4 pictures of shipping. A picture of the United States in the middle. The words "Customs Bonds" in the middle. An ocean in the background.

Customs Bonds – A Complete Guide

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Customs Bonds are required for many importers, traders and other activities coming into the United States. The purpose of these bonds is to protect the revenue of the United States and to ensure compliance with laws and codes.

What is a Customs Bond?

A U.S. Customs Bond is a surety bond that protects the revenue of the United States and compliance with laws and codes. The bond guarantees that tax, duties, fines, penalties and other amounts owed for certain activities will be paid to the U.S. Customs and Border Protection (CBP), AND that the person or business involved in those activities will comply with all laws and codes.

Customs Bonds can be either a Single Transaction Bond or a Continuous Bond.

Single Transaction Bond - A bond that secures a single activity or transaction.
Single Transactions Bonds may be useful when a principal if importing goods once or for a limited time. Single Transaction Bonds can also be required when a continuous bond is in place, but a transaction needs increased limits over the continuous bond amount.
Continuous Bond - A bond that secures one or more transactions or activities over a one-year period, is renewed automatically on the effective date of the bond and remains in effect until terminated.
Continuous Bonds are more common when a principal expects to have multiple transactions year after year.
Only one continuous bond may be used for each principal, for each bonded activity per 19 CFR 113.12b.

How Does a Customs Bond Work?

The Principal - The party needing the bond and promising to pay dues, fees taxes and other amounts to CBP. This party is also responsible for compliance with all laws and regulations. This is the importer, company or person with international operations.
The  Surety - The Bond Company guaranteeing the principal’s payment and compliance to the obligee.
The  Obligee - This is CBP. They are the party receiving the benefit of the bond on behalf of the United States.

The principal pays bond premium and provides indemnity to a third-party surety bond company. In exchange, the bond company provides a financial guarantee on behalf of the principal to the CBP (the obligee). The bond guarantees the payment of dues, taxes, fines and other amounts owed, along with compliance to laws and regulations. Should the principal not comply with laws, or should they not pay amounts owed, CBP could make a claim on the bond with the surety. The surety would pay the claim and seek reimbursement from the principal under the indemnity agreement.

A customs bond provides the U.S. with valuable protection. Instead of spending taxpayer time and money trying to collect amounts owed from an importer, the CBP can simply collect from the bond company. Surety bond companies are licensed and rated for their financial strength and ability to pay claims, so it is much easier for CBP to get paid. However, payment on the bond does not relieve the principal from further penalties from CBP and the U.S.

This interactive image shows how customs bonds work.
The Obligee is CBP. The obligee agrees to let the principal make entry. The obligee also agrees to let the surety step in the principal's shoes if a claim occurs.
The principal is the importer. The principal agrees to pay amounts due to the Obligee and uphold the laws. The principal agrees to pay bond premium and provide indemnity to the surety.
The surety is a third-party bond company. The bond company provides the customs bond to the principal. The bond company provides a financial guarantee to the Obligee in the event that the principal defaults on payments or obligations.

How to Obtain Customs Bonds

Customs Bonds in many amounts can be obtained with a simple application and credit check. The most popular bonds such as basic importation bonds and airport customs security area bonds are usually approved very quickly with little information. Like many surety bonds, very large amounts may require more information such as financial information from the principal.

What Do Customs Bonds Cost?

The cost of a customs bond depends on the amount of the obligation and the activity being bonded. Prices can be 1% or less for easy obligations or up to 4% for complex entries. Axcess Surety has multiple bond companies and tools to write customs bonds. We can issue them without additional fees and have rate flexibility in most cases.

CBP Activity Codes

CBP sets the requirements and amounts of Customs Bonds based on the activity code for which the principal is performing that requires bonding. The activity codes and bond amounts are below. 

Activity Code 1 - Basic Importation and Entry

Activity Code 1 is often referred to as an “Importer Bond.” Activity Code 1 Importer Bonds are the most common type of Customs Bonds and are needed by most importers of goods to the U.S. Activity Code 1 covers basic import and entry covers products used in immediate consumption, immediate delivery, or products entered or withdrawn from a warehouse.

