US Entry and the Custom Clearance Bond
As those dealing in freight forwarding and cargo contingency fully know, US customs reviews entries in a multi-step process. Generally, the freight is released to the importer before the process is complete. Customs therefore requires that a bond, which acts like an insurance policy, cover commercial entries. It acts as a guarantee that an importer will, once the freight is released, agree to pay duties in a timely manner (often within ten days if processed through a broker).
They must also agree to make or complete a proper entry, to produce documents and evidence when requested, redeliver the merchandise to customs custody, if necessary, and to rectify any noncompliance with the provisions of admission. Also, in order to receive a custom clearance bond they will need to agree to the examination of the merchandise and to use the freight in the manner dictated by a special-use provision entry, as well as comply with customs regulations, electronic entry requirements and advance cargo information filing requirements. They must also take responsibility for the consequences of any damages charged against the bond in the case of default.
Important information to know
The primary purpose of a customs bond is to guarantee the payment of import duties and taxes, as well as to assure compliance with all laws and regulations governing the entry of merchandise from foreign shipping points into the US. For restricted merchandise, including anything requiring a declaration to the FCC, FDA or other government agency, the bond is required to cover three times the commercial invoice value.
For items considered to be non-restricted merchandise, the bond must cover the commercial invoice value plus the duties and taxes applicable to the shipment. A Single-Entry bond needs to be filed in hard copy format to customs at the port in order to obtain a release. The documents are sent by courier to customs, reviewed by an inspector, subsequently released, and then returned to the broker’s office by courier. Remember, for time-sensitive cargo, that all of this traveling of the paperwork will often take some time.
Speak to an insurance agent knowledgeable about the custom clearance bond process, and also in surety and risk management solutions for supply chain and transportation intermediaries.