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UPDATED: 5/7/05
 

CUSTOMS BONDS

The U.S. Customs Service requires (19 cfr. Chapter 1. Part 113) that a bond is posted for any individual or corporation, who is importing into the United States. A Customs bond is a form of insurance wherein the holder of the bond (principal) states that a certain dollar amount (liability amount) has been pledged as a guarantee of payment when "liquidated damages" (changes in duty, fees, fines, etc.) are assessed. These damages occur when legal and regulatory obligations are not met. Although a bond can be posted in the form of cash (U.S. currency only), most bonds are issued through a U.S. surety company. There are two basic types of bonds:

1. Single Transaction Bonds (STB's) This type of bond is used for the small or occasional importer. It is prepared as needed, and covers only a single customs entry. Then general rule of thumb is that the bond must be for two times the value plus the duty.

2. Continuous Term Bonds Importers that have more than 5 shipments per year most often use this type of bond. This bond is obtained through a surety and covers all imports during the term of that bond. The bond can be renewed on a yearly basis. Due to the variety of regulations covering bonds and the differing requirements placed on specific types of merchandise, bond liability amounts can vary from shipment to shipment. A common liability amount for continuous bonds is $50,000. However, that amount can change depending upon the quantity and value of importations within a given year. Additionally, Customs may increase bond requirements if a particular importer has been assessed an excessive amount of liquidated damages.

Cambell & Gardiner will discuss your options with you, and help you determine which type of bond, fits your needs best. We deal with a number of different sureties to insure that we get you the best premium available for either type of bond.

U.S. Customs has proposed making changes in the required bond amounts. Please view an article in our "Current News" section for more information.

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