Is your company importing goods into the United States? Compliance with government laws and regulations is one of the largest financial risks to U.S. importers. Customs bond compliance can be simple, but there is important information every importer should be familiar with.
1. What is a customs bond?
Customs bonds are required for any import shipment which value exceeds $2,500. Essentially, a customs bond is a contract to insure importers oblige with duties, taxes and fees owed to the government. Additionally, customs bonds are required for any import shipment if the commodity is subject to other federal agency requirements (i.e. food - USDA). Bonds are a guarantee from a surety company that the importer of record will abide by the laws and regulations governing the importation of merchandise into the United States.
2. Who are the parties involved in a customs bond?
There are three parties involved with a customs bond: the principal, the surety and the beneficiary. The principal can be an importer, a broker, a carrier, a bonded warehouse proprietor, a foreign trade zone operator or any one of a number of other parties which seek to do business with CBP. The surety is normally an insurance company that has been authorized by the Department of Treasury to write CBP bonds. The principal and surety are also known as the bond obligors. CBP is the beneficiary on all of the bonds it authorizes.
3. What are the main types of customs bonds?
The two main types of customs bonds are Continuous Transaction Bonds and Single Entry Bonds. A continuous bond is used by importers who have a large number of entries or imports through several ports during a given year. Continuous bonds have a term of one year and are automatically renewed each year. Continuous bonds are valid until terminated by the surety or the principle. Single entry bonds are intended for a single shipment. The single entry bond only covers the entry or transaction for which it was written.
4. What are the penalties for non-compliance?
If a principal fails to perform its obligations under the bond, CBP may asses a claim against the principal and surety. The claim may be for breach of an obligation to pay duties or any other bond condition.
5. How does one obtain a customs bond?
One can obtain a customs bond through a surety licensed by the Treasury department. Additionally, many customs brokers are agents for sureties and sell bonds.
Marisol International provides both single entry and continuous bonds for import clients. Marisol professionals provide tailored customs bond advice based on importer volume and other specific needs. Contact us today for more information regarding customs bonds.