Customs Bonds

A customs bond is a type of surety bond – a legally binding agreement that guarantees an importer will comply with all U.S. Customs and Border Protection (CBP) regulations and pay any required duties, taxes, or penalties on their imported goods.

It’s a three-party contract between:

• The principal (importer or business)
• A surety company (guarantor of payment)
• The CBP (U.S. government agency requiring the bond)

If the importer fails to meet their legal obligations, the surety pays CBP — and the importer must reimburse the surety.

Why Customs Bonds Are Required

Customs bonds:

• Ensure the U.S. Treasury is financially protected
• Help enforce compliance with import laws and restrictions
• Cover commercial imports over $2,500 in value
• Are required for certain regulated commodities (like firearms, food, or pharmaceuticals)

Importers can obtain a customs bond through a licensed customs broker or directly from a bond agency.

If you are a warehouse operator and want to be able to store and secure imported/exported merchandise, you need a customs bond. You also have to determine the type of warehouse you'd like to establish and apply with the port director.

If you want to perform work in a secure CBP property, you'll need a customs bond. This would include operating as a customs-approved gauger or laboratory or work as a customs broker. 

There are two main types of customs bonds:

Single Entry Bond

• Covers one shipment or import transaction
• Used by importers who only ship goods occasionally
• Bond amount is based on the value of that single shipment, including duties and taxes
• Often required for first-time importers or those with infrequent entries

Continuous Bond

• Covers multiple shipments over a 12-month period
• Ideal for importers with frequent shipments or entries at multiple U.S. ports
• The bond amount is typically the greater of $50,000 or 10% of annual duties, taxes, and fees
• Also used by carriers, bonded warehouses, and customs brokers

Not sure which bond you need? If you import regularly or through different ports, a continuous bond is usually more efficient and cost-effective.

You don’t pay the full bond amount. Instead, you pay a premium, which is a small percentage of the total bond value.

• Typical range: 1% to 15%, depending on risk factors
• Factors that affect your rate:
  • Your import history
  • Financial strength
  • Type of merchandise
  • Bond type (single vs. continuous)
  • The surety’s underwriting requirements

For example, a $50,000 continuous bond might cost as little as $250 to $750 annually, depending on your qualifications.

The required bond amount depends on the type of customs bond:

For a Continuous Bond:

• The bond must be the greater of $50,000 or 10% of the total duties, taxes, and fees paid to CBP in the previous 12 months.
• If you’re a new importer and haven’t paid duties before, estimate your expected duties for the upcoming year.

For a Single Entry Bond:

• The amount must be at least the full value of the imported goods, including all duties, taxes, and fees.
• If your shipment includes restricted goods or products regulated by other federal agencies, the bond amount may need to be three times the shipment’s value, at CBP’s discretion.

Follow these steps to apply for and secure a U.S. customs bond:

Step 1: Determine the Type of Bond You Need

Decide between a single entry bond or a continuous bond based on your import activity:

• If you make frequent imports or use multiple ports, you likely need a continuous bond
• If you’re importing a single shipment, a single entry bond may be sufficient

You’ll also need to estimate your total duties, taxes, and fees for the year if applying for a continuous bond.

Step 2: Apply Through a Bond Agency

Submit your application through a licensed surety provider. You’ll need to complete CBP Form 301, which includes:

• The bond type
• Port of entry
• Description of imported goods
• Estimated duties and fees

If you’re working with a customs broker, they may assist with this step or file under their own bond.

Step 3: Receive and Review the Bond

Once approved, your bond agency will issue your bond based on your application and CBP requirements.

Step 4: Sign and Submit the Bond for Filing

• Sign the bond and return it to your agency
• The agency will file it with CBP electronically
• Processing typically takes up to 10 business days

Step 5: Remain in Compliance

Once your bond is active, you’re responsible for:

• Paying all duties, taxes, and penalties in full and on time
• Maintaining proper documentation
• Avoiding violations that could trigger a bond claim

Failure to meet these obligations could result in fines, penalties, or denial of entry for future imports.

