If you are regularly importing merchandise into the U.S., you probably know from experience that doing so with a Single-Entry Bond instead of a continuous bond is a pain point that costs you time and money. If you are launching a business that relies on international shipping via land, sea, or air, here is what you need to consider.
Before delving into continuous bonds, let us take a general look at Customs Bonds and their purpose. Customs Bonds are a core element of global trading and are not optional. The U.S. Customs and Border Protection (CBP) requires a valid bond to be in place for importing any commercial goods valued at over $2,500. Without it, the CBP will refuse entry past the port at which merchandise arrives.
The bonds help you increase compliance and avoid customs clearance delays and fines. They are, in essence, an agreement between a bond principal, a surety, and the U.S. Customs and Border Protection (CBP). The purpose is to guarantee that importers will perform all financial obligations to the CBP. If principals cannot fulfill their duties, the responsibility falls to the surety.
How does one purchase a Customs Bond? The typical way is through a freight forwarder or customs broker. Either party will provide the required paperwork.
Regarding costs, the CBP ordinance on monetary bonds available on their site is quite complex. Continuous Bonds are easier to understand. Primarily, regular importers should obtain a continuous entry bond at $500 a year (allow ten days for processing). You can purchase a minimum of $50,000 or 10 percent of the fees and taxes from the previous year. Even with as little as three or four annual shipments, a Continuous Bond is cost-effective.
One-off shipments should receive a Single-Entry Bond that costs about 0.5% of the merchandise value (minimum $50 charge) along with $75 for the ISF Bond for ocean shipments.
Now we get down to brass tacks. The principal Customs Bonds are Single Entry and Continuous Bonds. Your choice between the two depends on how often you intend to import merchandise into the U.S. A Continuous Bond covers all shipments during an entire year. This Bond type also handles high-value shipments coming from several ports of entry.
A Single-Entry Bond covers one shipment only. By purchasing a Continuous Bond, import-based businesses get the most ROI. Additionally, it is exhaustive and time-consuming to have to go through meeting the many bond-related terms and stipulations for every import.
You must have a bond before you can file the ISF Form. However, a benefit for regular importers with Continuous Bonds is that once filed with the CBP, they remain on file until actively terminated. Also, you do not need to purchase a separate bond for your ISF form if you are importing via ocean, which otherwise needs to be submitted at least 24 hours before importing.
Aside from the benefits mentioned above, a Continuous Customs Bond genuinely streamlines the customs entry process. It also accelerates the turnaround time as you can receive a paperless release very quickly after you submit your goods to customs. In other words, you can push your merchandise through CBP and continue onto the next phase of your supply chain much faster. For any import business to build a reputation, gain a competitive advantage, and be successful, meeting consumer demands for prompt and reliable delivery is essential.
Hopefully, this short guide has given some insight into continuous Customs Bonds.
There is yet another way to smooth and hasten the process – become a self-filer with eezyimport. By removing agents will lower your import costs. eezyimport offers an efficient DIY self-filling model (self – ISF or Entry Filing) or a DIY Broker model. eezyimport’s platform also provides competitively priced Continuous Customs Bonds and Single-Entry Bonds. The company aims to help businesses by making the import process cost-efficient and straightforward!