Continuous Bond for Activity Code 1 (Importer Bond)
The bond amount for a continuous bond for Activity 1 must be for the 10% of the estimated taxes, duties and fees in the previous 12-month period, OR $50,000, whichever is greater. This amount must be for each principal or co-principal appearing on the bond. If there were no previous 12-month amounts, an estimate of the next 12 months can be used, but the bond can still be no less than $50,000. Continuous bonds increase in increments of $10,000, up to $100,000 limits. After $100,000, the bond increases in increments of $100,000.
Single Transaction Bond for Activity Code 1 (Importer Bond)
The bond amount for a continuous bond for Activity 1 must be for the 10% of the estimated taxes, duties and fees in the previous 12-month period, OR $50,000, whichever is greater. This amount must be for each principal or co-principal appearing on the bond. If there were no previous 12-month amounts, an estimate of the next 12 months can be used, but the bond can still be no less than $50,000. Continuous bonds increase in increments of $10,000, up to $100,000 limits. After $100,000, the bond increases in increments of $100,000.
Unconditionally Duty 
Free Merchandise
Restricted Merchandise
Overtime Services
Anti Dumping and 
Countervailing Duties (AD/CVD)
Temporary Importation
 under Bond (TIB)
Special Classes of Merchandise
The bond amount may only be 10% of the value on these entries.
These entries require a bond for 300% of the value with a minimum of $100.
The bond must be in an amount to secure the payment of overtime services to CBP.
If CBP has determined there is sufficient evidence of AD/CVD and the continuous bond amount will be insufficient to enforce legislation, they may require additional amounts.
TIB is temporary importation of goods under bond, not imported for sale or sale on approval, without payment of duty with the intent to export or destroy the goods within a certain period of time not to exceed three years from the date of importation. These bonds must be for 2 times duties including Merchandise Processing Fees (MPF) determined at the time of entry, unless CBP determines that a higher amount is needed. The following are exceptions:

- Certain motion picture advertising, trade tools, equipment and other falling under 9813.00.50 HTSUS. Such bonds may only need to be 110% of entry, including duties as determined at time of entry.

- For restricted or prohibited merchandise, the amount of the bond must be the greater of 2 times the estimated duties, including fees OR 3 times the value of the merchandise.
These items falling under 19 CFR Part 12 must have a bond amount provided by the table.
Activity Code 1a - Drawback Payment Refunds Bond

Drawback Bonds are needed when a party requests and is approved for acceleration of drawback under CFR 190.02.


Continuous drawback bonds must be equal to 100% of the accelerated drawback amount that is estimated to be collected during the term of the bond. If accelerated drawback exceeds the bond amount, the bond will need to be increased. The bond amount must be at least $50,000. All continuous drawback bonds will be set in increments of $10,000 up to $100,000 and then in increments of $100,000.
Single Transaction Drawback Bonds are needed if a continuous bond is not on file. A single transaction bond for drawback 1a must also be in the amount of 100% of the amount of accelerated payment to be received on the entry covered. The minimum amount of a single transaction drawback bond is $100.
Activity Code 2 - Basic Custodial - Continuous Bond Only

Basic Custodial Bonds cover custodians of bonded merchandise. These include bonded warehouses and bonded carriers. Examples of those needing Basic Custodial Bonds include:

  • Freight Forwarders
  • Duty Free Stores
  • Container Freight Stations
  • Lightermen
  • Cartmen
  • Centralized Examination Stations

Code 2 Continuous Bond Amounts

The minimum amount for Code 2 Basic Custodial Bonds is $25,000. The bond limit increases in increments of $10,000 up to $100,000 and increments of $100,000 after that. 

