What Can Customs Bond Agents Do For You?

May 15, 2018
USA Customs Clearance
The customs bond guarantees that the importer will pay the taxes and duty at the port of entry. On the importer's behalf, with power of attorney, the agent works with licensed surety companies to purchase bonds. The amount of duty and taxes are paid to the U.S. Customs and Border Protection.
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Sure it seems easy to order merchandise from anywhere on the globe and have it shipped to your business. The plan is to stock the store shelves, not get a headache dealing with international goods. This is where customs bond agents can help save the day. Ok, that sounds great! But now you want to know; what can customs bond agents do for you?

The customs bond guarantees that the importer will pay the taxes and duty at the port of entry. On the importer's behalf, with power of attorney, the agent works with licensed surety companies to purchase bonds. The amount of duty and taxes are paid to the U.S. Customs and Border Protection.

Or you may have a more basic question; what are customs bond agents? Secondly, does my shipment even require all of that? It’s just a couple of boxes of seasonal items that you think would bring in good traffic and bottom-line profit. You think it should not be a hassle to just ship the merchandise to the boutique.

By ordering the goods that will be shipped from an international point of origin, you become an importer. As an importer, there are a few key things that impact your shipment.

Merchandise imported into the United States intended for commercial use, valued at over $2,500 is required to have a customs bond. Next, the importer will need to select between the two types of customs bonds needed for the shipment.

Add the time to file the various required documents and you soon realize it’s an overwhelming task to complete. However, all the details required to import goods is exactly what customs bond agents can do for you. Why not let the professionals handle the details of getting your shipment through customs and to your shop. Your only worry should be how to display the items on your store shelf.

Importing inventory can be a seamless process for your business, it just takes upfront planning and using a reliable resource. Use the USA Customs Clearance guide to learn what customs bond agents can do for you to make importing easier.

Role of a Customs Bond

customs bond is required

As stated earlier, a customs bond, also called an import bond, is required when importing commercial goods valued over $2,500. In addition to items under federal guidelines such as food or firearms must carry a customs bond before entering the country.

So what exactly is a customs bond? Think of a customs bond like an insurance policy. In essence that is precisely what a customs bond is; insurance.  In addition, the CBP has rules and regulations that importers must follow.

There are two types of bonds to choose from when importing goods:

Single Entry Bond – covers a one-time import shipment through a specific port. Typically best for companies looking to only import a couple of times per year.

Continuous Bond – a more comprehensive bond ensures import shipments through any U.S. port for a year from the filing date. A continuous bond is best for those looking to import large volumes of freight and use multiple ports. Under this bond, high-value imports are covered.

A customs bond agent can help determine what type of bond fits your import shipment. Regardless of the product or industry, agents are trained to secure the best bond to clear your goods through customs.

By working with customs bond agents, they take care of all the importing details. Agents help importers navigate the process of obtaining the proper bond and gathering the pertinent details for all documents. This step is critical, one missing document or detail could mean your shipment does not leave the port. This is just one example of what customs bond agents can do for you when importing goods.

A Bond by a Different Name

In the world of customs bonds, while there are two different types, different names are used when talking about a bond. A customs bond is also known as a surety bond, customs clearance bond, an import bond, a U.S. custom bond or an ISF bond.

And while they all cover the entry of an import, there are a few differences of note in the bond names. A customs bond, a customs clearance bond and U.S. custom bond are virtually the same. As the name suggests, the bond covers the imported cargo clearing customs at the point of entry. However, an ISF bond is required for all containerized ocean shipments imported into the U.S.

When talking to a customs bond agent, they will ask various questions to get started. Once the process begins, the agent will educate you about the bond types and names. This is the time for importers to ask questions. Although customs bond agents work on behalf of clients, it’s a good idea for the importer to know the basics of the bond purchased. In the grand scheme, the name may not matter as much as the overall function of the bond.

Whether you know it as an import bond or a customs clearance bond, know that the purpose is the same. It’s a different name but has the same function, to guarantee shipments clear customs. Specifically, the intent of a bond is insurance for the U.S. in case an importer fails to cover the assessed amount of goods entering the country. There are a lot of information needed when making a bond application, and attention to the fine detail is vital.

So to answer the question what can a customs bond agent do for you; they help importers understand the bond names which is always helpful information.  

ready to buy a customs bond

Import vs. Export

When it comes to moving freight, what is the difference between an import and export? It is a valid question and lets us know that some are confused about the overall process and what it all means.

A quick break down between the two:

Import – is to bring in; or arriving from somewhere outside of the U.S.

Export – is to send out; it’s leaving the U.S. destined for a foreign point of entry.

