Learn something new every day
More Info... by email
An entry bond is a type of document often utilized in transactions involving the import and export of products. The bond serves as a kind of guarantee that payment of the duty charges associated with the import will be honored. Typically, the importer is the party who pledges the entry bond, using the procedures required by the receiving customs office.
The idea behind the entry bond is that even if something should occur between the time of purchase and the date that the imported goods are received and processed by customs officials, the duty assessed on the received shipment will still be paid in full. This means that if the importer should go out of business in the interim but the shipment is not canceled and is ultimately received, the bond company issuing the entry bond will still cover the duty costs. The bond will also help cover any additional fees or penalties that may be assessed by the customs office. Payment is usually tendered after a waiting period is observed and no payment from the importer has been received; at that point, the customs office will file a claim with the bond issuer.
Typically, the amount of the entry bond will be significantly more than the anticipated duties associated with the imported shipment. In some nations, the amount may be as much as three times the assessed value of the goods being shipped. This approach makes it possible to allow extra for any penalties or other fees that may accumulate in addition to the project customs fees.
One of the more common examples of this type of financial document is known as the single entry bond. This type of bond covers a single shipment that is received into a customs office. The amount of the bond in relation to the type of goods included in the shipment will vary, with some kinds of goods requiring a bond that is equal to the value of the shipment, and others up to three times that value. Assessing the amount for the entry bond usually has to do with any type of trade laws that are currently in force in the receiving country. For example, an imported shipment of clothing items may be valued at the anticipated retail value, while an inbound shipment of medical supplies may require an entry bond of twice or three times the retail value.
Since the importer is usually the party that secures the entry bond, it is possible to ascertain the amount of coverage to secure. Most customs offices provide basic guidelines for this type of calculation. In addition, providers who supply the bonds will also be aware of current laws and regulations related to the import of goods and services, and be able to advise the importer of the proper amount for the bond issue.
One of our editors will review your suggestion and make changes if warranted. Note that depending on the number of suggestions we receive, this can take anywhere from a few hours to a few days. Thank you for helping to improve wiseGEEK!