Click the tabs to see the bond requirements.
Bonded Warehouse and 
Consignment Carrier Bonds
Overtime Service Bonds
Carriage of Merchandise Bonds
Multiple Custodial Operations
The required amount of custodial bonds for bonded warehouse and consignment carrier is determined by the Director of OF-RD. However, the bond must be at least $25,000 for each building or area covered. For example, a principal with four buildings will require a bond of at least $100,000 (4 X $25,000).
The required amount of the bond for overtime service must be for an amount to secure the entire amount of overtime services as determined by the Director of OF-RD.
The required bond amount must be enough to cover the purpose of the activity as determined by the Director of OF-RD, but it cannot be less than $25,000.
When a continuous bond is required to cover multiple custodial operations, the bond amount must be in an amount that satisfies all custodial operations. For example, an operator with a bonded warehouse and freight forwarding operation would need a bond for at least $50,000, which includes $25,000 for the warehouse and $25,000 for the freight forwarding.
Activity Code 3 - International Carrier Bonds

Activity Code 3 Bonds or International Carrier Bonds are bonds for airlines, vehicles, ships and other transportation of international goods and services into the United States. 

Continuous Activity 3 Bonds

A Continuous Activity 3 International Carrier Bond must be in an amount of at least $50,000. All continuous international carrier bonds are written in increments of $10,000 up to $100,000 and increments of $100,000 after that. All Activity 3 bonds are in addition to other bond requirements. The following are exceptions and changes to the required amounts on International Carrier Bonds.

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Commercial Aircraft 
Bonds
Commercial Vessel Bonds
Non-Vessel Operating 
Common Carrier (NVOCC)
Bonds
Railroad Carrier
Bonds
An Express Consignment 
Carrier Facility Bonds
Vessel Repair
Bonds
A commercial aircraft with at least 14 seats (including the crew) must have a bond in the amount of $75,000, OR twice the average collection of passenger user fees paid to CBP, whichever is greater. The average of user fees is based on the previous four quarters. These fees are listed under 19 CFR 24.22(g)(1)(i) Currently these fees are:
"Subject to paragraphs (g)(1)(ii) and (g)(3) of this section, a fee of $5.50, as adjusted by the terms of paragraph (k) of this section, must be collected and remitted to CBP for services provided in connection with the arrival of each passenger aboard a commercial vessel or commercial aircraft from a place outside the United States except:

(A) When the journey of the arriving passenger originates in a territory or possession of the United States;

(B) When the journey of the arriving passenger originates in the United States and was limited to the territories and possessions of the United States; or

(C) When arriving from one of the territories or possessions of the United States."
For aircraft with less than 14 seats (including the crew), the bond amount must be at least $5,000 for each seat and $5,000 for the aircraft. For example, an aircraft with ten seats would need a bond in the amount of at least $55,000 (10 X $5,000 + $5,000).
Commercial Vessels must have a bond in an amount of at least $50,000 OR twice the passenger user fees due to CBP, whichever is greater. The passenger user fees are based on the previous four quarters. These fees are listed under 19 CFR 24.22(g)(1)(i)(ii). Currently these fees are:
Fees for arrival of passengers aboard commercial vessels and commercial aircraft —

(1) Fees.

(i) Subject to paragraphs (g)(1)(ii) and (g)(3) of this section, a fee of $5.50, as adjusted by the terms of paragraph (k) of this section, must be collected and remitted to CBP for services provided in connection with the arrival of each passenger aboard a commercial vessel or commercial aircraft from a place outside the United States except:

(A) When the journey of the arriving passenger originates in a territory or possession of the United States;

(B) When the journey of the arriving passenger originates in the United States and was limited to the territories and possessions of the United States; or

(C) When arriving from one of the territories or possessions of the United States.

(ii) Subject to paragraph (g)(3) of this section, a fee of $1.93, as adjusted by the terms of paragraph (k) of this section, must be collected and remitted to CBP for services provided in connection with the arrival of each passenger aboard a commercial vessel from a territory or possession of the United States, regardless of whether the journey of the arriving passenger originates in a place outside the United States or in the United States.
Non-Vessel Operating Common Carriers assist shippers with the movement aboard cargo ships under their own bill of lading. They do not typically own the ships on which they are selling space. Instead, they lease the space on commercial vessels and sell the space to smaller companies needing to move goods. NVOCCs with international operations must have a bond in place of at least $50,000.
Railroad carriers must have a bond in the amount of $50,000 OR 5 times the monthly amount of railroad user fees paid the CBP, whichever is greater. The railroad user fees are calculated from the previous twelve months. The fees are specified in 19 CFR 24.22(d). The railroad fees are currently:
"(d) Fee for arrival of a railroad car —

