What happens when goods come into the United States and the importer wants to store them in a warehouse (without paying the duty)? Or when the goods must be transported to a destination outside the port of entry from a Customs secured area? What about freight forwarders or trucking companies who may arrange to move or store someone else’s goods before the duty gets paid? All of these needs can be met by one bond which is the Custodian of Bonded Merchandise bond, also known as the Activity code 2. The companies who store and move this bonded merchandise are the principals on the activity code 2 bond and they assume care, custody, and control of the merchandise until it is delivered to its point of destination or until formal entry of the merchandise is made. Custodians of Bonded Merchandise serve an important role in the import process and require certain steps for approval. In addition to the surety’s normal underwriting requirements, Customs puts applicants through a rigorous pre-approval process that includes background investigations of each employee that may come in contact with the goods, a visual inspection of the facilities (in the case of a warehouse) and listing of vehicles and drivers – where applicable, and also determines the necessary bond amount. Because of these rigorous pre-approval requirements, Customs will not approve the use of a single entry bond and therefore these bonds are continuous in nature. As Customs must provide approval for this type of bond, including the amount required, the principal must contact Customs prior to submitting a bond application. We can assist a broker with most questions regarding this process prior to submitting the application on behalf of their client.