Importing and exporting is a lucrative business in today’s economy, so it is no surprise that when you are involved in this industry, you will be required to know and deal with customs bonds and other similar issues. From Mexican avocados to American cars, the U.S. economy depends on the continued strength of our importing and exporting practices. With this in mind, any business owner knows that any transactions and issues dealing with customs are heavily involved with appraisals, inspections, duties, taxes, and regulations. This ensures that all goods, livestock, and other substances being transported are in line with both U.S. and international trading law. Due to the constant transporting of goods, customs bonds ensure that all transactions between a business owner and customs are protected by insurance.
Simply put, customs bonds are a type of insurance that guarantees that all customs transactions will be paid, whether or not the entity taking out the bond is able. There are many types of bonds, but all are designed to protect and ensure payment of customs duties due to a business or persons. It is a financial guarantee between 3 parties- the insurance company issuing the bond, the entity who is filing the bond, and Customs and Border Protection (CBP). It means that in the event the CBP cannot collect monies owed from the original entity, they will still get their money up to the bond amount from the insurance company. This also means that the insurance company can collect the amount paid to CBP from the original entity after it has been paid out. Every business that imports and exports goods in the U.S. is required by law to have customs bonds on file.
While there are many types of bonds associated with different types of imported and exported goods and merchandise, the most common type of bond is an Import Bond. All importers are required to have this type of bond by the CBP. It allows any shipments to go through the customs process. Depending on a business’s import frequency, they can file a single entry or continuous bond. Failure to file the correct type of bond for your business can result in fines, taxations, and can even lead to the revoking of your importing and exporting license.
When it comes to your business, there is no reason to take unnecessary risks. Knowing what types of bonds you need, where to get them, and how to file them require specialized knowledge that you may not have time for. Instead of risking your business by not dealing with customs bonds the correct way, the customs brokers at RM Customhouse Brokers have the experience and knowledge to handle them for you. Let us put our knowledge to work for you- contact us today to find out more about our services and how they can help you.