A U.S. Customs Import Bond is known by a
variety of names including; Importer Bond,
Customs Bond, C1 Bond, and an Activity
Code One Bond. Despite its many names,
they are all talking about the same
piece of the importing process. Now we
know what to call it,
but what exactly is a U.S. Customs
Import 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. In the case of a U.S. Customs
Bond, the bond principal is usually a
person or company that imports goods
into the United States. Having a bond on
file is a mandatory requirement of the
importing process and goods will not be
cleared at their port of entry without
one. U.S. Customs and Border Protection is
the government agency that controls,
regulates, and facilitates the movement
of goods into and out of the United
States. A U.S. Customs Bond is a type of
surety bond so it must be written by an
insurance company. Here at TRG we are an
insurance agency that works directly
with the insurance company to provide
these bonds directly to the importer.
Now what does the U.S. Customs bond do?
Although it is a type of surety bond, a
Customs Bond does not function like a
typical insurance product. A Customs Bond
does not protect the bond principle nor
does it protect the goods they import.
Instead it protects the government's
revenue stream. A Customs Bond is a
financial guarantee that CBP will be
paid any and all duties, taxes, and fees
determined to be due during the process
of importing. If the principle of the
bond is unable or unwilling to pay these
duties, taxes, and fees the bond ensures
the surety that wrote the bond will pay
up to the bond amount to CBP on behalf
of the principle. However, in the case of
a surety payout, the importer is not
absolved of their obligation. In fact, the
importer is still liable for the damages to
the surety as well as any remaining
obligation to Customs. There are two ways
of securing a Customs Bond for your
business; as a Single Entry Bond or as a
Continuous Bond. To learn the differences,
check out our videos specifically
covering the details of the two. Like
what you learned? Subscribe to our
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the international trade world.
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