Starting a business whose one of the main elements of modus operandi is importation or distribution is not a walk in the park. Numerous aspects require your attention. You would need to spend countless hours studying the regulation in your country before you can do everything conferring to the word of the law.
For those who didn’t know, ports are accountable for more than 75% of global trade. Even though it may not seem like it, this sort of transport is the most reliable, cheapest, and fastest way to receive merchandise. That’s why all ports in the world are interconnected. To enhance the whole procedure.
Since this is an organization on a global level, nobody should be surprised by the fact that there are regulated by international agreements all countries who have ports have signed. One of the most important aspects to take a look at when we are talking about import and export are customs bonds. If you are interested in this, you can find here more information.
Today, we want to shine a light on this concept and discuss it in greater detail.
What is a Customs Bond?
A customs bond is, let’s say, an agreement or contract signed between three different parties who participate in the procedure of importing or exporting certain goods. By signing one of these, all three parties are committing that they will follow all the regulations that make this process what it needs to be.
We are talking about a document that is an absolute must when it comes to bringing goods into the United States, by strictly following the regulations that surround it. Of course, signing one of these needs to be done solely with reliable and reputable companies. Otherwise, the chances of getting scammed are quite high.
It needs to be said that a vast majority of these bonds are issued by customs brokers. For those who do not know, these professionals are working closely with the agencies. They have the task of creating the agreement and organizing the whole procedure on the behalf of their clients, in this case, importers.
Why Do Importers Need These?
One of the commonest sayings in the US says that paying taxes is the only certain thing in life. In the case of importing, we would include duties besides taxes. So, you can see that having one of these bonds is something that serves as a guarantee that the trader will pay all the fees he or she is obligated to.
That means these will be paid accordingly even in some severe situations, like bankruptcy. As you can presume, bonds are documents required for all sorts of imports. So, you will need it not just for transport by the ocean, but by air as well. If this is not taken care of properly, it can cause numerous problems.
Among many problems that can pop up, we can find severe delays and fines. So, we can say, without any doubt, that these bonds are some sort of a price for you to bring any sort of produce into the country. Have in mind that these documents can expire. So, make sure you renew them rather quickly.
When Do We Need These?
You will be happy to know that these are not required in every situation when you import something. They are required when someone wants to bring in goods whose value is higher than $2.5k. Besides that, it is significant that this merchandise is subject to requirements from agencies in the United States.
For instance, if you’re trying to import food, then you will need to contact the institution that handles this sort of produce. The same can be said about any other case when you import something specific that needs further inspection. It is something every importer should have in mind.
It needs to be said that there are two types of these bonds. Let’s check them out.
The first one is known as a single entry customs bond. As its name is suggesting, this one works solely when you are about to import merchandise in the US only once. Since this is the commonest approach when it comes to importing, we’re not surprised these are the most popular ones out there.
That doesn’t mean that businesses who use these do it only once. In fact, it means that they do not do it regularly, which is, you will admit, much commoner than regular ones. They are quite cost-effective if the business is bring in the goods only once or twice per year.
These are charged, in most cases, in a fixed dollar amount. However, that doesn’t mean that it cannot happen you are charged a certain percentage of the merchandise’s value. Since these are single-entry, they will need to be renewed whenever the companies are about to repeat the procedure.
The second type is either known as an annual or continuous one. As you can presume, these allow the companies to do it for much longer. Think about it, if you are bringing some valuable goods into the country, it is a good solution to have this approval last for much longer, don’t you think?
One of the names these are known under, annual means exactly that. They usually last for twelve months. It means that the price can remain fixed completely, without any problems during this time. So, you can see that this makes this procedure much smoother than without them.
When the continuous bond expires, you will need to renew it. Thankfully, this procedure is not a complex one. The whole procedure lasts only a couple of minutes. So, you can be sure that this is not something that will require too much of your time and effort.
The Bottom Line
Customs bonds are an absolute must in this procedure as we’ve already said. Here, you can learn all there is to know about this concept. We have no doubt our readers will find this insight useful.