What are the Reasons for an Insufficient Customs Bond?

As per the 2011 report of U.S. Customs and Border Protection (CBP), a continuous import bond can be rendered insufficient for the following reasons:

• Unpaid debt issues like unpaid bills related to any of the entities on the bond may lead to insufficiency of your customs bond. Make sure you don’t delay the payment of duties and taxes for the shipment.
• It is required by the CBP for imports valued over $2,500 to obtain a customs surety bond and ensure the federal agency that it would be able to collect duties, taxes, and fees levied on the cargo. The bond amount should be calculated correctly. A continuous import bond is 10% of duties, taxes, and fees paid for the 12 month period. Importers need to act immediately after whenever they get a formal letter from the CBP regarding the failure of their bond.
• You can’t clear customs with an invalid bond given the wrong address on it. Customs examination process is always strict and they oversee every single aspect of a shipment before clearing it.
• A customs surety bond not only guarantees financial obligations but also bind the principal of the bond to comply with other CBP rules and regulations. The CBP officials can deem your bond insufficient if they find the freight is not in compliance with requirements.
• Improper paperwork or errors in documents can also lead to failure of your bond. Make sure you fire licensed and competent customs brokers or Surety Company to avoid mistakes while filing the customs bond.
• Invalid Employer Identification Number (EIN) or Social Security Number (SSN) on the bond.
• Failure to provide any required bond paperwork.
• Failure to annually deposit the required cash-in-lieu of surety for a continuous import bond.

Most of the times a customs bond is declared insufficient due to the above-mentioned reasons. In case of bond failure due to wrong address on it, it can only be returned to sufficient status once the importer submits a CBP form 5106 and bond rider to the Revenue Division Bond Team.

If you don’t want your goods to be held at the port of entry for days, you should act quickly to an insufficient bond. It would be ideal to contact your broker or surety company that helped you in obtaining a customs bond earlier.

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Created on Sep 14th 2019 06:25. Viewed 183 times.

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