For clients operating in the field of importation and/or exportation of goods, insurance, surety and risk management solutions for supply chain and transportation intermediaries are the items of primary focus. A customs import surety bond is a contract used for guaranteeing that a specific obligation will be fulfilled between customs and an importer for any given import transaction. The main purpose of a customs bond is to guarantee the payment of import duties and taxes.
A customs bond is required on all commercial imports entering the US. Merchandise will not clear customs without a properly executed bond, and according to US customs regulations, a surety bonds purpose is “to protect the revenue of the US and to assure compliance with any pertinent law, regulation or instruction.”
The importer agrees to certain conditions upon posting a bond, including agreement to pay duties, taxes and charges in a timely manner, to make or complete entry of goods, to produce documents and evidence of the shipment, and to redeliver merchandise if required or requested. This also includes agreement to rectify non-compliance with provision for admission, to allow examination of any and all merchandise and reimbursement and exoneration of the US where necessary, including compliance with any special requirements on duty free entries.
How and when are Drawback Bonds implemented?
Whenever merchandise is imported into, or exported out of the US, a principal may be entitled to a refund of duty, what is commonly referred to as a drawback claim. There are several types of drawback claims and methods of payment, including accelerated drawback, which is the most common way to be paid. With accelerated drawback, the refund is granted before liquidation of the drawback claim. A drawback bond guarantees full repayment to US Customs Border Protection (CBP) of overpaid drawback as determined by liquidation of the drawback claim.
There are many different types of bonds, depending upon the quantity and type of transactions involved. A commonly used import surety bond is a “Single Entry Bond” that can only be used once for a particular transaction. A “Continuous Bond” can be used for an annual period and will cover all transactions within that year. They can both be used at any port of entry. Brokers should help clients determine which is the more practical solution in any given situation.