Customs Bond Instructions for Importing

If you are planning to import goods into the United States, you’ll probably need a customs bond. Obtaining a customs bond sounds like a complicated process, but it doesn’t have to be. There are simple customs bond instructions to follow to make the process easy and headache-free.

Customs bond instructions can be broken down into 5 steps:

• Determine if you’ll need a customs bond
• Decide the type of bond you’ll need
• Find a surety company that offers the bond you’ll need
• Complete the application
• Pay all applicable fees

Getting a customs bond is a simple process. Learn more about customs bond instructions for important and make clearance for your shipment a breeze. 

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What is a Customs Bond?

A customs bond is a financial guarantee between the underwriter (insurance company) issuing the customs bond, the importer (customer) and the Customs Border Protection (CBP).  Per the import law, CBP requires all importers to file an Activity Code 1. An Activity Code 1 is an Import Bond to clear all items, even if the goods are considered duty free. 

According to U.S. Customs and Border Protection (CBP) regulations, an import bond’s purpose is to protect the interests of the U.S. A customs bond ensures an importer’s compliance with any laws, regulations, or instructions for duties paid when importing goods.

What Does a Customs Bond Do?

An import bond, or customs bond, ensures that the taxes, duties and fees are paid on all imports. The customs import bond guarantees that the CBP will collect all import duties, taxes, fines and penalties from the importer. If the importer cannot pay those costs, the insurance company that issued the customs bond will pay the remaining costs. Reasons an importer might not be able to pay customs fees as required might include the closure of a business or bankruptcy.

The importer agrees to meet the following 8 conditions when posting a customs bond:

• Agrees to satisfy taxes, duties, and other fees in a timely manner.
• Agrees to finish entry into the country.
• Agrees to furnish required documents and proof of shipment.
• Agrees to re-send merchandise if needed.
• Agrees to fix non-compliance problems with qualifications for admission
• Agrees to permit inspection of imported merchandise if deemed necessary.
• Agrees to reimburse the U.S. for any necessary inspection, handling and storage fees.
• Agrees to comply with the rules of duty-free shipments.

It’s important to know that a customs bond must be in place even when your import shipment is duty-free.

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Who Needs a Customs Bond?

You need a customs bond every time you are importing goods. You also need a customs bond when you are importing goods regulated by another federal agency. Many imports are regulated to protect the U.S. market and consumers.

U.S. agencies that oversee common imports include:

• Alcohol and Tobacco Trade and Tax Bureau (TTB): The TTB issues permits for importers of alcohol and tobacco products. TTB permits include the Federal Basic Permit, Certification of Label Approval (COLA), Natural Wine Certificate, and Certification of Age and Origin. These permits are required when importing alcohol. You will need a customs bond when importing goods regulated by the TTB.
• Consumer Product Safety Commission (CPSC): You will find that products regulated by the CPSC include children’s products and toys. A customs bond is required when importing goods that fall under CPSC rules.
• Department of Transportation (DOT): Cars are motor vehicle imports are regulated by the DOT. A customs bond is required when you import goods regulated by the DOT.
• Environmental Protection Agency (EPA): Chemicals and related goods imported into the U.S. are regulated by the EPA.  You’ll need a customs bond when your imports are regulated by the EPA.

• Food and Drug Administration (FDA): The FDA regulates the import of goods including medication, cosmetics, food, some housewares and food-related items, medical devices, and more. The FDA requires that prior notice is given for all imported food products. A customs bond is required when you are importing goods regulated by the FDA.
• U.S Department of Agriculture (USDA): The USDA regulates imported plants and plant products, animals and livestock, wood, and more. In many cases, the USDA requires permits and more. A customs bond is required when importing USDA regulated goods.

You might face fines and import delays without the proper customs bond coverage. Obtaining a customs bond is part of the process of importing goods. With the proper bond coverage, your imports might not clear U.S. customs. Should this happen, CBP officials can assess fines. CBP officials might also hold your imports for an extended period of time, resulting in storage fees. You also might have to pay additional inspection fees. The holder of the imported cargo can resell the goods with permission from CBP in order to cover expenses if the bond is not issued within 30 days of arrival.