A customs bond agent can easily take a moment to explain how importing and exporting differs. Basically, the difference between the two is documentation. Imports, meaning coming into the U.S. must have proper documents including a customs bond to ensure all taxes, duties and other fees will be paid at the port of entry. If this bond is not secured the cargo will be flagged at the port. It will be difficult to proceed on your own without assistance from a customs bond agent.

However, when exporting, the shipper must check and follow the rules of the country of entry. The destination country of the export may have additional guidelines that must be satisfied.

TheU.S. is among the top countries receiving imports followed by China, Germany, Japan and the United Kingdom. As for exporters, the U.S. makes the list again behind China and then Germany, Japan and South Korea round out the top countries.

While it may seem simple to understand importing. The details can be a little daunting depending on many factors. That’s where a customs bond agent is able to work with clients to help simplify things. After talking with a client, the agent can narrow down what type of bond is needed to get a shipment cleared. And yes time is of the essence for imports so agents work to ensure there are no snags at the port.  

Clearing Customs at U.S. Ports of Entry

how to clear customs

According to the CBP, there are 328 ports of entry in the U.S. This combination of ports cover land, sea, and air where cargo can be screened.

Any item being imported into the U.S. that is regulated by a government agency is also required to have a customs bond. In addition, the bond should cover the product value times three on regulated import products.

USA Customs Clearance works with customers importing a variety of merchandise. Most of the imports we work with enter via the West Coast including LAX, which is considered a major U.S. port of entry.

Products typically easier to clear customs:

  • Wood products
  • Auto parts/spare parts
  • Furniture
  • Machinery parts
  • Toys
  • Electronics
  • Sporting goods
  • Exercise equipment
  • Home improvement products

However, there is a list of items that are more difficult to clear customs. These items include:

  • Food
  • Coffee
  • Cosmetics
  • Pharmaceuticals
  • Go-karts
  • Cars
  • Firearms

The import of food products and coffee into the U.S. is required to have Food & Drug Administration (FDA) notifications and approvals included with the other customs documents. Cosmetics and pharmaceuticals also come under the FDA and imports must have proper approvals. When importing cars or go-karts, the Department of Transportation (DOT) and Environmental Protection Agency (EPA) must also sign off on paperwork.

By working with a customs bond agent, importers will not have to figure out the process and regulations on their own. Let an agent explain how it all works and provide guidance of how to handle items that need additional documentation. The agent knows what documentation is needed specific cargo being imported. They are also alerted to any changes made by the CBP that will impact clients. Don’t try to guess your way through securing a customs bond. The overall process will be smoother once you contact a professional and knowledgeable customs bond agent like those with USA Customs Clearance.

Information Needed by Customs Brokers

As you can imagine, there is a process of obtaining a customs bond. The details can be overwhelming and confusing. However, a mistake could mean your shipment arrives late.

In order to obtain a customs bond, you will need to provide required documentation about the shipment. On file should be the commercial invoice, packing list, bill of lading and arrival notice from the U.S. agent.

Customs brokers are working on behalf of the importer and will to have a power of attorney. It’s a key component allowing the agent to manage the entire process. A licensed customs broker, with power of attorney, will serve as the authorized agent for importing the shipment. The agent will also be able to conduct import and export transactions, sign and certify documents, endorse bill of lading, and is the guarantor for required bonds.

A customs broker will walk you through establishing a customs broker account. The application requires basic information about your company like name, address, accounts payable information and state of incorporation. The next step will be a general account questionnaire highlighting any connections to vendors or international shippers. The query will also focus on relationships directors or officers may have with companies, and if there are controlling interest within any company.

The job of the customs bond agent is to assist in getting your shipment cleared through the port of entry. It is critical for the agent to obtain all of the information they need upfront from the importer. Missing or incomplete information can delay your shipment clearing customs. This is not the time to withhold details about the shipment.

Remember the customs broker is working on your behalf, it’s a team effort. Both parties share a vested interest to make sure your import arrives on time clears the port of entry.

Still Have Questions

Questions For the Customs Bond Agent

When contracting with a customs bond agent, it’s really a partnership because they are working with you to make sure your cargo successfully clears the port of entry. Here’s a checklist of things to review when working with an agent.

  • What information will the customs bond agent need to know about your shipment? The customs bond agent will need details about your shipment. Be prepared to tell the agent where the cargo is going and other details.
  • Ask if the agent only files the bond or do they handle the entire import as well? We advise that importers work with customs bond agents capable of handling the entire process.
  • Have you had any shipments from previous importers stuck at the border?

This may be a red flag that there were issues with the bond documents filed by the agent.

