Responsibilities Surrounding Customs Bonds

A customs bond is “a contract which is given to ensure the performance of an obligation imposed by a law or regulation.” The parties involved in the bond contract are the principal (importer), Surety Company and obligee. The primary purpose of customs bonds is to guarantee the payment of import duties and taxes, as well as to assure compliance with all laws and regulations governing the entry of merchandise from foreign shipping points into the United States.


The principal’s responsibilities include making a timely respond to claims as well as attending to any protest, petition, or demands for payment that may occur. The principal should also track the goods in transit and have knowledge of the whereabouts of any goods in their care and to maintain informed compliance, which is the understanding of the methods for classifying and assigning a value to their merchandise and to ensure familiarity with laws and regulations of the customs agency.

Obtaining a customs bond


Contacting a licensed surety agent or customs broker is the surest way to obtain customs bonds. Many agents use existing trade relationships, or a referral from within the trade community. They can also be obtained by a simple Internet search. Agents may inquire about value added services, including:


  • Claims notifications


  • Entry monitoring


  • Renewal process


  • Timing concerns (bond placement, bond changes, etc.), and


  • Application process and pricing


It is always a good idea to ask what will be needed for underwriting of customs bonds and if pricing is inclusive of all fees.


Merchandise in transit


Importer Bond Activity Code 1 assures Customs that the importer will follow the rules and pay all duties, taxes, fines and penalties. Custodian of Bonded Merchandise Activity Code 2 assures Customs that carriers transporting “in bond” merchandise will not be compromised prior to being cleared at destination port, and International Carrier Activity Code 3 assures Customs that the operators of vessels conveying merchandise (ships, aircraft, etc.) properly manifest cargo and comply with all regulations related to operating the vessel. This is vital in order to prevent delays and other issues that can affect timely delivery of goods.


photo credit: Stuck in Customs cc