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

A Customs Bond is required on all commercial shipments of goods entering the commerce of the United States. According to Customs regulations, importers are required to post a bond...

"to protect the revenue of the United States and to assure compliance with any pertinent law, regulation or instruction.'"

Definition

A customs bond is a guarantee from a surety company to the United States government that the principal (importer) will abide by all laws and regulations governing the importation of merchandise into the United States. A bond is not designed or intended to protect the importer. The purpose of a bond is to guarantee that all customs duties, penalties, and other charges assessed by U.S. Customs will be paid and that all trade regulations will be followed. Any corporation, company, or individual who wishes to import goods into the U.S. is required to post a bond. In lieu of a bond, the importer may post cash equivalent to the required bond amount.

What Customs Bonds do

When a Customs Bond is executed, the bond principal (importer) agrees to the following conditions:
  1. To pay duties, taxes and charges in a timely manner.
  2. To make a complete entry.
  3. To produce documents and evidence as requested or required.
  4. To redeliver merchandise if requested by Customs.
  5. To rectify any issue of non-compliance with provisions of admission.
  6. Agreement for examination of merchandise by Customs, and to bear any and all costs associated with such examinations.
  7. To comply with special requirements on duty free entries or withdrawals.
  8. To comply with U.S. Customs regulations applicable to Customs cargo security
  9. To fully comply with all regulatory requirements of the U.S. Customs Service as well as all other government agencies that may have an interest in or regulatory control over your importations.

Role of the Surety Company

When goods are imported into the United States, the importer is responsible for making the goods available to the U.S. Customs Service for inspection, ensuring that marking requirements have been met, making transaction records available for audit and paying estimated or additional duties and fees, where applicable. The surety company issuing the bond guarantees the importer will comply with U.S. Customs regulations. The surety company will be called on for payment when the importer does not fulfill any obligation to the United States government with regard to an importation. If the importer fails to honor the conditions set forth in the bond, the surety company can be obligated to do so in the importer's place. In turn, the surety company is entitled to full recovery of any loss from the importer.

Two Bond types

There are two types of bonds: the Single Entry Bond (SEB) and the Continuous Entry Bond (CEB). SEBs are valid for one single importation. Single transaction bonds are typically used by importers who import infrequently. CEBs remain in force for 365 days from date of issue and are renewed annually until cancellation. This bond is both cost effective and helpful in obtaining expedited cargo release for the importer who is involved in trade throughout the year. The amount of this bond is usually equal to 10 percent of the total customs duties paid for the previous year or reasonable estimate for the current year. Contact us at [email protected] for details and a cost comparison.

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