Bond and Insurance

 

Customs Bond

A Customs bond is a financial guarantee between three parties: the Insurance/Surety company issuing the Customs bond, the Operator (who is required to file the bond), and U.S. Customs & Border Protection (CBP).

The Customs bond guarantees U.S. Customs & Border Protection that fees due from the Operator are paid by the Insurance/Surety Company in the event of Operator default. The Customs bond also indemnifies the Insurance /Surety Company, allowing them to use any legal means to collect from the Operator any monies that were paid to CBP on the Operator’s behalf.


FTZ Bond

A Foreign Trade Zone (FTZ) is considered non-U.S. territory for Customs’ purposes. Foreign goods placed into FTZ may be manufactured, manipulated, repacked or exported without paying duties.

The Activity Code 4 Customs Bond, required to be filed by all FTZ operators, is a guarantee to the U.S. government, from an insurance company, that the FTZ will follow all rules governing FTZ’s. If any rules or regulations are not followed and if any duties, fines or penalties arise as a result, the FTZ must pay Customs & Border Protection. If they do not, the insurance company will be required to pay. The bond further allows the insurance company to seek any legal means to recoup any monies paid on behalf of the FTZ.