Top 7 Questions You Have About Customs Bonds
What is a Customs Bond? Why do I need a Customs Bond? Here is a closer look at Customs Bonds in the U.S. and Canada.
1. What Is A Customs Bond?
A Customs Bond is a guarantee to the U.S. or Canadian government that any revenue owing will be paid by the importer when the government asks for payment.
2. Why Is A Customs Bond Needed?
Importing Into The U.S.
A Customs Bond is an entry requirement when importing into the U.S. If you want your goods to clear, or your goods have to be held at customs because they are pending acceptance by the respective government, then you will need a Customs Bond.
Without A Customs Bond, Your Goods Will Be Denied Entry Into The U.S.
Importing Into Canada
A Customs Bond is not an entry requirement in Canada. You have two options. Your first option is to pay cash at the border. This isn't always convenient so people and companies tend to favor the second option, and that's to get a Customs Bond. That way your goods can be released into Canada, and you can pay the duties and taxes at a later date.
3. Who Needs A Customs Bond?
Importing Into The U.S.
Everyone importing into the U.S. needs a Customs Bond. As the importer, you can be assisted by a Customs Broker or a licensed surety to get your Customs Bond.
Any business or individual importing for commercial purpose and/or filing a formal a declaration with US customs must have a bond in place. There are two options: A Continuous bond or a Single Entry Bond.
Importer Security Filing: Mandatory Bond Requirement
Importing Into Canada
For individuals or businesses importing into Canada, Customs assists in determining if you need a bond and the type of bond you require. This will depend on the type of goods you have, the overall value of the goods and the reason the goods are entering.
4. How Do I Get A Customs Bond?
You can get a Customs Bond with your Customs Broker or a licensed surety.
5. Continuous vs. Single Entry Bonds?
Used for individuals or businesses who frequently import into the U.S. or Canada. A Continuous Bond is valid for one year from the date of issue. It covers all standard entries within that year and provides the ability to cross at every port of entry. There are some special entries and commodities that have additional bonding requirements. To determine what type of bond your goods need we recommend contacting a Customs Broker.
Shippers, Customs Brokers, facility operators and importers who frequently import goods with customs will have a Customs Bond to allow for continuous interactions.
It is important to note that if you have 3 or more shipments in a year, or you have 1-2 high valued shipments, it is more cost effective to apply for a continuous bond rather than use a single entry bond.
Single Entry Bond Or Single Transaction Bond
Used for individuals or business who import infrequently. In Canada, a single entry bond will only cover a few entries within a specified date and can only be used at a single port of entry. In the U.S. a Single Entry Bond, also referred to as a Single Transaction Bond, only covers one shipment. Even if you have 3 shipments at a single port of entry, each entry will need to have its own bond.
Single Entry Bonds are U.S. specific. The only application in Canada would be on the carrier side. Carrier's can complete a one-trip bond to a designated location.
6. What Is The Cost Of A Customs Bond?
The Cost Of A Canadian Customs Bond
The price you pay for the bond depends on the:
- Type of Bond
- Type of Goods
- Value of the Goods
The Cost Of A U.S. Customs Bond
In the U.S. the clearance requirements can also affect the price you pay for the bond.
If it is a bond where the goods are subject to a Participating Government Agency (PGA) then the bond amount is 3 times the value of the goods.
If it is quota, anti-dumping, countervailing duties, temporary import bonds, or a special entry type, the bonding requirements and cost will vary.
It is best to contact a Customs Broker to find out what the charges would be for your specific Customs Bond.
7. What Are The Advantages Of Using A Customs Bond?
A Customs Bond guarantees to the government that the duty and taxes will be paid at a later time after release of the goods at the border.
In the U.S., the type of bond you select is where you have your advantage. A continuous bond gives you the most coverage for an annual fee whereas a single entry bond you will pay a premium for a single use.