Customs Bonds FAQs

What is a Customs Bond?

A US Customs Bond*, or Activity Code 1 bond, is a contractual agreement between the Importer of record, the Bond Surety Company and US Customs & Border Protection (CBP). Customs Bonds facilitate faster Customs clearance because they guarantee the CBP will be immediately paid if any additional import duties, taxes or fees need to be assessed. This allows the CBP to clear the shipment without having to wait for the Importer to submit payment. The CBP is paid by the Surety Company, then the Importer reimburses the Surety.

 

Customs Bonds are available as Single-Entry bonds, which cover individual shipments, or as Annual/Continuous Customs Bonds, which cover all shipments over a 12-month period. Customs Bonds are required by the CBP for all commercial imports valued at $2500 or more, even if a shipment is duty-free.

 

*Also known as a Surety Bond or Import Bond.

 

How Fast Can I Get a Customs Bond?

Once a valid Power of Attorney is put in-place, a bond can typically be obtained within 24-48 hours — even faster when we receive your bond application during normal business hours (8am to 5pm ET, M-F). Immediately following the purchase and confirmation all documents are in order, we will file your bond electronically with the CBP. Click here to choose your bond and get an application started.

When is a Customs Bond Required?

CBP regulations require a Customs Bond to be on file for commercial imports on shipments valued at $2,500 or higher, even if the merchandise being imported is duty-free. If you are importing goods, you need a Customs bond.

 

How Much is a Customs Bond?

Customs Bond pricing depends on the bond value and type. Single-entry bonds are calculated based on the individual shipment, whereas Continuous Customs Bonds are based on 10% of the total taxes, duties and fees paid by the importer over the previous 12-month period.


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What Does $50,000 Customs Bond Represent?

Does it cover import shipments that are valued up to $50K?

 

A $50K Customs Bond refers to a “continuous” or annual import bond that covers all your imports over a 12-month period, regardless of the value of any single shipment (the value of a shipment can far exceed $50K). $50,000 is the minimum Continuous Customs Bond size allowed by the CBP. Importers qualify to purchase a $50K bond if their duties, taxes, and fees paid to the CBP over the previous 12 months were less than $500K. New Importers can also purchase a $50K bond without a 12-month history, based on the assumption that their first-year duties, etc. will be less that $500,000.

 

Once your annual duties, taxes and fees meet or exceed $500K, you must purchase a larger bond amount. Continuous Customs Bond amounts are calculated based on 10% of the total duties, taxes, and fees an importer paid over the previous 12 months, in $10K increments up to $100K, and in $100K increments thereafter, as follows:

 

Total duties, taxes and fees
(previous 12 months)
Bond Amount
$0 - $499,999
$50,000
$500,000 - $599,999
$60,000
$600,000 - $699,999
$70,000
$700,000 - $799,999
$80,000
$800,000 - $899,999
$90,000
$900,000 - $999,999
$100,000
$1,000,000 - $1,999,999
$200,000
$2,000,000 - $2,999,999
$300,000 (etc.)

For example, if your duties, etc. paid to CBP totaled $550,000 over the last 12 months, you would need to purchase a $60K bond (10% of $550K, rounded up to the next $10K), whereas if they totaled $1,550,000, you would need a $200K bond (10% of $1,599,000, rounded up to the next $100K).

 

Click here to shop for a Continuous Customs Bond.

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What is a Continuous Customs Bond?

A Continuous Customs Bond* is valid for one year, and allows goods to be imported into the United States in accordance with US Customs and Border Patrol (CBP) requirements. Compared to Single-entry Customs Bonds, which cover individual shipments and therefore must be calculated and purchased each time you have a shipment, a Continuous Customs Bond covers all your shipments over a 12-month period, regardless of frequency or value.

The Bond amount is calculated based on 10% of the total duties, taxes and fees you accrued over the previous 12 months. Importers who are just getting started and don’t have a 12-month history can simply purchase the minimum $50K bond, unless they know for certain that their annual CBP duties, taxes and fees will exceed $500,000.

 

The CBP requires that virtually all commercial imports are bonded, either with a Single-entry Customs Bond or a Continuous Customs Bond. Continuous Customs Bonds reduce paperwork, saving you time and hassle. If you import as few as two shipments per year, a Continuous Bond may still be of benefit.

 

*Also known as an Annual Customs Bond or Activity Code 1

 

Why Do I Need to Sign a Power of Attorney for a Customs Bond?

A signed Power of Attorney (POA) allows us, as your broker, to file your bond with the CBP. It is a legal requirement per US Customs regulations.

 

You can save time by downloading and completing a POA in advance. Then, it will be ready when you apply for your Customs Bond (click here to download).

 

Where Can I Buy a Customs Bond?

Customs bonds can be purchased through a Customs Broker licensed in the US. A Customs Broker deals directly with the Bond Provider, known as a Surety Company. When a bond is purchased, the Customs Broker files a unique bond number on behalf of the Importer.

 

DB Schenker has been in business for over 140 years and is one of the largest Customs Brokers in the US. Purchasing your bond through us ensures that your bond is from an A+ rated Surety Company, and it also often results in significant cost savings. A Customs Broker with experienced consultants can provide guidance on what type of customs bonds your company requires. To shop for a Continuous Customs Bond, click here.

What Types of Customs Bond are There?

Usually when someone needs a “Customs Bond”, they are referring to an Activity Code 1 Import Bond, which can be either a Single-entry or Continuous Customs Bond. There are other bonds required by the CBP for various circumstances. Here are some of the most common, listed by their Activity Code:

 

Activity Code 1 Import Bond
Activity Code 1A
Drawback Payment Refunds Bond
Activity Code 2
Custodian of Bonded Merchandise Bond
Activity Code 3
International Carrier Bond
Activity Code 3a
Instruments of International Traffic
Activity Code 4
Foreign Trade Zone Bond
Activity Code 11
Airport Security Bond
Activity Code 16
Importer Security Filing Bond

DB Schenker has over 140 years experience and is here to help you with all your Customs Bonds needs.

 

What Can I Do About the Section 301 Changes?

  • HTS Classification Management and Line Reviews
  • Import Regulatory Compliance Management
  • Consider Submitting a Section 301 Exclusion Request Process
  • Importer or Broker conducts a bond sufficiency review on a monthly basis. To avoid a bond stacking liability issue, it is in the importers best interest to forecast their import activities for the next 12 months to determine if a bond amount increase beyond the minimum amount will be more appropriate.

With Section 301 Changes, Do I Need a Line Review?

It is beneficial to perform an onsite and offsite HTSUS line reviews to assess the correctness of information being declared by importers and exporters relative to the HTS classifications of internationally sourced or sold goods.

Contact

Have questions? Click below to contact us anytime. Click here to send us an email. Or call us and speak directly with one of our experts (Monday through Friday, 8 a.m. to 5 p.m. ET). 

Schenker, Inc.
Trade Advisory & Risk Solutions
41 Pinelawn Road, Suite 110
Melville, NY 11747
Phone +1 (844) 724-8723 (in USA)
Phone +1 (516) 690-2171 (outside USA)
TradeSolutionsUS@dbschenker.com