U.S. Customs Bonds

In Canada the Customs Broker is the party that holds the Customs Bond.

In the United States, the importer posts bond.

Two types of Surety Bonds for Customs Consumption Entries

U.S. Customs Bonds

Definition of a Bond:

An contract in which an agency guarantees payment to Customs in the event of unforeseen financial or other loss through the actions of an importer or from the importation.

U.S. Customs Bonds

The importer, the carrier or any party that has right to make entry will be required to post bond for any number of situations.

The Bonds are purchased from US Customs approved companies who will charge according to the economic health of the applicant, their importation history, and the type of bond being purchased.

U.S. Customs Bonds

• Agreement to pay duties, taxes and charges in a timely manner

• Agreement to make or complete entry

• Agreement to produce documents and evidence

• Agreement to redeliver merchandise

• Agreement to rectify any non-compliance with

provisions for admission

• Compliance with special requirements on duty-free entries

• Agreement for examination of merchandise

• Reimbursement and exoneration of the United States

U.S. Customs Bonds.

Single Entry Bond:

Covers only the transaction for which it was written

The bond amount is the amount of all duties, charges, fees plus the value of the shipment.

If the item is restricted, or the goods are subject to other agencies, the requirement is 3X the value of the shipment.

U.S. Customs Bonds.

Continuous Bond.

Importer who has multiple imports would consider a continuous Bond

Min. amount: $50,000.00 or /

10% of duties & fees paid in previous 12 months

U.S. Customs Bonds.

Continuous Bond.

Bond is valid until terminated by surety or the principals.

Bond does not have to be renewed each year (but usually is!)

CF 301 - Continuous Customs Bond Application

Specialty Bonds.

Bond for Drawback Payment Refunds

Bond allows the importer to immediately collect refund of customs duties paid before customs makes a determination as to the validity of the claim.

Foreign Trade Zone Operator

Bond allows operator to set up and administer a “Foreign Trade Zone” to allow goods to enter Duty free and to be processed.

Specialty Bonds.

Warehouse Bond “WHS”

Bonded warehouses; container freight stations; bonded carriers.

International Carrier

For clearance or entry of vessels or aircraft arriving from outside of the United States

- Promise to comply with laws and regulations on bringing Goods

into the USA

Specialty Bonds.

Temporary Import Bond.

T.I.B.:Merchandise may be entered (under certain conditions) duty free if goods are in the U.S. on a Temporary basis.

Instead of paying duty the importer posts a bond for twice the amount of duties and taxes.

If goods do not leave the U.S. within the specified time (or destroyed) the bond is cashed by U.S. Customs

Specialty Bonds.

In-Transit Bond (IT Bond):

A bond that allows a shipment to be transported

or warehoused under U.S. Customs supervision until it is

formally entered into the customs territory of the U.S. and

duty is paid, or until it is exported from the U.S.

Bond is issued per transaction

Specialty Bonds. .

Immediate Export Bond (I.E.)

Issued immediately upon the goods being refused entry into the USA.

Guarantee that the goods will be exported.

Specialty Bonds. .

Transportation and Exportation Bond ( T & E)

If goods are traveling through the U.S. and will not clear Customs a T&E bond is issued.

Example: Truck shipment from Mexico to Canada.

U.S. Customs

Prohibited / Restricted Countries

Cuba

Iran (food & carpets allowed)

North Korea

Myanmar

Sudan

Angola

Liberia

U.S. Customs

Foreign Trade Zones

Restricted Access Sites Authorized by the “Foreign Trade Zones Board”

Customs Entry procedures do not apply even though FTZ are within the territory and jurisdiction of the U.S.

Secured areas located near or in a US Customs Port of entry

U.S. Customs

Purpose

To encourage and expedite US participation in international trade

To defer payment of duties until goods are entered into the commerce of the United States

U.S. Customs

A Customs entry is not required for goods entering the FTZ as they are deemed not to have entered the US.

Goods sent to the FTZ from the US are deemed to be exported once they enter the FTZ

U.S. Customs

Administered by Foreign-Trade Zone Board

U.S. Customs Service has regulatory control of all goods moving to or from a zone.

But….because zones are considered outside the Customs Territory, requirements that would otherwise apply to imported goods are suspended as long as the merchandise remains in the FTZ

U.S. Customs

Inside a FTZ foreign or domestic merchandise may be stored, sold, exhibited, broken-up, repacked, assembled, distributed, sorted, graded destroyed, mixed with other items, or manufactured.

Machinery and equipment that is imported for use with the FTZ for the above is not exempt from duty.

What can be done inside a FTZ?

U.S. Customs

Activity against the public saftey

All manufacturing is reviewed in terms of government policy and economic effect.

Cannot mfg: alcoholic beverages, perfumes containing alcohol, tobacco products, firearms or sugar.

What cannot be done inside a FTZ?

U.S. Customs

To get goods admitted into FTZ:

Application is made on CF 214

- Commercial Invoice

- Evidence of Right to make Entry

US Customs reviews entry and Port director issues a to allow the goods admission.

U.S. Customs

To Take goods out?

Export

Consumption Entry into the USA

U.S. Customs

Advantages

Inverted Tariff Relief: Imported goods into a FTZ are at a higher duty rate than the finished good.

No Time Constraints on Storage: Can be stored indefinitely.

Reduced Security and Insurance Costs

U.S. Customs

Advantages

Duty Deferral: Duty is only paid when the goods enter the US or a NAFTA Country

Duty Elimination: Goods can be imported into a FTZ and then exported without payment of duties

Savings of MPF & HMF