A Customs bond is a contract that is given to insure the performance of an obligation or obligations imposed by law or regulation. A bond is like an insurance policy that is paid to the U.S. Customs Service if a required act is not performed. Bonds have a number of uses in the U.S. Customs Service. The most common use allows importers to take possession of their goods before all Customs formalities are completed. Another common use allows a carrier to move goods that have not been entered from one place to another. All parties that import merchandise into the United States for commercial purposes or transport imported merchandise through the United States must have a Customs Bond. Who are the parties to a Customs bond? Usually, there are three parties to a customs bond: the principal (importer), the surety and the beneficiary. The principal on a Customs bond can be an importer, a broker, a carrier, a bonded warehouse proprietor, a foreign trade zone operator or any one of a number of other parties that seek to do business with Customs. The principal gives the bond to Customs to insure satisfactory performance of obligations that it undertakes. The surety is normally an insurance company that has been authorized by the Department of the Treasury to write Customs bonds. The surety agrees to pay any liability that might arise from the principal's failure to perform its obligations. The principal and surety are also known as the bond obligors. The U.S. Customs Service is the beneficiary on all the bonds it authorizes. What happens if the obligations under the bond are not met? If a principal fails to perform its obligations under the bond, liquidated damages are owed to Customs. The amount of liquidated damages is established by the conditions of the customs bond. Both the bond principal (importer) and surety are “jointly and severally” liable for liquidated damages. In no case can a claim for liquidated damages exceed the amount of the customs bond that appears on the Customs Form 301. If the customs bond principal cannot or will not perform its obligations, Customs and Border Protection (CBP) can make demand for payment of liquidated damages on both the principal (importer) and the surety. Customs and Border Protection (CBP) will accept payment from either party in satisfaction of the claim. If the surety pays Customs and Border Protection (CBP), it can make a claim for payment against its principal, but Customs and Border Protection is not a party to that transaction. What are the main types of customs bonds? Continuous Customs Bond A continuous customs 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. A continuous bond is valid until it is terminated by the surety or the principal. The principal is only required to renew the bond once a year. The minimum customs bond amount for continuous customs bonds will be $50,000 or 10 percent of the total taxes and fees paid in the previous 12-month period whichever is greater. Please note that all customs bond amounts will be rounded up to the next whole dollar amount in multiples of $1000. Please let us know if you’re interested in purchasing a continuous bond through us. Single Entry Bond Importers obtain a single entry bond for a single shipment. It covers only the entry or transaction for which it was written. The amount of Customs bonds may vary based on the commodity being imported. Type of Bond Bond Amount Required By US Customs Basic Single Entry (General Goods) Invoice value of goods plus Customs duty/taxes/fees Quota or Visa Entries Three times the invoiced value of the goods Automobiles (Non-conforming) Three times the invoiced value of the goods Entries Requiring Other Federal Regulatory Compliance Three times the invoiced value of the goods Temporary Importation (General) Two times the estimated duties/taxes/fees Temporary Importation – Samples solely for use in taking orders, motion picture advertising films, professional equipment, tools of trade, and repair components for professional equipment and tools of trade 110% of estimated duties/taxes/fees Temporary Importation – duty free goods One times the merchandise processing fee or $100; whichever is greater Goods Unconditionally Free of Duties 10% of the invoiced value Anti-Dumping & Countervailing Goods Determined by US Customs The bond amount required by US Customs may be subject to change by Customs directive or may vary from port to port at the discretion of the District Director of Customs |