It’s important to know that the importer is responsible for paying the fees, duties and taxes on the imported shipment when a bond is used. Like any insurance policy, the bond is there just something goes astray during the import process. You might consider a customs bond a safety net for importing.

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What Are the Different Types of Customs Bonds?

While there are several different types of customs bonds that depend on the quantity and type of transactions involved, there are 2 bonds that are most commonly used: Single entry and continuous bonds. 

Single-entry customs bonds cover one shipment of goods into the U.S. The cost of a single-entry bond can vary. 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 CPSC, 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.

Continuous bonds work a little bit differently than single entry bonds. A bond that is continuous is allowed for an annual time period and then will have to be renewed. A continuous bond is a good option if you are importing multiple shipments in a year. 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.

Worried that your customs bond is about to expire? Check out our article The Complete Guide to Customs Bond Renewal.

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When Do I Switch from Single Entry to Continuous Bonds?

The bond you select likely depends on how often you plan to import goods. 

If you have two or more shipments that you are going to be importing in a given year, then you might want to use a Continuous Bond. It might be more economical. If you are only making two or fewer shipments in a year, it might be a better value to obtain a single entry bond for each shipment of imported goods. 

Customs Bond Instructions for Importing

Obtaining a customs bond sounds like a complicated process, but it doesn’t have to be. You can follow a few simple customs bond instructions to make the process easy.

Step 1. Determine if you’ll need a customs bond. 

You’ll need a customs bond if the goods you are importing are worth more than $2,500 or are regulated by another federal agency. You can learn more about who needs a customs bond above.

Step 2. Decide the type of bond you’ll need.

You will need to obtain either a single entry bond or a continuous bond. The type of bond you select depends on your needs as an importer. Single entry bonds cover one shipment of goods into the U.S.; continuous bonds cover all shipments in a year. 

Step 3. Find a surety company that issues the bond you’ll need.

An easy option to obtain a customs bond is by working with USA Customs Clearance. USA Customs Clearance allows you to start the bond process simply by obtaining a quote online. Getting a continuous bond from USA Customs Clearance is an easy 3 step process. First, you’ll fill out an online form to request a customs bond quote. Second, you’ll submit your method of payment for the bond and fill out an application. From there, you’ll receive your bond and can start the import process. 

You can also find a list of licensed surety companies online from the U.S. Treasury’s Financial Management Service.

Step 4. Complete all necessary applications.

In many cases, the application process is part of the bond purchasing process. If you are obtaining a bond on your own without professional involvement, you’ll need to fill out all applicable applications. You’ll need to share information about your business. Required information that might include your business name and address, employer identification number (EIN), number of years in business, where the imports are coming from, a description of the imported goods and the value of the imports.

You’ll also need to sign power of attorney over to the surety issuing your bond. This will allow the surety to file the bond on your behalf. 

Want to make sure your commercial imports are prepared properly for Customs clearance? Check out our article Importing Depends on the U.S. Customs Bond Verification Process.

Step 5. Pay all applicable fees for the bond.

USA Customs Clearance makes it easy to pay online for your customs bond. If you’re using a single entry customs bond, the bond you purchase must be worth the value of the goods and all associated fees, duties and taxes. If the goods you are importing with a single entry bond are regulated by another government entity, you’ll need to buy a bond worth at least 3 times the value of the goods you are importing, plus fees, taxes and duties. The surety company you are working with will file the bond at the correct port of entry so you may import your goods.

If you are working with a Licensed Customs Broker, they can walk you through the bonding process. There are many benefits to working with your Licensed Customs Broker. Your Licensed Customs Broker can make sure your imported goods make it into the U.S. in a safe and timely way. Your Licensed Customs Broker can help you ensure that you are following all customs regulations when importing goods into the U.S.