  • How long does it take to get a bond? How long before my shipment do I need to contact you? You can’t afford for your shipment to lag in customs. Look for agents who can promptly secure a bond and successfully clear your cargo through customs.
  • Do you take care of the duties and taxes on my behalf?

Importers want to find licensed customs bond brokers that can outlay the duties and taxes and invoice the customer.

  • Documents importers need to make sure to go over with customs bond agents:
  • Bond application for broker
  • Customer agreement/contract
  • Power of Attorney
  • W9
  • Manufacturer affidavit may also be requested
  • NAFTA form – required for Canadian goods

Working with the customs bond agent is an important part of the process of importing your goods. The agent should be knowledgeable about everything you inquire about in order to explain it to you in layman’s terms. Make sure to ask questions along the way.

What is the Cost of a Customs Bond?

Synonymous with asking what can customs bond agents do for you, the next question is often about the cost. Bond amounts are set by the CBP which are not less than $100. While you must obtain an actual customs bond quote, let’s outline minimum rates.

As a general rule to calculate the amount of a Continuous Customs import bond:

Take the amount of duties and taxes for the shipment, in most cases it’s 10 percent of the annual total with a minimum of $50,000.

However, for a single entry bond, the amount is usually not lower than the total import value entered. The minimum is $100,000. Like a continuous customs import bond, the amount of the single entry bond also includes taxes, fees and duties.

If planning to import a large quantity of goods through ports of entry, a continuous entry bond may best. This bond type also covers high-value imports. So if you don’t know the duty rates of your imported freight, don’t worry. That’s another example of what a customs bond agent can do for you.

Licensed customs brokers like our partners AFC International, LLC handle ACH bank transfer payments to the CBP for importers. We have our own bank so payments are made daily, thus saving time to ensure your import arrives.

Work with a customs bond agent who can help figure out what type of bond you need and get a quote. Importing is a challenging endeavor if you decide to go it alone. Give our experienced agents a call to ask questions about what it takes to import and receive a quote.

Our licensed customs bond brokers actually invoices and outlays duties for importers. Since duties must be paid 10 days after the shipment is released, our bond agents handle everything and invoice you.

What Happens If Issues with a Customs Bond?

Cargo without a customs bond

Going it alone to file a customs bond may result in an insufficient bond for your import. Time is of the essence for importers who need results not issues. If the amount of the bond is less than what is being imported and duty taxes, it is considered insufficient.

A variety of other reasons can also deem a bond insufficient. Things such as listing an invalid importer of record or not depositing proper cash-in-lieu of surety for the continuous bond can delay customs clearance. Errors on the paperwork for the import bond could also delay the arrival of freight.

In addition, neglecting to secure a customs bond on imported freight also means it does not leave the port upon arrival. Without the proper documentation the CBP will hold the import until the issue is resolved. It could also mean a penalty is tacked on in excess of taxes, duties, fees and other fines including possible storage fees.

To avoid delay, it’s highly suggested that importers work with a customs bond agent. The agent’s job is to ensure proper documentation is filed and to expedite payment of taxes, duties and fees. Some customs brokers will outlay the duties on the customer’s behalf.

The CBP requires a bond on all imports over $2,500 in value intended for commercial use. A customs bond agent can advise what type of bond will best cover import freight. It’s their expertise you are counting on to get your import through customs without problems. Instead of worrying and wondering if you completed the forms correctly, let the agent calm your fears and handle everything.

Our customs bond agents double check each and every document in all bond applications. They are getting paid to make sure everything is done correctly without cutting corners which could ultimately cost the importer more money and time.

ready to buy a customs bond

Previous Broker

When clients work with a customs broker, they are trusting that all details surrounding their import will be handled professionally. They put their trust in the broker. How disheartening is it then to learn a problem has occurred? More importantly, the issue is the fault of the broker? Time, money, and freight are in jeopardy.

The professional customs bond agents with USA Customs Clearance and our partners AFC International are able to assist clients with a full range of importing issues. An area we find a growing demand is helping clients that have run into problems with other brokers.

If you previously worked with a broker and were met with issues getting your freight cleared through customs, we can offer to help. Brokers with USA Customs Clearance can work with importers to refile paperwork and attempt to recoup any lost funds due to previous mistakes. In addition, the broker can file what’s known as a summary amendment on behalf of the import to resolve previous problems.

Many may not realize that the CBP can red flag a broker as easily as they can an importer for customs clearance violations. If there were issues with a previous broker, the result may be freight stuck at the port or a myriad of other problems. It can take several weeks to resolve issues for cargo to be cleared through customs.

