A Customs bond is a financial guarantee filed between three parties: the principal, the insurance/surety agent, and U.S. Customs and Border Protection (CBP). The purpose of a Customs bond is to make sure that all duties, taxes and fees owed to the federal government will be taken care of.
There are some situations where duties, taxes, or penalties will be assessed but not paid when you file your entry with Customs and Border Protection (CBP) — bonds are designed to cover these expenses.
There are two types of bonds: single entry and continuous.
Single Entry Bond (STB)
A single entry bond is best if you only import goods every once in awhile. It has a minimum amount for a single transaction of $100 and includes the value of the merchandise plus duties, taxes, and fees to be paid to the government.
Continuous Bond (CB)
A continuous bond is best if you frequently import goods to the U.S.. Continuous bonds are equal to 10% of duties, taxes, and fees you (the importer) have paid in the last 12 months. The minimum amount is $50,000. This bond is valid until cancelled, either by you or your surety.
If you choose to use a continuous bond, you’ll need to get permission from the Entry office at the port you’ll be importing most of your goods through. You’ll need the following:
- Your bond (CBP 301),
- A letter of intent on your company letterhead (this simply states the type of bond; import bond, international carrier bond, etc.), describing the merchandise you are importing and the amount of duties or taxes you paid to CBP last year, and
CBP Form 5106, but only if your address or telephone number has changed from a previous application.