(1) Fee. Except as provided in paragraph (d)(6) of this section, a fee of $8.25, as adjusted in accordance with the terms of paragraph (k) of this section, will be charged for the arrival of each loaded or partially loaded passenger or commercial freight railroad car. The railroad company receiving a railroad car in interchange at a port of entry or, barring interchange, the company moving a car in line haul service into the customs territory of the United States,will be responsible for payment of the fee. Payment of the fee must be made in accordance with the procedures set forth in paragraph (d)(3) or (d)(4) of this section. For purposes of this paragraph, the term “railroad car” means any carrying vehicle, measured from coupler to coupler and designed to operate on railroad tracks, other than a locomotive or a caboose.

(2) Fee limitation. No feewill be collected under paragraph (d)(1) of this section for the arrival of a railroad car during any calendar year once a prepayment of $100, as adjusted in accordance with the terms of paragraph (k) of this section, has been made as provided in paragraph (d)(3) of this section, provided that adequate records are maintained to enable CBP to verify any such prepayment.

(3) Prepayment. As an alternative to the payment procedures set forth in paragraph (d)(4) of this section, a railroad company may at any time prepay a fee of $100, as adjusted in accordance with the terms of paragraph (k) of this section, to cover all arrivals of a railroad car during a calendar year or any remaining portion of a calendar year. The prepayment, accompanied by a letter setting forth the railroad car number(s) covered by the payment, the calendar year to which the payment applies, a return address, and any additional information required under paragraph (i) of this section, must made in accordance with the procedures and payment methods set forth in this paragraph and paragraph (i) of this section."
An Express Consignment Carrier Facility is: “A separate or shared specialized facility approved by the port director solely for the examination and release of express consignment shipments.”

The bond amount for express consignment carrier facilities must be at least $50,000 OR twice average collection of express assignment carrier facility fees payable to CBP, whichever is greater. The carrier facility fees are found at 19 CFR 24.24(b)(4). Currently the fees are calculated as:
"(4) Express consignment carrier and centralized hub facilities —

(i) General. Each carrier or operator using an express consignment carrier facility or a centralized hub facility must pay to CBP a fee in the amount of $1.00, as adjusted in accordance with the terms of paragraph (k) of § 24.22 of this chapter, per individual air waybill or individual bill of lading for the processing of airway bills for shipments arriving in the United States. In addition, if merchandise is formally entered and valued at $2,500 or less, the importer of record must pay to CBP the ad valorem fee specified in paragraph (b)(1) of this section, if applicable. An individual air waybill or individual bill of lading is the individual document issued by the carrier or operator for transporting and/or tracking an individual item, letter, package, envelope, record, document, or shipment. An individual air waybill is not a consolidation of several air waybills, and is not a master bill or other consolidated document. An individual air waybill or bill of lading is a bill representing an individual shipment that has its own unique bill number and tracking number, where the shipment is assigned to a single ultimate consignee, and no lower bill unit exists. Payment must be made to CBP on a quarterly basis and must cover the individual fees for all subject transactions that occurred during a calendar quarter."
Vessel Repairs require a bond in the amount of at least $50,000.
Activity Code 4 - Foreign Trade Zone (FTZ) Operator - Continuous Bond Only

Foreign Trade Zones are defined as: “Secure areas under U.S. Customs and Border Protection (CBP) supervision that are generally considered outside CBP territory upon activation. Located in or near CBP ports of entry, they are the United States' version of what are known internationally as free-trade zones.”

CBP is responsible for the transfer of merchandise into and out of the FTZ and for matters involving the collection of revenue. The bonds guarantee this collection of revenue as well as the payment of any fines or other amounts owed. 

When a bond is used to secure activities within an FTZ, the bond amount must be at least $50,000 and in an amount the Director of OF-RD deems necessary to accomplish the purpose for which the bond is given. An FTZ Bond is in addition to any other required CBP Bond.

