Upon importation of merchandise, an importer assumes certain responsibilities to the U.S. Customs: making the goods available for inspection; labeling and packaging requirements; making records of transactions available for inspection; paying estimated, or any additional duties when and where applicable. U.S. Customs is authorized to take bonds to assure the performance of the responsibilities by the importer.
Bonds are a guarantee from the surety company to the United States Government that the importer will faithfully and timely abide by all laws and regulations governing the importation of merchandise into the commerce of the United States. The bond is not designed or intended to protect the importer (rather it protects the people and government of the United States), nor does it relieve the importer of any of their obligations.
The surety company, by bonding the importer, assumes the same duties and responsibilities of the importer. If an importer fails to honor any condition of the bond, the surety can be compelled to do so in their place.
Types of Customs Bonds
Option 1: Continuous Transaction Bonds (aka Annual Bonds) – Continuous Transaction Bonds (CTB) cover all import transactions at all U.S. ports within one year from the date the bond is approved and effective. This includes 10+2 Importer Security Filing (ISF). They cover 10% of the annual estimated duties for the calendar year. A CTB shall never be less than $50,000. Most Customs brokers sell annual bonds for $400 to $500. (Cargocentric sells for $250)
Option 2: ISF Bond and Single Entry Bond – Without a CTB, the importer must purchase both an ISF Bond and a Single Entry Bond (SEB), which covers one import entry. An ISF bond costs a flat fee of $50. The SEB amount is determined by the commercial value of the goods plus the US Customs duty. The cost of an SEB is calculated at $3 per $1,000.
Single or Continuous?
Scenario 1: Minimums – The minimum cost of an ISF bond and SEB for an ocean shipment worth is $80. Thus, importers who plan on shipping on shipping three or more times over a 12-month period should purchase a continuous bond.
Scenario 2: Import Values – The cost of an ISF bond and SEB for a shipment worth $75,000 will be at a minimum of $275. Thus, importers who plan on shipping goods valued at more than $75,000 over a 12-month period should purchase a continuous bond.
How do I purchase a Customs bond?
Cargocentric helps purchasing bonds easy. Continuous Transaction Bonds require a simple application (Click here to get started) and can be approved within a few minutes. Single Transaction Bonds are purchased at the time of U.S. Customs entry transmission and require no additional information from the importer.