A customs bond is a financial guarantee that the importer will pay the duties, taxes and fees owed on an import. US Customs and Border Protection requires one before it will release goods. Without a bond, there is no entry, and without an entry the container does not leave the terminal.
It is not insurance for your cargo. It is a guarantee to Customs. That distinction matters, because importers often buy one believing it protects the goods.
Why CBP Requires a Bond
Duty is assessed after goods arrive, and paid later. CBP is therefore extending credit to every importer, every day.
A bond is what makes that credit acceptable. If the importer pays, nothing happens beyond a premium. If the importer defaults, the surety pays Customs, and then pursues the importer for the money.
The bond also gives CBP leverage on compliance. Liquidated damages, penalties and unpaid duty can all be claimed against it.
Single-Entry vs Continuous
There are two types, and choosing the wrong one is a common first-import mistake.
| Single-entry bond | Continuous bond | |
|---|---|---|
| Covers | One entry | All entries for 12 months |
| Typical cost | A flat fee per entry | Roughly a multiple of the single-entry fee |
| Best for | One shipment, or an unusual one-off | Any importer shipping regularly |
| Bond amount | Based on the entry’s value and duty | Based on the prior year’s duty, with a minimum |
The rule of thumb: if you expect more than two or three entries in a year, the continuous bond is cheaper per entry.
What the Bond Does Not Cover
| Covered | Not covered |
|---|---|
| Duty, taxes and fees owed to CBP | Damage to your cargo |
| Penalties assessed against you | Loss of the vessel or container |
| Liquidated damages | Theft in transit |
Cargo insurance is a separate product. If a forwarder offers “customs bond and insurance” as one line item, ask what each part actually covers.
Who Actually Holds It
The importer of record must have the bond. Not the forwarder, not the supplier.
This has a practical consequence. In a DDP arrangement, the party acting as importer of record is the one whose bond is used. If that is a forwarder or a logistics partner, the bond on file belongs to them, and the entry history accrues to them.
That arrangement is legitimate, and common. It is also worth understanding, because the importer record follows the bond holder, not the buyer.
What Causes a Bond Problem
No bond at all. The entry is rejected. This is discovered at the worst moment, which is when the vessel arrives.
Insufficient bond amount. Over a year of growth, the original bond can become too small. CBP may require an increase mid-year.
A claim against the bond. Liquidated damages are claimed against the surety, who then seeks recovery from the importer.
The bond is under a different entity. A company that changes its legal name or restructures can find that the bond no longer matches the importer of record.
Related Entries
Key Facts
- A bond guarantees duty payment to CBP, it is not cargo insurance.
- The importer of record must hold it, not the forwarder or supplier.
- Single-entry covers one entry; continuous covers 12 months.
- More than two or three entries a year usually makes continuous cheaper.
- No bond means no entry, and the container stays at the terminal.
- Entry history follows the bond holder, which matters in DDP arrangements.