Customs bond: what it guarantees and which one you need

It is a contract between three parties: the importer (the principal), a surety company that backs it, and US Customs and Border Protection (CBP). If the importer does not pay duties, taxes or fees, or breaks the conditions of entry, CBP can claim against it.

The bond an importer uses for entries is the basic importation and entry bond. Its conditions are set out in the regulations, and the same bond can carry other obligations, such as the ISF.

Formal entries need a bond. That generally means goods worth more than $2,500, and some lower-value goods that the rules exclude from informal entry. A non-US company entering goods also needs a bond with a US surety.

Ocean imports need one more: the ISF filing has to be covered by a bond, either the importer’s own or the bond of the agent filing for it. See ISF filing.

There are two ways to hold one:

• A continuous bond covers every entry you make for a year and renews. It suits anyone importing more than a few times a year.
• A single-entry (single transaction) bond covers one entry. It suits a one-off shipment, or a first import before you know your volume.

For a continuous importer bond, CBP’s guidance starts from 10% of the total estimated duties, taxes and fees over the previous 12 months, then rounds up. Continuous bonds go up in steps of $10,000 to $100,000, then in steps of $100,000. A new importer’s amount is set from its expected imports, and CBP reviews whether a bond is still enough as volume grows.

Some goods need much more on a single-entry bond. Goods under other agencies’ rules that could threaten public health or safety, and goods under quota, need a bond of at least three times their entered value.

An importer whose bond does not cover the ISF can take out an ISF bond on its own. CBP’s guidance sets its minimum at $50,000 for a continuous ISF bond and $10,000 for a single one. More often, the broker or forwarder filing the ISF covers it with its own bond.

On a duty paid shipment where the carrier or its broker is the importer of record, the entry is theirs, so their guarantee covers it. You need none of your own for that shipment. An annual bond of yours covers your own imports, so it applies when your company is the importer. See importer of record.

• Booking a formal entry with no bond arranged, so the goods wait at the port.
• Letting a continuous bond fall short as imports grow: CBP can ask for a larger one.
• Assuming the forwarder’s bond covers an entry where your company is the importer.
• Forgetting the ISF: a bond for entries does not help if nobody’s bond covers the filing.

The shipment form asks whose bond covers the entry: the carrier’s single-entry bond, priced into its bid, or your own annual bond. Your annual bond is only offered when your company is the importer. Every carrier bidding prices the same answer. See who handles customs at the destination.