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What Does a Customs Bond Cover?

April 25, 2018
Laura Isaacs
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.
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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.

What Does a Customs Bond Cover?

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.

When is a Customs Bond Required?

You will need a continuous bond

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:

  • U.S Department of Agriculture
  • Food and Drug Administration
  • Environmental Protection Agency
  • Department of Transportation
  • U.S. Fish and Wildlife Service
  • Consumer Product Safety Commission

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.

ready to buy a customs bond

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.

What Types of Bonds are There?

A continuous customs bond is valid for one year

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.

Which Customs Bond is Best for My Business?

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.

How Do I Get a Customs Bond?

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.

How Much Does a Customs Bond Cost?

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.

Still Have Questions
  • Continuous entry customs bonds are fairly simple. To obtain the bond, you’ll need to pay for coverage of at least $50,000 or 10 percent of the fees and taxes you paid in the previous year. Though the cost for this coverage can vary, it is often more economical to purchase a continuous bond if you plant to import three or more shipments in a year
  • Single entry customs bonds can be a little bit trickier. The minimum amount of the bond must be at least what the goods are worth plus the taxes and fees you’d owe on them. If your shipment must meet the requirements of another federal agency, the bond must be worth at least three times the value of the goods imported. For example, if you are importing $6,000 worth of plants that need to be inspected by the USDA, you will be required to purchase a bond amount of at least an $18,000. The price of the bond can vary by surety company. It’s also important to keep in mind that you will need additional coverage for ISF if you are shipping by sea.

Ready to Get Started? Get Help Today

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.

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