You have read the title, but it is worth reiterating - if you do not have a Customs bond, your goods will be denied when you attempt to import them into the US. We appreciate that this may not be new information for seasoned importers, but for those newly attempting to import goods into the US, it is a vital piece of the puzzle that often takes businesses by surprise. This is especially true when those businesses are used to shipping into countries where a bond is unnecessary. 

Fortunately, getting the right kind of bond for your import is a topic that has been covered several times on this very blog, so by being here, you’ve already taken an essential first step. We always encourage importers to educate themselves, but it is worth pointing out that the best way to know if your goods have specific needs beyond what is described here is by getting in touch with one of PCB’s expert Customs Brokers. We can help identify potential issues and missed opportunities while ensuring that your shipments have what they need to enter the commerce of the US with minimal friction. 

What is a Customs Bond in the USA?

A Customs bond is, at its core, a promissory note between the Importer of Record (IOR) and US Customs and Border Protection (CBP). It works to secure the payment of any duties, taxes, penalties, or associated Customs fees and operates similarly to what you might expect from car, house, or other types of insurance. In the event that an importer defaults on their obligations to Customs, the bond works to indemnify US Customs and Border Protection for its losses. 

Like car insurance, it is required by law, and all commercial transactions, along with some personal imports, require a bond for US Customs. Two types of bonds can satisfy this CBP requirement, and they come in two varieties that differ in a variety of ways, including how long each Customs bond lasts. 

What is the Difference Between a Single Transaction Bond and a Continuous Bond? 

The two types of Customs bonds we are discussing today are single-transaction bonds and continuous-transaction bonds. What type makes the most sense for your import comes down, fundamentally, to how many imports you are making and over how long a window you are going to be making imports. 

Single Transaction Bond

A Single Transaction Bond, otherwise known as a SEB, is designed for a single entry into the United States. It’s ideal for importers who are just bringing in a single import, and a separate bond is required for each entry you are bringing into the US. The single-entry bond amount is calculated by combining the value of your shipment plus any duties and fees. Additionally, you can typically expect to pay a fee for every $1000 worth of bond value.

Remember that food products, electronics, or anything subject to another government agency requires the bond to be calculated at three times the value of the shipment plus duties and fees. This increase can significantly affect the amount you pay per SEB, and it could possibly require special approval from the surety company, which could lead to a further delay in your shipment.

Below is a list of other government agencies that require the value of a SEB to be tripled:

• US Food & Drug Administration (FDA)
• Environmental Protection Agency (EPA)
• Fish & Wildlife (F&W)
• Federal Communications Commission (FCC)
• Consumer Products Safety Commission (CPSC)
• Bureau of Alcohol, Tobacco & Firearms (BATF)
• Department of Agriculture, Agricultural Marketing Services (AMS)
• Toxic Substances Control Act (TSCA)
• All merchandise that is subject to Quota and/or Visa requirements

Continuous Transaction Bond

A continuous transaction bond (CTB) is designed to cover all merchandise entered into the commerce of the US for an entire year from the date the bond becomes effective. The essential advantage of using this bond comes when the importer has many imports to make. It is offered at a flat rate, meaning you can expect to pay a much lower fee than if you were to buy an SEB every time you import. If you are a regular importer, a CTB represents a significant cost saving for you and your business.

Put plainly, you need a Customs bond to import goods into the US, but what bond you get is primarily determined by the nature of your imports. If you are unsure about which bond type makes the most sense for your imports, you are encouraged to contact our Customs brokerage team today. We can help guide you through that process along with any other considerations or challenges your import may have on its way into the US. Get in touch today to give your import process the boost it needs!