By Vincent Wen    Photo：CANVA

The so-called "Bond Fee" is essentially a security deposit to ensure that the importer will handle any disputes, compensation, or other issues that may arise after the goods are imported. Specifically, if an importer abandons the cargo and refuses to pay any fees due to unforeseen circumstances, U.S. Customs has the right not only to auction the goods but also to deduct costs associated with the bond to cover various other charges incurred during customs clearance, such as storage fees, duties, and terminal handling charges (THC). The primary beneficiaries of this bond are the U.S. government and customs authorities.

Whether shipped by sea or air, importing goods into the U.S. requires the purchase of a bond. There are generally two types of bonds:

1. Single Bond: This type is purchased on a per-shipment basis. A single bond typically costs at least USD 50 per shipment and increases by USD 5 for each additional USD 1,000 of cargo value. For full container and less-than-container shipments by sea, where an ISF (Importer Security Filing) 10+2 filing is required, an additional ISF bond is needed if the single bond is chosen. The minimum cost for an ISF bond with a cargo value of up to USD 100,000 is USD 100 per shipment. Air shipments do not require an ISF, so an ISF bond is unnecessary.

2. Annual Bond: This bond is valid for one year and typically costs around USD 500 for a cargo value of up to USD 100,000 annually. After purchasing an annual bond, there is no need to pay a separate bond fee for each shipment within the bond's effective period, making it more economical for importers who frequently ship goods to the U.S. throughout the year.

There are also two methods for customs clearance: (1) Clearance under the U.S. consignee’s name, where the consignee provides a Power of Attorney (POA) and their bond; (2) Clearance under the exporter’s name, where the exporter provides a POA and works with a U.S. agent to obtain an Importer Record Number, with the agent assisting in purchasing the bond. Note that exporters can only purchase annual bonds, not single bonds. Regardless of the method, the U.S. consignee’s company Tax ID, also known as the IRS number (The Internal Revenue Service Number), is required for clearance. Both exporters and importers can purchase bonds.

Failure to purchase a bond is equivalent to failing to file a record with U.S. Customs upon import. Even if the ISF has been filed, the cargo may face rejection and fines upon arrival at the port. This bond fee is different from standard insurance fees paid by exporters or consignees, as it does not conflict with shipping insurance. The latter only covers issues that affect the goods themselves during transport.

Appreciate if you could share TGL Blog among your friends who are interested in first-hand market information of supply chain and updated economic incidents.