If your company imports goods into the United States, compliance with government laws and regulations is important, and one such compliance is customs bonds. You must post one to ensure that all duties, taxes, and fees owed to the federal government will be paid.
While custom bond compliance is often simple, there are a few pieces of information you should understand.
What are Customs Bonds?
Customs bonds are required for any commercial import valued in excess of $2,500 — that or any commodity subject to federal agencies requirements, such as food, firearms, etc. These bonds serve as a guarantee from a surety company that you’ll abide by the laws and regulations governing the importation of the merchandise. In other words, you’re essentially entering into a contract with the government.
Who Is Involved?
Three parties are involved with customs bonds: the principal, the surety, and the beneficiary. The following are brief definitions for each:
- Principal — any importer, broker, carrier, bonded warehouse proprietor, foreign trade zone operator, or other party seeking to do business with the U.S. Customs & Border Protection
- Surety — any insurance company authorized by the Department of Treasury to write the bonds
- Beneficiary — the U.S. Customs & Border Protection
Are There Different Types of Customs Bonds?
There are two main types of customs bonds: continuous and single-entry.
As the name suggests, continuous transaction bonds allow importers to move multiple shipments through several ports within the given year. Subject to automatic renewal, you or the surety must terminate the bond to make it invalid.
Single-entry bonds are issued for a single shipment. Thus, the single-entry bond only covers the entry or transaction for which it was written.
What About Penalties for Noncompliance?
If you fail to perform the obligations under the bond, such as pay duties, taxes, or other fees, the U.S Customs & Border Protections may assess a claim against you and the insurance company.
How Do I Get a Customs Bond?
You can get a customs bond through an insurance company licensed by the Treasury Department.