Customs Bond Processing

There are often many questions that arise in relation to the U.S. Customs Bond Renewal Process.  We’re going to take a few minutes to clear up any questions our audience might have about how a bond is placed, terminated, or replaced.  For additional background information on bonds, check out JJarosky’s article titled “U.S. Customs Bond Basics for Importers,” or visit customs’ website at CBP.gov

First and foremost, a continuous bond that is already in place automatically renews every year until a request for termination is made.  Any bond terms outside of this format are simply billing cycles utilized by various bond providers.   There is no 2 or 3 year bond; only a 2 or 3 year billing cycle associated with an account.

Placing a new U.S. Customs Bond begins with an agreement being made between a surety and an importer.  A broker or freight forwarder can act as a liaison between the surety and the principal (in this case, an importer), however this is not mandatory.  It is possible for an importer to negotiate directly with their surety.

After terms have been agreed upon between the importer and surety, the surety will request U.S. Customs and Border Protection place a bond, with CBP, the importer, and the surety as the three parties in the agreement.

*CBP currently operates on a lead-time of 10 business days.  Any requests made are processed on a first-come-first-serve basis, with this 10 business day time period in mind.

Next, CPB will send the importer and the surety documents relating to the new bond.  The new bond can be used from its effective date onward.  Once again, a U.S. Customs Import Bond will remain in effect until any of the three parties requests that it is terminated.

Terminating a U.S. Customs Bond is similar to placing one, although there is an important point to be made here:  If the principal (the importer) places a termination request for the bond in question, after 10 days’ lead-time the order is executed and the bond no longer exists.  If a surety requests that a bond be terminated, they are required to send their request to CBP and the principal (the importer) by certified mail with a return receipt.  The surety must allow 30 days’ notification time after receiving the return receipt.  CBP provides instructions for these procedures on their website.

Replacing a U.S. Customs Bond involves terminating the old bond, and placing a new one.  In most instances, this process takes place instantly at midnight.  The old bond is terminated, and the new bond is instated simultaneously, ensuring no lapse in coverage.  CBP will then send the new bond information to the principal via CBP form 301.  This form includes pertinent data regarding the bond on file, and should be filed as part of an importer’s logistics documents.  Once the new bond number is issued and its effective date has arrived, it can be used to clear entries.

These are the basics of U.S. Customs Bond processing—for more detailed instructions and information, take advantage of the copious knowledge CBP offers online.