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Customs Bonds
By posting a customs bond on regular import entries, the customs broker and importer provide a guarantee to U.S. Customs. The bond guarantees we will faithfully and timely abide by all laws and regulations applicable to the importation of merchandise into the commerce of the United States.
Such laws and regulations include but are not limited to such areas as making the goods available for examination /inspection, marking, labeling and packaging requirements, making transaction records available and payment of U.S. Customs additional duties when appropriate.
The CBP Form 301 is the bond form that is signed by the bond principal and
surety agent.
There are two main types of bonds. ARI Customs House Brokers is able to offer either type.
- Continuous Transaction Bond
A continuous bond is normally obtained by importers who have a large number of entries and/or imports through several ports of entry during a given year. They are also obtained by international carriers who frequently arrive and depart the CBP territory and by custodians of merchandise who do business with CBP on a regular basis. It has a term of one year and is automatically renewed each year. A continuous bond is valid until it is terminated by the surety or the principal. The minimum bond amount for a continuous bond is generally $50,000 or 10 percent of the total taxes and fees paid in the previous 12-month period whichever is greater.
- Single Entry Bond
Single Entry Bond amounts are set by the port director who accepts the bond. The bond amount for a single entry bond generally is the total entered value plus all duties, taxes, and fees. If merchandise is subject to other federal agency requirements or is restricted merchandise, the bond amount set is three times the total entered value of the merchandise plus duties, taxes and fees. We use these bonds for individual shipments. It covers only the entry or transaction for which it was written. All bond amounts will be rounded up to the next whole dollar amount in multiples of $1,000.
If a principal fails to perform its obligations under the bond, CBP may assess a claim against the principal and surety under the terms and conditions of that bond. The claim may be for breach of an obligation to pay duties. In that case, CBP may make a claim for unpaid duties under the bond. If the principal breaches a different condition of the bond, CBP may issue as claim for liquidated damages. The amount of liquidated damages is established by the conditions of the bond. In no case can a claim for liquidated damages exceed the amount of the bond that appears on the CBP Form 301.
If the bond principal cannot or will not perform its obligations, CBP can make demand for payment on both the principal and the surety. Both the bond principal and surety are "jointly and severally" liable for any claims made under the bond, including claims for liquidated damages. That means CBP will accept payment from either party in satisfaction of the claim. If the surety pays CBP, it can make a claim for payment against its principal, but CBP is not a party to that transaction.
Please click here for the basic Q & A on CBP Bonds.
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