The customs brokers through AFC International are working on behalf of the client to get shipments cleared. This is a serious process that could mean lost money and time for the importer if there are mistakes. It’s easy to avoid fines and shipment delays. Contract with a customs brokerage firm that considers it a priority to ensure all documents are correct filed promptly and the bond is the right amount and type to cover the shipment.

Customs Bond Claims

We’ve been talking about what a customs bond agent can do for you. As you’ve learned a customs bond agent is able to assist with myriad items related to obtaining an import bond. And their goal is to work from start to finish with all the documentation needed to clear your cargo at the point of entry.

The purpose of a customs bond is to guarantee that the importer will pay all taxes, duties, and fees charged at the point of entry for a shipment. In addition, the importer is also agreeing to follow the regulations set by the CBP and other federal agencies.

Still Have Questions

Unfortunately, from time to time problems arise with a bond which can prompt the CBP to file a customs bond claim. In the event that the bond is not enough to cover the duty, taxes, and fees of the imported shipment, the CBP can force the issue.

In obtaining the customs bond, the importer is agreeing to all of the conditions including paying the duties, taxes, and fees associated with the shipment upon arrival in port. There are a number of different claims the CBP may file in order to clear the cargo.

The CBP can deem that your shipment falls into one of the four categories of bond claims that includes:

  • Liquidated damages
  • Supplemental Duty Bills
  • Debit Voucher
  • Miscellaneous Bills

In most cases, while a liquidated damages claim can be challenged at the entry port, the other bond claims must be paid within a 15 to 30-day window. Neglecting to resolve a bond claim can mean the CBP pursue legal means to recoup the money.

A professional customs bond agent will be able to facilitate any claims filed against the importer. Just as obtaining a bond can be difficult to navigate, it can be challenging to work through the details of handling a bond claim.

Customs Bond Agents Keep Clients Informed

customs agents

Wondering what else a customs bond agent can do for you? Beyond the obvious of securing import bonds, customs bond agents keep clients informed. They must stay abreast of updates and changes from Customs and Border Patrol along with other agencies. It is this information they pass on to clients who often do not have the time to keep up with it all.

They are aware if there have been any government policy changes impacting the import process. Agents are also able to explain new laws or issues with certain types of cargo being cleared.

It is also the customs bond agent who is most up to date on import and market trends in a particular season or industry that may have high volumes. The agent can advise a client if freight may be arriving during a busy time for other cargo. In addition to obtaining a customs bond, the goal of the agent is to inform the client of all aspects.

For instance, the Bond Centralization Program now handles all new applications for continuous or single entry bonds. The program allows for additional centralized filing and the agent is able to go over those details with clients when the time comes.

Our customs bond agents also make sure clients are in compliance with all regulatory agencies. Imports that are not in compliance at the point of entry will be flagged. Again, this means extra time and money. Education is a critical step in the customs bonding process, making sure importers are compliant and aware of all the conditions relating to their cargo.

While working with USA Customs Clearance, we make sure our clients are aware of what may impact their imports. It’s our goal to educate our clients so they become a more knowledgeable and educated importer.

Customs Bond Partnership

obtain a Customs Bond

The customs bond agents of USA Customs Clearance works with our partners AFC International, LLC and their licensed customs brokers. The licensed customs broker is who actually obtains import bonds. The customs bond agent facilitates the initial phase in the importing process. This is yet another item to add to the list in answering the question of what can a customs bond agent do for you.

We work hand in hand with importers to find the best rates for customs bonds to cover their cargo. This joint knowledge helps make the bonding process seamless for clients which in turn ensures cargo clears customs promptly.

Licensed customs brokers, with a power of attorney, can work on behalf of the importer to get all the documents prepared. The list of documents the broker will need from the related to the cargo to be imported includes:

  • Commercial invoice – outlines important information about the cargo like price, origin, and description.
  • Packing list – what’s in the shipment along with size of goods
  • Bill of Lading – inventory sheet of what is included in the shipment
  • Arrival Notice – an itinerary of when the cargo will arrive in port and other specifics needed to clear customs.

The USA Customs Clearance and AFC International, LLC partnership provides a wealth of benefits for clients who have the strength of two successful companies working on their behalf to import freight.

Learn what USA Customs Clearance Can Do

It’s time to contact USA Customs Clearance if you still have questions about what can customs bond agents do for you. Learn how to cut the worry out of clearing customs on everything from importing alcohol to importing toys. Focus on the bottom line of business with our help. Talk with one of our knowledgeable agents by clicking the “Chat Now” tab at the bottom of the page. We are ready to answer questions and prove how we can serve your importing needs to clear customs quickly and easily.

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