A customs bond acts as an insurance policy in that it guarantees payment to US Customs and Border Protection (CBP) of all duties and taxes due on an import shipment. All import entries valued over $2500 will only be granted entry when there is evidence that a bond has been posted with CBP to cover any potential duties, taxes, and charges that may accrue.
An importer may choose between purchasing a single entry bond or a continuous bond. A continuous bond (also known as an annual bond) is generally considered a more cost effective option, as it also fulfills an importer’s obligations to have an Importer Security Filing (ISF) bond on file. A single entry bond covers only the entry or transaction for which it was written.
A continuous bond has a term of one year and covers all entries for a specific importer during that year. So the more entries per year, the more cost effective the continuous bond will become. A continuous bond is much simpler to administer because an importer only needs to purchase one bond each year and it can be automatically renewed each year and remains valid until the surety or the principal terminates it.
Other scenarios requiring a customs bond
If you are a warehouse or facility operator and want to become a customs bonded facility with the ability to store or secure imported or exported goods, you also must obtain a customs bond. In order to meet the necessary requirements you must apply with the port director and determine the specific type of warehouse you intend to establish for these purposes. Having a customs bond in place provides a buffer between CBP and the importer, and this will reduce unnecessary issues and delays and is required by CBP for nearly all items being imported.
If you’re an international carrier and you transport cargo or passengers via air, vessel or vehicle from a foreign destination to the US, or a domestic carrier that merely wants to transport imported cargo “In Bond” from one state to another you will also have to obtain a customs bond.