The Customs Bond Types You Need to Know
One of the first decisions you need to make as an importer is discovering the customs bond types you need to do business effectively. Learn the ins and outs of import bonds to find out which ones will work for you.
Surety Bonds Act as an Insurance Policy
A surety bond, which is also known as a customs bond, acts as a very important insurance policy for importers. An import bond is a contractual agreement between U.S. Customs and Border Protection (CBP), the importer of record and the surety company. Importers provide these types of customs bonds to ensure financial responsibility for your shipments.
Types of Customs Bonds:
1. Single Entry Bond – covers the one time entry of imported goods.
2. Continuous Bond – covers the import of goods for a year.
All types of customs bonds protect the U.S. government in the event the importer does not fulfill financial obligations such as duty taxes and monetary penalties.
Do You Need a US Customs Bond?
You need a US customs bond whenever you are importing commercial goods valued at more than $2,500. You also need bonds if you are an international carrier transporting freight through vessels, vehicles or air into the United States.
Two Types of Customs Bonds
There are two main types of customs bonds available to you. Figure out which import bond works best for you below.
Single Entry Bond Definition
A single entry bond is for importers that import a single shipment for a specific port of entry. This type of customs bond work 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.
Continuous Bond Definition
A continuous bond covers all of an importer’s shipments with international carriers at all US ports of entry for an entire year. 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.
Insufficient customs bonds can be an import deal breaker when you are working to import your goods into U.S. ports of entry. A bond is insufficient if an importer is importing more product and duty taxes than the product’s customs bond amount.
Reasons for an Insufficient Import Bond
Continuous bonds are insufficient if they meet these fates:
- Invalid or “non-deliverable” addresses for any entity using the bond
- Not complying to a formal demand letter to increase the amount from the CBP by the listed deadline
- Failure to comply with Office of Administration mandates
- Outstanding debt related to any bond entities (Unpaid bills and debit vouchers)
- Not providing required bond paperwork
- Invalid importer of record number
- Missing bond paperwork
- Not complying to a rejection of a termination request
- Failure to deposit proper cash-in-lieu of surety for the continuous bond
Insufficient Bonds Can Halt Imports
You can avoid delays of your bonded merchandise by utilizing licensed customs brokers to handle your imports swiftly and properly.
Avoid Insufficient Customs Bonds by:
- Posting the proper bond amount
- Increasing bond amounts as needed
- Having the proper address and updated contact information
- Utilizing the proper types of customs bonds
- Addressing issues with claims promptly
- Monitoring your bond’s activity to make sure the amount is still suitable
Resolve Bond Issues Required by Customs
If issues arise with your continuous import bond or single entry bond, you need to correct errors promptly. If you don’t resolve continuous bond issues, the following will happen:
- The release of goods will stop
- Other continuous bonds will suffer from insufficiency labels
- Importer records are voided
Utilize a Customs Broker for Customs Bond Types
The import customs clearance process can be difficult to master entirely on your own. A licensed customs broker with AFC International ensures your customs bond types are filled out properly and your imports are cleared through U.S. Customs quickly.
Connect with a customs broker that has the knowledge necessary to handle your imports and ease your mind during the customs clearance process.