Different Types of Customs Bonds
A bond is like an insurance policy that guarantees payment to Customs Border & Protection (CBP) if a required act is not performed. There are different types of Customs Bonds (also known as CBP Bonds) required by the CBP. The most common use allows importers to take possession of their goods before all CBP formalities are completed. Gallagher Transport’s experts will guide you on the type of bond required for your situation.
All individuals or companies that import merchandise into the United States for commercial purposes or transport merchandise still in Customs control through the United States must have a CBP Bond.
Some of the most common bonds used in importing are:
- IMPORT BOND – The import bond is required by CBP from all importers in order to clear goods through Customs with a value of $2,500.00 or more or goods that require additional government agencies.
- DUTY DRAWBACK BOND – This bond allows an importer to obtain a refund of 99% of the duties paid on imported goods upon providing proof these goods were exported through a formal drawback claim with CBP supervision. The bond only applies to importer’s who are filing claims for Duty Drawback and wish to participate in Accelerated Payment in which the importer can receive their refund within 90 days of filing the claim as opposed to the normal 9-12 month refund period. If the importer wants to participate in Accelerated Payment, then they must post a bond, otherwise it is not required for drawback claims.
When is an Import Bond Required?
If you are importing merchandise into the U.S. for commercial purposes that is valued over $2,500, or a commodity subject to partner government agencies (PGA) requirements (i.e. firearms or food), you must post a Customs bond to ensure that all duties, taxes and fees owed to the federal government will be paid. One of the benefits of using a Customs Broker is your broker can obtain the bond on your behalf. The shipment may be filed with a “Single Entry” import bond or a “Continuous” import bond.
Single Entry vs. Continuous Bond
Gallagher Transport can guide you on whether it is more cost effective for you to choose to obtain a Single Entry Import Bond or a Continuous Bond, and it ultimately depends on the value of your shipments and how often you import into the U.S. A Continuous Bond is normally obtained by importers who have a large number of entries and/or imports through several ports of entry during a given year. If you need a Continuous Customs Bond, the minimum Continuous Bond amount accepted by CBP is $50,000. A Continuous Bond is also good for importers with very high value entries, even if it is only one entry since a Continuous Bond is only required to cover 10% of duties/taxes due on all goods imported during the year the bond is active.
If you are only importing a single shipment, then a single entry bond may be sufficient. It covers only the entry or transaction for which it was written. If you only import goods occasionally, this type of bond may be recommended. The required amount for a single entry customs bond is no less than the total entered value of your goods on the single entry including all duties, taxes and fees. If the merchandise being imported is subject to other federal agency requirements or is restricted merchandise, the bond amount must be at least three times the total entered value of the merchandise.
In order for a Customs Broker to file for a continuous bond on your behalf, a completed bond application and power of attorney will be required.
If this all seems confusing, don’t worry, we can help! Our experienced brokers will explain exactly what type of customs bond you need, and whether it should be single entry or continuous and for what amount.