What are Custom Bonds?
A customs bond is a contract used to guarantee that a specific obligation will be fulfilled or completed between customs and an importer for any import transactions. Its main purpose is to guarantee the payment of import duties and taxes. The U.S. Customs and Border Protection requires that all import shipments be accompanied by customs bonds.
What types of Customs Bonds are there?
There are two basic types of Customs Bonds; Single Entry or Transaction bonds, and Continuous or Annual Bonds.
What is a Single Entry bond?
A Single Entry Bond or an SEB covers a single Customs entry of 1 shipment. Most bond companies will not issue an SEB more than three times a year, as it creates scrutiny within the U.S. Customs and Border Protection.
How much do Single Entry Bonds cost?
The cost of single entry bonds or SEB’s varies depending on the mode of transportation. The minimum cost for an SEB is $65 when shipped by air, and $140 when shipped by ocean. Ocean shipments, for example, require 2 separate bonds (ISF Bond and Entry Bond).
These are normally calculated based on the entered value of the merchandise, including taxes, duties, and fees. In the case that the goods are subject to other government agency requirements (visa, quota), the price of SEBs will be counted three times the total entered value of the merchandise.
What is an Annual Bond?
An annual bond is a $50,000 bond, valid for 1 year. It is attached to a company's tax ID/EIN number and can be reused throughout the year for multiple imports. Annual bonds are not a broker or forwarder-specific bond, so in the case that you switch brokers, the bond will still be valid.
How can I indicate my bond size?
To indicate your bond size, you must first know the total amount of duties and taxes incurred on your shipment. After that, follow this chart to understand the size of your bond.