Copy URL to Clipboard
A customs bond, whether continuous or single, ensures that required fees and duties are paid to the appropriate government agencies after importing goods into the United States. Choosing which bond is right for your shipment is a vital step in the import process.
Key Takeaways
Understand the difference between continuous and single entry bonds in this walkthrough and make the best choice for your business.
Importing Starts With a Contract.
You Must Pay Import Duties & Taxes for your Goods.
A continuous customs bond is one that you can renew indefinitely. When you initially purchase this type of bond, it will be effective for one year from the date of issue.
There are multiple benefits to obtaining a continuous bond if you are a commercial importer who receives shipments year-round or more than four in a single year.
Some of these benefits include:
Purchasing a continuous customs bond for your shipments provides you with peace of mind knowing that all taxes and duty fees will be paid to U.S. Customs and Border Protection (CBP) correctly, regardless of when or where your products arrive.
As stated above, a continuous customs bond is good for one year from the initial date of issue. This means if you purchase your bond in February, it will be good until February of the following year, at which point, you may choose to renew it.
Surety companies and customs brokers will offer importers a way to set their renewals to automatic. A continuous customs bond on automatic renewal will be good for as long as you keep up with payments.
What you pay for a continuous customs bond will depend on the amount of taxes and tariffs imposed on the product being imported. The value of the shipment itself is only significant in terms of requiring a customs bond or not. Any commercial import that is valued at $2,500 or more will require a customs bond.
The calculation for a continuous customs bond is typically 10% of the total taxes and tariffs required by CBP on an annual basis for the shipment of your product. The typical starting amount, as well as most common, is $50,000.
Continuous customs bonds may then be calculated as follows:
As duties and taxes rise, so does the cost of a bond. The bond amount is equal to what the surety company will pay in a 12-month period. These payments not only include the total duties and taxes owed to CBP per entry or transaction, but they may also cover any fines or penalties imposed. Once purchased, bonds may take up to 10 days to fully go into effect.
A single entry customs bond, or SEB, serves the same basic purpose as a continuous entry bond. It is meant to ensure that all applicable duties and taxes are paid to CBP upon your shipment’s arrival in the United States.
However, a single entry bond can only be applied to a single shipment or transaction, and it must be used at a port of entry pre-specified by the importer. For the purposes of a SEB, a single shipment is defined per the master bill of lading (MBL). Therefore, multiple containers can be covered if they are all included on the same MBL.
Importing Starts With a Contract.
You Must Pay Import Duties & Taxes for your Goods.
Single entry bonds are not subject to a specific time period. Rather, after the completion of a single shipment or transaction, the bond will expire. It will only last the necessary time for the shipment to be completed.
Calculations for the bond amount on single entry bonds vary slightly from continuous bonds. At a minimum, you must purchase a bond amount equal to the value of the products in the shipment, plus any import duties and taxes the CBP requires.
However, if your products are regulated by any other agency besides the CBP, the bond amount will need to be three times the value of the shipment. As an example, if you are importing $5,000 in wine regulated by the Bureau of Alcohol, Tobacco, and Firearms (AFT), your bond amount needs to be worth at least $15,000.
You should also consider that if you have purchased a single entry bond for a shipment arriving by sea, you will also need to purchase additional coverage to meet International Security Filing (ISF) regulations.
CBP maintains a list of monetary guidelines for determining bond amounts. However, speaking with a licensed customs broker is generally the best way to ensure your purchased bond will cover everything you need it to.
Ultimately, the main differences between a single entry bond and a continuous bond will be the number of shipments they can cover and the manner in which their values are calculated. Having a clear idea of their differences is important.
To simplify things, the following chart lies out the major differences between the two bond types side by side.
Despite their many differences, these bonds share some key similarities as well. Specific characteristics to keep in mind are that both are:
Ultimately, as an importer, you must decide which bond will be the most cost-effective for your business. Importing goods can be costly. If you are an established importer with frequent shipments, a continuous bond is likely your best option financially.
On the other hand, if you are in the process of growing your import business, single-entry bonds could be the best option until your business grows to the point where a continuous bond is necessary.
There are many types of customs bonds out there, and it can be difficult to determine which one you need. Check out our article Types of Customs Bonds - Activity Codes And Uses to learn more.
All customs bonds are eligible for renewal. The majority of importers who purchase a continuous customs bond will have it set to renew automatically at the end of the year. Sureties and customs brokers may offer single or multi-year payment plans.
Even when a continuous customs bond expires, it will remain on file with the CBP until a termination notice is received.
If you have purchased a single entry bond, it can be renewed with a continuation certificate. This will not turn it into a continuous bond. You will still be purchasing a customs bond that covers only a single transaction. To qualify for a continuation certificate, the value, duties, and taxes must be the same as the original SEB.
Any additional shipments you wish to import must have their own unique customs bond if you continue to use a single entry bond.
Purchasing an import bond is a big step in creating and maintaining a successful import business. Make the best decision for your business and work with the experts at USA Customs Clearance to make sure you get a customs bond that works for you.
USA Customs Clearance offers continuous customs bonds to match your shipping needs. Speak with one of our experienced and licensed customs brokers 1-on-1 to get the guidance your business deserves.
We also offer several other services for importers, including:
Get the advice you need today by giving us a call at (855) 912-0406 or contacting us online, and we will be happy to advise you on all your import needs.
Copy URL to Clipboard
Add your first comment to this post