Blackthorne Preloader Logo

Understanding Customs Bonds & Importer of Record Services

Understanding Customs Bonds & Importer of Record Services

30/12/2019 00:00:00

 

Lots of businesses in the United Kingdom when contemplating moving their company abroad or expanding their company with an abroad office will choose the United States of America. Whatever your reasons may be for choosing the USA when making the move there are lots of things that you need to be aware of, one of the most important being customs bonds.

Of course, you must provide a security guarantee that you will comply with the country’s rules and regulations and insufficient customs bonds can be the import deal-breaker when importing your goods across the country’s borders. To find out more about customs bonds Blackthorne has put together an easy to understand guide - including how an Importer of Record can help in this regard.

What is a customs bond?

A customs bond, also known as an import bond, is essentially an insurance policy/financial guarantee between the United States Customs and Border Protection (CBP), the Importer of Record (IOR) and the insurance/surety company.

A customs bond ensures that the CBP will be paid all of the duty and taxes owed to them and that the importer will adhere to the rules and regulations of the CBP.

When is a customs bond required?

Customs bonds are required whenever you are importing merchandise into the United States for commercial purposes valued at over $2,500. Imports that contain goods subject to government regulations by agencies such as the FDA are also required to have a customs bond.

Are there different types of customs bonds?

To put it simply, yes, there are two different types of customs bonds. If you are new to the import/export world then having knowledge of the different customs bonds used by private shippers and professional Importers of Record services will be very beneficial. You get single transaction bonds and also continuous bonds; they are explained below:

Single transaction bond (for individual importers)

If you want to import into the United States just once, then you have to present the security of your legitimacy to the CBP through a single transaction bond. You may also hear this referred to as a single entry bond.

Continuous bond (for regular Importers and IOR Services)

This bond covers all the shipments undertaken by a regular importer or IOR service at every port of entry in the United States. The most used continuous import bond is called ‘Activity Code 1’ and this provides coverage of $50,000 and remains valid for 12 months after it is issued.

As a business owner moving abroad, if you are going to be shipping frequently, then a continuous bond is a better investment for you.

Why do importers need a customs bond?

The only things certain in importing are duties and taxes. By requiring you to have a bond, the United States government is guaranteeing that your duties and taxes will be paid, even in the extreme event that your company can’t pay for them.

How do I get a customs bond?

The easiest way to get a bond is often through your customs broker, international freight forwarder or Importer of Record who can take care of all of the paperwork for you.

If you do choose to do it on your own then you must purchase a bond from a surety licensed by the Treasury Department. It is important to get this right though so ensure that you purchase the bond from the correct people.

Getting to grips with customs bonds

If you’re unsure about customs bonds or you’re struggling to get your head around them or, you simply want to make moving your business to the United States as easy as possible then seek assistance from a seasoned IOR service. One of the Importer of Record’s responsibilities is to ship every sort of your consignment while taking care of the customs requirement pertaining to that shipment.

There is no denying that working with an Importer of Record for your business move to the United States is a smart idea and Blackthorne can assist you if you decide to go down this route. Our incredibly experienced team assist with everything from customs bonds to export licences as well as acting as your IOR and legal entity. You can trust that working with Blackthorne will make the whole process much easier and a lot less stressful.