Why is a Customs Bond Required?
Why is a bond required to import goods? A party that imports merchandise into the US or transports imported goods through the US must provide a customs bond to US Customs and Border Protection (CBP) to guarantee their financial responsibility. The bond protects the US government in the event the importer is unable to fulfill their obligation to pay duties, taxes and any monetary penalties assessed while the goods are in Customs custody and/or following the release of the goods.
As a benefit, a continuous bond may allow importers’ shipments to be cleared through Customs with greater ease.
Similar to an insurance policy, if the importer fails to meet their financial obligation to the government, the surety that underwrites the bond is required to pay the amount owed to the government on behalf of the importer.
Two Types of Customs Bonds
The amount of a bond depends on the type of goods involved in the shipment. Typically, for single entry bonds, the bond must be equal to the Customs entered value of the goods plus the estimated duties. In some cases, a bond is required to be much higher than the entered value, such as if the goods are subject to an anti-dumping duty (ADD) or countervailing duty (CVD), if the goods are subject to Participating Government agencies (PGAs), or certain entry transaction also require a different bond.
The two types of Customs bonds available are Single Entry Bonds and Continuous Bonds:
- Single Entry Bonds (SEB) cover a single import transaction at one port of entry. This option is ideal for companies that typically have less than 4 imports into the US per year and the goods have a low value. For each shipment, a new SEB would have to be purchased.
- Continuous Bonds (CEB) cover all of an importer’s shipments, at all US ports of entry, for a complete year. This option is ideal for large volume shippers or for shipments of high value.
To get your Customs Bond setup quickly, contact our customer service team today at:
firstname.lastname@example.org or 800-832-1207.