A US Customs surety bond is simply required by the US Customs and Border Protection (CBP) agency. There are multiple activity codes and classes to have the assurance of importer’s performance and obligations that he would adhere to all rules and regulations and fulfil all the duties, fees, and taxes levied on his commodities within the due time. The laws and procedures can be different as per the mode or activity utilized by the importer to import his property in the United States.
Activity Code 1 Customs Bond
Customs bond that falls under activity code 1 is posted by the principal of merchandise to guarantee that certain duties are paid in advance and goods that are being imported to the US are in complete compliance with federal laws. The minimum amount for this type of customs surety bond is $50,000. The bond amount is usually equal to ten per cent of duties and other import taxes paid in the previous year.
When Is A Customs Bond Required?
If you’re going to import goods for commercial purpose which is valued over $2500 then you need to post a sufficient 301 customs bond. Import documents are really crucial to clear the customs and entry ports. CBP is responsible to protect the nation’s territory from unsafe cargos that may contain animal and plant pests or diseases that could cause serious damage to America’s crops, livestock, pets, and the environment. It also ensures that there is no deceitful activity ongoing in the process.
Type of Customs Surety Bond
There are mainly two types of 301 customs bond – Single Entry Bond and Continuous Customs Bond. If importer wants to trade one time in a single year than the first one single entry bond is ideal. In another case, if the owner of the goods requires importing multiple times in a year, he/she can post a continuous import bond.
Cost of Bonds
Customs bond costs around $250 to $450 per year. The price can be varying according to the type and volume of the merchandise.
Brokers
It is a hard and tedious job for traders to tackle with customs alone. This is why they hire freight forwarders to handle the documents and clearance. This is kind of a Suretyship between three parties the principal, surety, and obligee (CBP). The IFFs hire brokers to obtain a customs surety bond and they handle other paperwork as well on behalf of freight forwarders and importers.
