Anyone who wants to import more than $2,500 for commercial use will need to secure a customs bond if they want to get their goods past U.S. Customs and Border Protection (CBP). These bonds help keep the customs process moving along efficiently and protects the government from importers who fail to pay their taxes and duties.
Keep reading for more insight into what customs bonds are and how they work.
Customs bonds act as a financial guarantee between an importer of record, the CPB and the insurance or surety company that issues the customs bond. Essentially, a customs bond guarantees that the importer complies with customs regulations and makes their payment of additional import duties, taxes, fines, and penalties. A customs bond makes it possible for CBP to clear the shipment without having to wait for additional payment from the principal as the bond ensures they’ll be paid.
What exactly is a customs bond? A customs bond is a surety bond that is designed to guarantee that relevant fees and import duties are paid to CBP. The CBP’s job is to monitor and review any imports in order to secure the border from drugs and other undesirable things they don’t want entering the country illegally.
Essentially, a customs bond makes it possible for goods to gain entry to the United States, like a passport of sorts. If this bond isn’t purchased and provided to the CBP at the time of entry, then the goods will be held at customs. The imported goods will remain in customs while pending approval until you can provide proof you have a customs bond. Only then can your goods be released. After your customs bond is posted, you can walk away with your goods, but have to pay duties within ten days.
If you don’t have a bond, you can choose to pay your taxes and duties in cash up front in order to have your goods released. If you fail to pay your duties and taxes, the CBP can seek payment from the surety company. Eventually the bond holder will have to pay the surety company back.
There are three parties involved in a customs bond:
To better understand how a customs bond works, it helps to know the following terms.
When the following situations apply, you need a customs bond.
There are multiple types of customs bonds and each type of bond is labeled with a different Activity Code.