When Do You Need a Customs Bond?

A customs bond is required when importing commercial goods that are valued at $2,500 or more or when importing goods that are subject to government agency regulations such as the EPA, FDA, and USDA. If you’re not sure if you need a customs bond, our Licensed Customs Brokers can assess your situation and let you know if one is required. You can reach out to us at (885)912-0406.

What Is A Customs Bond? (An A-Z Guide and How To Get One)

Q: What is a Customs Bond?

A customs bond is a financial contract between a surety company, an importer, and Customs and Border Protection (CBP). The contract ensures that import duties and fees are paid for when importing commercial goods into the United States.

Q: How Do You Get a Customs Bond?

A customs bond can be obtained from a surety company or Licensed Customs Broker. USA Customs Clearance offers continuous customs bonds for just $245. You can purchase a continuous customs bond directly on our website.

A customs bond is a binding contract required by Customs and Border Protection (CBP) for commercial imports valued at $2,500 or more. Having a customs bond ensures that relevant fees and import duties are paid to CBP.

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Last Modified:

August 31, 2021

Customs Bond Definition

A customs bond is a legal binding contract that you purchase to give you assurances as an importer that your import taxes and fees will be paid. It’s peace of mind during import transactions.

What is Bond for Import?

Importing can be confusing. A customs bond for importing is a binding contract that acts as a financial guarantee between the importer of record (you), the CBP and the insurance/surety company providing the bond. A custom bond provides you with the assurance you need as an importer that your import taxes and fees are paid.

What Does CBP Stand For?

The CBP is the abbreviation for the U.S. Customs and Border Protection. To be clear, this is a different agency than the U.S. Border Patrol. While the Border Patrol is technically a part of the CBP, the Border Patrol unit specifically patrols the borders while the CBP as a whole works to review and monitor imports and secure the border from drugs and other items entering the country illegally.

US imported over 2 trillion worth of goods in 2020

In 2020, the U.S. imported $2.42 trillion worth of goods.

Source: https://www.cbp.gov/newsroom/stats/trade

When Do I Need a Customs Bond?

There are a number of situations when you need an import bond. These situations include:
• When your imports are for commercial use
• When your imported goods are required to meet federal regulations
If the merchandise is subject to government agency rules and regulations, the bond amount must be equal to three times the value.

What Does It Mean if a Shipment is Bonded?

That means you did the right thing and got a customs bond! In short, a bonded shipment means your goods are covered for customs charges, including all duties, taxes and any penalties that may occur during the import process.

What is Bond in Freight?

When you are shipping goods in-bond, that means your products are moving within the United States but you are still waiting on official customs clearance from U.S. Customs before the goods can officially be sold. Customs Brokers can help your goods reach official approval from Customs.

Why Do Importers Need Customs Bonds?

Think of a customs bond as the ticket you pay for your goods to gain entry to the United States. Before you purchase that bond, your goods will be held at customs and are pending approval until you show proof of that bond. You need the bond to gain approval for your imports.

How Much Is a Customs Bond?

The import bond cost is calculated based on the amount of taxes and fees that are tied to your imported goods. Typically, the bond amount is at least 10 percent of the total duties and fees paid to the CBP. As a benchmark, this total is usually $50,000 at the minimum and the average bond is around $50,000.

Since 2017, CBP has collected over $200 million in additional fees through importer audits.

Source:https://www.cbp.gov/newsroom/stats/trade

CBP collects fees through importer ausits

How Are Customs Bonds Calculated?

Obtaining the right customs bond is important, but it’s also important to verify that your bond is the right amount. While the minimum bond amount is $50,000, many importers need a larger amount to properly secure their imports. In order to find the correct amount that’s needed, CBP suggests following a simple calculation. The customs bond calculation is outlined in the figure below:

How Long Does a Customs Bond Last?

A continuous customs bond lasts for one year and allows imports to come into the United States continuously during that time.

How Is My Import Bond Used?

Import bonds are used by Customs Brokers to clear goods. The bond is critical because it:

• Contains a unique bond number tied to your company’s importer number (Tax ID)
• Is valid at all U.S. port of entry
• Remains tied to all importing documents filed for your goods

CBP can suspend use of a customs bond if it violates certain requirements.

Source: cbp.gov/sites/default/files/documents/insufficiency.pdf

What are the Different Types of Customs Bonds?

A continuous customs bond lasts for one year and allows imports to come into the United States continuously during that time.

What is an Import Bond?

This is the gold stand standard of bonds when it comes to importing. Activity Code 1 Import bonds are required by importers to clear U.S ports of entries.

What is a Drawback Bond?

A drawback bond, known as a Activity Code 1a bond, allows for importers to receive up to a 99% refund of all duties paid as long as the goods were exported out of the U.S.

What is a Custodian Bond?

An Activity 2 - Custodian bond covers specific bonded merchandise working through businesses such as warehouses, carmen, container stations and carriers. These goods are known as in-bond.

What is an International Carrier Bond?

Activity 3 - International Carrier Bonds covers the goods, the passengers involved and the overtime involved for those working to clear international goods.

What is an FTZ Bond?

An Activity 4 - Foreign Trade Zone Bond is needed for Custom Clearance in non U.S. territories. This covers your goods in foreign areas and also keeps the goods secured when they are built or repacked outside of U.S. territories.

What is an Airport Security Bond?

