Custom bonds are a necessity for businesses importing even moderate amounts of material into the United States. They’re useful or even necessary in many other countries, as well. Let’s learn more about customs bonds before we discuss how to get a custom bond.
What Is a Customs Bond?
A custom bond or customs bond is a type of insurance policy. It ensures that the national government will be paid for your import duties and taxes. For example, they want to know that their tax bill will be paid even if your business goes out of business.
When Do You Need a Customs Bond?
Importers in many cases must have a customs bond. In the United States, any imported shipment worth more than 2500 dollars requires such a bond. These bonds are mandatory if you’re bringing in shipments by either air or sea. If you are importing goods subject to Food and Drug Administration inspection, you need a bond no matter the dollar value.
If you are found not to have a customs bond, you could be fined or see your items stuck in customs until you pay your bill. And that bill includes any associated fines. Note that these bonds are required in addition to any departmental paperwork.
Industry professionals know that customs bonds are a necessity of doing international business. However, you can’t just pay for the bond and be done. Bonds expire. This is why people must renew their customs bonds periodically. Single-entry bonds are tied to a specific shipment. Continuous transaction bonds are a continuous bond that covers all shipments or imports over a 12-month period. At the end of the year, you have to renew it.
How Do You Get a Customs Bond?
If you want to know how to get a customs bond, know that your customs broker or international freight forwarder can do it for you. Then they can put the bond number on the international shipping forms. If you have a continuous bond, they’ll use the same bond number on every shipment for the 12-month period. This may be saved in your profile, if you’re making regular shipments. Or they can secure a bond for each individual shipment and keep the bond number associated with the shipment.
If you’re trying to do things on your own, you can try to secure one through a reputable business. These businesses should be licensed by the country’s government. Unfortunately, it is very easy for scammers to pose as insurance companies and take the money of unsuspecting clients.
When you work with a good customs broker, the bond can be secured in only a few days. They’ll file the bond with the necessary government agencies.
How Does the Customs Bond Work?
The bond or surety company, which may be your customs broker, will pay the additional fees, taxes and duties at the point of entry. Then the government officials will release the goods to the importer. The importer then reimburses the bond or surety company for these costs. The benefit comes from immediate payment of said fees, rather than waiting to hear back from the government and then send payment to them.