If you are an experienced U.S. importer, you are well aware of the requirement for a Customs Bond. If you are not, then this blog is for you.
A Customs Bond acts as a promissory note between the Importer of Record (IOR) and U.S. Customs and Border Protection (CBP). The bond secures payment of any duties, taxes, penalties or associated customs fees. Just like car insurance, customs bonds are provided by third party insurance providers commonly referred to as surety companies.
Required by law just like car insurance, the biggest difference is that instead of insuring your property, you are insuring the imported goods, and the Customs Bond basically indemnifies U.S. Customs and Border Protection, should you default on any of your obligations.
All commercial transactions and some personal importations require a bond. There are two types of bonds that satisfy this CBP requirement.
Single Transaction Bond
A Single Transaction Bond, otherwise known as a SEB, is good for a single entry into the United States. The single entry bond amount is calculated by combining the value of your shipment plus any duties and fees. In addition, you can typically expect to pay a fee for every $1000 worth of bond value.
Keep in mind that food products, electronics or anything that is subject to another government agency requires the bond to be calculated at three times the value of the shipment plus duties and fees. This can significantly increase the amount you pay per single entry bond (SEB) and possibly require special approval from the surety company which can delay your shipment.
Below is a list of other government agencies that require the value on an single entry bond to be tripled.
? U.S. Food & Drug Administration (FDA)
? Environmental Protection Agency (EPA)
? Fish & Wildlife (F&W)
? Federal Communications Commission (FCC)
? Consumer Products Safety Commission (CPSC)
? Bureau of Alcohol, Tobacco & Firearms (BATF)
? Department of Agriculture, Agricultural Marketing Services (AMS)
? Toxic Substances control Act (TSCA)
? All merchandise subject to Quota and/or Visa requirements
Continuous Transaction Bond
A Continuous Transaction Bond, otherwise known as a CTB, covers all merchandise entered into the commerce of the United States for a full year from the date that the bond becomes effective. A significant advantage to purchasing a CTB is the immediate savings in costs. Offered at a flat rate, you can expect to pay a much lower fee than purchasing a single entry bond every time you import.
A continuous transaction bond for high volume importers is the most efficient option available.
Lastly, do not wait until the last minute to decide on the best option for your importing needs. Bonds need to be secured in advance of goods arriving into the United States, otherwise you risk your goods being delayed. For more information, please contact Pacific Customs Brokers Inc. (USA) toll-free at 877.332.8534 and we?ll be happy to assist you.