An importer bond, or Activity Code 1, is the most common type of Customs bond. This type of bond allows an importer of merchandise to bring their goods into the United States. The bond guarantees that the entry paperwork is filed correctly by the principal or principal’s customs broker and the appropriate amount of duties, taxes and fees will be paid by the principal to Customs. Additionally, the importer bond also satisfies the requirement of airport security and ISF filings.
An importer bond can be issued as a continuous bond, or as a single entry bond. The bond amount for a continuous Importer bond is usually equal to 10% of the duty and other import taxes paid in the previous year, as well as fees such as MPF (merchandise processing fees) and HMF (Harbor Maintenance Fees). The bond amount is set in multiples of $10,000 if this amount is less than $100,000 or multiples of $100,000 if this amount is over $100,000. Currently, the minimum bond amount required by U.S. Customs is $50,000.
The bond amount for a single entry importer bond can vary significantly based on the country of origin, type of commodity and value of the goods imported by the principal. There are various ways the bond amount could be determined. The amount can range from 10% of the entered value of the goods all the way up to three (3) times the value of the goods plus the appropriate duties, taxes and fees. Therefore, the principal should check with the entity clearing the entry, such as their customs broker, to confirm the bond amount needed. Based on the significant difference in determining the bond amount, if the principal is importing more than once or twice a year, a continuous bond may be more cost effective.