What are Customs Surety Bonds and How to Obtain One?

You may find several types of bonds in the market such as contractors bonds, dealer bonds, bid bonds, etc. You may have heard of performance/contract bond that guarantees satisfactory completion of a project by a contractor. That saves consumers from poor business practices and unsatisfactory outcomes. A surety bond has a little different definition. It is like an insurance policy/contract issued by a third party agency/brokerage to a business/individual that guarantees its services to its customers.

Identically, a customs surety bond is a contract between three parties – the importer, bond issuer, and the US Customs and Border Protection (CBP). A customs bond is required by the CBP that guarantees payment of duties and taxes on time. It also bonds the importers to import items from foreign countries that comply with relevant laws and regulations.

Customs Bonds

In order to import merchandise in the United States, importers need to provide a customs surety bond to the CBP to assure the financial obligations. This type of bond protects the government to collect all the monies and penalties levied on the shipment in the event the importer fails to pay the duties to CBP. The insurance company becomes liable to pay the remaining clearance on behalf of the bond owner.
There are mainly two types of bonds, Single Entry Bond and Continuous Customs bond. A single entry bond is valid for one-time importation via ocean vessels. On the contrary, a Continuous Customs Bond is valid for all the imports made within a year and suitable for companies that bring goods into the US frequently.
Note: If you’re carrying a single transaction bond, you will be required to purchase an additional Importer Security Filing (ISF) bond also known as 10+2. You will be required to submit it to the CBP 24 hours prior to the goods being loaded to the vessel.

Bond Amount

The amount of bond is calculated on the basis of the total value of shipment and duties and fees associated with it. Mostly, the minimum amount for a Continuous Customs Bond is $50,000.

Obtaining Customs Surety Bond

Getting a customs bond is not a challenging process nowadays. You can simply contact an insurance company that deals in preparing these bonds and they will also guide you through the process. They will help in calculating the bond amount and filling the right information in the form to be submitted to CBP. Specialists know the tight spots of the process and have access to the market to give you valuable advice. Make sure you hire an agency that is licensed by the U.S. Treasury Department for issuing customs surety bond.

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