If you’ve got your feet wet importing goods from overseas then your company will no doubt have become familiar with the concept of posting a customs or import bond. For those that are new to import/export, here’s is the basic information on what a customs bond is and when you need to post it:
What Is A Customs Bond?
A customs bond is essentially an insurance policy that guarantees the payment of import duties and taxes to the United States government, even in the extreme event (bankruptcy for example) that your company can’t pay. There are 3 parties involved in the customs bond:
- The Insurance/Surety Company issuing the bond,
- The Principal (who is the importer of record and required to file the bond), and
- Customs & Border Protection (CBP).
The customs bond guarantees CBP that if they cannot collect monies that are payable by the Principal, they can seek remedy from the Insurance/Surety Company up to the bond amount. It also indemnifies the Insurance/Surety Company, allowing them to use any legal means to collect from the Principal any monies that were paid to CBP on the Principal´s behalf.
When Do I Post A Customs Bond?
CBP requires all importers to file an import bond in order to clear their entries, even if the goods are duty-free. Below are the instances when a customs bond will be required:
- If you are importing merchandise into the United States for commercial purposes that is valued over $2,500, and/or you are importing a commodity (such as firearms or food), which is subject to other federal agencies requirements. For example, if you are importing any type of food items, you’ll always need a customs bond in addition to your Food and Drug Administration (FDA) requirements.
- If you are an international carrier and you transport cargo or passengers via air, vessel or vehicle from a foreign destination to the United States or a domestic carrier that merely wants to transport imported cargo “In Bond” from one state to another.
- If you are a warehouse or facility operator and want to become a Customs bonded facility with the ability to store or secure imported or exported goods.
- If you want to perform some activity in a secure CBP area, i.e. Cartage, or serve as a Customs Broker or as an approved gauger or laboratory.
But perhaps, the most common purpose of a customs bond from the perspective of an importer, is that you can take possession of your goods promptly. If a bond is not posted, you will have to pay all duties and taxes “cash-up-front.” Posting a bond allows you to receive your goods “immediate-delivery,” and you can pay the duties 10 business days later.
Consider J.M. Rodgers Co for all Your Import Brokering Needs
It is possible to apply for a customs bond on your own, however, the easiest way to get a bond is through your customs broker or international freight forwarder. J.M. Rodgers Co., Inc. is a highly experienced and skilled customs house brokerage and freight forwarder and we provide a comprehensive customs import/export service that includes the posting of customs bonds on your behalf, as well as all customs brokering at the border. For more information, give us a call today.