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What is a Customs Bond?

A Customs 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.

In other words, A customs bond is an insurance policy that guarantee the United States government will be paid for the import duties and taxes.

The most common bond is Activity Code 1 and there are two types of Activity Code 1 Bonds:

Single Transaction Bond – This bond can be used for one specific transaction in one particular import shipment. The bond amount is determined by the value of the goods plus the duty and fees owed This bond type can only secure the Importer Security Filing (ISF) if filed as a unified filing and an importer must also purchase a separate ISF bond when required.

If the merchandise is subject to governmental agencies( FDA, EPA, APHIS, DOT, etc) then bond amounts are usually three times the merchandise’s value.

Continuous Bond – In many situations, this bond is more advantageous for an importer. This bond covers all entries nationwide for a 12 months period. The bond amount is determined by taking 10% of estimated annual duties and the minimum bond amount is $50,000.

The Continuous Bond automatically covers the ISF. The importer won’t have to purchase a separate bond for the Importer Security Filing (ISF).

The benefits of getting a continuous bond includes ower cost, lower processing time, reduce the possibility of Customs review.

The easiest way to get a bond is often through the Customs brokers, who work with surety agencies on behalf of the importers. This is beneficial to the importer because a Customs broker has the expertise and relationships related to Customs activity, and can better assist in proactively monitoring the bond and also with resolution of any issues or claims that may arise.

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