bonds.

(b) Non-acceptance of bonds. (1) An agency bond-approving official may decline to accept bonds underwritten by a certified company for cause, but only if the company has been given advance written notice by such agency. The advance written notice shall:

(i) State the intention of the agency to decline bonds underwritten by the company;

(ii) State the reasons for or cause of the proposed declination of such bonds;

(iii) Provide the company with an opportunity to rebut the stated reasons or cause; and

(iv) Provide the company with an opportunity to cure the stated reasons or cause.

(2) The agency may decline to accept bonds underwritten by the company if, after consideration of any submission by the company or failure of the company to respond to the agency's notice, the agency issues a written determination that the bonds should not be accepted, consistent with agency authorities.

(3) The agency shall articulate its procedures and for cause standards for declining to accept bonds in an agency regulation prior to declining any bonds in specific cases. The agency regulation should be subject to notice and comment rulemaking. “For cause” includes, but is not limited to, circumstances when a surety has not paid or satisfied an administratively final bond obligation due the agency. The agency regulation should define when a bond obligation becomes administratively final under the agency's procedures. Existing agency rules or regulations that substantially comply with, or that are consistent with, the requirement to articulate procedures and standards in advance meet the requirements of this paragraph.

(4) Agencies that decline bonds under this section are encouraged to use best efforts to ensure that persons conducting business with the agency are aware that bonds underwritten by the particular certified company will not be accepted.

(5) The agency's authority to decline bonds under this section does not apply:

(i) When the underlying obligation or other for cause reason that forms the basis for the agency's written determination to decline bonds under paragraph (b)(2) of this section, or the agency written determination to decline bonds, has been stayed or enjoined by a court of competent jurisdiction, or

(ii) To otherwise acceptable payment and performance contract bonds, when the agency has already accepted a project bid bond on a contract before making the written determination under paragraph (b)(2) of this section.

(6) Notwithstanding any provision of this section, an agency bond-approving official may decline a bond from a Treasury-certified surety without advance notice if the bond is not executed in proper form, or is not in the correct penal sum amount, or is otherwise technically deficient on its face.

[79 FR 62001, Oct. 16, 2014, as amended at 89 FR 48837, June 10, 2024]

Notes of Decisions

Cited in 4 cases (1 in the last 5 years), 1981–2025 · leading case: Am. Motorists Ins. v. Villanueva, 706 F. Supp. 923 (Ct. Intl. Trade 1989).

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Am. Motorists Ins. v. Villanueva, 706 F. Supp. 923 (Ct. Intl. Trade 1989). · cites it 3× “The Customs officials grounded their decision on 31 C.F.R. §§ 223.17 and 223.18 which allow the Secretary of the Treasury to revoke a delinquent certified surety’s ability to write bonds.”

Old Repub. Ins. v. Pitman, 520 F. Supp. 1225 (Ct. Intl. Trade 1981). · cites it 2× “31 CFR 223.17 and 223.18 on which plaintiffs rely deal with revocation of a surety’s certificate of authority, and are also manifestations of the Secretary’s exercise of section 1623(b)(2) power.”

Patterson v. City of Shaker Heights, Ohio (N.D. Ohio 2025). “ety denied bond claim jurisdiction despite oath of office indicating public surety was in place”; “FOIA and agency complaints confirm attempts to conceal the bond chain, including non-disclosure of monetization pathways through DTCC, CRIS, and Bloomberg-based instruments”; and…”

Old Repub. Ins. v. Pitman, 2 Ct. Int'l Trade 31 (Ct. Intl. Trade 1981). “The rejection of plaintiffs surety bonds on entries filed in the District of Miami by the District Director, dated July 13, 1981, without prior notice and opportunity for hearing under 31 CFR 223.17 will cause immediate irreparable harm, injury, loss, and damage, in that it…”

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