Activity Code 5 - Commercial Gauger and Commercial Laboratory Bond - Continuous Bond Only

Commercial Gaugers are defined by CBP as: “Commercial organizations and individuals who measure, gaugers, or sample merchandise. The term "public gaugers" is used to denote a type of commercial gaugers dealing mainly with petroleum and petroleum products, such as crude petroleum, as well as alcohol, etc.

Commercial gaugers may own and operate commercial laboratories and vice versa. Once a commercial laboratory or commercial gaugers is accredited by U.S. Customs and Border Protection (CBP), they test and/or measure imported commodities on behalf of CBP.

Activity Code 5 - Commercial Gauger and Laboratory Bond Amounts

Click the tabs to see the bond requirements.
Commercial Gauger Bonds
Commercial Laboratory Bonds
Commercial Gaugers Bonds must cover amounts determined under 19 CFR 113.67 (a). These include:
“(a) Commercial gauger bond conditions. A commercial gauger's bond must contain the conditions listed in this section and must be a continuous bond.

(1) If the principal is a commercial gauger whose reports of gauging or whose samples are accepted for CBP purposes, the principal agrees to:

(i) Gauge or sample merchandise according to the standards and procedures set out in the CBP regulations.

(ii) Abide by the requirements set out in § 151.13(b) of this chapter; and

(iii) Submit properly any required report, proof, abstract, or sample to CBP.
(2)
(i) If the principal defaults, the obligors (principal and surety) agree to pay liquidated damages equal to the value of the merchandise involved in the default or three times the value of the merchandise involved in the default if the merchandise is restricted or prohibited merchandise or alcoholic beverages, or such other amount as may be authorized by law or regulation.

(ii) If the principal defaults on the agreements in these conditions and the default does not involve merchandise, the obligors agree to pay liquidated damages of $1,000 for each default or such other amount as may be authorized by law or regulation.

(iii) It is understood and agreed that whether the default involves merchandise is determined by CBP, that the amount to be collected under this condition will be based on the quantity and value of the merchandise as determined by CBP and that value as used in these provisions means value as determined under 19 U.S.C. 1401a.”
Commercial Laboratory Bonds must cover amounts under 19 CFR 113.67(b). These include:
“(b) Commercial laboratory bond conditions. A commercial laboratory's bond must contain the conditions listed in this subsection and must be a continuous bond.

(1) If the principal is a commercial laboratory whose laboratory analysis reports are accepted for CBP purposes, the principal agrees to:

(i) Conduct laboratory analyses according to the standards and procedures set out in the CBP regulations;

(ii) Abide by the requirements set out in §§ 151.12(c) and 151.14 of this chapter; and

(iii) Submit properly any required report, proof, abstract, or sample to CBP.

(2)

(i) If the principal defaults, the obligors (principal and surety, jointly and severally) agree to pay liquidated damages equal to the value of the merchandise involved in the default or three times the value of the merchandise involved in the default if the merchandise is restricted or prohibited merchandise or alcoholic beverages or such other amount as may be authorized by law or regulation.

(ii) If the principal defaults on the agreements in these conditions and the default does not involve merchandise, the obligors agree to pay liquidated damages of $1,000 for each default or such other amount as may be authorized by law or regulation.

(iii) It is understood and agreed that whether the default involves merchandise is determined by CBP, that the amount to be collected under this condition shall be based on the quantity and value of the merchandise as determined by CBP and that value as used in these provisions means value as determined under 19 U.S.C. 1401a.”
Activity Code 6 - Wool and Fur Products Labeling Act and Fiber Products Identification Act Importations - Single Transaction Bonds Only

Any product under the Wool Products Labeling Act of 1939, The Fur Products Labeling Act, or Textile Fiber Products Identification Act must have a bond in the amount of two times (2X) the product's value plus applicable duties. 

This bond is in addition to any other required CBP Bond.

Activity Code 7 - Bill of Lading - Single Transaction Bonds Only

When a party is unable to produce a bill of lading, air waybill or other evidence of right to make entry, a bond may be substituted. In such cases, the bond must not be in an amount less than 1.5X the invoice value. 

