Continuous Bond: What is it, and why do you need one?

Customs Question of the Month

Q: Why do I need a continuous bond?

A: Customs Bonds are required by US Customs for all commercial imports valued at $2,500 or more, even if a shipment is duty-free.  A bond guarantees to U.S. Customs & Border Protection (CBP) that the importer will make good on its payment for the duties and taxes due per shipment.  There are Single Entry Bonds (SEBs) that are on an entry by entry basis and Continuous Bonds that are for one year.  A continuous bond is 10% of duties, taxes, and fees paid for the previous 12 month period (minimum $50,000) and will also cover the ISF bond on any ocean shipments. A $50,000 continuous bond amount is sufficient to cover up to $500,000 in duties, taxes, and fees.  We would also suggest that the importer have a continuous bond if their commodity will require any transmission with PGA (FDA, lacey, EPA, etc).  When a PGA is reported, the invoice value of the shipment must be tripled in order to calculate the bond value for the SEB.  This can become costly depending on the value of the shipment.