Your client obtains customs bonds in order to guarantee the payment of import duties and taxes. These bonds also assure compliance with all laws and regulations governing the entry of merchandise from foreign shipping points into the U.S. If your client’s main business is importing merchandise into the U.S. for commercial purposes and shipments are valued over $2,500, or they import freight that is a commodity subject to other federal agencies requirements (i.e. firearms or food), they must post a customs bond to ensure that all duties, taxes and fees owed to the federal government will be paid.
Other reasons to purchase a customs bond
Anyone that is a warehouse or facility operator that desires to become a bonded facility with the ability to store or secure imported or exported goods must obtain a customs bond as well. In addition, they must apply with the port director and determine the exact type of warehouse they wish to establish. The same goes for international carriers in the business of transporting cargo via air, vessel or vehicle from a foreign destination to the US, or any domestic carrier that merely wants to transport imported cargo from one state to another. In each scenario they will also be required to obtain customs bonds.
As a broker, you should be advised not to issue any customs bonds without being provided with power of attorney so that you may file a client’s entry or entries on their behalf. Inform your client that, in lieu of purchasing a bond from a licensed or corporate surety, they may pledge cash, although the bond will provide the necessary permission to proceed with the transportation of the listed goods in this case.
The type of bond your client elects to obtain will ultimately depend on how often they import into the U.S. For example, if they only import occasionally, a single entry bond is the recommended choice. If however, they import goods more frequently (and through various ports of entry), procuring a continuous bond is beneficial and economically the better choice.