Customs Bonds: Single Transaction, Continuous, ISF Bonds
Customs Bonds are financial guarantees to U.S. Customs for your shipment in the event of any liabilties, fines and penalties which CBP may issue in the event of any non-compliance with your shipment. Customs bonds are non refundable instruments guaranteed by a Surety Company in which the customs broker can help you obtain.
Customs bonds are required for all ISF Filings and formal customs entries into the United States. For new importers with low shipment volume, the combination of the ISF Bond and Single Transaction Bond is recommended and most often used. Single bonds can be considered pay as you go for each shipment. For large businesses or importers with high import volume, the Continuous Bond is used to cover both the ISF and clearance bond for unlimited amount of imports within a 365 day basis from date of issue. Continuous Bonds cost more to obtain than Single Entry Bonds and can help offer cost savings in the long run with increased shipments.
Three main types of Customs Bonds:
1. Single Transaction Bond - STB bond covers only a single shipment entry. If the goods are entering the US by ocean vessel, an additional ISF-D Bond is required for Single Transaction Bonds. For air-shipments, ISF-D Bond is not required.
2. Continuous Bond - A continuous bond is the most commonly used bond for frequent Importers and is good up to a year. If you plan on importing more than 2-3 times a year, a Continuous Bond is recommended for a more efficient customs clearance process and save on costs.
3. ISF Bond - ISF Bond is used for importers which do not possess a Continuous Bond. ISF Bonds are one time use, for a single shipment ISF Filing. A Customs Single Transaction Bond is required separately for the customs clearance.
Custom Bond Value Determination:
Single Transaction – Bond is usually completed for either an amount equal to the value of the merchandise plus the duty, taxes and other fees or, for certain merchandise as determined by U.S. Customs, an amount equal to three (3) times the value of the merchandise.
Continuous Bond – Bond amount is usually equal to 10% of the duty and other import taxes paid in the previous year, in multiples of $10,000 if the duties are less than $1,000,000 or multiples of $100,000 if the duties are over $1,000,000. Currently, the minimum bond amount required by U.S. Customs is $50,000. Further, care should be taken to insure that the bond is sufficient to cover the duty, not the value, on any single shipment of merchandise.
Helpful FAQ links from US Customs: