There is a lot to think about when you are importing goods. Things like finding the right supplier, arranging shipping, and dealing with government rules might overwhelm you. One thing that makes the process simpler is a customs bond.
Customs bonds are a necessary part of importing goods. A customs bond covers the payment of duties and taxes for imported goods to the U.S. government. Customs bonds are required to cover shipments entering the country by sea and by air.
What does a customs bond cover? A customs bond is a required document that acts as an insurance policy. A customs bond is an imports bond that ensures payment of duties and taxes to the United States government upon the import of goods and commodities.
A customs bond ensures that your duties and taxes will be paid even in extreme circumstances, like bankruptcy or the closure of your business. You can face fines or delays without the proper customs bond.
If you decide to work with a Licensed Customs Broker, the broker’s customs bond can be used to secure your transaction.
According to information from U.S. Customs and Border Protection (CBP), a customs bond is required when you are importing commodities valued at more than $2,500.
A customs bond is also required when you are importing goods subject to other federal agencies requirements. For example, if you are importing firearms, you’ll need a customs bond in addition documents required by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). Other government agencies that oversee imports and will require the purchase of a customs bond include:
According to information from CBP, you will also need to get a customs bond if you are a domestic carrier transporting cargo by air, sea or vehicle if the cargo is “IN BOND.” The customs bond is required even if you are just transporting “IN BOND” cargo from one state to another.
You will also need a customs bond if you are a warehouse or facility operator who wants to store imported or exported goods. You also must apply with the closest port director to determine the type of warehouse you wish to create for imported commodities.
Customs bonds are required if you want to serve as a Customs Broker or perform an activity in a CBP secure area. CBP approved inspectors and laboratories should also have Customs Bonds.
Importers can choose between two main types of customs bonds: Single entry or continuous bond. The bond type you select should ultimately depend on how often you plan to import goods into the U.S. A single entry customs bond covers one import shipment. A continuous customs bond is valid for one year and covers all imports into the U.S. within the year.
It’s also important to note that your Licensed Customs Broker’s bond can be used to secure your transaction. Working with a Licensed Customs Broker can make the process easy and simple.
If you plan to import frequently and use different ports of entry, a continuous bond might be a better option economically. If you only importing on one occasion, a single entry bond might be best.
A continuous entry customs bond comes with other benefits, too. If you select a continuous entry customs bond, you will not have to purchase an additional bond for your Importer Security Filing (ISF). ISF is a rule set in place by CBP that mandates importers submit information at least one day before goods are loaded on a sea vessel from an exporting country. This allows CBP to review your cargo for security and safety risks.
If you are working with a Licensed Customs Broker like USA Customs Clearance or AFC International, it’s very likely that the broker’s customs bond can be used to secure your transaction. If you need to obtain a customs bond yourself, you can get one through a surety licensed by the U.S. Department of the Treasury. There are hundreds of sureties located across the country.
A Licensed Customs Broker might include use of their bond in the cost of doing business. If you are purchasing a bond on your own, it’s important to consider that you are essentially buying an insurance policy. You are purchasing a customs bond for a specific amount of coverage. Just like the benefits of single entry and continuous bonds vary, so does the price.
The import customs clearance and customs import bond process can be difficult to master on your own, whether you are importing furniture from China, importing wood to the USA or any other import process. A Licensed Customs Broker will help to ensure your imports are cleared through customs efficiently and in compliance with customs laws.