Customs Bonds (also known as Surety Bonds) are required by the U.S. Customs Service (Title 19 USC, section 1623) as a means to ensure that importers guarantee payment in the event that liquidated damages are assessed against shipments imported into the country. A bond is intended to protect the U.S. government in the event the importer cannot or will not fulfill their obligation to pay monies due.
The writing of a Customs Bond is a very important part of the import transaction. If the Customs Bond is not properly prepared and does not meet certain requirements, you, as the importer of record, may be faced with serious problems. Without a properly executed bond, your shipment will not clear U.S. Customs.
There are two basic types of Customs Bonds.
The first is a Single Transaction Bond (also known as a Single Entry Bond or SEB), which covers a single import transaction at one port of entry. The total bond amount is determined by the type of bond needed, as well as the limit of liability required by U.S. Customs.
The second type of bond is a Continuous Bond, which covers all entries made by an importer at all U.S. ports of entry. The most common amount for a Continuous Bond is $50,000.00, which is also the least amount allowable by U.S. Customs. The amount of a Continuous Bond is generally 10% of the importer’s annual estimated duties for the next calendar year and is good for one complete year.