What are the types of customs bonds and how are they set?
If you are looking to import goods directly into the United States through U.S. Customs and Border Protection (CBP), then you will need to purchase a customs bond, depending on the frequency of your shipments. A customs bond is a legal binding document between the shipper and CBP that allows importers to take possession of their merchandise while guaranteeing all import duties and taxes will be paid.
Continue reading to learn the different types of customs bonds and how they are set.
Single Entry Bond
A Single Entry Bond covers only the shipment for which it was written. These bonds are set up by the port director. It can be used one time and one time only for the specific items written into the bond. The amount of the bond includes no less than the total entered value plus all duties, taxes, and fees. For goods that are restricted or subject to other federal agency requirements, the amount is no less than three times the total entered value. This type of bond expires once it is used.
This type of bond is best if you only plan to have a single shipment in a calendar year. If you plan on having several import shipments then you will need the second type of bond which we will discuss in the next section.
Continuous Transaction Bond
This bond is needed for those who wish to import multiple shipments. It is good for one year and is automatically renewed each year until terminated by the surety or principal party on the bond . Importers with multiple shipments, international carriers, and custodians of merchandise who frequently import merchandise into the United States obtain this type of bond.
The Revenue Division of the National Finance Center in Indianapolis, Indiana, is responsible for setting up all Continuous Transaction Bonds. The minimum amount to set up this bond is $50,000. For more on the money guidelines, visit the CBP website
Now that you know which type of bond is best for you, it’s time to find a trusted customs broker such as ClearFreight to get everything set up for you. Contact us today for your customs clearance needs or for help with any other part of your supply chain!