customs bond

Freight Requirements Include Obtaining the Customs Bond

As any freight forwarder fully knows, all cargo entering the US must go through a specific process. The freight requires that a customs bond, much like an insurance policy, be used to cover all commercial entries. The importer agrees to pay duties in a timely manner and the cargo is then released. For international carriers that transport cargo via air, vessel or vehicle from a foreign destination to the US (or a domestic carrier that merely wants to transport imported cargo “IN BOND” from one state to another), they will have to obtain a customs bond.

They must also produce documents and any other evidence when requested. In order to receive a custom clearance bond they understand that a customs agent may wish to examine the merchandise with the understanding that the freight is to be used in the manner dictated by a special-use provision entry.

They may also be required to rectify any noncompliance with the provisions of admission as well as to comply with customs regulations, which may include electronic entry requirements and advance cargo information filing requirements. In the case of default of the bond, they must also take responsibility for the consequences of any damages charged against the bond.

Agencies must pay certain import duties and taxes

The payment of import duties and taxes are the primary purpose of a customs bond, along with the assurance of compliance with all laws and regulations governing the entry of merchandise from foreign shipping points into the US. For merchandise that may fall under restrictions, which may include items requiring a declaration to the FCC, FDA or other government agency, the bond is required to cover an amount above and beyond the commercial invoice value (generally 3x the value of the freight).

For any items deemed to be non-restricted merchandise, the bond is used to cover the commercial invoice value plus the duties and taxes applicable to the shipment. Once the documents are sent by courier to customs and reviewed by an inspector, they are then subsequently released and returned to the broker’s office by courier.

If you are a warehouse or facility operator and want to become a Customs bonded facility with the ability to store or secure imported or exported goods, you must obtain a customs bond. While the customs bond process isn’t very complicated, it’s recommended that you speak to an insurance agent knowledgeable about how this system works.

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