How Long Does a Customs Bond Last?

A single entry bond expires once the shipment it covers is cleared.

A continuous customs bond, however, is valid for 12 months from the effective date and must be renewed annually to remain active.

Renewal Process

To maintain your bond:

• Your surety provider will typically notify you before renewal is due
• You must confirm that your projected duties and import activity have not changed significantly
• If your activity increases, the bond amount may need to be adjusted (e.g., higher duties = higher bond requirement)

Ongoing Responsibilities

Keeping a continuous bond in good standing requires:

• Timely payment of all duties, taxes, and fees
• Accurate and complete import documentation
• Immediate notification to CBP and your bond agency if your business changes (ownership, name, structure, etc.)

Failing to maintain your bond may result in CBP revoking your ability to import goods, even if the bond hasn’t expired.

Failing to secure a required customs bond can lead to serious delays, penalties, and legal consequences for importers and logistics providers.

Key Risks and Outcomes

1. Entry Denial

If you attempt to import goods without a valid bond, U.S. Customs and Border Protection (CBP) will not clear your shipment. The goods may be:

• Held at the port
• Returned to the sender
• Forfeited or seized in some cases

2. Financial Penalties

Without a bond, you’re personally liable for all duties, taxes, and fines. You may also face:

• Late payment penalties
• Liquidated damages
• Enforcement actions from CBP

3. Suspension of Import Privileges

CBP may suspend or revoke your ability to import goods in the future if you attempt to bypass bonding requirements.

4. Business Disruption

For carriers, bonded warehouse operators, and customs brokers, failing to maintain a valid customs bond can result in:

• Loss of licensure
• Inability to legally operate
• Damage to business reputation and client relationships

Most importers use standard single entry or continuous customs bonds, but some situations require specialized bonds or handling under CBP rules.

Common Special Scenarios

1. Section 301 Tariff Cases

Importers of goods affected by Section 301 tariffs (targeting certain Chinese products) may need to post higher bond amounts due to increased duties. In some cases, CBP may require collateral or enhanced bonding conditions to mitigate risk.

2. IPR Sample Shipments

Companies importing goods for Intellectual Property Rights (IPR) testing or enforcement may need to secure a bond that allows for sample inspection and potential return or destruction, depending on the result.

3. Suspended or Debarred Importers

If a party has been suspended or debarred from federal programs, additional bonding requirements — or a full ban on bonding — may apply. These cases are typically flagged during CBP risk assessment and reviewed individually.

4. Customs Brokers and Warehouse Operators

Licensed brokers and bonded warehouse operators are often required to hold specialized activity code bonds under CBP Form 301. These are tailored to the type of service they provide and include obligations beyond standard import entries.

When to Speak With a Bond Specialist

If your business operates in any of these scenarios—or you’re unsure about your risk profile—it’s best to consult a customs bond agency or licensed customs broker. They can assess your situation and ensure the bond structure meets all CBP requirements.

Importers who don’t want to purchase a customs bond have one alternative: posting cash collateral with U.S. Customs and Border Protection (CBP). This is called the “cash-in-lieu of surety bond” option.

How the Cash Collateral Option Works

• You must deposit the full face value of the bond directly with CBP
• There is no annual premium or interest charged
• You must renew the cash deposit annually to keep your bond active
• Your funds are held by CBP and may remain frozen years after termination

For example, to replace a $50,000 continuous bond, you must deposit $50,000 in cash—and another $50,000 the following year to renew.

Why Most Importers Choose a Bond

While cash collateral avoids fees, it has major drawbacks:

• Ties up working capital that could be used to grow your business
• Requires large upfront and annual payments
• Delays access to your own funds if you cancel the bond

By contrast, a customs bond from a surety company:

• Requires only a small percentage of the bond amount as a premium (typically 1%–15%)
• Doesn’t tie up your cash
• Is easier to maintain and renew through a bond agency

Most importers, especially small and mid-sized businesses, choose the surety bond option for greater flexibility and cash flow.