Customs Bonds 101 – An eBook Series

With the new year well underway, it’s the perfect time to boost your knowledge about Customs Bonds.

Over the course of the coming year, TRG will be rolling out an educational series of eBooks designed to help you better understand Customs Bonds. To help with this educational process, we will be posting about specific pages of the eBooks on this blog. If you have any questions or comments about any of the material that you see, please don’t hesitate to ask us. There is also contact information within the eBook, which is available in its entirety via this link. A special thanks to George Dickson who authored these in their entirety before his departure last year.

I would like to kick start this educational experience by unveiling the first eBook, USCB 101: Customs Bond Basics, as well as today’s topic: “What is a Customs Bond?”.

What is a Customs Bond?

A U.S. Customs Bond is a three-party contract between a bond principal, a Treasury-listed surety, and U.S. Customs and Border Protection, also known as ‘CBP’. Having a bond on file is a mandatory requirement of the process of importing in the United States and goods will not be cleared at their port of entry without one.

Customs Bonds define Monetary Obligation

They are written by an insurance company, yet they don’t offer the typical coverage that you might expect. In fact, this type of surety bond exists solely to guarantee that the government (specifically U.S. Customs and Border Protection) is going to get paid its duties/fees/fines due to them from the importer during the process of importing goods into the U.S. If they fail to pay then the surety (the insurance company backing the bond) will be liable. Check out this link for information about the different types of Customs Bonds.

Customs Bonds are also a Three-Party Contract

As stated before, U.S. Customs bonds are an agreement between a bond principal (typically an importer in the U.S.), a U.S. Treasury-listed surety (an insurance company), and U.S. Customs and Border Protection (CBP). This contract dictates that in the event that the importer doesn’t pay the government that the surety will pick up the bill.

Certainly, Customs bonds are more complex than this, and as we move forward with this book we will continue to unravel more of the mystery surrounding Customs bonds.