The Activity Code 11 - Airport Security Bond is utilized for companies you outsource to move goods to secure areas of airports. This applies to employees in all areas of the airport that handle your goods as well.

What is an Importer Security Filing Bond?

Activity Code 16 - Importer Security Filing Bonds are needed for each ISF filing to help protect against and oversee fines and penalties that may occur for late ISF Filings.

• Activity Code 1 - Import Bond
• Activity Code 2 - Custodian of Bonded Merchandise Bond
• Activity Code 3 - International Carrier Bond
• Activity Code 3a - Instruments of International Traffic
• Activity Code 4 - Foreign Trade Zone Board
• Activity Code 11 - Airport Security Bond
• Activity Code 16 - Importer Security Filing Bond

What is the Most Common Type of Importer Bond?

The single entry bond and the continuous bond in Activity Code 1 are the bonds that importers use most often to clear Customs. Read on to learn more.

What is a Single Entry Bond?

A single entry bond is for importers that import a single shipment for a specific port of entry.

Single Entry Bond Definition and When I Need It

This type of customs bond works well if you only import goods that have a low cost value occasionally. This option is ideal for companies that typically import less than four shipments into the U.S. per year.

How Much is a Single Entry Bond?

The value of the bond you need can vary too. At minimum, a single entry bond should be worth the value of the goods you are importing, plus any applicable duties, fees and taxes. If your imports are regulated by another federal agency, you’ll need to get a bond worth 3 times the value of the goods imported.This means that if you are importing $8,000 in toys regulated by the Consumer Product Safety Commission, you’ll need a bond worth at least $24,000.

Are you shipping your imports by sea and using a single entry bond? You’ll be required to obtain additional bond coverage to meet International Security Filing (ISF) regulations if you are shipping goods by sea.

36% of CBP trade seizures were related to Intellectual Property Rights (IPR)

Source:https://www.cbp.gov/newsroom/stats/trade

Trade seizures related to intellectual property rights

What is a Continuous Bond in Customs?

A continuous bond covers all of an importer’s shipments with international carriers at all US ports of entry for an entire year.

Continuous Bond Definition and When I Need It

A US customs continuous bond is important for importers and shippers with a large number of entries that use several ports of entry annually. This type of customs bond also handles shipments with high value.

Do I Need a Continuous Bond?

How Do I Renew My Customs Bond?

A continuous bond renews annually. You must purchase at least $50,000 in coverage when getting a continuous customs bond. It’s important to know that a continuous customs bond will cover ISF rules when shipping goods by seas. Continuous bonds cover all transactions within that year. You can use continuous custom bonds at any port of entry.

Documents For Importing You Need to Have

To achieve an effective and efficient importing process, file the necessary import documents.

List of Shipping Documents

1. What is the Importance of a Commercial Invoice?

The commercial invoice contains transaction details regarding your imports, which includes:
• Purchase Price
• Product description
• Customs clearance number
• Country of origin
• And more

2. What is a Packing List in Logistics?

A packing list details your imports, outlining the contents, dimensions and the net weight of each package/container.

3. What is a Bill of Lading?

A bill of lading is a legal document that lists goods in the form of a receipt and outlines the details of those goods.

What are the three purposes of a bill of lading?

• It's an official receipt that confirms your imports are loaded
• It contains the terms of your contract
• It's the official title for your goods

4. What is the Purpose of Notice of Arrival?

An arrival notice is issued by the carrier’s agent to the consignee and provides detailed information about the arrival and further details required for customs clearance processing.

The top 5 US import partners in 2020 were China, Mexico, Canada, Japan, and Germany

Source:https://www.trade.gov/data-visualization/trading-partners-exports-and-imports

Customs Brokers Obtain Import Bonds

Sureties licensed by the U.S. Treasury Department access import bonds. You can find a list of customs brokers broken up by state to learn more. Many licensed customs brokers, though, will not issue you a bond without a power of attorney, which files import entries on your behalf.

Customs brokers can work as agents for sureties, sell bonds and assist you with importing your goods into the United States port of entry of your choice.

How Long Does it Take to Get a US Customs Bond?

Once you’ve confirmed that you need a customs bond, the next step is obtaining one. Customs bonds can be purchased from a surety company or Licensed Customs Broker. While surety companies typically only provide customs bonds, Licensed Brokers also offer customs clearance services.

How Do I Get a Customs Bond?

The process to get a Customs Bond through USA Customs Clearance is as follows:

1. Purchase your continuous customs bond from us
2. Complete the simple & quick online application
3. Receive approval for your application the same day
4. Begin importing with your bond within 2 days of CBP application activation

How Do You Get a Customs Bond?

What Does a Customs Broker Do?

A customs broker is a professional that is licensed and regulated by the U.S. Customs and Border Protection to help you with all of your importing needs, including meeting all Federal requirements and making sure you have all the proper importing paperwork filed.

Do You Need a Customs Broker?

Leverage a Licensed Customs Broker

When you utilize the services of a Licensed Customs Broker, you ensure your bond is correct, complete and you have a secure transaction. Licensed brokers handle the behind the scenes import bond work for you. Connect with a customs broker that has the experience you need to handle the details so you can focus on your importing business. These experts can help you increase bond amounts and update contact information. Brokers allow you to focus on your business and avoid importing hurdles.

ONLY

$245

Get A Customs Bond >