Additionally, you’ll find that your Licensed Customs Broker can provide other value-added services during the import process. These services might include:

• Help arranging customs clearance for your imported goods at the point of entry into the U.S.
• Prepping your imports for release as needed.
• Making sure that all your imported goods and merchandise enter the U.S. in a well-organized way.
• Acting a liaison with CBP agents to make sure that all duties, taxes and fees are paid as required.
• Obtaining all applicable permits and licensed from regulating federal agencies to import your items.
• Helping you during the entire import process, including advising you through free-trade agreements, determining entry options, or figuring out the eligibility of duty or tax deferment.

You can learn more about taking advantage of the services of a Licensed Customs Broker. Your Licensed Customs Broker will put their knowledge and expertise to work for you to help make the process of importing goods simple and easy.

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Are There Any Alternatives to Customs Bonds?

If you cannot or do not want to follow customs bond instructions, you will find a few other options. You can import goods into the U.S. without a customs bond or surety bond.

To import goods without a customs bond, you’ll need to post cash instead of customs bond. Opting to post cash in lieu of a customs bond option can be very expensive. To post cash instead of a continuous customs bond, you’ll need to post your money as collateral for the entire value of the bond. This amount is generally $50,000 or more. You’ll find there are no additional interest or fees when you are posting cash in place of a bond. To renew your bond, you will have to post the same amount of cash as collateral each year to keep the cash-in-lieu of bond active. Also, the cash you post will be held for a few years even after the bond is terminated. When opting to post cash instead of a customs bond, you are securing your own transaction with collateral and promising that any duties, taxes and fees will be paid.

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Are there Customs Bond Instructions for Temporarily Imported Goods?

There are special customs bond instructions to follow if you are temporarily importing goods into the U.S. These situations are fairly rare, but they do happen in importing. According to information from CBP, you might be able to use a temporary imports bond, or TIB, when importing goods into the U.S. for a limited time or when the goods are to be destroyed shortly after entry.

To obtain a TIB, the importer buys a bond that is worth double the fees, taxes and duties owed upon the import of the item. When using a TIB, the importer agrees to either destroy or export the goods brought into the country within a certain amount of time, usually one year or less. Making sure your imports are either returned to the country of origin, exported, or destroyed within the time deadline is essential. Failing to do so can result in fines that are double the usual duty amount for the imported goods.

According to information from CBP, you’ll find 14 subheadings for items that are allowed to be imported with a TIB. These goods can include:

1. Items being imported to be repaired, processed or altered.
2. Samples of women’s clothing that is only to be used as models at a place of business.
3. Photos and art to be displayed or in illustrated pamphlets, advertising materials or catalogs.
4. Examples or samples of merchandise to be only used for taking orders.
5. Items to be used to produce like items, like printing plates or casts.
6. Items for study and research. This includes items or goods only intended to be used for experimental testing and review.
7. Vehicles including cars, planes, motorcycles, and boats being imported into the U.S. for specific contests and races. 
8. Trains and railroad equipment coming into the U.S. for a limited time for the repair, to clear obstructions or fight fires.
9. Containers that are designed to hold compressed gases, either empty or filled, and items used to cover or hold merchandise during transport.
10. Professional equipment or tools of the trade to serve a purpose or complete a temporary job by nonresidents of the U.S.
11. Items and goods designed for temporary use in the manufacture of items for export.
12. Animals coming into the U.S. for breeding, to be exhibited or for competition for prizes.
13. Artwork, engravings, scientific equipment, photos and similar items brought into the U.S. by artists, scientists or lecturers arriving from abroad for exhibition or promotion of science, art, or industry.
14. Cars, car bodies, and car parts for show purposes.

If you are importing goods eligible for a TIB, it might be wise to work with a Licensed Customs Broker who can help you navigate the rules and regulations. Your Licensed Customs Broker can help you follow temporary custom bonds instructions.

Still Have Questions about Customs Bonds Instructions?

Figuring out customs bonds instructions for importing doesn’t have to be a hassle. Follow our simple steps and make your next importing transaction simple, whether you are importing pet supplies, light fixtures or more. Are you ready to obtain a customs bond and start importing? Get started by clicking the chat icon in the bottom right corner or requesting a quote for a customs bond online now!