Why Do I Need a Customs Broker?

Customs Brokers are licensed by U.S. Customs and Border Protection (CBP) to conduct CBP business on behalf of importers. They take the burden of filling out paperwork and obtaining a CBP bond off of the importer’s hands.

The importer is always ultimately responsible for knowing CBP requirements and for ensuring their importation complies with all federal rules and regulations, but using a Customs Broker can save you from making costly mistakes.

What Can a Customs Broker Do For You?

It’s the Customs Brokers job to arrange for payment of duties and taxes, process import and export documentation, follow Customs regulations, sign documents, and clear Customs on behalf of their claims.

Why an Importer Needs a Bond?

Customs Regulations state that a bond (fiancee) is required to:  “protect the revenue (of the United States) or to assure compliance with any pertinent law, regulation, or instruction.”

A Customs bond is a performance bond.  The parties involved in the bond are the Principal ( you, the Importer of record), the Surety, and the US Customs Service.  Basically, the surety promises Customs that the Principal will perform any obligations he/she may have resulting from the importation of his/her merchandise.  If the principal defaults on his/her obligations, the surety must step in to assume that obligation.

The importer of record, enters into the following importation conditions

• Agreement to Pay Duties, Taxes, and Charges.
• Agreement to make or Complete Entry
• Agreement to Produce Documents and Evidence.
• Agreement to Redeliver Merchandise.
• Agreement to Rectify Any Non-Compliance with Provisions of Admission
• Agreement for Examination of Merchandise.
• Reimbursement and Exoneration of the United States.
• Agreement on duty-free Entries or Withdrawals.

Examples of  non-compliance with Customs regulations are acts which result in the assessment of liquidated damages,

• Non-payment or late payment of estimated duties;
• late filing of Entry Summaries
• failure to provide missing documents
• failure to redeliver merchandise;
• shortages irregular delivery, non-delivery;
• untimely exportation or destruction of merchandise entered under a temporary   importation bond, etc. 

When your merchandise is released by Customs, you have 10 days within which you must pay your estimated duties.  When Customs reviews your entry for liquidation, there may be a determination that additional duties are owed.

When the Surety has been instructed to make payments to Customs under the terms of the bond, they have the right to demand reimbursement from you, the Bond Principal.  “Delivery of a Customs Bond (to the Customs Service) with an entry is solely to protect the revenue of the United States and does not relieve the importer of liabilities incurred from the importation of merchandise into the United States.”

In place of a bond, US money, US bonds (except for savings bonds), US certificates of indebtedness, Treasury notes, or treasury bills in an amount equal to the amount of the bond may be posted with Customs.  We do not recommend this procedure for a number of reasons.  First of all, a bond is cheaper.   If you deposit money, etc., it must amount equal to the value of the merchandise plus duty.  US Customs will not release your money for some months or even years.  A bond on the other hand costs you a premium, which is a small percentage of the full amount.

We highly recommend to contact your Customs Broker before any shipment transaction is made.