Is the ISF Bond required? And the differences between Clearance Bonds

Customs Bonds are required by US Customs to safeguard the financial liabilities and interests of the United States in the event of any claims if issued to the importer due to non compliance, such as late ISF Filing. This is the reason why US Customs requires the ISF Bond to be part of the ISF Filing when submitted so if there are any instances where CBP issues out a penalty. Their financial interests in recovering the monetary fees are guaranteed by the bond which is a form of insurance. 

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When it comes to importing goods, there are different types of import bonds, these different types can be classified as either single use bonds or continuous annual bonds. For new importers who plan to import only once or few times within the year , single ISF Bonds and entry bonds are the preferred choice due to the low cost. For the Continuous Annual type, this type of bond covers all shipments the importer has for a whole year, but costs are more to obtain depending on the amount of coverage needed.

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Customs Bond Types

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1. ISF Bond - Single use only, covers one ISF Filing per shipment. Guarantees $10,000 of ISF penalty limit for ISF non compliance. 

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2. Single Entry Bond - SEB bond is used for the customs clearance entry filing. Not to be confused with ISF Bond. 

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3. Continuous Bond - Continuous bonds are used for businesses with heavy import activity. The cost of C Bond is not recommended for low volume importers due to the higher upfront costs to purchase.

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Custom Bond Value Determination

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Single Transaction – Bond is usually completed for either an amount equal to the value of the merchandise plus the duty, taxes and other fees or, for certain merchandise as determined by U.S. Customs, an amount equal to three (3) times the value of the merchandise.

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Continuous Bond – Bond amount is usually equal to 10% of the duty and other import taxes paid in the previous year, in multiples of $10,000 if the duties are less than $1,000,000 or multiples of $100,000 if the duties are over $1,000,000. Currently, the minimum bond amount required by U.S. Customs is $50,000. Further, care should be taken to insure that the bond is sufficient to cover the duty, not the value, on any single shipment of merchandise.