What is a Customs Bond?
A customs bond (also known as an import bond) is a type of surety bond that is used for importing goods to the United States. It is a specific type of surety bond that doesn’t necessarily provide protection to any one person or party. Instead, it protects the U.S. taxpayers (via the U.S. Customs and Border Protection) against fraud and ensures that all taxes, fees and other payments associated with importing goods are paid in full.
The purpose of customs bonds are for:
- Compliance: Customs bonds ensure that importers comply with all federal regulations and requirements for importing goods into the U.S.
- Financial Security: They provide a guarantee to the CBP that all duties, taxes, and fees due will be paid, which protects the government’s financial interests.
- Facilitate Trade: By providing a financial guarantee, customs bonds expedite the clearance process for imported goods, facilitating smoother and faster trade operations.
When to Obtain a Customs Bond
Customs bonds are generally required if a person or company meets a few different criteria:
- They are importing goods valued at $2,500 or more into the U.S. for commercial purposes
- They are importing firearms, food, pharmaceuticals and other commodities that are regulated by federal agencies
- They are an international carrier that transports goods (or people) from other countries into the U.S.
- They are a U.S.-based carrier that needs to transport goods in-bond.
- They are a warehouse that will be storing goods that have been imported or will be exported
- They are a company who will perform work within a property owned by the U.S. Customs and Border Patrol.
How Customs Bonds Work
If any of the above scenarios are in effect, a customs bond will be required to perform the service or import/export the goods that need to be moved. There are two major import bonds: single entry customs bonds and continuous customs bonds. Single-entry bonds are for importers who are looking to bring a single large shipment into the United States. Continuous bonds are for carriers, logistics companies, warehouses and other businesses/people who import goods into the U.S. frequently and on a continual basis.
When goods are brought into the U.S., all duties, taxes, fees, etc. must be paid. Customs bonds ensure that these are all paid. The bond will provide compensation to Customs and Border Protection via a surety in the event that fees are not paid or if an importer does not follow all laws and regulations that govern over imports into the U.S.
There are two main types of customs bonds:
Single Entry Bonds: These are purchased for a single shipment. The bond amount is typically set at a minimum of the total value of the goods plus any duties, taxes, and other fees. Single entry bonds are suitable for importers who do not frequently import goods into the U.S.
Continuous Bonds: These cover all entries made by an importer over a 12-month period. The minimum bond amount for a continuous bond is usually $50,000 or 10% of the total taxes and fees paid by the importer to CBP in the previous 12 months, whichever is greater. Continuous bonds are more cost-effective for regular importers since they cover multiple shipments under one bond.
Obtaining Customs Bonds in Minnesota
Are you a Minnesota business that deals with imported goods? Do you have a large shipment that needs to come to shore in the U.S.? You will likely need to obtain a customs bond. Contact The Surety experts at The Patrick J. Thomas Agency today to start the bonding process.