What is a Customs Bond?
A Customs Bond or an Import Bond is a three-party contract between an importer(bond principal), an Insurance/Surety Company issuing the Customs bond, and the U.S. Customs and Border Protection (CBP). Customs Bonds facilitate faster Customs clearance because they guarantee the CBP will be immediately paid if any additional import duties, taxes, or fees need to be assessed.
This allows the CBP to clear the shipment without having to wait for the Importer to submit payment. The CBP is paid by the Surety Company, then the Importer reimburses the Surety.
When do I need a Customs Bond?
A bond is required for clearing Customs on commercial goods that are valued at over $2,500 and if the goods are subject to requirements from other U.S. government agencies (i.e. all food items require a bond and must meet FDA requirements). Note that this requirement extends to even duty-free shipments.
What types of Customs Bond are there?
There are two basic types of Customs bonds:
1. Single Entry Bond
A Single Entry Bond (SEB) covers a single Customs entry of one shipment. Most bond companies will not issue a SEB more than three times a year, as it creates scrutiny within the U.S. Customs and Border Protection.
The cost of a SEB varies depending on the mode of transportation. The minimum cost for a SEB is $65 when shipped by air, and $140 when shipped by ocean. Ocean shipments, for example, require two separate bonds (ISF Bond and Entry Bond).
2. Continuous/Annual Bond
Annual bonds are valid for a single year. As they are attached to a company’s tax ID/EIN number and can be reused on multiple imports. Moreover, annual bonds are not specific to a certain broker or freight forwarder, so even if you switch customs brokers, your bond will still be valid. A typical annual bond costs $500.
How does a Customs bond work?
In additional duties, taxes or fees are assessed by CBP at any port of entry, then:
- Bond/Surety company guarantees payment to CBP.
- CBP releases shipments covered by the bond to importers.
- The importer must reimburse the broker or surety if duties and fees aren’t paid.
Where can I buy a Customs Bond?
A Customs bond can be purchased through a Customs broker who is an agent for a Surety that is licensed and approved by the U.S. Department of the Treasury.
How long does it take to get a Customs bond?
Your bond agency will handle your bond filing with the CBP, and the process usually takes about 10 business days.
How is my Customs bond used?
Customs bonds are used by Customs Brokers to clear goods. The bond is critical because it:
• Contains a unique bond number tied to your company’s importer number (Tax ID)
• Is valid at all U.S. ports of entry
• Remains tied to all importing documents filed for your goods
General Guidelines for Completing the CBP Form 301 for Continuous Bonds