A bond given for the production of a bill of lading or air waybill shall be considered as canceled upon production of a bill of lading or air waybill, and may be considered as satisfied but shall not be canceled upon the production of a carrier's certificate or certified duplicate bill of lading or air waybill.

Activity Code 8 - Detention of Copyrighted Material - Single Transaction Bonds Only

If the port director believes any imported material may be infringing on a copyright, the port director may withhold the item and notify the copyright holder. Within 30 days of the notice, the copyright holder must file a written demand to exclude the item from entry and file a bond or the item will be released to the importer. 

The bond is conditioned to hold the importer or owner of the imported article harmless from any loss or damage resulting from Customs detention in the event the Commissioner or his designee determines that the article is not an infringing copy prohibited importation. The bond needs to be at least 120% of the value of the items plus duties, taxes and fees owed to CBP. The bond is in addition to any other CBP bonds required. The copyright owner obtaining the bond may not withdraw the bond until a decision on the issue of infringement has been reached.

Activity Code 9 - Neutrality - Single Transaction Bonds Only

Neutrality deals with arms, munitions and vessels of war. The port director shall not allow clearance of department for any vessels where there is a suspected violation of the Neutrality Act of 1939

When a bond is necessary to protect Neutrality, the bond shall be at least 2X the value of BOTH the vessel and the cargo. The bond will be required in addition to other CBP bonds.

Activity Code 10 - Court Costs for Condemned Goods - Single Transaction Bonds Only

When property or vessel has been seized under 19 CFR 162.47, a party may file a claim for the vessel or property within 20 days of public notice. The claim must be accompanied by a bond that guarantees the payment of cost and expenses of the proceeding. The bond shall be in the greater of $5,000 or 10% of the property value. However, the bond must not be less than $250. A forfeiture officer may waive the bond requirement upon satisfactory proof of financial inability to post the bond, the fines, and penalties.

Activity Code 11 - Airport Customs Security Area - Continuous Bond Only

An Activity 11 bond guarantees that those with access to customs security areas in airports will comply with all laws and regulations. This includes employees and contractors of the bonded principal. If an importer has an Activity Code 2 or Activity Code 3 Bond in place, a separate Activity Code 11 is not necessary. An Activity Code 11 Bond is in addition to any other CBP Bond requirement.

Customs Security Area is defined as:

“The Federal inspection services area at any airport accommodating international air commerce designated for processing passengers, crew, their baggage and effects arriving from, or departing to, foreign countries, as well as the aircraft deplaning and ramp area and other restricted areas designated by the port director.”

Activity Code 11 Bond Amounts

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The amount of an Airport Customs Security Area Bond depends on the number of employees accessing the area. The minimum amount of a continuous bond is a follows:

  • Fewer than 15 employees requiring access - $25,000 Bond
  • 15 - 25 employees requiring access - $50,000 Bond
  • More than 25 employees requiring access - $100,000 Bond
Activity Code 12 - International Trade Commission (ITC) Exclusion - Single Transaction Bonds Only

19 USC 1337 deals with unfair trade practices. When entry of merchandise is subject to such an order from the ITC, a bond may be required. The ITC sets the amount of the bond. The bond is in addition to any other CBP Bond requirement.

This bond cannot be issued on form 301. It must be in the form of Bond to Indemnify. This bond must be transmitted to the relevant Port of Entry or Center. It cannot be submitted via EBond.

Activity Code 15 - Intellectual Property Rights - Continuous or Single Transaction Bond

Under CBP regulations, CBP provides samples to trademark, trade name and copyright owners (rights owners) of certain merchandise suspected of bearing infringing trademarks, or copyrights or imports seized for such violations. To obtain such a sample, rights owners must provide an Intellectual Property Rights (Article Code 15) Bond.

An Intellectual Property Rights Bonds can be continuous or single. It guarantees four things:

  1. The principal will hold the U.S. and its employees or agents, along with the importer providing a sample, harmless for damages from providing that sample to the principal. 
  2. The sample property provided by the CBP will be returned by the principal.
  3. If the sample property is damaged, lost or stolen while in the principal’s possession, the principal will pay 120% of the item's value in liquidated damages. 
  4. In addition to any liquidated damages, the principal will pay any duties, taxes, costs, charges, and penalties as a result of the principal’s failure to comply.

