U.S. Customs Bonds

According to Customs regulations, a Customs Bond is "...a contract which is given to ensure the performance of an obligation imposed by a law or regulation." The primary purpose of a Customs Bond is to guarantee the payment of import duties and taxes as well as assure compliance with all laws and regulations governing the entry of merchandise from foreign shipping points of the United States.

Why is an importer required to post a bond with U.S. Customs?

A Customs Bond is required on all commercial shipments of goods entering the commerce of the United States. When a Customs Bond is executed, the bond principle agrees to the following conditions:

1. Agreement to pay duties, taxes and charges in a timely manner
2. Agreement to make or complete entry
3. Agreement to produce documents and evidence
4. Agreement to redeliver merchandise
5. Agreement to rectify any non-compliance with provisions for admission
6. Agreement for examination of merchandise
7. Reimbursement and exoneration of the United States
8. Compliance with special requirements on duty-free entries

A Customs Bond is not a form of insurance. It is not designed or intended to protect the importer, nor does it relieve them of any of their obligations to pay amounts due to Customs. According to Customs regulations, its purpose is "to protect the revenue of the United States and to assure compliance with any pertinent law, regulation or instruction."

What are the alternatives to posting a Customs Bond?

In lieu of a bond, an importer has the option of posting cash or other U.S. government obligations (Treasury bills, notes, or bonds other than U.S. savings bonds) in an amount equal to the amount of the bond. However, if an importer deposits money with Customs, such funds will not be released until some time after the entry is liquidated (months or years). Instead, U.S. Customs gives an importer the option of posting a bond that relieves the importer's cash supply or credit line.

TYPES OF CUSTOM BONDS

Single Transaction Bond
A single transaction bond is a one time bond for a particular import shipment which can only be used for one Customs transaction. The bond amount is equal to the total entered value of the merchandise plus all duties, taxes and fees unless the merchandise is subject to other government agency requirements or visa/quota requirements. In this case the bond amount would be equal to three times the total entered value.

The cost of a single transaction bond is $4.00 per $1,000 of the bond amount with a minimum charge of $40.00.

Continuous Bond
A continuous bond is a self-renewing term bond which covers all Customs transactions through any port of entry. The bond amount is determined by taking multiples of $10,000 nearest 10% of duties, taxes and fees paid by an importer or broker acting as importer of record during the last calendar year. A minimum bond of $50,000 is required.

To apply for a U.S. Customs bond please click here

For more information regarding Customs bonds please contact us at info@magicbrokers.com.