Activity Code 11 Bonds are in addition to other required CBP bonds. These bonds cannot be submitted through EBond.

Activity Code 16 - Importer Security Filing (ISF) - Continuous Bond

Before certain merchandise arriving by vessel to the United States can be imported, certain information must be transmitted in advance by the shipper or their agent. These requirements are often referred to as 10+2 requirements because of the 10 items the importer needs to supply + the 2 items the carrier needs to supply.

The Importer Must Supply:
1. Seller
2. Buyer
3. Manufacturer
4. Ship-to Party
5. Container stuffing location
6. Consolidator
7. Importer of record number/foreign trade zone applicant identification number
8. Consignee number(s)
9. Country of origin
10. Commodity Harmonized Tariff Schedule number to six (6) digits
The Carrier Must Supply:
1. Container status messages
2. Ocean vessel stowage plan

An ISF Bond guarantees that the accurate information has been supplied to CBP. When a continuous bond is supplied for the sole purpose of meeting the ISF requirement, the bond must be at least $50,000. When a single transaction bond is used solely to satisfy the ISF requirement, the bond must be at least $10,000. The ISF Bond is in addition to any other required CBP Bond.

Activity Code 17 - Marine Terminal Operator

Marine Terminal Operators (MTOs) are defined by 46 CFR §525.1(c)(13) as: 

“A person engaged in the United States or a commonwealth, territory, or possession thereof, in the business of furnishing wharfage, dock, warehouse or other terminal facilities in connection with a common carrier, or in connection with a common carrier and a water carrier subject to Subchapter II of Chapter 135 of Title 49, United States Code. A marine terminal operator includes, but is not limited to, terminals owned or operated by states and their political subdivisions; railroads who perform port terminal services not covered by their line haul rates; common carriers who perform port terminal services; and warehousemen who operate port terminal facilities. For the purposes of this part, marine terminal operator includes conferences of marine terminal operators.”

MTO Bond Requirement

All MTOs who operate at ports of entry who engage in commerce of cargo arriving from foreign countries must post an Activity 17 MTO Bond unless they handle bulk cargo exclusively. An MTO Bond may not be less than $100,000 and may be $250,000 or more if the MTO has had previous violations. The bond requirement is in addition to any other CBP Bond requirement.

An MTO Bond may not be submitted on Bond Form 301 or be submitted electronically through Ebond.

Deferral of Duty on Large Yachts for Sale at Boat Shows - Single Transaction Bond Only

Large recreational yachts that will be sold at boat shows can defer entry completion and paying duties for up to 6 months under 19 cfr 113 .75 appendix c. The bond guarantees the payment of duties, taxes and fees that would be owed upon entry. The bond must be in an amount of 2X the duties, taxes and fees that would be appropriate upon entry. 

If within 6 months, the yacht is exported or sold, the bond will be returned. If the yacht is not sold or exported within 6 months, the owner will be required to make entry and replace the bond with an appropriate entry bond. 

The bond cannot be submitted via Ebond.

Alternatives to CBP Bonds

Cash may be used to guarantee CBP obligations instead of surety bonds. Cash must still be in the amounts required by bonds. Cash must also be held for one year periods. Generally, surety bonds are superior to cash for individuals and businesses. While cash may not have an upfront cost, it has an opportunity cost. Cash held by to secure CBP requirements could be used for other purposes such as operations or growth. 

CBP Bond Summary

CBP (Customs) Bonds can seem complicated. They are required for most importers and exporters of goods and products to and from the United States. Let the customs bonds experts at Axcess Surety make the process easier. Contact us today for assistance. Importers and exporters can also learn more about surety by visiting our Complete Guide

Written by Josh Carson, AFSB

Vice President of Axcess Surety. Surety Bond and financial expert dedicated to helping contractors, businesses and individuals understand and obtain surety bond credit.

Photo of Josh Carson VP of Axcess Surety.

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